MARCH/APRIL 2011
M ASSACHUSET TS/NEW ENGL AND
DEALER NEWS
OFFICIAL PUBLICATION OF THE MASSACHUSET TS/NE W ENGL AND INDEPENDENT AUTOMOBILE DE ALERS ASSOCIATIONS
CRAIGSLIST 101: BEST PRACTICES ALSO Mobile Commerce Takes Center Stage PLUS The Art and Science of Used Auto Inventory
DALLAS, TEXAS Permit No. 2079
PAID
PRSRT Standard U.S. Postage
Visit us at w w w.miada.com
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INSIDE
MAGAZINECONTENTS 8 The Art and Science of Used Auto Inventory 12 Craigslist 101: Best Practices 16 Mobile Commerce Takes Center Stage
Product Discounts for NIADA Members AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States with over 4,350 stores across 48 states, the District of Columbia and Puerto Rico. NIADA members have access to AutoZone’s “hot-shot” delivery program including discounts on more than 750,000 product level SKUs in over 70 distinct product categories.
For more information, view www.niada.com/dealers_edge.php
BOARD OF DIRECTORS CHAIRMAN OF THE BOARD MA
VICE PRESIDENT MA/NE
PRESIDENT MA
TREASURER MA/NE
Lou Tedeschi A.S.P.I. Motor Cars 781-329-5144 aspided@aol.com
Ben Donnarumma Allstar Auto Sales 508-480-8989 ben@allstarauto.com President NE Lou Tedeschi A.S.P.I. Motor Cars 781-329-5144 aspided@aol.com
Bill VanLaarhoven Martin Auto Sales 508-294-7738 i.a.s.1@comcast.net
Brad Anthony Select Used Cars 508-533-4114 info@selectusedcars.com
SECRETARY MA/NE
Mark Gabelhart Route 14 Motors LLC 781-293-5599 rt14motors@comcast.net
ADVERTISERSINDEX ADESA................................................................ 9 Auto Auction of New England..... Inside Back Cover AutoTrader.com.................................................... 3 Auto Use............................................................ 14 Chase................................................................ 17 Lynnway Auto Auction......................................... 5 Manheim.com ..................................................... 7 Manheim New England...............Inside Front Cover Persian Acceptance Corp................................... 15 SmartAuction .....................................................11 Southern Auto Auction..........................Back Cover Western General / Protective ............................ 13
NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV NIADA HEADQUARTERS: 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; PHONE 817-640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF INDEPENDENT AUTO DEALER OR THE NATIONAL INDEPENDENT ATOMOBILE DEALERS ASSOCIATION. 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 © 2011 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED.
STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITOR Mike Harbour • mharbour@niada.com PRODUCTION MGR. Jacob Kerns • jacob@niada.com ART/PRODUCTION MGR. Christy Haynes • christy@niada.com PRINTING Nieman Printing
Mark Your Calendars for the 2011 National Tire Safety Week! RMA’s tenth annual National Tire Safety Week will be held June 5-11.
The annual event is an initiative of the RMA’s “Be Tire Smart – Play Your PART” program, a year-round effort designed to help drivers learn the simple steps they can take to ensure that their tires are in good working condition. RMA is the national trade association for tire manufacturers. Tire manufacturers and retailers nationwide will work to educate motorists about proper tire care and maintenance. RMA provides tire retailers, auto dealers and automotive repair shops with free “Be Tire Smart” brochures and other materials. Many participating retail outlets use the opportunity to promote tire care through advertising, promotions, free tire pressure checks and conducting media outreach. More than 22,000 tire and auto service outlets participated in the 2010 National Tire Safety Week. RMA released a survey of more than 5,400 vehicles that showed half with at least one under inflated tire. Nearly 20 percent of vehicles had at least one tire under inflated by 8 pounds per square inch (psi). Under inflated tires waste fuel, risk safety and cause tires to wear out faster. Tire and auto retailers who are interested in obtaining free RMA materials for National Tire Safety Week can order them online at www.betiresmart.org. Those who have participated in the event before can expect to receive materials again this year.
