IL | Dealer's Edge | July 2019 by NIADA

DEALER’S

ILLINOIS INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION

EDGE JULY/AUGUS T 2019

WORLD AUTOMOBILE AUCTIONEERS CHAMPIONSHIP RECAP CODY SHELLEY CLAIMS 2019 TITLE | PAGE 6 |

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WWW.IL-IADA.ORG JULY/AUGUST 2019 DEALER’S EDGE 1

SALES MATTERS

HOW MANY HOURS PER WEEK= SALES SUCCESS?

FOUR

| By John Chapin

FACTORS

CONSIDER

important to the people she was selling to, it cut down significantly on the time she needed to get up to speed on the industry and product knowledge. That said, most new sales reps are new to an industry and, as a result, this is another area in which a significant amount of time needs to be invested. Network Typically, a new sales rep doesn’t have a large, loyal, influential network they can rely on for tons of business. If they do, it tends to be the exception versus the rule. For example, if Rob Gronkowski decided to be an insurance agent, financial planner, or sales rep for almost anything, he’d get tons of business based on his network. Similarly, if a well-known and liked member of the community in their 60s decided to switch careers, they’d likely be able to do a large amount of business simply based on their network and centers of influence. Again, these two examples are the exception, not the rule. Most new sales reps will need to spend a lot of time building their network by pounding the pavement, making phone calls, doing other forms of marketing, and following up.

Recently I was speaking with an insurance agency owner about the lack of success of his two most recent hires. They were putting in about 45 or 50 hours per week. Keep in mind these agents are in their 20s, new to the industry and relatively new to sales. In other words, not only do they have to spend time learning about an industry, they also have to learn how to sell, in addition to learning the ins and outs of the company. Taking all of that into consideration, I gave him my estimate of how many hours they should be putting in. His response: “Look, you can’t expect millennials to work more than 40 or 50 hours a week.” How Many Hours Should a New Sales Rep Be Putting in? When hiring a new sales rep, I tell people to look for five things: people skills, mental toughness, work ethic, attitude, and character (honesty and integrity). Give me a person who is positive and upbeat, is good at connecting and communicating with people, is able to persist and persevere through rejection, will always do the right thing, and is willing to work their butt off to be successful, and I’ll show you someone who will be successful in sales, and pretty much anything else for that matter. The number of hours someone is willing

to put in, though most closely related to work ethic, also ties into attitude, mental toughness, and character (they’re taking money from you to do a job, which requires putting in the effort necessary to get the results and pay you back). Ultimately there are four factors that determine how much time someone needs to put in: how good their sales skills are, how well they know the industry, how large, loyal, and influential their network is, and whether or not they are new to the company they’re now working for. Sales Skills To be successful at the highest levels, the new sales rep will need great sales skills. If they were in another industry previously, and already have great sales skills, that’s good but they’ll still have to adapt their skills to the new industry. Either way, developing great sales skills is a job all by itself, and a significant amount of time needs to be spent here. Industry Knowledge If they’ve been in the industry for a while, this can be helpful. My sister was basically the equivalent of a dental hygienist for seven years before she began selling dental equipment. Because she already knew all the products and what was

Are They New to the Company? This is the least of the factors in the equation and is a short-term consideration, but if a rep is new to the company, they have to learn the tools, systems, procedures and processes of that company. This includes how the CRM works, the email and phone systems, who to go to for certain questions, what paperwork is required when and how to fill it out, relationship building within the organization along with learning some of what everyone else does and a plethora of other details about the inner workings of the organization, the business, and the industry as a whole. All that said, if a sales rep is new to an industry and company, they have average, poor, or few sales skills, and they do not have an extensive network they can rely on for massive amounts of business, they should be putting in a minimum of 67 hours a week, and probably more than that, for their first three to five years. And there are plenty of millennials willing to put in the hours to be successful. You just have to dig to find them and know how to paint a picture of an exciting future in your industry. Also, their generation does not have a monopoly on people who don’t want to work. John Chapin is a sales and motivational speaker and trainer. He has over 31 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. For more information, visit www.completeselling.com or email johnchapin@completeselling.com.

WWW.IL-IADA.ORG JULY/AUGUST 2019 DEALER’S EDGE 3

LEADERSHIP MATTERS |

By Dan Rockwell, the Leadership Freak

CREATING CHANGE

JULY/AUGUST INSIDE

2019

06...........World Auto Auctioneers Championship 07.....Success Objectives & Social Media Metrics 09.................................CFPB Targets Collections 10................................NIADA Government Report 12..................Building an ADA Compliant Website 14............... Building a Successful (Sales) Culture

ADVERTISERS INDEX

Dyer Auto Auction............................................... 5 Manheim ............................................................. 11 NextGear Capital............................................. 8-9 vAuto................................................... Back Cover

WHAT’S NEW

NABD SUBPRIME CONFERENCE S AV E T H E DAT E : OCTOBER 7-9 Save the date for the 2019 NABD Fall Buy Here-Pay Here Subprime Conference! It will be held October 7-9 at the Marriott Marquis Chicago. Stay tuned for more details!

STARTS

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

GETTING

OUT

ONE’S

BUBBLE

To initiate change, leaders require collective insight outside of their own reality. Co-sensing is a practice for collecting that insight. The essence of co-sensing is getting out of one’s own bubble: •V irtual bubbles: social media echo chambers. • I nstitutional bubbles: organizational echo chambers. •A ffinity bubbles: the kind of people we like to hang out with.

