DEALER’S
ILLINOIS INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION
EDGE MAY/JUNE 2019
FINDING GOOD CHEAP CARS PART 3: NEW TECHNOLOGY
|P A G E 6|
DALLAS, TEXAS Permit No. 2079
PAID
PRSRT Standard U.S. Postage S TAT E A F F I L I AT E
VISIT US AT W W W.IL-IADA.ORG
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MARKETING MATTERS
HOW TO EARN A STEADY FLOW OF BUSINESS
REPEAT
| By Kenny Atcheson
AND
REFERRAL
Many independent dealers are reliant upon tax season to make or break their year. Wouldn’t it be great to have the ability to generate an endless, steady flow of customers at a reliable and predictable pace rather than waiting for the annual tax season bump? That’s what an R&R System can do for your dealership. R&R is my abbreviation for Repeat and Referral business. One system earns both Rs because the same behaviors that earn one earn the other. The first step to having an incomegenerating R&R System is to make a decision to put forth effort, devote time, and invest money into a system. System is italicized here to stress its importance. Occasionally asking customers for a referral or to buy again is not a system. That is a random act of marketing. A Repeat and Referral System Provides Stability To illustrate the point, let’s look at things that aren’t so stable. A company reliant upon cold calls likely struggled big time when the Do Not Call list and other similar laws and regulations were enacted. The same thing happened with broadcast fax and later texting. Then there were changes in the marketplaces, such as DVRs and the way media may or may not be delivered. People don’t want to sit through commercials, so they record shows. ACCELERATE
SYSTEM
Newspaper organizations struggle. Yellow Pages are moving from print to digital. An overnight algorithm change in Google can cause your company’s search engine rankings to plummet. Your business could go from ranking number one to disappearing off the first page of Google in the blink of an eye – by one algorithm change. It happens all the time. In 2016, Google AdWords Pay-Per-Click went from ranking 10 ads to four ads on the right side of the first page. If your business succeeded by ranking number five when there were 10 companies listed, your ad likely disappeared overnight when the list dropped to four. Then the world really shifted toward mobile. If your advertisements were geared for people who used desktop computers or laptops, you faced another challenge unless your website was already mobile-friendly. These are just a few laws, rules, and changes. If your company has a great referral system in place that is implemented regularly, referrals and repeat purchases will come at a steady and somewhat predictable pace. Think of repeat purchases as previous customers who refer themselves. Implement the same behaviors and systems to generate referral customers that you use to generate repeat customers. An R&R System is Under-the-Radar “I don’t know why that dealership is so successful while we struggle. We have similar inventory and I don’t think they advertise.”
This is what the head of your competition will likely say when you have a powerful force of referral soldiers who battle every day to send business your way. I am a fan of under-the-radar strategies. It is hard for a competitor to copy a constant flow of referrals, because they have no idea why you are having so much success. Occupy Space in Your Customers’ Minds Your customers don’t spend nearly as much time thinking about your dealership as you would hope – no matter how great their experience was. While tailgating outside a football game, if your customer was asked by a friend if they knew of a great dealership, your customer would probably recommend your business. But if your customer overheard two people talking about needing a good dealership, would your customer go out of their way to politely interrupt the conversation and recommend you? This would require your customer’s escalating motivation to refer your dealership. To occupy space in your customers’ brains at all times – including situations where they are motivated to refer business to your dealership – you must provide great experiences and communicate regularly. Sure, occasional big customer events are great. But continuous communication that offers fun, value, and prizes via print and email newsletters is a continuous method to occupy brain space – including the grey matter that reminds them about your businesses when a situation arises to refer your dealership. Referrals provide stability and consistency. Many behaviors and systems that are implemented to increase referrals also increase repeat purchases. Keep that in mind when you consider the effort or investment it takes to communicate consistently with your existing customers. Kenny Atcheson is the founder and president of Dealer Profit Pros and author of Marketing Battleground: How to Deploy Under-theRadar Strategies to Explode Your Profits. Learn more at www.DealerProfitPros.com.