vAuto Helps Dealers Find Manheim Inventory vAuto’s proprietary stocking module can now allow its customers to quickly and efficiently source used vehicles at Manheim auctions as well as access Manheim run lists. “Partnering with Manheim is the first of many exciting integrations with our new AutoTrader.com relationship,” said Keith Jezek, vAuto president, in an early February announcement. “Combining vAuto’s stocking tool with Manheim’s comprehensive list of vehicles is a huge win for our customers. Manheim is a key player in facilitating the buying and selling of used vehicles for automotive dealers, providing vAuto’s customers the best resources to stock vehicles.” vAuto’s stocking module allows dealers to make their decisions for purchasing vehicles based on what the customers are actually buying in their own marketplace at that exact time, down to the level of year, make, model, trim and equipment configuration. In the past, dealers had to rely on historical data, not current trends, when making stocking decisions.
FOR INFORMATION ON HOW TO BECOME A MEMBER OF MIADA, PLEASE CONTACT MARY QUINLAN AT 781-278-0077
MIADA OFFICE
1 UPLAND ROAD BLDG. 200 • STE. 226 • NORWOOD, MA WEB SITE: WWW.MIADA.COM • 781-278-0077
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COMPLIANCE
Just Manage It BY - PAU L C A N TI N
As members of MIADA, we trace our opportunity for success to the privileges granted to us by the state and municipal governments of Massachusetts. As licensed automobile dealers,
we have a unique opportunity to prosper, create opportunities for others, and serve the public. To get here, we’ve had to meet the registration and revenue requirements every small business has to deal with. As dealers, we also must meet those municipal requirements that come with our licensed dealer status, as well as those DOT requirements that come with our authority to properly use dealer plates. But the requirements don’t stop there. On an ongoing basis, we dealers also must demonstrate our ability to comply with the special regulations focused on our industry by: Displaying signs that meet the information needs of the public; Maintaining an up-to-date Used Vehicle Record Book; Having Used Car Warranty and Lemon Law stickers displayed on each car; Meeting the other General Requirements For Dealer Inspection (see side bar*) as defined by the Registry of Motor Vehicles, Section 5 Division.
Compliance is assured by inspections conducted by officers of the State Police who visit dealerships, often without notice. When they find compliance, the process ends. When compliance is not found, the process can become a much more time-consuming one beginning with a hearing at the Registry and possibly leading to loss of dealer plate privileges. Savvy managers avoid those complications. They run their operations so site inspections never uncover problems. Inspections never lead to time lost attending a Registry hearing. They never lead to the inconvenience of lost dealer plate privileges. Skilled managers welcome Section 5 inspectors as allies who help, as is called for in our Code of Ethics, to bring honor and dignity to the automotive industry. As professionals, we manage the inspection process by making compliance a daily priority and always remaining ready for an on-site inspection.
IF THE SEC TION 5 S TATE POLICE UNIT VISITED Y O U R D E A L E R S H I P, WOULD YOU BE RE ADY? The items below are the general requirements for a dealer inspection.* Have the following documents available for review:
Dealer license from city or town Business certificate Articles of organization/corporate papers (if applicable) FID/EIN A list of all authorized users who will have access to the Section 5 plates and photocopies of valid driver’s license for each authorized user
• You must be principally and substantially engaged in the business of selling motor vehicles, recreational vehicles, trailers or motorcycles. Ensure you have a permanently affixed exterior sign posted of sufficient size and design to give the general public notice of the name, and nature of the business. You must have a sign to display business hours. • Section 5 registrants cannot share office space. You must have a separate and exclusive entrance to your place of business, unless they are both owned by you. The building structure or office trailer must have adequate office space to conduct business. You must have a display area dedicated for selling vehicles. If you are sharing a display area, there must be a physical separation (cordoned off area). • You must have used auto warranty and lemon law stickers. These stickers should be displayed on the “vehicles left rear passenger side window”. • You must have access to a repair facility. If applicable, you must have a Garage Record Book and adequate service records. • Please have available for inspection an approved format of the Used Vehicle Record Book. The number of vehicles for sale should be properly recorded in the UVRB. • You must register your business with the Department of Revenue to be identified as a dealer in Massachusetts. You can call the DOR at 617-887-MDOR (6367). • Prior to a State Police Inspection, please check with your city or town licensing board for any additional requirements. *Inspection requirements as provided by MassDot-RMV Division sent via fax to a dealer member prior to inspection. Section 5 Division, P.O. Box 55897, Boston, MA 02205
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BY BI LL MO K RY
THE ART AND SCIENCE OF USED AUTO INVENTORY Building a profitable used auto inventory requires having the right information and the talent to know how to use it. Over the years, I’ve been blessed with tremendous mentors who have provided me with valuable insights, one of which is managing a used vehicle department is both a science and an art.