Take Learning Journeys to the Places of Most Potential A deep-dive journey is designed for participants to access a deeper level of emerging reality to the change they want to make by observing hands-on practices. It incorporates a combination of shadowing, participation, and dialogue. Observe, Observe, Observe: Suspend Your Voice of Judgment and Connect with Your Sense of Wonder Only in the suspension of judgment can we open ourselves to a sense of wonder. FIVE PRINCIPLES FOR SUCCESSFUL Being amazed is about noticing the world CO-SENSING beyond how we view it. Build a Committed Core Team Practice Deep Listening and Dialogue The core team must reflect the diversity When connecting to other people and of the key stakeholder groups to bring the contexts, open all three “channels” of talents and competencies needed, and to listening: Listen from what surprises you, make the project their #1 priority. from the whole, and from what you sense A checklist to get the core team focused wants to emerge. during a kickoff event: Collective Sense-Making •W hat (what you want to create) Whatever process you use to make sense •W hy (why it matters) of the learning journey, pay disciplined •H ow (the process that will get you there) attention to all you observe. Paying •W ho (the roles and responsibilities of disciplined attention means you are all key players involved) intentionally holding back all inclinations •W hen and where (the road map to mix in your own interpretations or forward) solutions.

BOARD MEMBERS

OFFICE

For information on how to become a member of IIADA, please contact Scott Alpeter at 800-987-6627 or scott@il-iada.org.

WITH

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 Ryan Clark Greater Rockford Auto Auction

4 DEALER’S EDGE JULY/AUGUST 2019 WWW.IL-IADA.ORG

LEGAL MATTERS |

By Jeff Ingram

THE

BE CAREFUL WITH CREDIT REPORTS PROPER

Obtaining and using a customer credit report is one of the most common actions taken by car dealers. Each credit report should be treated with care because each one represents potential liability to you. There are numerous restrictions on the use of those credit reports. Generally, what you obtain is a “consumer report.” Use of such a report is governed by a federal statute. A “consumer report” includes more than just what you may normally think of as a credit report. A consumer report is a written, oral or other communication of information by a consumer reporting agency bearing on a customer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living which is used or expected to be used or collected to serve as a factor in establishing the consumer’s eligibility for credit or insurance, employment purposes or any other purpose authorized by statute. Credit reporting agencies are limited in furnishing a consumer report. Such a report can be furnished only if the consumer report is to be used: 1) in connection with a credit transaction involving the consumer; 2) for employment purposes; 3) for insurance underwriting purposes; 4) for a legitimate business need in connection with a business transaction initiated by the consumer or to review the consumer’s

PROCEDURES

account. How do credit reporting agencies ensure their reports are used only for these purposes? By obtaining warranties from you confirming the report is being obtained for one of these permitted reasons. If you take an adverse action based in whole or in part upon the information in a consumer report, you must provide: 1) notice of that action to the consumer; 2) the name, address and telephone number of the agency that furnished the report; 3) a statement that the agency did not make the decision to take the action and cannot provide the reasons why the action was taken; and 4) notice that the consumer can obtain a free copy of the report from the agency and dispute anything therein that is inaccurate or incomplete. An adverse action is not just a refusal to provide financing. An adverse action can include offering a financing rate in excess of the amount requested by the customer. If you deny credit for personal, family or household purposes or increase the credit charge based on information gathered from someone other than a consumer reporting agency, you must, if requested by the consumer in writing, disclose the nature of the information to the consumer. Be sure you have reasonable procedures in place to assure compliance with these sections. Such procedures could be an important defense

in a claim brought by a consumer. It has long been thought that you do not have to supply the adverse action notice if the credit decision is made by someone else. For example, if you submit a credit application to a potential financing source and that source refuses to extend credit, that source must supply the adverse action notice. If their notice if sufficient, you probably do not have to furnish one. There has, however, been litigation as to whether or not dealerships must also send an adverse action notice even if the financing source sends one. To be safe, you should send your own notice to everyone who has an adverse action taken against them. Many dealership computer systems automate this process, making it easy to send out those notices. Once you obtain a credit report, you must take steps to protect that information. Do not allow employees or other persons to view the report unless there is a legitimate business reason for them to view the report. Do not simply throw the report away. When you dispose of a report, you should do so in a secure manner such as by shredding the report. Store reports in a secure manner to prevent unauthorized access. Obtaining credit reports is a necessary part of your business. Do not let it cost you money for failing to follow the proper procedures.

AUCTION NEWS

KAR JOINS BLOCKCHAIN INITIATIVE

INDUSTRY LEADERS EXPLORING BLOCKCHAIN TECHNOLOGY KAR Auction Services Inc. recently announced its participation in the Mobility Open Blockchain Initiative (MOBI) Electric Vehicle Grid Integration (EVGI) working group alongside representatives from Accenture, GM and Honda. MOBI is a member-driven consortium of smart mobility industry leaders exploring blockchain technology for use in the digital mobility ecosystem. Its EVGI working group will research the potential value of using blockchain technology and the logistics necessary to pilot peer-to-peer energy smart contracts, tokenized carbon credits, and vehicle-to-grid (V2G) energy storage and ancillary services. MOBI’s EVGI working group will explore smart contracts to help create a more transparent, conflict-free way to exchange money and property, research the use of blockchain digitized ledgers to track and manage carbon credits that off-set charging station setup costs and examine V2G energy storage solutions. WWW.IL-IADA.ORG JULY/AUGUST 2019 DEALER’S EDGE 5