WHEN YOU CAN’T SELL MORE, SELL SOMETHING BETTER | By GWC Warranty
IMPROVE BACKEND PROFITS
Let’s look at ways you can begin upselling more often and improving back-end profits even when your service contract penetration is right where you want it. Start the Conversation Early Advertising basic level coverage, like with a Certified program, helps plant the seed early on and gets customers on board with the principles behind service contract protection. Once customers are bought in on the ground floor, you then have the foundation needed to get them to a higher level of coverage. Stick with What Works Over and over, you’ll hear mention of the
menu approach and the 300 percent rule. Both are proven tactics that can be repeated in the F&I office for consistent success. Presenting good, better, and best options and working your way down from the top coverage you offer is the best way to help customers see the value in richer coverage. And it’s important that you do this every time, without exception. Practice Makes Perfect Not just with the menu technique but also with overcoming objections, the more you practice, the more successful you’ll be. You can schedule workshops with your team or
work on your skills with on-demand online resources like Virtual Training to ensure you and your team stay sharp in these critical areas. Keep the End Result in Mind Better coverage means increased profits and happier customers. Don’t discount the long-term profit opportunities and repeat business that can come as a side effect to selling better coverage. When your customers are well protected and can avoid out-ofpocket repair bills, they’ll undoubtedly sing your praises to family and friends and on review sites across the web. WWW.IL-IADA.ORG MAY/JUNE 2019 DEALER’S EDGE 3
AUCTION NEWS
WESTLAKE FINANCIAL SERVICES ANNOUNCES AUCTION OF THE YEAR A M E R I CA’ S AU TO AU C T I O N H A R R I S B U R G H O N O R E D
MAY/JUNE INSIDE
2019
03...........How to Earn a Steady Flow of Business 05........................................... Director’s Message 06................................. Finding Good Cheap Cars 07................................NIADA Government Report 10...................Be the Coach Your People Deserve 12................. Make Phone Tag a Thing of the Past 14........How to Build a Better Dealership Website
ADVERTISERS INDEX
BacklotCars......................................................IFC Dyer Auto Auction............................................... 5 Manheim ............................................................. 11 NextGear Capital ..........................................12-13 vAuto................................................... Back Cover
WHAT’S NEW
Westlake Financial Services congratulates America’s Auto Auction Harrisburg as its 2018 Auction of the Year winner. Westlake recognizes Manheim Nashville, ADESA Sacramento Brashers, Manheim North Carolina, and Manheim Phoenix for their top performance in their regions. “We are happy to congratulate our 2018 Auction of the Year winner America’s Auto Auction Harrisburg. They are a great partner and together, we look forward to continuing our growth,” said Westlake Financial Services VP of Remarketing William Walters. The 2018 top regional auction performers are: Northeast Region Winner: America’s Auto Auction Harrisburg Midwest Region Winner: Manheim Nashville Pacific Region Winner: ADESA Sacramento Brashers Southeast Region Winner: Manheim North Carolina West Region Winner: Manheim Phoenix
LIVE WEBCAST OF WAAC M AY 1 0 O N N I A DA .T V Catch all the exciting competition from the World Auto Auctioneer Championship! Auctioneers and ringmen from across the country will vie for the top titles and you don’t want to miss it. Tune in to NIADA.tv on May 10 for the free live webcast.
OFFICE
For information on how to become a member of IIADA, please contact Scott Alpeter at 800-987-6627 or alpeterscott@gmail.com.
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. The Dealer’s Edge is published bi-monthly 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 The Dealer’s Edge or NIADA. Likewise, the appearance of advertisers, or their identification as members of IIADA or NIADA, does not constitute an endorsement of the products or services featured. Copyright ©2019 by NIADA Services, Inc.
STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITORS Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT Jeffrey McQuirk • jeffrey@niada.com PRINTING Nieman Printing
Each year Westlake grades auto auctions based on sales and service levels including sales of Westlake remarketed units with the highest MMR percentage. Westlake recognizes top performing auctions in each region with the highest graded auction receiving the “Auction of the Year” award. “We are proud to be working with all our auctions and I want to congratulate the top five,” said Westlake Chief Financial Officer Paul Kerwin. “We hope to continue our success alongside each of these groups.” Westlake partners with auctions nationwide to sell thousands of used cars each month. Many units are sold with Westlake’s Buy with Confidence Guarantee, which gives dealers peace of mind they are purchasing quality units. Additionally, Westlake offers a Dealer Loyalty Program in which retailers receive discounts when Westlake units are purchased at auctions and financed through Westlake. Those interested in learning more are invited to contact the remarketing department and check our upcoming sales at www.westlakefinancial.com/Remarketing.
