DEALER NEWS
MASSACHUSETTS/NEW ENGLAND INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION
MAY/JUNE 2018
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DALLAS, TEXAS Permit No. 2079
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SAFETY WATCH |
FORD RECALLS FUSIONS, FOCUSES
Clutch May Fracture
Ford Motor Co.is recalling 5,361 201314 Ford Fusion vehicles equipped with a 1.6L GTDI engine and 6-speed manual transmission and 2015-16 Ford Focus vehicles equipped with a 1.0L GTDI engine and 6-speed manual transmission. Also included are four 2017 Ford Focus vehicles that had clutch replacements with potentially affected parts. The clutch may fracture, resulting in damage to the transmission assembly and possibly a transmission fluid leak. Ford will notify owners, and dealers will update the Focus vehicles with software that detects and prevents prolonged clutch slip, and will replace the clutch, as necessary, free of charge. Owners of Fusion vehicles will have their clutch assembly replaced free of charge. Parts are not currently available. Owners will be notified of the recall with an interim notification that began March 26. A second letter will be mailed when the remedy is available, currently expected to be in the second quarter of 2018. Ford's number for this recall is 18S07.
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HOW TO CONTEND _ _ AND WIN AGAINST BIG COMPETITION Level the Playing Field
Being an independent dealer in a world of new big box stores, online retailers and nearby competitors can feel like being the small fish in an ocean of competition. You can level the playing field, though, with nothing more than an open mind and a willingness to adapt. Keep It Simple And by this, we mean keep it simple for your customers. Is it easy for them to get to your website? Is your inventory laid out in a way that’s intuitive for customers to browse? Can they contact you with just one click and limited information? Today’s customer wants the information they need exactly when they desire it. Your website is the most important piece in making sure they get information quickly and easily. Merchandising As an independent dealer, you don’t have the luxury of manufacturer certified preowned programs. But that shouldn’t stop you from merchandising your inventory the same
way. This goes for both on the lot and online. Having a certified pre-owned program in place helps you make the same promises as bigger stores while giving your customers the confidence that comes with the perception of a certified vehicle. Communication Flexibility Not every customer will want to send messages through web form. And not every customer will want a phone call. Some will want to send you a Facebook message, others might want to tweet at you and some might want a text message. Being able to communicate with your customers in their desired format lets you reach more potential leads. But it’s dependent on your commitment to learning how to communicate in all these different formats. Unique Experience The advantage an independent dealer will always have over bigger competition is a truly unique experience customers can’t get anywhere else. When done correctly, independent dealers can offer a more intimate, lower-pressure experience than big box stores to go along with a friendly local feel that only an independent dealer can provide. Once you’ve used tools and merchandising to attract the same business as bigger competition, use your friendly, comfortable environment to bring it all home.
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INSIDE 08.................................................NIADA Convention Preview 10.................................57 Million Vehicles with Open Recalls 12.............................................................................Collections 13...........................................Get Certified or Get Left Behind 14................................................. NIADA Government Report 18............................................................Don’t Step on a Rake
WHAT’S NEW
NIADA NABD Convention & Expo Register Now! Registration is open for the NIADA/NABD Convention & Expo, June 18-21 in Orlando! With the forces of NIADA and NABD combined, it promises to be the most robust convention yet. Learn more and register today at www.niadaconvention.com.
ADVERTISERS INDEX
ADESA ................................................................................ 15 Alliance Inspection .............................................................. 13 AmTrust Financial.................................................................. 9 Auto Auction of New England ...........................................IBC AutoZone ............................................................................... 5 Central Mass AA.................................................................... 3 Lynnway Auto Auction....................................................... 6, 7 Manheim ...............................................................................11 NextGear Capital ................................................................. 12 Southern Auto Auction....................................................... IFC vAuto .....................................................................Back Cover
OFFICE
For information on how to become a member of MIADA, please contact Melissa Otis at 781-278-0077 or director@miada.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 MA/New England Dealer News 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 Dealer News or NIADA. Likewise, the appearance of advertisers, or their identification as members of MIADA or NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2018 by NIADA Services, Inc.