COVER STORY

AUCTION NEWS

WORLD AUTOMOBILE AUCTIONEERS CHAMPIONSHIP RECAP

CODY SHELLEY FOLLOWS HIS MENTOR WITH A VICTORY AT THE 2019 WORLD AUTOMOBILE AUCTIONEERS CHAMPIONSHIP

Photos by Myers Jackson ceo@myersjackson.com

World champion ringman Landon Waddle

WAAC president Paul C. Behr (left) and 2018 champion auctioneer Casey Enlow (right) flank the 2019 world champs: Blake McDaniel and Chris Elliott (team), Cody Shelley (auctioneer) and Landon Waddle (ringman)

Winning a world championship was a special moment for Cody Shelley. There was only one way it could be even more special. When 2018 champion Casey Enlow handed his fellow Oklahoman the trophy at the 2019 World Automobile Auctioneers Championship, Shelley couldn’t help getting emotional – especially since he knew it took Enlow, his longtime mentor, 17 tries before he won his title. “I don’t feel worthy or deserving of this,” Shelley said. “He’s taught me so much.” Shelley, who won in his sixth appearance in the contest, credited Enlow and Oklahoma auctioneer John Gary Collins as being instrumental in turning a high school rodeo star with dreams of going pro into a world champion auctioneer. “This means so much, especially coming from Casey – and from the other people who have won it in the past,” Shelley said. Shelley’s score of 91.5833 edged 2017 runner-up Matt Moravec for the victory in the 31st annual event, held May 10 at

6 DEALER’S EDGE JULY/AUGUST 2019 WWW.IL-IADA.ORG

Charleston Auto Auction in Charleston, S.C. Landon Waddle of Lago Vista, Texas claimed the title of world champion ringman, while Blake McDaniel won his second team title, this time pairing with defending champion ringman Chris Elliott to take top honors. Shelley, who turned 30 the day before the contest, looked very much like a rising star when he finished third in his first WAAC appearance in 2013. But he missed the finals the next two years, then skipped the event the next year before returning in 2017. In fact, Shelley almost missed this year’s WAAC as well, after a delayed flight turned what should have been a relatively easy trip into an all-night odyssey. He had rushed back from Dallas that day, stopping at his home near Tulsa just long enough to pick up the bag his wife Ashley had packed for him before heading to the airport. But when a flight delay caused him to miss his connection to Charleston, Shelley said, he thought about turning around and going home.

World champion auctioneer Cody Shelley

He didn’t – not because he wanted to compete as much as because of his friendships with his fellow auctioneers. “I’ve met so many unbelievable people here,” he explained. “I was just going to go home. And then I got to thinking I just wanted to see everybody. … That’s what made me go.” It was nearly midnight when Shelley arrived in Atlanta. He tried to talk his way onto another flight to Charleston, but it was full, forcing him to rent a car and drive. “I said, ‘I understand the flight was overbooked, but since it’s been delayed, some people didn’t make it. Can you let me on?’ ” he recalled in an interview on Mike “McGavel” Jones’ podcast. “ ‘Nope.’ The pilot was standing there at the gate and he said, ‘I’ll race you.’ ” Needless to say, the pilot won the race. Shelley arrived in Charleston at 4:45 a.m., took a quick shower and got to the auction at 6:30 to get ready to compete. “It was a long day,” he said. “It didn’t go as planned, but I got here.”

SOCIAL MEDIA | By Kathi Kruse

TOP SUCCESS OBJECTIVES & SOCIAL MEDIA METRICS

OPTIMIZE

YOUR

ROI

One of the best things about social media marketing is that it’s measurable. I’m still caught off guard when I hear some dealers don’t track their social media metrics or review their data. But I do understand, because so many dealers truly aren’t sure what metrics to track or what the data might indicate. Defining the right social media metrics is key to meeting dealership business objectives and makes it so much easier to measure ROI (return on investment). Two factors weigh heavily in computing ROI: costs and metrics. Costs are the investments required to meet dealership objectives. Many dealers don’t measure and analyze each cost associated with social media marketing: •A ttention (there’s a reason it’s called “paying attention”) • Labor/Human Resources • Financial • Training • Organizational Development • Social Technology • Agencies and/or Consultants • Paid Media (i.e. Facebook ads) • Employee Engagement Metrics are how you measure the result of your investments. One accurate measurement is worth a thousand expert opinions. Tracking the right social media metrics to determine ROI is challenging. With real-time data providing cues to re-work certain tactics, it’s crucial to designate someone whose job is to track and analyze. Restructure of the dealership’s organizational framework may be required. A marketing team’s comfort in working with data and analytics is critical. Tracking the right metrics is important but so is knowing what to do once you have the data, especially when things aren’t going as planned. Measuring metrics and analyzing results is formidable and you should take careful consideration. Sometimes a social media audit is called for. Due to the unique nature of the data, and the social aspect of the medium, it’s essential to isolate issues and determine true success. Achieving dealership objectives with social media requires experiential knowledge to make metrics meaningful. If you need guidance, seek out trusted advisors who can help you accurately measure and analyze your results. Tracking and auditing results is most beneficial when you know the right metrics to measure. Here are the top five dealership business objectives we encounter at Kruse Control,