BOARD MEMBERS CHAIRMAN
Gordon Tormohlen Tormohlen’s Good People Automotive 1800 S Ihm Blvd Freeport, IL 61032 815-232-5543 goodpeople@aeroinc.net
PRESIDENT
Joe Mok G Motor Cars 2411 E. Oakton St Arlington Heights, IL 60005
VICE PRESIDENT
Eric Nelson Nelson Automotive Inc. 1801 S Busse Mt Prospect, IL 60056 eric@heycars.com
www.il-iada.org 800-987-6627
TREASURER
BOARD MEMBERS
Mark Alcorn Carlyle Auto Sales 1708 Broadway Rockford, IL 61104 815-262-2231 mark467@frontier.com
Ginger Higgins Integrity Motor Cars
SECRETARY
Alex Tovstanovsky 8959 Hanslik Ct Naperville, IL 60564 (630) 631-2535
EXECUTIVE DIRECTOR
Scott Alpeter IL-IADA Headquarters 21200 S. La Grange Rd. Suite 356 Frankfort, IL 60423 (800) 987-6627 scott@il-iada.org
Angus Macaskill Carmax Randy Crase Crase Auto Connection Steve Taylor Auto Credit of Southern Illinois Steve Luczak Advantage Auto Mike Wells Integrity Motors Arien Whitehall Standard Automart Moises Aleman Roselle Motors Ryan Clark Rockford Auto Auction Adam Berger Kelley Kronenberg Rafal Labuda Quick Sales Corporation
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ASSOCIATION NEWS
| By Scott Alpeter
ASSOCIATIONS HELP EVERYONE WIN!
DIRECTOR’S
MESSAGE
The Illinois IADA needs you! And you need us! The association is here to help you thrive as a business owner. Associations associate or, in other words, connect with each other, join together with each other and partner with each other. Groups are stronger than individuals. When we join together and bond as a brotherhood we can learn from each other and we will become better at what we do. We want all the dealers in Illinois who want to do business the right way to be part of our association. Together we share ideas, recommend vendors, warn each other, and help each other. We all benefit from this shared mentality to thrive in our businesses. We currently have a small group of dedicated members who are doing some great things, but we need more members and more support. We appreciate those who are supporting us now and those who are determined
to support us in the future. We really do need hundreds of other dealers to join with us in the coming months. If you have friends in the industry,
encourage them to join with us. They can easily sign up at our new website: www.il-iada. org. With a myriad of discounts available from our vendor partners, joining the Illinois IADA is a moneymaker - a win for each dealer! Everyone can win! As we grow stronger we will have the ability and the means to push for businessfriendly laws that will help our businesses and be able to better fight against proposed bad laws we see regularly in our state. We need unity! We need to bond together! We need to help one another so each of us is a little better tomorrow than we were today. Great things lie ahead for all of us as we “associate” with each other. Please share this invitation with other dealers you know. Yes, now! Thank you for your continued support! Scott Alpeter is executive director of Illinois Independent Automobile Dealers Association.
MARKET WATCH | By Used Car News
CONSUMERS SAY THEY WANT ONLINE FINANCING
FICO SURVEY ON CONSUMER PERCEPTION
There is a disconnect between consumers’ finance preferences for current loans and consumers’ finance preferences for future loans – with the largest gap centered on digital. That is a key finding of FICO’s second annual global survey on consumers’ perceptions of their vehicle financing experience. The research looked at how consumers view the financing of their new and used vehicle purchases, as well as how vehicle finance companies are currently meeting customer expectations. More than a quarter of consumers (28 percent) listed online financing as their first choice for their next loan, an increase from the number of current online borrowers (13 percent). Meanwhile, 63 percent of consumers applied for their current automotive loans from the dealership, but only 40 percent said dealership financing would be their first choice for their next automotive loan. While dealership financing continues to be the preferred loan option, online loans are gaining traction, driven by changing consumer expectations.