STATE MAGAZINE MGR./SALES
Troy Graff • troy@niada.com EDITORS
Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT
Christy Haynes • christy@niada.com PRINTING
TEST DRIVES HELPING KEEP SHOPPERS IN DEALERSHIPS With all the talk lately of buying cars completely online – and an apparent willingness from consumers to take this leap –
shoppers low in the sale funnel, or early in their vehicle consideration process, still seem to favor dealerships. An Autolist survey, the results of which were released in conjunction with the recent 2018 NADA Show, found the majority of consumers aren’t ready to move the entire car-buying process online. In fact, 66 percent of respondents to the survey – which polled 1,095 car shoppers in March who are in the market for new and used vehicles – said they are “unlikely” or “very unlikely” to purchase a vehicle completely online without ever seeing it in person. So what’s keeping consumers coming to dealerships? According to the survey results, the answer is test drives. In fact, 63 percent of respondents said the primary reason they would visit a dealership was to test drive a vehicle. And that’s apparently where customer satisfaction with the dealer experience is highest as well. On the other hand, one of the least enjoyable parts of visiting a dealership for new car customers? You guessed it – the financing process.
EXECUTIVE COMMITTEE PRESIDENT Juan Mendez JC Auto Sales
Bob Shaw Sr. Shaw Auto Leasing
Rich Copponi Auto Use/Auto Loan
VICE PRESIDENT Bob Baker Jr. Dorchester Motor Sales
Dana Duchak Lynnway Auto Auction
Tim Hoegler Manheim New England
TREASURER John Perro Perro’s Auto Sales
Dave Chandler Toy Store Auto Sales
Harold Proodian Wagner Group
SECRETARY Brent Landes Landes Family Auto
Luke Semmelrock Central Mass Auto Auction
Robert Shedd II The Auto Brokerage
Rick Schneider The Garage
Steve Newcomb Royal Administration
EXECUTIVE DIRECTOR Melissa Otis director@miada.com
PAST PRESIDENTS
Steven Carnes - Worldwide Preowned LLC Tim Collins - Quincy Auto Auction Eddie Coolbrith - S & E Auto Ron Dial - Dialworks Phil Greenstein - Keystone Automotive
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Interestingly, this ranked even lower than the process of negotiating a vehicle price. And consumers want to speed up the transaction process as well. According to the Autolist poll, the part of the buying process consumers wanted to see improved upon the most was the time it took to complete the transaction. A third of survey respondents said it was the No. 1 area where dealers could improve. Consumers also noted dealerships could serve to improve “the helpfulness of their salespeople and the vehicle information provided during the browsing process.” Perhaps one element not often thought of in consideration with consumer expectations is dealership size, but according to the Autolist survey it certainly plays a role. “While consolidation and corporate groups are quickly overtaking what was largely a family-run business network, buying from a national chain isn’t important to a majority of shoppers,” AutoList analysts said. Specifically, 63 percent of respondents said it wasn’t important to them the store be part of a national chain.
BOARD OF DIRECTORS
CHAIRMAN OF THE BOARD Bob Hayes Auto Town Rentals Inc.
Nieman Printing
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Recent Survey Results
MARKET WATCH | BY AUTO REMARKETING STAFF
Dan ElDourihi 1A Auto Sales Pierrot Abiramia Milford Auto Mall
Don McKenna - Patriot Motors Inc. Fred Moschetto - Moschetto Brothers Inc. Louis Tedeschi - ASPI Motor Cars John Eleftherakis - John’s Auto Sales
TEE UP for Disabled & Limbless Veterans! Monday, August 13, 2018 Tournament Schedule
Granite Links Country Club
Registration and Lunch - 12:15 Cocktail Reception - 6:30
Quincy, MA
26th Annual Golf Tournament
MIADA
Cost $175/person $700/foursome $49/dinner only
Dinner - 7:15
Always a sell out! Register early as space is limited!
Help Support the work they do with Veterans and their families.
For More Information Contact MIADA at director@miada.com 781-278-0077
dlvma.org
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ASSOCIATION NEWS | BY ANDY FRIEDLANDER
For the past several years, NIADA has worked hard to top itself when it comes to the annual NIADA Convention and Expo.