including the relevant social media metrics you’ll want to track. Retain Current Customers •R each. Reach is an important social metric for all business objectives. However, it’s far easier to sell to existing customers than it is to strangers. •E ngagement (comments, likes, shares, retweets, re-grams). Engagement is the kingpin of everything social. How are existing customers engaging with your content? •R eviews. Customers do not consume in silence. What common words or themes are customers saying? •R eturn visits from social media. How are you tracking visitors to your website? What tactics are you using to engage them on an ongoing basis? Engage New Potential Customers • I ncrease in likes and followers. Is there a specific plan to increase your audience? Which platform, by how much and by when? •C ontent. What types of content are getting most engagement? •N ew opt-ins from social media. Are you offering valuable information at no-charge in exchange for contact info? •C ustomer acquisition. How many, at what cost, over what period of time? •A udience demographics. Are the people you’re reaching actually your target customers? Improve Customer Satisfaction •R esponsiveness to messages and reviews. Everyone likes to be heard. Responsiveness gives prospective customers a glimpse of how you handle concerns, issues and questions. •R esponse time. Forty-two percent of social customers expect a response within 60 minutes. Is your store prepared to handle social media inquiries within the hour? •O nline reviews. What’s the company’s practice for building a successful review funnel? •N egative feedback (reviews, hide posts, unlike page, unfollows). How often is it happening? How is this handled within the organization? Establish Earned Authority and Trust •T raffic and time on your website from social media. “Social signals” let Google know your site is being talked about. Hopefully, there’s a live human managing your social channels to keep the engagement high. •L inks to your site from social media. When

social signals (traffic from social sites) turn into social shares, further value comes into play. People share good content and link to your site. Social media then becomes a huge win for SEO. •A mplification (shares by others). This is evidence your content resonates. Sharing provides “social proof,” which is a psychological phenomenon where people assume the actions of others in an attempt to reflect correct behavior for a given situation. We view a behavior as more correct in a given situation to the degree we see others performing it. •O pt-ins for “free helpful content.” One of the best ways to develop trust is to offer valuable tips/information at no charge in exchange for an email address. Have you explored this tactic? Have you considered a putting together a PDF with car buying tips? •V ideo views. How much time did people spend viewing your videos (such as walkaround or “how-to” videos)? How many watched each video all the way through? Increase Sales •F acebook ad spend vs results. Are you setting goals for Facebook ads? Does your vendor track these goals? How did each ad achieve its intended goal? •F acebook ad relevance. How did your offer resonate with the intended audience? •O rganic vs paid engagement. Are your posts resonating with your audience before you pay to promote them? •G rowth of audience who visited your website from social. Which campaigns brought the most visitors? •L eads. Are you tracking results using dedicated landing pages and lead forms? •C onversions. How many sales converted from Facebook ads? •R evenue generated. What is your monthly revenue earned from Facebook ads? Determining the costs and tracking the right social media metrics will provide the data to measure your actual return on investment. Use these recommendations to put optimal processes in place. Your marketing decisions will become better informed, your social media will be more successful and the puzzle pieces will finally fit together on social media ROI. Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc., which coaches, trains and delivers webinars focused on integrating social media and online reputation management into dealership operations. She can be reached at kathi@ krusecontrolinc.com.

WWW.IL-IADA.ORG JULY/AUGUST 2019 DEALER’S EDGE 7

INDUSTRY WATCH | By Auto Remarketing Staff

LATEST SAFETY FEATURES PIQUING INTEREST

RECENT

SURVEY

While your used inventory probably doesn’t have any self-driving cars – yet – your store already might have models containing the latest safety features a large number of consumers surveyed by CarGurus want. Along with gauging interest in vehicles having features such as a rear-view camera or blind-spot monitoring, the company’s newest automotive consumer research findings showed that over the past year there was a perception shift regarding self-driving cars. CarGurus learned consumers expressed greater enthusiasm for self-driving car development overall, and also showed a stronger likelihood of owning a self-driving car in the next 10 years. Specifically, the survey found: •R espondents excited about the development of self-driving cars increased from 21 percent in 2018 to 32 percent in 2019, and the respondents concerned about them decreased from 47 percent to 37 percent. •2 8 percent of respondents specified they could own a self-driving car in the next 10 years, more than double the 13 percent from last year. “Consumer sentiment around self-driving cars is changing fast, with enthusiasm rapidly replacing skepticism,” said CarGurus director of customer insights Madison Gross. “These benchmarked results demonstrate that today’s consumers are becoming more comfortable

CARGURUS

with the idea of either owning an autonomous vehicle, or having them on the road, and it will be fascinating to continue to monitor this perception shift.” While dealers cannot yet go to the wholesale market and find self-driving vehicles heading down the lanes, managers can offer vehicles that have advanced safety features some owners already have or hope to get in their next vehicle. CarGurus’ survey delved into that topic, too: •R ear-view camera: 34 percent already own and 43 percent extremely interested. •B lind-spot monitor: 11 percent already own and 61 percent extremely interested. •S urround-view camera: 4 percent already own and 51 percent extremely interested. •A utomatic emergency braking: 8 percent own and 45 percent extremely interested. •A daptive cruise control: 14 percent already own and 38 percent extremely interested. •L ane-keep assist: 8 percent already own and 41 percent extremely interested. •D river-attention monitor: 5 percent already own and 37 percent extremely interested. •A utomatic parking: 2 percent already own and 37 percent extremely interested. When looking into which companies consumers trust the most to develop selfdriving cars, the survey found Tesla remains atop the most trusted, and increased its lead

over last year. The next-most-trusted companies to produce a self-driving car are Toyota and Waymo. Seventeen percent of respondents selected “None” for which company they trust, which is a shift from the 27 percent in last year’s survey. CarGurus’ research looked into which vehicle owners would consider buying a self-driving car from their current brand, if it were available. Survey orchestrators found: •5 6 percent of Honda owners would consider buying a self-driving car from Honda. •5 1 percent of Toyota owners would consider buying a self-driving car from Toyota. •4 3 percent of Chevrolet owners would consider buying a self-driving car from Chevrolet. •4 1 percent of Ford owners would consider buying a self-driving car from Ford. CarGurus asked respondents whether they were ready to take a ride in self-driving cars provided by services such as Uber and Lyft. The survey showed: •3 5 percent of people who currently use ride hailing services are likely to take a ride from these services in a self-driving car. •O f those who currently use ride hailing services, 22 percent trust Uber the most to develop a self-driving car and 13 percent trust Lyft.