While there are no cookie-cutter solutions applicable to every scenario, there are tried and true blocking and tackling strategies that can help any department maximize results. When it comes to proper inventory mix, there are several ways a dealership
USED CAR MANAGERS SHOULD BE AWARE, AT THE VERY LEAST, OF THE TOP-SELLING VEHICLES IN THEIR MARKET BY MAKE, MODEL AND YEAR AS WELL AS THE TOP-SELLING VEHICLES AT THEIR STORE can study information to improve volume, gross and ROI. However, before the information can be broken down, the store must have the information. While this may seem obvious to some, I am routinely presented with departments that fail to accomplish this seemingly simple task. Used car managers should be aware, at the very least, of the top-selling vehicles in their market by make, model, and year as well as the top-selling vehicles at their store. All too often when I ask used auto managers to name the three top-selling used vehicles in their markets, they look at me like a deer in headlights. Or, they automatically respond “Honda Accord” or “Toyota Camry.” That’s great! What year? What trim level? What mileage band? How
many of these have been sold at your store in the last 90 days? What was the average age when it was sold? There are several tools available to help managers accumulate this data, such as Auto Exchange for internal data and Cross Sell for external data. Once this data is collected, it is imperative management consistently identify which vehicles sell in their market (internal and external). That’s the science part of the equation; it’s not especially difficult to identify commodity type vehicles and, if you’re willing to travel or pay, to procure them. Further breakdown of historical internal and external trends is, however, necessary. Specifically, it would be beneficial to track sales volume, aging, and gross profit for specific COS bands. These could be broken down as follows:
$0 – $5000 $5,001 – $10,000 $10,001 – $12,500 $12,501 – $15,000 $15,000-plus The used auto dealer should be aware of and actively track each of the above categories for each price band in used cars, trucks, SUVs, and vans, comparing the current stocking mix to what has yielded the greatest success. The categories can be broken down further into import/domestic categories as well, if needed. This information, coupled with knowledge from external tools, is used to direct buying specific inventory at specific price points to generate specific results. The art of used vehicle inventory comes from identifying and procuring vehicles that put your store ahead of the curve. For example, a few years back fuel prices spiked and, as a result, highly economic, smaller pre-owned vehicles were suddenly at a premium, while large pickups and SUVs could be bought for a dime a dozen. The market was quickly flooded with these gas guzzlers, but few people had the vision or foresight to accumulate them. Those who did were those who had the knowledge and experience to understand the ebb and flow of the used car market, so
they loaded up on these vehicles at very cheap prices. It’s not difficult to guess what happened to their profits when the price of fuel went back down. Recognition of these opportunities is not always easy; often it comes from experience. I believe we are involved in one as I type this column. Thanks to the Cash for Clunkers program, new car inventories are generally low; there are fewer trades in most used inventories and the price of vehicles at auction has gotten higher. While this could mean several different things depending on your market, I would think the potential for increased gross profit, even on vehicles more traditionally thought of as commodity cars, is greater than ever. Hopefully, you’re tracking the trade capture rate. A normal benchmark for capturing trades is 55 percent of appraisals. Because of today’s market conditions, I would encourage all managers to aggressively get involved with customers and inquire about their desire to trade their vehicle, as well as ensure your store is appraising every vehicle possible. Further, I believe it’s imperative to improve the appraisal capture rate by 10 percent or more. Used autos are at a premium and the extra money put into a trade has never been a better investment. This type of forward thinking involves risk some dealers simply may not be willing to accept. Those who do so are more frequently ahead of the used vehicle game. The science of used inventory can be resolved by accumulating information, breaking it down (all the way to COS bands, if you really want to be detailed) and buying and trading aggressively according to trends. The art requires experience and guts. BILL MOKRY IS A SALES AND F&I S P E C I A L I S T F O R S E R V I C E G R O U P, A N INSUR ANCE AND FINANCIAL SERV I C ES COM PANY THAT PROVI D ES I N COME DEVELOPMENT TR AINING AND SERVICING SOLUTIONS TO AUTO DEALERSHIPS. HIS MANY YEARS OF DEALERSHIP EXPERIENCE INCLUDE SEVERAL AS GENERAL MANAGER OF A SUCCESSFUL USED CAR OPER ATION. H E CAN BE REAC H ED AT BMOKRY@SGIFS.COM .