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MARKET PERSPECTIVE | By Doug Hadden
FINDING GOOD CHEAP CARS
PART
3:
NEW
COVER STORY
TECHNOLOGY
In the first installment of this three-part series, we looked at how to take advantage of upstream online auctions. Upstream is just a fancy way of saying “before the vehicle is shipped to physical auction.” We focused on OLOCs (One-Owner, Low-Mileage, Off-lease Cars) and learned how to acquire affordable cars your customers want, without having to go to a physical auction. In the second installment, we looked at buying real-time in multiple lanes, at multiple auctions, right from your desktop, laptop or phone! Since these articles, I have received a lot of great feedback and even trained some folks on how to buy cars live online – including easily accessible options like ADESA’s simulcast platform that allows dealers to bid virtually, in real time, on cars in the lane. One dealer said, “I may never go to a physical auction again.” Another dealer I worked with loves going to the physical auction. After training, he was standing in the auction lane bidding on cars as they drove through while also on his phone – bidding on cars at the same auction, at the same time, but in different lanes, and even checking proxy bids on cars at other auctions. Technology is opening new doors of opportunity for dealers, giving them a competitive edge like no other. This month we will look at new technology that is changing the way we buy and sell wholesale vehicles. When I owned my pre-owned lot many, many years ago, besides attending two local auctions every week, I spent every Monday morning stopping at Starbucks buying coffee and pastries I would take to my favorite used car manager who ran a large new car franchise. I usually arrived at the store as soon as the service department opened the front gates so I could look at and book out all the weekend trades before the
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UCM arrived. I would list what I wanted to pay for each car and what it needed for reconditioning on my yellow pad, head to his office and wait. We would grind out prices and two or three hours later I would call some drivers and get my new inventory to reconditioning. Not only did I have to get up at the crack of dawn, pay too much for a couple of rundown cars to get the ones I wanted (the old “package deal”), but I also burnt half a day away from my lot. Needless to say, this wasn’t a very efficient use of my time or inventory dollars. Fast forward to last week. I’m sitting at lunch with a friend who owns a small preowned lot, talking about how hard it is to find good cheap cars. His phone gives off a chirp. He quickly taps his phone, scrolls through a couple of screens, pounds out some numbers on his phone calculator, taps his phone one more time and gets back to our conversation. What was he doing? He was bidding on a car that was traded in at a new car franchise less than two hours ago. That’s right, sitting at lunch bidding on fresh trades and in the time it took to eat his burger, he owned the car! There are a few companies in this stillgrowing, dealer-to-dealer digital auction space. I’m most familiar with ADESA’s sister company TradeRev, a mobile app that sends notifications to your phone as new car franchise dealers launch cars to a 45-minute on-demand, digital auction. You can view multiple photos, watch videos and even listen to the engine run. Settings allow you to customize your experience, enabling you to create alerts for only the types of cars you want – so you spend less time looking and more time buying. Think about the efficiencies this technology brings to the industry. With built-in artificial intelligence and
machine learning, you can find the right car at the right price, in a transparent and fair process, all in about an hour. You can have funding, titling and transport pre-arranged in the app so when you win a car it quickly appears on your lot. And what about the seller? We know the longer you keep a car in stock the less gross you get – the dreaded “lot rot” is real. Even when you hit a home run on an aged unit, if you do the math on a profit-per-day basis, the ROI is weak at best. What would wholesaling a trade the same day it’s brought into inventory do for the average inventory turn time? It’s a win-win for both buyer and seller! The industry is changing, but so is the technology we use to run our operations. If you have not embraced buying cars upstream, live online from your PC, laptop or phone, or the newest app-driven one-hour, on-demand auction, you may want to rethink your business plan. I’m not saying you can’t continue doing what you’re doing now and be profitable. I’m saying there is technology out there that can and will help you be more efficient – which leads to higher profits with less effort. Mastering these new, high-tech systems and apps is so easy there is no reason not to give them a try. I’ll even help you get started. Email me at Doug.Hadden@ADESA.com and I will set up some time for training you on one or all of the new technologies discussed in these articles. Once you get comfortable using the new tech, not only will you be more efficient and profitable, you may also have time left over to do other things you haven’t been able to do, like spending more time with family and friends! Until next time – have fun and sell cars! Doug Hadden is executive director of dealer consulting services for ADESA Auctions Inc. He can be reached atDoug. Hadden@adesa.com.
WASHINGTON UPDATE | By Shaun Petersen
GOVERNMENT REPORT NIADA is your voice in Washington D.C., advocating for independent dealers, the used vehicle industry and small business. Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities.