While it hasn’t been easy, that goal has been met. Attendance has risen for each of the past five conventions, with the past two setting alltime records in that category. The 2017 event had more attendees, more exhibitors and more education sessions on more topics than any in the convention’s 71-year history. Clearing such a high bar takes extreme measures. And so, NIADA has gone mega. That’s mega as in MegaConference – for the first time ever, a showcase for the combined resources of NIADA and the National Alliance of Buy Here-Pay Here Dealers, which was acquired by NIADA in December. The acquisition was the impetus for merging NABD’s traditional May conference into NIADA’s Convention in June, which will create what is expected to be the largest event in the used car industry, one that will provide unmatched resources for independent dealers and allow you to Rewrite the Playbook for success. That event – the NIADANABD Mega-Conference, officially known as the 72nd NIADA Convention and Expo – is coming up June 18-21. After nine years in Las Vegas, it’s moving for 2018 to a brandnew venue, the luxurious Rosen Shingle Creek Resort in Orlando, Fla. So what exactly is a MegaConference? It is some 60 education sessions, the most ever for an NIADA event, covering every aspect of independent dealership operations in five distinct educational tracks – Retail, BHPH, Legal and Regulatory, CPO and an allnew Digital Marketing track. It is sessions exploring new developments and best practices in inventory acquisition, sales, marketing and advertising, F&I, collections, technology, social
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NIADA GOES MEGA NABD Joins NIADA Convention and Expo to Create the Used Car Industry’s Largest Event – the Mega-Conference
media, cybersecurity and so much more, led by the industry’s best and brightest experts – including NIADA’s own Justin Osburn. It is the top-of-the-line BHPH-specific training attendees of NABD conferences have come to expect over the years, featuring NABD founders Ken Shilson and Ingram Walters, NIADA BHPH gurus Chuck Bonanno, David Brotherton and Mark Dubois, and many more of the Buy Here-Pay Here world’s top minds. It is Wednesday afternoon’s Financing Fair, a chance for you to meet one-on-one with a variety of finance companies to discuss your specific problems – and to find solutions. It is the new Marketplace Keynote Series, offering the insights of some of the industry’s most prominent leaders, thinkers, innovators
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and disruptors about where the used car market is now and where it’s headed, as well as cutting-edge ideas on how you can take advantage of those conditions. It is by far the largest Expo Hall in NIADA Convention history, featuring more than 210 exhibitors offering the latest state-of-the-art products and services to help keep you ahead of the pack in today’s ultra-competitive used vehicle market. It is the boundless enthusiasm of keynote speaker Dick Vitale, appearing courtesy of CARFAX. Known to basketball fans for his energy, wit and colorful descriptions of players and plays, Dickie V’s entertaining message of overcoming life’s challenges and obstacles is nothing short of “awesome, baby!” He’ll speak Tuesday afternoon and will meet attendees at the CARFAX
booth during the Expo Hall’s Grand Opening Reception that evening. And, of course, it is the traditions that have become an essential part of the NIADA Convention and Expo, beginning with the popular Cigars and Martinis welcome reception Monday night, featuring a tailgate party theme. We’ll honor the industry’s best at Wednesday night’s National Leadership Awards banquet – including Crystal Eagle membership awards, the CPO Dealer of the Year the NABD BHPH Hall of Fame’s latest inductee and the NIADA & Cox Automotive Community Service Award – leading up to the climactic announcement of the National Quality Dealer of the Year on Thursday night. And we’ll close the event in style with a rocking After Party featuring live music. Your chance to go mega by attending the NIADA-NABD Mega-Conference is here now. You can register online at www.niadaconvention.com, and if you do it by May 18, you can get the Early Bird rate of $549. And don’t miss out on group discount opportunities for additional attendees from your dealership. Due to the immense interest in this event, NIADA is offering two options for accommodations. Because the Rosen Shingle Creek is almost sold out, NIADA has secured a block of rooms at the nearby Rosen Centre as well – with transportation to and from the Convention venue provided. But hurry – the deadline for reservations is May 18. For reservations at the Rosen Shingle Creek, call 1-866-996-6338 and use the group code GRP2018NIADA. For the Rosen Centre, call 1-800-204-7234 and use group code GRPNIADA2018. Don’t miss out on this great opportunity. Register and make your travel plans now. For more information about the 2018 NIADA Convention and Expo, visit www.niadaconvention.com or www.bhphinfo.com, or call 800-682-3837.