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Q&A With NIADA President Anthony Underwood:
2011
Used Car Market Report
National Independent Automobile Dealers Association (NIADA)
Anthony Underwood was named president of NIADA in 2010. He started selling cars in Alabama in 1977, and he opened his first dealership in 1994 with five vehicles. Anthony’s two stores sell a combined total of 800 vehicles each year. He has been an active member of the NIADA and Alabama IADA for many years. Anthony has served on the boards of both NIADA and AIADA. He was named NIADA National Quality Dealer of the Year in 2003 and, that same year, earned his Certified Master Dealer certification. How have independent dealers adjusted their businesses in the last three years? Independent dealers have faced unprecedented challenges in the last three years. Even though the overall economy is improving, dealers are still struggling with limits on inventory and consumer credit. But dealers are resilient and have adjusted by stocking fewer vehicles and focusing on the types of vehicles that turn quickly. Solid inventory management underpins the successful dealer. Many dealers have retrained employees to ensure that everyone is contributing to the success of the business. Employee productivity has improved as staffs have been reduced to the current level of sales. In the process, we have learned to run our stores more efficiently. We have also seen a shift to the Buy-Here, Pay-Here model by dealers who have access to capital. In our store, we have cut in half both our staff and our inventory. We have also expanded the number of lenders we rely on to finance our customers. We are now sourcing some inventory online, buying vehicles that will sell quickly, and generating more sales based on specific customer orders.
How are independent dealers coping with the shortage of used vehicles? Independent dealers are confronting two challenges: higher prices and fewer pre-owned cars in the marketplace. Independent dealers are spending more time and effort to find the right inventory. Everyone is going to more auctions, both online and in person, as well as tapping local wholesale sources. Some dealers have been very successful in buying inventory directly from private owners. Three or four years ago, dealers were able to find plenty of vehicles under 70,000 miles and three or four years old at acceptable prices. But independent dealers have modified the age and condition guidelines to reflect what their customers can afford. As a result, dealers are doing more reconditioning to get vehicles frontline ready.
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You are quoted as saying “We will never go back to business as it was in the past.” Can you explain what you meant by that? Our business model has changed. New car dealers are getting more into the pre-owned business, so we have to meet that challenge. Franchised dealers offer service departments, larger facilities, and access to newer inventory. NIADA members know that they have to continue to improve their business skills and adapt to this new competition. NIADA can teach dealers to run more efficient operations, but the business of selling cars is still about knowing your market and your customers and being responsive to their needs. Independent dealers need access to information to enable them to make quick decisions. NIADA helps independent dealers stay abreast of the national and local economic, regulatory, and business issues facing our industry and each dealer.
How is NIADA monitoring the potential rules under the new Consumer Financial Protection Bureau? We have encouraged members to stay connected with one another by attending local and national meetings and by contacting their legislators on issues that could impact our business, in particular Buy-Here, Pay-Here. The NIADA website includes a blog where dealers can find information on local and national issues and answers to their specific questions.
You are a strong advocate for dealer education. What resources does NIADA provide dealers? NIADA is serious about education, and we recognize that it is one of the strongest things we have to offer our members. Knowledge is power, and what you don’t know can hurt you. Our three-day Certified Master Dealer Program gives dealers the critical skills and information they need to meet the challenges of operating successfully in a challenging environment. NIADA and its industry partners provide dealers with online and in-person training that covers the full range of inventory and dealership management topics. For example, the NIADA/Manheim partnership teaches dealers how to buy and sell vehicles online through The Wholesale Institute training on NIADA TV.