LEGISLATIVE Privacy a priority: Privacy issues have become a high priority on Capitol Hill in the wake of a recent report from the Government Accountability Office that recommended Congress consider enacting a federal Internet privacy law. The GAO found no comprehensive U.S. Internet privacy law governs private companies’ collection, use or sale of users’ data and said Congress should take action to protect consumers. Andrew Smith, director of the Federal Trade Commission’s Bureau of Consumer Protection, testified last month before the House Oversight and Reform Committee’s Subcommittee on Economic and Consumer Policy, describing the FTC’s role in overseeing the data security practices of credit reporting agencies and enforcing data security laws. Those laws include the FTC Act, which prohibits unfair or deceptive acts or practices, the Fair Credit Reporting Act, which requires CRAs to provide consumer reports only to entities that have a permissible purpose for receiving them, and the Gramm-LeachBliley Act, which requires CRAs and other institutions to safeguard nonpublic personal information. Smith testified that the FTC favors comprehensive data security legislation that would give it additional tools such as civil penalty authority, jurisdiction over common carriers and nonprofits, and targeted rulemaking authority. Small business advocate: On March 27, the Senate Committee on Small Business and Entrepreneurship unanimously approved the nomination of David C. Tryon as chief counsel for advocacy of the Small Business Administration. If approved by the full Senate, Tryon will be responsible for educating lawmakers and regulators as an advocate for small business in the federal government’s agencies and rulemaking processes. NIADA was among 30 small business organizations that signed a letter sent to committee chairman Marco Rubio (R-Fla.) and committee members in support of Tryon’s nomination. The Small Business Administration is an important ally to NIADA and independent dealerships within the federal government. SBA has participated in the NIADA National Policy Conference and has worked with NIADA on a number of issues relevant to dealers. With Tryon in the advocate role, SBA will be better positioned to advance the interests of independent dealers and small businesses.
David C. Tryon
REGULATORY On March 7, the Department of Labor issued a notice of proposed rulemaking that would make more than a million more American workers eligible for overtime. The new rule would increase the salary threshold for employees to be exempt from overtime requirements by almost $12,000 per year, to $35,308 per year ($679 per week). Currently, employees with a salary of less than $23,660 per year ($455 per week) must be paid overtime if they work more than 40 hours per week, while workers making at least that salary level can be eligible for overtime based on their job duties. The new rule is intended to update the threshold – last set in 2004 – using current wage data projected to Jan. 1, 2020. DOL is seeking public comment on the rule, and specifically on its proposal calling for periodic reviews to update the salary threshold. DOL said it developed the proposal with extensive public input from six in-person listening sessions held around the nation and more than 200,000 comments as part of a request for information in 2017. The proposed rule maintains the current rule’s overtime protection for police officers, firefighters, paramedics and nurses, as well as non-management productionline employees and non-management employees in maintenance, construction and similar occupations. The proposal does not include automatic adjustments to the salary threshold. NIADA is reviewing the details of the proposal and will submit appropriate comments. We encourage dealers to consider commenting as well. For more information, visit www.dol.gov/ whd/overtime2019. Comments about the proposed rule can be submitted at www. regulations.gov, in the rulemaking docket RIN 1235-AA20.
PAC NIADA-PAC hosted Rep. Patrick McHenry (R-N.C.) at a business roundtable April 25 at Big Tex Auto Mart in Dallas. A contingent of about 20 dealers and association leaders gave Rep. McHenry a tour of the dealership, explaining how the used car business works, the services it provides and the obstacles faced by independent dealers every day, and discussed many of the issues currently being considered by Congress that impact the industry. McHenry is the ranking Republican on the House Financial Services Committee, whose jurisdiction includes oversight of the Consumer Financial Protection Bureau. NIADA and our PAC encourage association members to invite your elected representatives – at the federal, state and local levels – to visit your dealership. It is the single most effective thing you can do as a dealer to educate those representatives about what you do, how your business works and how the laws and regulations they create affect you and your business in the real world. Erika and Robert Blankenship
GRASS ROOTS Texas IADA is supporting a bill that has been introduced in the state legislature that would eliminate a form that limits a customer’s choice of where to title a vehicle and give dealers the authority to transfer the vehicle’s title in any of the state’s counties. As part of TIADA’s lobbying efforts, Erika Blankenship testified before the Texas House’s Transportation Committee in support of the bill. Blankenship and her husband Robert are owners of RLB Texas Auto Center in Austin – winner of NIADA’s National Quality Dealer award in 2017. She serves as chair of TIADA’s legislative committee and is a member of the NIADA legislative and regulatory affairs committee. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
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BE THE COACH YOUR PEOPLE DESERVE MANAGEMENT MATTERS | By Dave Anderson
ARE
YOU
A
CRITIC
Ken Blanchard called feedback the “breakfast of champions,” and rightfully so. We all need feedback to grow and develop to our fullest potential. When done properly, coaching those on your team and giving them quality feedback is one of the highest return uses of your time. However, when it comes to giving feedback, many leaders today are more of a critic than a coach. They point out what’s wrong without offering the individual any coaching that would allow them to adjust and bring better performance day in and day out. Criticism without coaching doesn’t elevate people – it frustrates people. What follows are some key principles of coaching, and some steps to make sure you’re the coach your people deserve, and not just a critic of them. But first, let’s discuss what it means to be a critic and what it means to be a coach so you can better assess your style of giving feedback. A critic is defined as “one who expresses displeasure or an unfavorable opinion about someone or something.” Simply put, criticism without coaching is merely expressing displeasure and leaving it at that – not exactly the balanced feedback “breakfast” necessary to grow, develop, and invest in the people on our team. A coach, on the other hand, is “someone who gives private teaching, a trainer or coach.” Make no mistake, a coach will also express displeasure concerning poor behaviors or performance, but the difference is he or she will also provide instruction on how to improve. With a better understanding of what it means to be a critic and a coach, let’s look further at the differences between them. To improve performance, a coach will provide feedback concerning poor performance and immediately follow it up by redefining a performance expectation. The coach will do this both conversationally and sincerely, without getting personal, profane, loud, or reminding the offender of their past flaws and faults as the critic does. To improve performance a good
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OR
A
COACH?