INDUSTRY WATCH | BY CARFAX
57 MILLION VEHICLES IN U.S. HAVE OPEN RECALLS New Research from Carfax Millions of vehicles being acquired, retailed and serviced by dealers this year may have potentially dangerous unfixed recalls. According to Carfax, more than 57 million recalled vehicles – more than one out of every five vehicles in the U.S. – currently are in use across the country. The company’s annual research suggests the southern parts of the country are most likely to have cars with open recalls. Southern states like Texas, Mississippi, Louisiana, New Mexico, Alabama and Arizona are some of the top states with the highest open recall percentages. California, Texas, Florida, Pennsylvania and New York have the most vehicles with open recalls. “For more than two decades, Carfax has supported the manufacturers’ efforts to get recalled cars fixed,” said Carfax president Dick Raines. “Every day we help thousands of dealers identify vehicles with open recalls. We also alert millions of drivers about
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recalls on their vehicles so they can bring them to dealers to be fixed. Safety is our number one concern.” Carfax offers free services to help notify dealers and about open recalls. Carfax Advantage dealers have their inventory continuously monitored for recalls by Carfax free of charge and get regular reports identifying which vehicles have open recalls. Making this information readily available for dealers can help boost closure rates of open recalls. In addition, registering customers with myCarfax helps keep those drivers informed about recalls. For dealers with service bays, registering customers for myCarfax also comes with free benefits that help increase customer loyalty and retention. The new data also suggests that work-life balance may be a factor for some vehicle owners not knowing about a recall or getting it fixed. Light trucks and SUVs – vehicles often used by businesses and busy families – are the ones most likely to have unfixed recalls.
Recently in Vegas, Carfax checked cars for open recalls at a local DMV. They spoke to several people whose vehicles had open recalls they knew nothing about until Carfax showed them. “Carfax told me the car had an open recall. I found out that it was the driver’s airbag,” said consumer Robert V. in Redmond, Ore. “After purchasing the car it went to the local BMW dealer where it was replaced in less than an hour. I was treated royally, chatted about the car and soon was on my way. I did appreciate knowing beforehand.” Dealers can inform online shoppers about open recalls by listing their vehicles for sale on Carfax Used Car Listings. Every vehicle listed for sale on carfax.com includes the Carfax Report dealers run for each vehicle, which includes open recall information reported to Carfax and helps consumers buy with confidence. Editor’s note: Recall statistics for your area are available upon request. For more information, visit www.carfaxonline.com or call 888-788-7715.
F&I MATTERS | BY SCOTT BATES, CPA
M RE 90
%
MOBILE BUSINESS
TOOLS AND TECHNOLOGY TO HELP ME MANAGE BUSINESS MY WAY* BILLY GRAHAM GRAHAM AUTO SALES LOGANVILLE, GA
Smart. Simple. Fast. Learn how Billy gets MORE at nextgearcapital.com
*This testimonial was received via interview, audio and/or video submission. This testimonial is based on this dealer’s individual experiences, reflecting real life experiences of a NextGear Capital dealer. NextGear Capital does not claim they are typical results that dealers generally will achieve. This dealer’s experiences may not be indicative of future performance or success of any other dealers. Some of the testimonial has been shortened so the whole message is not displayed due to length and/or relevance.