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Craigslist 101:
If eBay were free, would you advertise your inventory on it? This should
be a no brainer! Craigslist and Ebay had equal amounts of unique visitors in the U.S. for the first time ever in May 2010, according to comScore data. Dealers who think Craigslist is not for them are missing the boat. It doesn’t matter if you’re selling dollar-cars or the high lines; customers of all ranges are going to the Craigslist marketplace to search for vehicles! A free site offers very little to no technical support, which is why I believe a lot of dealers are missing out on huge opportunities because they’re not educated on Craigslist and don’t have the right process in place to realize potential. Those who have discovered the power of Craigslist advertising will agree it’s a constant battle to keep up with the terms of service as well as keep their posts young, live and searchable to generate leads. The first thing I want to point out is Craigslist is the best ROI for lead generation out there. It is free to post, but to get maximum results requires knowledge of Craigslist terms, time and a dedicated process. With the amount of vehicles posted in the Denver Craigslist market, for example, you must have a daily presence on the site. For the longest time, we used to think that as long as your vehicle is live on Craigslist, it didn’t matter how recently you posted
CRAIGSLIST IS IDEAL FOR THE DEALER BUDGET AND MANY RELY SOLELY ON THE SITE FOR ONLINE LEADS. ARE YOU GETTING YOUR PIECE OF THE PIE?
it. This could not be more wrong; the proof is in the pudding. Every time dealers list a new ad on Craigslist, they get most of the calls the day they post and the day after. After an ad has been on the site more than three days, it gets a lot less calls. Craigslist searches are driven by date. For example, if a customer was to search for a Honda Accord in Denver, there’d be more than 1,000 results spread across 10 or more pages! If you posted your 2008 Honda Accord three days ago, it is most likely already on the fifth results page. Our recommendation is to delete each ad after 48 hours, then repost it to maintain its effectiveness and stay at the top of the list. Remember, the Craigslist consumer will look at the first search page results on craigslist, but they’ll usually find what they’re looking for there and never make it to the next page. A pair of actions you should be aware of is flagging and ghosting. Ghosting is when your ad appears to be live but can’t be found anywhere on Craigslist. It’s an action done by Craigslist administration that’s definitely the worst of the two because you have no idea it’s happened because the ad looks normal. Flagging is done by the Craigslist community. One thing to keep in mind is Craigslist is a community-based classified site. The majority rules and decides whether an ad is worthy enough to stay live. This is where the flagging system comes into play. Each Craigslist consumer has the right to flag your vehicle. One Craigslist visitor cannot take down your vehicle ad, but he can contribute towards it. That means it takes more than one person to flag and remove it from the site. So how many flags does it take? Well, it depends. Nobody really knows the exact figures except Craigslist; in metro Craigslist markets, it may take up to 20 flags to take down an ad. In smaller markets, where, for example, only 100 vehicle ads get posted per day, only two flags might take down an ad!
Most importantly, flagging will result in ghosting and will eventually blow up your Craigslist account so none of your ads will stick. You’ll have to go through the Craigslist community forums and blogs to get back to good standing. That process will take a lot of time and reading; most dealers will be overwhelmed doing such a thing. So why do people flag? I believe 80 percent of it occurs because posters aren’t following the terms of service. For example, maybe you posted a 2008 Honda Accord ad on Monday and posted it again on Tuesday without deleting the earlier ad. The Craigslist community frowns upon this and is very click happy when it comes to flagging. If you have experienced this, you might want to consider automated postings that post ads more frequently with a fraction of your present efforts. The other 20 percent of flags, in my opinion, are your competition. Not fair? Perhaps not, but Craigslist is a free service (to post cars and trucks), so who can you complain to? The fact is Craigslist at some point really frustrates every car dealer, but we all have to deal with it. The good news is there are posting tools to take on this challenge as well as automated tools to post your entire inventory every day. If your competition is flagging your ads, they’ll eventually tire from doing so. Just don’t make it easy by attempting to post your entire inventory every day on your own as that effort will result in a high flag and ghosting rate. Craigslist is ideal for the dealer budget and many rely solely on the site for online leads. Are you getting your piece of the pie?
BY DUSTI N JANSSO N
BEST PRACTICES
Dustin Jansson provides consulting, Craigslist posting tools and automated Craigslist posting services, as well as other dealership products. Contact him at 303-232-3435 or dj@dealernetsolutions.com. For more information, visit www.dealernetsolutions.com.