coach will show the person what good performance looks like. By redefining the performance expectation with the individual, you’re setting the standard. By modeling and demonstrating the good performance you’re looking for, you’re setting the example. To further reinforce his or her point, the coach will explain why it’s important to perform the task or duty in the manner prescribed. A great demonstration of what you’re looking for, by itself, is not enough to help coach the individual to greater levels of performance. This is why the best leaders in any field explain the “why” behind it. They understand people are more likely to apply the “how,” and live with the “what,” if they first understand the “why.” To test the individual’s comprehension of the feedback and the example demonstrated, a coach will ask the person to perform the task again to demonstrate their understanding of the proper technique. The only way you can know for sure that people get it is to test them, and let them show you they’ve got it. If the person requires further training to be able to perform the task or create the desired outcome, the coach will provide the resources necessary to support the person. Strong cultures understand talent doesn’t arrive fully developed, and a ferocious dedication must be made to training, coaching, and mentoring employees. Identifying and resourcing a team member’s growth by providing tools, experience, mentors, training or additional practice are key ways the coach supports and helps build the skillset necessary for the person to perform well. Once the performance improves, a coach will reinforce the change or improved behavior. This is because behaviors that are reinforced and rewarded are more likely to be repeated. But remember, the longer you wait to reinforce the behavior, the less impact it has. Reinforce often and quickly when you’re trying to influence behavioral and performance changes.
If necessary, the coach will establish consequences for the performer if the poor behavior or performance continues. If you want to change a behavior, you must change the consequence for that behavior. As the saying goes, “If nothing changes, nothing changes.” Even when establishing consequences, a good coach will affirm belief in the performer and his or her ability. This is because the coach understands the consequence being established is something they’re doing for the person, not to the person. The sole objective of a consequence is to improve performance. In summary, a critic is good at finding and pointing out faults or flaws. While a coach does likewise, his or her primary objective is to create the structure and tools necessary to eliminate the flaws. The coach is not just a “finder” but a “fixer.” With these points in mind, are you more of a critic or a coach? If you were to randomly survey team members on your coaching and feedback abilities, would they agree? If not, or if you’re unsure, the good news is you can fix that by bringing more focus to applying the principles shared here and adding value to your people, so they in turn can add more value to the organization. If you have good people who are being hamstrung by criticism without coaching, don’t expect them to endure or stay in your ranks for long. They won’t put up with the abuse, nor should they. Step up and be the coach they deserve – don’t wait until it’s too late to do so. Dave Anderson, “Mr. Accountability,” is a leading international speaker on personal and corporate performance improvement. He is also the author of 14 books and host of the podcast, The Game Changer Life.