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COLLECTIONS The Key is Relationship Collections best practices are designed to increase the number of payments received on every contract – increasing cash flow and potentially increasing sales from referrals. A shut-off box on a car is no substitute for good collections practices. You are also discouraged from making field calls, as it can violate CFPB rules – not to mention be potentially dangerous. The key is to make your payment a top priority in the mind of the customer – specifically because customers trust and perceive your dealership is willing to work with them to find a solution. Nothing can really motivate a customer to pay for a car except a strong relationship. This approach is harder than billing and repossession. It takes a different mindset among your collections and service staff, but it can be efficient if you establish a positive rapport and understanding from the beginning of the transaction. Your process and paperwork should be consistent and clean every time, no matter who is closing the deal. Emphasize that you expect payments on or before the agreed due dates. If you can, set up an electronic funds transfer with customers around their payroll time. You can’t require it, but you can make it attractive by offering a discount. Outline the process of what will happen if they can’t pay on time. If the car malfunctions or if they need to refigure the payment terms due to a change in circumstances, talk through those situations, too. Establish a clear process for communicating, which in some cases may be opt-in text messaging. You can now use SMS for automatic payment reminders, service reminders and late payment notices. In any and every case, keep the lines of communication open. Follow up with a check-in call. Congratulate customers on their purchase
and ask them if they have any questions. Make it clear your team is there to help so their first contact with you is positive, rather than a delinquency call. Provide clear contact information for customers to reach their “account rep.” A strong closing process with full disclosure followed by a welcome checkin call reduces the need to chase down payments, and also increases the number of payments made. This won’t happen on every transaction. There will still be cases of repossession, but dealers can reduce the chances. A full inventory of cars is not what you want. Deal with service issues quickly. One of the biggest reasons customers stop making payments is that the car has a problem. Make it clear during the closing process that any issues with the car will be handled, whether through a limited warranty or service call. Depending on the issue and timing, work out how the customer will participate in paying for the service. Calculate the cost of the repair against the benefit of more monthly payments, and often the benefit is on the side of more monthly payments and a happy customer willing to refer your dealership to friends and family. Keep in mind that your inventory is not your biggest asset – your portfolio is the golden egg. Accounts need to be worked every day by collections. Don’t just wait for the phone to ring. A 30-day past due notice equals four to six missed payments. If you have 100 accounts, a good rule of thumb is to have four collections staff and one part-timer in the wings to pitch in when necessary. Scott Bates, CPA, is a partner in the audit practice and leads Cornwell Jackson’s Business Services Department, which includes a dedicated team for outsourced accounting, bookkeeping and payroll services. Contact Scott at scott. bates@cornwelljackson.com or 972-202-8000.
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| BY GWC WARRANTY
GET CERTIFIED OR GET LEFT BEHIND
Having a Certifed Program is No Longer an Option
Every customer who hears “Certified Pre-Owned vehicles” instantly equates that with a more confident purchasing decision. But the power behind Certified programs isn’t limited to major manufacturers. With the right program and process in place, dealerships of any kind can cash in on the cachet behind the Certified name. These days, having a Certified program is no longer an option. Without one, your dealership runs the risk of being left in the dust. With independent dealers joining in on the Certified trend, it’s now more about how you execute your Certified program than just having one and hoping it sets you apart from competitors. Even the Playing Field If you don’t have a Certified program today, you run the risk of falling behind the industry. Independent dealers now have access to Certified programs, meaning more dealers than ever before are jumping on the bandwagon. If you look around at competition and see Certified programs popping up, it’s time to get on board before you get lapped by the field.
Marketing Power The term Certified provides a powerful lead generation tool for you. Customers see value in Certified vehicles and will seek them out when browsing inventory. By marketing your inventory as Certified, you’re providing an instant feeling of confidence to your customers who are looking for a car they can rely on. Upsell Opportunities The dealers who have the most success with Certified are the ones who rarely sell it. What this means is that strong Certified programs at independent dealerships often lead to upsell opportunities to richer coverage levels and longer terms. Certified is a basic level of coverage for your customers that should give them confidence in the vehicle, but highlighting what that coverage doesn’t cover can help customers see value in higher coverage levels, which will ultimately increase your revenue opportunities on the back end. Hone Your Skills If you’ve had trouble instituting a consistent F&I process in the past, Certified programs can help you work on upsell tactics while still having a baseline level of coverage to protect your customers. Over time as you develop your F&I process, you’ll see more upsell opportunities converted into actual back end revenue.
Renewal Opportunities Most Certified programs provide shorterterm coverage to protect your customers in the months right after the purchase. Making note of when these contracts are set to expire will give you the opportunity to engage with your customer after the sale. In checking up on your customers, you can remind them their coverage is about to run out. Even if you don’t land a VSC renewal, you might just learn about friends or family members who are shopping for cars. The extra customer touchpoint could prove profitable in the long haul.