REGULATORY NEWS | By SubPrime Auto Finance News Staff

CFPB TARGETS COLLECTIONS

PROPOSING

NEW

FDCPA

The Consumer Financial Protection Bureau is setting its regulatory target next on debt collection in light of technology advances such as text messaging and more. The bureau issued a notice of proposed rulemaking (NPRM) to implement the Fair Debt Collection Practices Act. CFPB officials said the proposal would provide consumers with “clear protections against harassment” by debt collectors and “straightforward options” to address or dispute debts. Among other things, the CFPB explained the NPRM would set “clear, bright-line” limits on the number of calls debt collectors may place to reach consumers on a weekly basis as well as clarify how collectors may communicate lawfully using newer technologies such as voicemails, emails and text messages that have developed since the FDCPA’s passage in 1977. The bureau also noted its initiative would require collectors to provide additional information to consumers to help them identify debts and respond to collection attempts. “The bureau is taking the next step in the rulemaking process to ensure we have clear rules of the road where consumers know their rights and debt collectors know their limitations,” CFPB director Kathleen Kraninger said. “As the CFPB moves to modernize the legal regime for debt collection, we are keenly

RULES

interested in hearing all views so that we can develop a final rule that takes into account the feedback received.” Prior to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (DoddFrank Act), the CFPB explained Congress had not delegated to any agency the authority to issue substantive rules to interpret the FDCPA. The Dodd-Frank Act delegated that authority to the bureau. Officials reiterated their proposal would: • Establish a clear, bright-line rule limiting call attempts and telephone conversations: The proposed rule generally would limit debt collectors to no more than seven attempts by telephone per week to reach a consumer about a specific debt. Once a telephone conversation between the debt collector and consumer takes place, the debt collector must wait at least a week before calling the consumer again. • Clarify consumer protection requirements for certain consumer-facing debt collection disclosures: The proposed rule would require debt collectors to send consumers a disclosure with certain information about the debt and related consumer protections. • Clarify how debt collectors can communicate with consumers: The proposed rule would clarify how debt collectors may lawfully use newer communication technologies

to communicate with consumers and would protect consumers who do not wish to receive such communications by, among other things, allowing them to unsubscribe to future communications through these methods. The proposed rule would also clarify how collectors may provide required disclosures electronically. In addition, if consumers want to limit ways debt collectors contact them, the rule clarifies how consumers may easily do so. • Prohibit suits and threats of suit on timebarred debts and require communication before credit reporting: The proposed rule would prohibit a debt collector from suing or threatening to sue a consumer to collect a debt if the debt collector knows or should know the statute of limitations has expired. The proposed rule also would prohibit a debt collector from furnishing information about a debt to a consumer reporting agency unless the debt collector has communicated about the debt to the consumer, such as by sending the consumer a letter. The proposed rule can be found at https://files. consumerfinance.gov/f/documents/cfpb_debtcollection-NPRM.pdf. Officials said the public is invited to submit written comments on the proposed rule. The bureau said it will carefully consider comments received before a final regulation is issued.

WASHINGTON UPDATE

NIADA GOVERNMENT UPDATE | By Shaun Petersen

LATEST

GOVERNMENT

ISSUES

AND

Sen. Marsha Blackburn

LEGISLATIVE Sen. Thom Tillis (R-N.C.) has introduced a bill to delay the new accounting standards for financial institutions – including Buy Here-Pay Here dealers – scheduled to take effect in 2020. The current expected credit loss (CECL) standard, which was issued by the Financial Accounting Standards Board in 2016, relies on an estimation of expected losses over the life of loans. The current standard, known as allowance for loan and lease losses, is based on losses already incurred. S.1564, which has six cosponsors, would stop implementation of the new standard while the Securities and Exchange Commission and other financial regulators study the potential impact of switching to CECL, including its effect on small financial institutions such as credit unions, the availability of credit and the risks to the U.S. economy. The proposal would also require a costbenefit study to determine the impact of CECL on nonfinancial institutions, insurers and government-sponsored enterprises. The Senate bill was introduced after a letter co-written by Rep. Roger Williams (R-Texas) and signed by a bipartisan group of 25 legislators – including Rep. Henry Cuellar (D-Texas) – was sent to the SEC expressing concerns that the new standard would adversely affect the availability and cost of credit. The bill was quickly endorsed by finance industry associations, including the American Bankers Association and the Credit Union National Association. REGULATORY CFPB proposes Debt Collection Rule: Debt collection, which has been on the Consumer Financial Protection Bureau regulatory radar for the past year, is now on center stage after the CFPB issued a notice of proposed rulemaking to update Fair Debt Collection Practices Act. The proposed rule is designed to account for recent advances in communications

10 DEALER’S EDGE JULY/AUGUST 2019 WWW.IL-IADA.ORG

ACTIVITY

NIADA is your voice in Washington D.C., advocating for independent dealers, the used vehicle industry and small business. Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities.