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Going Mobile in Your Dealership One of the new keys to the success of your business is your smart phone. You can
operate your dealership on-the-go, making fast, informed decisions that will ultimately improve your bottom line. More than 440,000 mobile sites and over 500,000 mobile apps exist today, including a growing number of auto-industry related apps. It may seem daunting to integrate this emerging technology into your business, but these tools are a must-have for both acquisition and retail. What are ‘mobile apps’ and how do they help dealers? An app is a software application that helps people accomplish tasks faster. Among other things, an app can use the hard drive of the mobile device to store data for faster recall and operation, perform calculations, access hardware features such as camera and GPS – and all without an Internet connection. At its core, the Internet revolution was about how technology harnessed the power of information to generate efficiencies, and this is exactly the opportunity mobile apps offer to dealerships today – providing information onthe-go and tying it all together to take action. How can mobile apps streamline your business?
Mobile browser-based tools provide dealerships with more on-the-go visibility but lack a built-in ability to act in real-time on information organically across the dealership. But, just as a mobile app enables on-the-go stock trading, for example, an app such as eCarList’s ‘True Target Mobile’ allows dealerships to take a massive dataset and a complex, multi-step, -vendor and -personnel process and make it all work from a single handheld device. The ‘True Target Mobile’ app gives dealerships mobile access to pricing data from multiple books, current data from top online marketplaces and the ability to filter, organize and view the data geographically for territory (including vehicle pricing from competitive dealerships). Other functions include VIN scans, taking/adding/removing photos, integrating Carfax Vehicle History Reports and sharing appraisals and pricing with other mobile devices. Are there other benefits to going mobile? On the acquisition side, smart phones provide access to information you need to stock your lot with cars that customers want. It’s no secret that the used car supply is decreasing due to rising demand, so the competition for quality units is getting tighter.
Think about the top concerns your customers have when shopping for a used car: previous damage, maintenance, ownership history, and of course, price. Tools like Carfax Vehicle History Reports are readilyavailable through various mobile devices to verify this important information and bid with confidence. Having your mobile device handy helps you tie it all together quickly and successfully acquire the right cars for your lot. Today’s mobile devices provide access to information that brings transparency and process effi ciency to dealers. The possibilities mobile is opening up for our industry are truly extraordinary – and in the current economic climate, leveraging new and user-friendly technology is key to moving more cars and saving money in the process. BY LEN CRITCHER AND LANCE VICKERY Len Critcher is CEO of eCarList, provider of award-winning inventory management and online marketing solutions that make it easy for dealerships to fully own and control the vehicle merchandising process through one unified platform. Lance Vickery is director of dealer business at Carfax and has spent more than 25 years in the auto industry.
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WEBINAR
LIQUID MOTORS, NIADA TO PRESENT SOCIAL MEDIA WEBINAR
NIADA members can learn how to leverage social media to garner brand recognition, build consumer confidence and drive new business opportunities during a social media webinar presented by Liquid Motors and NIADA in April.
Learn how to leverage social media to build consumer confidence and drive new business opportunities quickly and easily! Social media continues to be the fastest growing segment on the Internet. As of September 2010, Facebook has over 135 million active users in the U.S. and each user averages seven hours per month on the site, more than double that of any other site on the Internet. The seminar, set for April 12 at 10 a.m. Central, will present the following:
GETTING STARTED IN SOCIAL MEDIA l
persian
Building a Social Media Marketing Plan - Setting Budget, Goals, Objectives and Guidelines: We’ll cover how to build an effective social media marketing plan Reputation Management: We will help NIADA members understand why this is critical and how to simply and effectively make sure that consumer positive experiences are portrayed and how to respond to negative postings Building a Presence: We will cover how to secure social media accounts and how to configure the accounts for the most effective brand presentation and user experience
LEVERAGING SOCIAL MEDIA TO GROW YOUR DEALERSHIP l
Build Followers and Fans: We’ll discuss how to effectively grow your followers and fans including the dos and don’ts for posting content to social media Leveraging Check-ins: We’ll help members understand how to leverage new location based services to market their dealership on social media sites Dealers also will learn the key metrics to use to track the progress and success of their social media efforts and how to utilize technology to simplify and improve results tracking.
TO REGISTER, CALL 877-573-6877 OR SEND A REQUEST TO socialmedia@ liquidmotors.com.
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M O B I L E C O M M E R C E takes center stage with consumers looking for vehicles, parts and accessories This past holiday season, surveys and statistics showed what many analysts and industry observers were thinking: mobile commerce is growing by leaps and bounds, and every industry is in on the trend, including automotive.