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WASHINGTON UPDATE | BY SHAUN PETERSEN
Latest Government Issues and 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. REGULATORY A federal appeals court in March struck down parts of a Federal Communications Commission ruling, including its controversial definition of an automated telephone dialing system. In a unanimous decision, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit overturned the FCC’s 2015 definition as far too broad, noting it “invites the conclusion that all smartphones are autodialers.” According to the Telephone Consumer Protection Act, calls made with an autodialer without the receiver’s consent are a violation carrying penalties of $500 to $1,500 per instance. That law defines an autodialer as “equipment that has the capacity to store or produce telephone numbers to be called using a random sequential number generator.” In 2015, the Obama Administration’s FCC interpreted “capacity” to
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include a device’s “potential functionalities” – meaning even if a device is not capable of autodialing now, it could be with additional software or other modifications. It also said equipment that can dial numbers from a list qualifies as an autodialer. “The commission’s understanding would appear to subject ordinary calls from any conventional smartphone to the act’s coverage, an unreasonably expansive interpretation of the statute,” Judge Sri Srinivasan wrote in the court’s opinion. “It cannot be the case that every uninvited communication from a smartphone infringes federal law and that nearly every American is a TCPA violator-in-waiting, if not a violator in fact.” The court’s decision drew praise from current FCC chairman Ajit Pai, who said the now-overturned interpretation was “yet another example of the prior FCC’s disregard for the law and regulatory overreach.”
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LEGISLATIVE A resolution passed by the Senate last month likely spells the end for the Consumer Financial Protection Bureau’s much criticized 2013 guidance on indirect auto lending. S.J.Res.57, a joint resolution that would overturn the guidance under the Congressional Review Act, was introduced March 22 by Sen. Jerry Moran (R-Kan.), with 15 co-sponsors. It passed by a 5147 vote on April 18. The resolution followed a December opinion from the Government Accountability Office that defined the guidance document as a CFPB rule for the purposes of the CRA, which means it can be struck down by a simple majority vote of both houses of Congress. The indirect auto finance guidance, issued in March 2013, claimed dealer discretion on interest rates creates a “significant risk” of unintentional disparate impact discrimination and spelled out the bureau’s intention to pursue enforcement actions on that basis.
Critics have pointed out the CFPB’s theory is based on shaky methodology for determining disparate impact and the guidance was put in place without comments from stakeholders, public hearings or studies of its impact on the cost of credit to consumers. A similar resolution, H.J. Res. 132, has been introduced in the House and is expected to pass. The White House has signaled its support of the resolution and the President is expected to sign it into law. H.R. 5266: Rep. Dennis Ross (R-Fla.) and Rep. Kyrsten Sinema (D-Ariz.) have introduced a bill that would change the CFPB’s leadership from a single director to a bipartisan, five-member, Senate-confirmed commission. The bill was co-sponsored by Rep. David Scott (D-Ga.) and Ann Wagner (R-Mo.). “As one of the most powerful agencies ever created, the CFPB should not be exempt from the principles of good governance, and with this legislation, we can ensure that it no longer will be – regardless of who holds the White House,” Ross said.
GRASS ROOTS The Georgia IADA scored another victory, fighting off a third attempt by legislators to raise the title ad valorem tax on used car purchases. The tax increase would have negatively impacted independent dealers by making it more difficult for them to provide reliable transportation to customers who can’t afford new vehicles. GIADA executive director Paul John credited the association’s government affairs team of Mo Thrash and John Haliburton with the outcome, with an assist from Lt. Gov. Casey Cagle, who supported GIADA’s efforts. “This win confirms GIADA and all used car dealers across the state not only have a voice, but a very loud and powerful one,” John said. “Lawmakers heard us and they know who we are. This past session, they were reminded of just how strong we can be as a united group of small businesses.”