Sen. Thom Tillis

technology that didn’t exist when the law was enacted in 1977, such as text messaging, email and voicemail. The bureau said the rule would set “clear, bright-line” limits on the number of calls debt collectors can make to consumers per week and clarify how debt collectors can communicate with consumers through various technologies – including allowing them to opt out of various methods. It also spells out disclosures collectors must make to consumers about their debt, limits lawsuits and threats to sue, and requires a debt collector to notify consumers before providing information about a debt to a consumer reporting agency. While the CFPB’s proposed rule would apply only to third-party collectors and would not affect independent dealers collecting their own debt, NIADA is seeking to avoid having this proposal set a precedent for future rulemaking governing first-party creditors servicing their own accounts. NIADA, working with the Buy Here-Pay Here Commission, is considering filing comments. FTC revises Safeguards Rule: The Federal Trade Commission has proposed amendments to revise its Safeguards Rule, which requires financial institutions to protect the security of their customers’ information. The revisions include significant changes, tightening the requirements to be included in the comprehensive information security program mandated by the rule and requiring encryption of all customer data as well as access controls and multifactor authentication to help prevent unauthorized users from accessing customer data. The proposed amendments are not without controversy, having been approved by the commission by a narrow 3-2 vote, and there has been talk about adding an exemption for small businesses. Commissioners Noah Phillips and Christine Wilson issued a dissenting statement, expressing concerns about, among other things, the “one size fits all” approach taken

by the proposed rules, noting the cost of implementing them and how that could disproportionately affect small businesses. The FTC is accepting public comment through August. NIADA is in the process of studying the amendments and their impact on independent dealers and plans to submit comments.

PAC NIADA met with freshman Sen. Marsha Blackburn (R-Tenn.) during her recent visit to Dallas to discuss issues affecting the used vehicle industry – notably the much-debated issue of open recalls. It was the association’s first meeting with Blackburn as a Senator. In November, the former eight-term U.S. Representative became the first woman elected to the U.S. Senate from Tennessee. She is a member of the Senate Committee on Commerce, Science and Transportation – a key committee that has jurisdiction over the recall issue. We look forward to more conversations with Sen. Blackburn in the future. GRASS ROOTS Bills have been introduced in both houses of New York’s state legislature that would ban the use of starter-interrupt devices by auto dealers. In response, NIADA and the New York IADA met with the sponsors of both bills – Assemblyman Michael DenDekker (D), author of Assembly Bill 3897, and Sen. Timothy Kennedy (D), who introduced SB 758 – to educate them on how the devices are used, what they can and cannot do, and their benefits to consumers and the subprime industry. Both legislators agreed to engage NIADA and NYIADA in additional conversations to further discuss best practices and potential model legislation. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.

ACCELERATE |

By GWC Warranty

MAKE IT A BIG YEAR WITH A MENU

LAND

VSC

SALES

Selling more service contracts and higher quality F&I products all starts with how you present them to customers. If you do it right and do it often, you stand to make big gains in the F&I office. It’s been proven time and again that running through your menu of service contract options in a strategic way is the best way to land more VSC sales. Stick to the plan and you can look forward to a profitable uptick in F&I business. Consistency Is Key A menu sell is going to work if you do it every time with every customer. Anything less and it’s nothing more than a shot in the dark. You won’t land a VSC sale every time, but your chances only improve with each time you go through the full presentation – not to mention the practice you get along the way. Start From the Top Executing a masterful menu sell starts at the highest level of coverage you offer. Working your way backwards through the menu highlights the components and coverages that

drop off as you decrease the coverage level. This points customers in the direction of making a decision on what certain components and coverage perks are worth to them. And when a customer makes the decision on their own they’re more likely to feel they bought something rather than being sold something. Ask the Right Questions It’s important to tell a story to help customers understand why they need a VSC. The best way to go about this is to ask questions to understand what matters to a customer. Are they looking for a commuter car? Or maybe it’s a customer who prioritizes style and image. Whatever it is, digging in to understand what customers find important about their

vehicles can shape your story. For the commuter, you can sell practicality and protecting their job. For the imageconscious buyer, a VSC helps protect their investment and get the vehicle back on the road quickly.

COMPLIANCE MATTERS | By Digital Authority Partners

BUILDING AN ADA COMPLIANT WEBSITE

QUICK

GUIDE

Lawsuits targeting business websites with ADA violations are on the rise. In fact, the number of ADA lawsuits filed in federal court for alleged website violations reached a record of over 10,000 in 2018, a 34 percent increase from 2017. You risk steep fines if your car dealership’s website is not ADA compliant. Your first violation could cost anywhere from $55,000 to $75,000, not to mention the potential revenue loss from failing to cater to the nearly 50 million adults in the United States living with some form of disability. It pays to comply with ADA regulations, but more importantly, it’s the right thing to do. What does it mean to have an ADA compliant website? Title III of the Americans with Disabilities Act stipulates businesses must provide a website experience that works for all citizens – including those with disabilities. This means having a site that accommodates users with visual impairments, as well as those with hearing, motor, and cognitive impairments. Here are four critical steps to ensure your website is ADA compliant.