MARKETING MATTERS
| By Christopher Leedom
MAKE PHONE TAG A THING OF THE PAST OPTIMIZE COMMUNICATION WITH SMS
How many of you are frustrated by the volume of voicemail – both left and received – during the average workday? Whether it is for sales, service or collections, your staff leaves dozens, if not hundreds, of voicemails every day. It has probably become one of the biggest drains of productivity and labor – though nevertheless necessary – until now. Do I have you scratching your head a bit? First, let me issue a challenge. Identify one employee in your dealership or finance company that interacts with your customer base on a daily basis – for instance, a salesperson, collector or service advisor. Next, identify 20 customers you need to communicate with that particular day. If you are a working with a collector, pick 20 accounts that just became delinquent. If you are in sales, pick 20 customers that need follow up. Take 10 of these customers and send them an SMS message initiating communication with them. Sales, service, or collections – it doesn’t matter. Call the other 10 customers, leaving a voicemail initiating communication if you don’t reach them. By the time you get done calling the 10 “phone call” customers, chances are 50 percent
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of the SMS customers will have already texted you back! Why? Because 93 percent of SMS messages are read within 10 minutes and a return text is usually sent within 20 minutes. How does that compare to the voicemails? It’s no contest. You probably will connect with two or maybe three of the outbound phone calls and will likely leave seven or eight voicemails. I have observed this exercise with countless operations. Our organization has worked with thousands of dealers and finance companies over the past 20 years. When we started Textmaxx Pro four years ago, I could not have predicted the impact on productivity. We see it not just in the auto space, but across virtually every industry we serve. In today’s world everyone returns an SMS message well before returning a voicemail. There are countless studies that prove this. So how do you optimize your SMS messaging strategy? First, think of it the same as your phone system. You need a tool that is proprietary and resident to your business that will serve your SMS communication needs, and ensure compliance. I hear too many dealers say, “My employees are really good at texting – they use their
personal phones.” I cringe. Think about it, would you utilize your salesperson’s personal phone number when advertising on the web or in television commercials? Would you give each employee a copy of their entire CRM activity when they leave your dealership to work elsewhere? That is precisely what you are doing if you do not have a product that allows you to store, monitor and control all SMS activity. It doesn’t matter whether it is sales or collections. You need to retain and control those conversations for a host of reasons, not the least of which is compliance – but that is a topic for an entire article itself. If you want to eliminate – or at least greatly reduce – the wasted time and effort of phone tag, implement a well thought out customer contact strategy where SMS communication is your first form of communication. You will be amazed at the impact it will have on employee productivity. It is an incredibly effective way to communicate with your customers. In my opinion, it is even more effective in collections or service, where you already have a relationship with the customer. Studies show SMS messaging to be the preferred method of communication of most customers, across virtually every demographic. It is hands down the most efficient mode for just about every conversation. Chris Leedom is the CEO and founder of the Leedom Group. The Leedom Group includes Textmaxx Pro, a complete SMS messaging solution for small to medium businesses with a custom design for the automotive industry. You may reach Chris at chris@leedomgroup.com.
ACCELERATE |
By GWC Warranty
IS YOUR REPUTATION IN GOOD HANDS?
CHOOSE YOUR SERVICE CONTRACT P ROV I D E R W I S E LY
Unfortunately in the used car business, your reputation after the sale can sometimes be out of your hands. Once that aspect of your business is out of your control, you need to be sure it’s protected in the hands of someone you trust. If you’ve been in the business long enough, you know that despite the best reconditioning and the best inventory selection, you’re bound to run into vehicles that encounter issues after the sale. When this happens, it’s your reputation on the line. How these fragile situations are handled can have long-lasting impacts on your reputation in your market. Partnering with a service contract provider that has the tools in place to take care of your customers the way you’d want them treated is perhaps the most important thing you could do to protect your reputation when your customer’s experience is out of your control. That’s why you need to know some specifics about what your service contract provider has to offer so you can be sure your customers are in good hands after they drive off your lot. Coverage Lookup A simple online coverage lookup tool is a great way for customers to learn details about their contract on a moment’s notice. Whether it’s start or end mileage, expiration dates, component coverage or a look at the contract itself, having this in place helps customers know exactly how they’re covered.
Find a Shop A customer’s nightmare is a mechanical breakdown far away from home. A nationwide network of service facilities is one thing but being able to easily find a shop in an unfamiliar area is another. This online application takes the worry out of an out-of-town breakdown. Quick Answers These days, consumers demand answers, and they demand them quickly and on their terms. Having a service contract provider that allows customers to submit questions via online forms, live chat or social media gives customers multiple options, so they can get answers in whatever way suits their busy schedules. Good Reviews Online reviews in today’s automotive industry are vital to success. The same goes for service contract providers. Stick to trusted sites like Google (sometimes hidden in the maps section), Facebook, or Consumer Affairs and look beyond just star ratings. While overall ratings are important on the surface, looking at how often a service contract responds and the frequency with which customers leave reviews will give you a sense of how that provider cares for your customers.