PAC On March 9, Rep. John Carter (R-Texas) held a luncheon in Fort Worth and NIADA was invited to participate. The NIADA-PAC also made a contribution to his campaign. Now in his seventh term in Congress after 20 years as a district court judge, Carter serves on the House Appropriations Committee and is chairman of the Homeland Security Subcommittee on Appropriations. Carter has been a supporter of the auto industry and small business since he was first elected in 2002. He was a featured speaker at NIADA’s National Leadership Conference and Legislative Summit – now known as the National Policy Conference – in 2013, the first time since 1999 the event had been held in Washington D.C. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
MANAGEMENT MATTERS | BY ZACH KLEMPF
WHY IT’S TIME YOUR STORE INVESTED IN A CRM SYSTEM
Help Your Dealership Succeed
Over the past several years I have had the opportunity to travel across the United States as well as Canada speaking with independent and BHPH dealerships of all sizes. The most evident observation I have had is most of these dealerships operate without a CRM system.
In the franchise dealer world, customer relationship management is a de facto mandatory system critical for managing a dealership’s sales pipeline. Typically, used car dealerships believe they are too small or CRM is too expensive for their store. In fact, these dealerships need CRM/ILM technology the most. Historically, most industry-focused CRMs were built for new car stores and large independent operations. The complexities of these tools were barriers to entry for independents. In recent years, that has dramatically changed with more cost-efficient options entering the marketplace. When I talk with an independent dealer manager I often ask the following three questions: • What is your customer acquisition cost across your different marketing channels? • What lead provider is performing the best and what is its close rate? • What is your cost per sale across the different lead providers you work with? The majority of the time the manager cannot give a concrete answer to these questions, which points to a deficiency in their business. Many used car dealerships spend the majority of their marketing budget on Internet lead providers like TrueCar, Car Gurus, and Autotrader. However, they don’t invest in tracking these data sources, which could save thousands of dollars per month as well as
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provide key performance indicators for their business. With fierce competition from franchise dealer pre-owned departments and automotive e-commerce players like Carvana, used car dealers need to be more data driven in their day-to-day operations. A decrease in front/back margin means all of the “fat” of the business must be trimmed, and making an investment into tools that provide analytics is key. If your dealership is making the marketing investment into multiple lead providers there is a real need to track how many deals close rather than how many overall leads you are receiving. Often I hear a dealer say they get the most leads from “X” lead provider but when further reviewing the data many of those leads are not closing as high and it may not be the best overall performing lead provider. When looking at the performance of a lead provider it cannot solely be based on the number of leads, which is a vanity metric. It should be attributed to deal conversion, and unless there is a CRM or other system in place this is very difficult for an independent dealership to track. One of the most fundamental components of effectively implementing any CRM, especially in a smaller independent store, is the “garbage in, garbage out” philosophy. Paradoxically, this tends to be a cause of churn in independent dealerships fully leveraging the capabilities of a CRM. Let me run through the three most common CRM implementation and usage issues I have observed with independent dealerships’ adoption of a CRM program. Onboard training: This is one of the most crucial components of the CRM setup process. Often dealerships do not take this call as seriously as they should.
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During the onboard call everyone who plans on using the CRM should be present, attentive, and listening carefully. This is where the nuances of the system will be explained and important features like lead reassignment rules will be set up. Missing out on this call or not paying attention will hinder a dealership from reaching the true potential of the CRM. Hold your team accountable: Often dealerships will get set up on a CRM, excited about the “idea” of implementing a CRM, and let the system primarily be used only by the salespeople. Management should also be involved in using the platform and oversee whether salespeople are completing follow ups and are on task. While a CRM adds some automation to this, it is up to management to enforce usage. Always greener on the other side: Some independent dealers make a decision on an impulse and terminate a vendor on a whim. It’s important to realize each CRM system will have its own quirks. Constantly changing vendors “to find the right fit” can lose momentum and unnecessarily take employee bandwidth with setup. Be sure to vet and research your new CRM provider before signing up. Then allow 3-6 months for your store to adapt to the new system. Implementing a CRM is sometimes a painful process, especially if technology has not been previously embraced in the dealership. Nonetheless it’s important to understand that being more data driven and putting the proper systems in place will ultimately help your dealership succeed in today’s competitive marketplace. Zach Klempf is founder and CEO of Selly Automotive. He can be reached at zach@ a1softwaregroup.com.
SOCIAL MEDIA | BY KATHI KRUSE
DON’T STEP ON A RAKE Avoid Social Media Pitfalls
For many dealers, social media seems like a minefield. Add the fact it's quickly matured into a very viable place to engage customers and promote sales and you've got a terrifying place many dealers would rather ignore.