12 DEALER’S EDGE JULY/AUGUST 2019 WWW.IL-IADA.ORG

Ensure your website can be easily navigated with a keyboard. Users with disabilities may have trouble gripping a mouse, but they can still operate the computer using another limb, their eyes, a headpointer or a mouth stick. Ensure users can perform all tasks on your website using a keyboard. This includes everything from page navigation to clicking on a link or button, selecting a radio button, or scrolling through the website’s menu. Use alternative text on graphics. Blind or visually impaired users need software applications called screen readers to make sense of your website. Screen readers rely on alternative text or metadata included in the website code to “translate” images to users. Alternative text should be 125 characters or less to be compatible with most screen readers. As an example, alt text for the image of a vehicle should include the vehicle type, color and other background details. Make your forms accessible. All website forms need to be easy to understand and fill out by those with disabilities. This can be achieved by adding

text labels to your forms such as “textbox,” “checkbox,” “radio button,” and “menu.” Provide clear instructions about what actions you expect users to take, such as “request a quote” or “apply for financing.” Don’t place time limits on your form. This allows users with disabilities to complete actions at their own pace. Additionally, all forms should have easy-to-see error messages with steps on how to fix them. Fix your language. You can program the language of your website’s content by using the HTML language attribute, allowing screen readers to read content out loud with the correct pronunciation. For example, without the language attribute, a screen reader pronouncing a German car brand would sound like a tourist who doesn’t speak the language, causing confusion for the listener. Use proper color contrast. You also need to ensure adequate color contrast. Reading brown on a black background is hard enough for a normal user, but almost impossible for those who are color blind. According to the Web Content Accessibility Guidelines standard for color contrast, a 4.5:1 ratio between text or images and background is required. All customers and website visitors deserve a great online experience. Designing an accessible website should be one of your top priorities in 2019. If you don’t have the expertise to fix ADA compliance issues inhouse, consider working with an agency. Digital Authority Partners can help you build a userfriendly, ADA compliant website. Contact us at hello@ digitalauthority.me or (312) 600-5433 to get your ADA audit today.

MARKETING MATTERS | By Kenny Atcheson

ANOTHER STRATEGY MAY GET REGULATED

THE

FUTURE

RINGLESS

A new court case may have major implications for an effective and inexpensive strategy. First, here is a history of a few other historical examples. Text marketing offers 90 percent open rates – better than anything else. Businesses learned of these high open rates and quick response rates from marketing companies such as Dealer Profit Pros and a lot of dealers started doing it. Consumers got annoyed and wrote letters to Congress. As a result, Congress and/or FCC heads made it tougher to succeed by texting customers. Popups on websites were all the rage when they were first devised. They couldn’t be ignored. Well, popup blockers took care of that. Google Adwords even made it against their terms and conditions to send an ad that contained a popup to a page. Facebook Ads offered great targeting. Facebook has more information on Americans than the federal government. I did some pro bono work for a new Christian preschool in my area. I was excited to use targeting based on “geographical location,” “parents with kids between the ages of 1 and 5,” and “parents who identify as Christian.” There was only one problem. Facebook removed the religious affiliation targeting. They’ve since removed lots of other targeting after Zuck’s visit to Congress. Cold-calling – although a pain – was effective and had no cost other than labor. If it was being done by a commission-only salesperson there was no upfront cost – only commissions paid after the sale. It was great. Then government muckety-mucks came up with the Do Not Call list. And now a new court case… When ringless voicemail first came out, I jumped for joy. It was fast, inexpensive, and a whole lot less annoying than robocalls. Even if robo-calls were 100 percent legal and compliant, I don’t like using them because nearly everyone is annoyed by them. (*Pro tip: don’t annoy potential customers.) A ringless voicemail is as it sounds. Ringless voicemail providers assured, “You can get tens of thousands of voicemails to potential car buyers without their phone

VOICEMAIL

ringing, within minutes for very little money – and they won’t know it’s automated.” Personally, I have found most consumers are not fumed by receiving voice messages, but they despise robo-calls. Unfortunately for advertisers, the U.S. District Court for the Southern District of Florida has concluded ringless voicemails are “calls” under the TCPA and therefore subject to its regulations. In the Schaevitz v. Braman Hyundai, Inc. case, the dealership used a ringless voicemail provider to transmit unsolicited pre-recorded voicemail messages to individuals’ cell phones. None of this article is meant to be legal advice. I am not an attorney. However, in my personal opinion, this Florida case could lead to nationwide recognition of the outcomes of the case, meaning the Do Not Call list will apply. What Does it Mean? This article is not meant to discourage or encourage any of the strategies mentioned thus far. Many still work well, just not as well as they used to because of regulations. Or they require further analysis and rules to be adhered to. There are definitely two things every dealer should do: • Use a multi-media approach. The more media strategies you use, the less likely a new rule, regulation, or law will affect your business. In addition, different people respond to different types of media. • Use strategies that will never be outlawed or overly regulated. Direct mail and referrals are two of those strategies. The United States Postal Service is not going anywhere. It legally has to exist. There are a number of advantages to using direct mail in our 2019 Direct Mail Quick Tips Guide. Email jean@DealerProfitPros.com if you would like a free copy. Referrals won’t be outlawed either. There may be limitations on paying for referrals (check with your attorney) but word of mouth will always be effective – if you treat people awesomely. Kenny Atcheson is the founder and president of Dealer Profit Pros and author of Marketing Battleground: How to Deploy Under-the-Radar Strategies to Explode Your Profits. His website can be found at www. DealerProfitPros.com.

ACCELERATE |

By GWC Warranty

VEHICLE PHOTOS THAT SELL

SET YOUR INVENTORY APART

Every picture you take of your inventory and post online can be the one click that sells a car or sends your customers on to a competitor’s website. When it’s time to get your camera ready for that new score from auction, be strategic to make sure your customers see everything that’s good about your inventory. Focus on the Details Things like tire treads, shots of clean engine compartments, high-quality stitching on upholstery and other small items can show your attention to detail that will attract customers and save them on repairs after the sale. These items may seem small, but can give the customer the impression they’re buying a meticulously maintained vehicle.