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ONLINE MARKETING
| By Adam Tobias
HOW TO BUILD A BETTER DEALERSHIP WEBSITE
3
STEPS
In the increasingly competitive car dealership industry, brand loyalty is more important than ever. It’s also harder than ever to build. Cutting through the noise requires a clear message and focus on the customer experience. Standing out and building a loyal customer base may seem impossible. But small and mid-sized dealerships around the country are punching back and delivering amazing experiences that win lifetime customers. Brand loyalty is still possible for dealerships to attain. And when they do, the benefits are incalculable. EXAMPLE: A
A dealer’s website is their first impression with a potential customer. That’s where our brand loyalty journey begins. The Purpose of Every Dealership Website Dealership websites have one job: Get customers to visit the dealership. Car buyers today spend over 60 percent of their time conducting research online and visit only 1.2 dealerships on average. If your website doesn’t convince a buyer to visit your dealership, you have lost a deal, and potentially a lifetime customer. The problem is most dealers try to do too much with their website. Instead of focusing on their sole job – getting customers into the dealership – dealers load their sites with financial services, their life story, and vehicles that customers don’t want to see. For this reason, most dealership websites are hard to navigate. The customer doesn’t know what to do, so they leave your site and go on to the next one. The best dealership websites – those that effectively drive customers to the dealership – show customers only the information they need to know. Everything else is a distraction. IMPROVING YOUR WEBSITE IN 3 STEPS Here are three elements that matter most for your website. By focusing on these three elements, you can cut out the junk that distracts customers and turns them away.
14 DEALER’S EDGE MAY/JUNE 2019 WWW.IL-IADA.ORG
Element 1: Value Proposition Oli Gardner is a master of building great websites. As co-founder of Unbounce, Oli spends his days thinking about and testing how websites can convert more users into customers. In a recent podcast, Oli discussed dealership websites and the importance of clearly communicating your value proposition to your customers: “If you can’t communicate [your value proposition] quickly, your competitor will,” said Oli. “If you can’t communicate quickly, your competitor will.”
“Amber and the team were extremely helpful. No pressure and they were attentive to our needs. Great experience. We will definitely be back for our next purchase. Amber answered all our questions, even met us on her day off and followed up the next day via text to ensure we were happy. Financing was quick and painless. The whole process was under two hours.” Reviews that seem over-the-top, or even fake, can do more harm than good. Dealerships should encourage customers to leave honest reviews. Never create fake testimonials or encourage customers to write
EXAMPLE: B
Oli said you have less than five seconds to make your value proposition clear to visitors. If you don’t, they will move on to the next site. When a customer first visits your website, they have one question on their mind: What can you do for me? The answer to that question is your value proposition. Dealerships should put their value proposition at the top of their homepage. Remove other messages that might distract from it, including financing deals, weekend sales, and messages from the dealer. Most dealers struggle to do this, but when they do, the difference is clear. The dealership website in “Example A” is easy to read and has a clear value proposition: “Family owned for 35 years. 5 minute approvals.” Your value proposition is a signal to your target customer they are in the right place. Remove clutter from the homepage so your most important message stands out. Element 2: Testimonials/Social Proof Customers are always on the lookout for scams and bad companies. They want to see proof you’ve made customers happy in the past. Testimonials are the best way to put a wary customer’s mind at ease. Testimonials should be honest, authentic, believable and relatable. Here’s an example of an excellent testimonial for a dealership in Oregon:
“favorable” reviews. People can sniff out inauthenticity a mile away. They will steer clear of your dealership and find another. Element 3: Call to Action Button Finally, your website needs a call to action: a clearly-defined next step for customers to take. Most websites look like “Example B.” This homepage has at least 10 different calls to action, with everything from “Shop inventory” to “Claim your Offer!” With so many elements vying for your customer’s attention, the action they’re most likely to take is leaving your site. When it comes to CTAs, clarity is king. Your homepage should have no more than three “actions” for customers to take. Ideally, your website offers a single CTA. Brand loyalty starts with the dealership website. If you promise an excellent car-buying experience, make sure your website provides an excellent experience, too. Dealership websites should be clear, trustworthy, and easy to navigate. Focus on the most important elements of your site and remove the clutter. Dealers who do this will be best positioned to build brand loyalty and earn lifetime customers. Adam Tobias is the co-founder and COO of Dealercue, which provides dealerships with real-time, intelligent, market-driven vehicle appraisal, pricing, inventory management, and sourcing solutions. He can be reached at adam@dealercue.com.