Ignoring social media in today’s world is the equivalent of opening a store without telling anyone. But all the warnings in the world are not going to motivate a dealer to take action if they still have a lot of fear. I'd like to alleviate some of that fear today. Avoiding social media pitfalls has become a big business. It's difficult to know where to turn for the best advice. For nearly 10 years now, I've been singing the “social media song” and, alas, the needle hasn't moved much, especially for auto retail. You know what? That's okay. It's perfectly fine to venture out into social media at your own pace. What I don't want you to do is venture out and step on a rake.
5 FOUNDATION ESSENTIALS FOR SOCIAL MEDIA SUCCESS
Whether you're new to social media or you've been using it for some time, these five components will help you leverage all you can from each platform.
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DEALER NEWS
May/June 2018
Secure Your Reputation with a Social Media Policy
At Kruse Control, we advocate implementing an upto-date policy for employee use of social media. The line between dealers and their employees on social media is steadily blurring. Organizations today need a social media policy that helps keep the store’s reputation intact while also encouraging employee participation online. A social media policy outlines how an organization and its employees should conduct themselves online. This document helps safeguard your brand’s reputation. Ideally, you'll want to consult with the following stakeholders when creating a social media policy for your store: • C-level (owners and managers). • Human Resources. • Corporate counsel. • Social media strategist. Because social media moves fast, this policy should be considered a living document – ongoing updates will be necessary.
Written Social Media Strategy
Social media strategy defines how a dealership will use social media to achieve its business goals, including the supporting platforms and tools it will use to do so. At a basic level, it’s a statement of intent, outlining the goals and measurable objectives for using social media, and the target outcomes you want to achieve.
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When defining what it takes to achieve social media success, we need to talk about strategy first. I was inspired to include this component because I receive questions like these from good people, many of whom are struggling to find answers: • “Do I have to be on every social network?” • “What type of things do I say on social media?” • “How often should I post?” • “How do I get more followers?” • “My boss asked me to take over the Facebook page, but where do I start?” • “Should I pay for social advertising?” • “I'm in a boring industry. Do I still need social media?” • “Do I need social media management tools?” • “Should I outsource my social media?” I've had a run of these emails lately and, frankly, my heart aches for these good people because they're lost. It's easy to get lost these days because the social media landscape is no longer a field of flowers sparsely populated. Today, social media is a dense, crowded, noisy, smoggy urban jungle.
Do a Social Media Audit
Whether your social media marketing is in-house or outsourced, it’s often difficult to see where the gaps are between your current successes and where you need to be. Your inbox is full of tips, tools and hacks to “improve” results and it’s exhausting. The best way to remove the guesswork is with a social media audit. A social media audit is a smart step because time and resources are often wasted trying to improve things that don’t need improving, while neglecting the things that really need attention.
Build an Online Review Funnel
Word of mouth referrals have always been a go-to resource for finding trusted sellers, and online ratings sites are where most people turn today.
Online reviews are insanely influential: • 90 percent of consumers read online reviews. • 88 percent trust online reviews as much as personal recommendations. • 86 percent will hesitate to purchase from a business that has negative reviews. • Customers are likely to spend 31 percent more with a business that has positive reviews. • 92 percent will use a local business if it has at least a 4-star rating. Benefits of building an online review funnel: 1. Systematically drive customers to one conversion funnel that routes them to the review sites you care about. 2. Automatically ask, remind and guide happy customers through the funnel. 3. Recover unhappy customers before they vent online. 4. Analyze results daily for actionable insights to improve upon.
Engage with Social Customer Service
People increasingly turn to social media to engage with businesses. Social has matured as a communication channel and people have blended it into their lives. They expect dealers to do the same. While many companies now use social media regularly, very few take social customer service seriously. Currently, 92.5 percent of brands fail to meet customer expectations on social media and these failures can have big implications. Quality customer service – regardless of channel – relies on a meaningful, efficient, solution-focused exchange between dealers and their customers. The growing preference for social media as a communication channel requires your organization to re-think its customer service strategy. Good social customer service strategy keeps your store in the conversation and doesn't allow malcontents and competitors to speak for you.
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.