Highlight Your Reconditioning You spend valuable time and money on getting your cars ready for primetime. Show this to your customers. You can even go as far as to show off an invoice or list of work done on the car to get it ready. It shows your customers how this car can stand out from similar models on sale elsewhere. Try Video A tool like Covideo gives you the ability to bring a standard vehicle walk-around to life. It gives you the ability to give your customers a firsthand look at the car. You can take them behind the wheel, in the seats and up close with every bell and whistle to show it off like a photo never could. WWW.IL-IADA.ORG JULY/AUGUST 2019 DEALER’S EDGE 13

SALES MATTERS |

By John Chapin

BUILDING A SUCCESSFUL (SALES) CULTURE

FOUR

FEATURES

You just hired the perfect person: great work ethic, positive and upbeat. They show up early, leave late, take 10 minutes of a 15-minute break, and do more than expected and more than you ask for. Now let’s take that person and put them into an environment where people are negative, aren’t held accountable, take three days off for a hang-nail, show up at 8:05 then spend 45 minutes “getting ready” for their day, start preparing to leave at 3:30 and leave at 5:00 like there’s a fire drill. What happens to that perfect hire? One of two things: they either become just like everyone else after about a month, or they leave. Whatever your culture is, it has a substantial impact on performance. There is significant peer pressure to conform to the culture, be it good or bad. This peer pressure is one of the four main motivators for people who belong to any group. Positive peer pressure is what took my grades from C’s in public high school to A’s and B’s in private high school. It’s also what ensured I made over 200 phone calls per day in my first job as a stockbroker. If you’re a great team or organization with a great culture, fantastic. Unfortunately, most organizations have negative cultures, or at least elements of them.

F EATUR ES O F GR E AT C ULT UR E S Great Leadership Culture is top down. It begins at the top and flows down through the entire organization. Whatever the leadership team eats, breathes, walks and talks related to culture will become the culture. As a leader, you don’t get what you want, you get what you tolerate and allow. And what you tolerate and allow you tacitly condone and get more of. If you allow people to miss their numbers year after year, when it’s evident they aren’t making the calls and doing the necessary work, you’ll get more of that. If you allow negativity in the workplace and don’t hold people accountable, you’ll get more negativity and more people not doing their job. On the flip side, if you lead by example, walk your talk, believe in people more than they believe in themselves, empower them, listen to them, give them all necessary tools and resources, and hold them to a higher standard, you’ll get more of that. Rules and Decrees The culture in an organization is how people treat other people, how they treat work, and how they treat the work environment. Great cultures have rules and decrees regarding these three items – written rules and decrees.

14 DEALER’S EDGE JULY/AUGUST 2019 WWW.IL-IADA.ORG

GREAT

WORK

CULTURE

Here are a few examples: • E veryone is expected to show up on time, work until the end of the day, finish what they start, be honest, have integrity, and put in a full day’s work for a full day’s pay. • E veryone will be held to the highest professional and ethical standards. There is no place in the workplace for negativity or unprofessionalism. You will be respectful to all employees and clients. Gossip, talking, and otherwise communicating behind someone’s back won’t be tolerated. • W e are a great organization with a great product. We take better care of our clients than the competition because we care more. Your rules and decrees, totaling about eight to 15 in number, should be framed and prominently posted in several highly-visible areas in the workplace on a document titled: Rules and Decrees of the Workplace. Prospective employees should also receive a copy of these during the interview process and you should have a conversation with them about how they feel about these. By the way, full acceptance of the rules and decrees is a non-negotiable prerequisite to being hired. Everyone is on Board with “All In” Commitment When Malcolm Butler was limited to a few special teams plays in Super Bowl 52, many people said that move cost the Patriots the Super Bowl. Maybe. My contention is that had they let him play and won Super Bowl 52, the Patriots would not have been back to play in Super Bowl 53. No one who breaks the rules gets a pass. If this is allowed even once, people inside the organization start to question the integrity of the culture, and the culture starts to crumble. When you’re more interested in winning, or making a sale, than living by your values, it’s the beginning of the end. Again, no one gets a pass on the rules, not even your top sales rep.

This doesn’t mean people don’t get a mulligan. You can allow a mistake or two, but address it immediately, and keep the leash short. Don’t allow chronic offenders who are making blatant and/or repetitive mistakes. While an occasional mistake may be inevitable, carelessness, ignorance, and apathy aren’t. Culture is a Living, Breathing Organism A great culture can’t simply be written out, placed on the wall, and left to die. It needs to be kept alive and well by visiting it often, talking about it, and reviewing it. Repetition is important, because like any new habit it will take time to imbed the culture into the consciousness and sub-consciousness of everyone in the organization. Once it’s locked in and habitually followed, discussing the culture keeps it on everyone’s radar and ensures it is remembered and adhered to. Also, it may be necessary to tweak some rules or decrees from time to time. Though many rules and decrees aren’t likely to change, there may be times when changes in people, technology, and other unforeseen future events make an edit necessary. Finally, you build a great sales culture by building a great overall company culture. As part of the organization, the sales department is included in all rules and decrees. Everyone, from leadership to the mailroom, must be on the same page when it comes to culture. So, while the sales department may have some additional rules and decrees related to activity, quotas, and other items, building an all-in, solid organizational culture is what will ensure the success of the sales culture. John Chapin is a sales and motivational speaker and trainer. He has over 31 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. For more information, visit www. completeselling.com or email johnchapin@completeselling.com.