In 2011, smartphones are forecasted to account for half of the mobile phone market, according to The Nielsen Co. On top of that, an ABI Research report says mobile online shopping will generate $119 billion in sales by 2015, accounting for 8 percent of the e-commerce market. When car dealers make it easy for their business to be found through a mobile web browser, loyalty campaigns, marketing initiatives, text promotions and sales can attract and retain customers. What are consumers browsing with their smart phones? The same types of items they started browsing on computers: researching purchase decisions, cost comparisons and finding the location of physical items. Recently, eBay reported a substantial increase in mobile traffic, where sales more than tripled in 2010 to near $2 billion in gross merchandise volume. Last year, vehicle purchases led all categories on eBay mobile applications in terms of GMV, while parts and accessories were number two in terms of the total number of items purchased. Dealers know when they have a physical lot, customers still come to kick the tires when the sales office is closed. Now, today’s consumer might still come to the lot, but he or she will also pull out a smart phone, check the hours of the dealership and research the same make and model for competitive pricing. The same thing is happening even if the consumer doesn’t drive to a physical lot. A consumer may be in his garage working on a car and need to find a part or accessory. Instead of going inside and turning on the computer, he’s browsing his smart phone
to find the part, price and local availability. Just as e-commerce has completely changed the way we do business, wireless devices and smartphones are again altering what we know about consumers’ purchasing behaviors. Seeing similarities in mobile commerce and e-commerce, auto dealers ask themselves a familiar question: would anyone really buy a car from their smart phone? In 2010, more than $118 million in car and truck purchases were made via the eBay mobile application – more than 12,600 vehicles were sold. Parts were the second biggest category in mobile last year, with more than 911,722 parts purchased, and more than $60 million in sales. For independent dealers, mobile applications and mobile commerce are the must-have digital tools of 2011. With smartphones capable of surfing, downloading apps and connecting with coworkers and friends in an instant, researching and shopping for vehicles, parts and services is a natural extension. For example, a business traveler waiting at an airport may use that downtime to look for a needed part for his car or browse available vehicles for a new truck. If an independent dealer’s inventory is not readily available on a mobile app, chances are there’s an entire customer segment that may not see what’s for sale. A recent ForeSee Results survey found 30 percent of consumers used a mobile phone to research products on the Internet, compared with 11 percent in 2009. Those making a purchase through a mobile phone increased from 2 percent in 2009 to 11 percent in 2010. For example, Tilo Steurer, founder and owner of Eurocar, the West Coast’s largest independent dealership of its kind, sells and buys vehicles and regularly uses eBay’s mobile app to buy cars, parts and accessories. “I purchase anywhere from five to 10 cars every month, most of the time through the
eBay mobile app,” Steurer said. He also uses the eBay mobile app to keep track of his business while not in the office. With any form of sales – online, mobile or in-store – customers consider the credibility of the seller and business before making a purchase. Building that credibility takes consistent communication, which is made easier when dealers can keep in touch through mobile and online sources. “Communication is very important, especially when making an expensive online purchase such as a luxury car,” Steurer said. “With the eBay mobile app, I can respond more quickly to customer questions, which builds credibility and increases the opportunity for a sale.” To accommodate this growing trend, eBay Motors is launching a mobile app that will provide a customizable buying experience optimized for vehicles, parts and accessories, as well as unique social and community features for the enthusiast. Features include VIN scanning and a virtual garage to give enthusiasts personalized information. After searching for a vehicle, users can share it with friends and social networks or ask the seller a question. Users can create “car cards” for their vehicles which display photos and stats about the vehicle and can be used in searches for parts and accessories. On the garage tab, consumers can input and store the vehicles they own or scan the VIN barcode with the iPhone’s camera to populate information. In the garage, car owners can create to-do list for vehicle projects, store custom parts searches and share the garage with their social network. For dealers, having parts, accessories and vehicles at a consumer’s fingertips is an ideal way to extend marketing and sales without a lot of development and technical effort. Mobile commerce is still in its infancy but is growing at a faster pace than e-commerce. With the Internet available wherever consumers are with their smart phones, it’s only a matter of time before mobile commerce becomes a dominant form of purchasing. Because of the similarities to e-commerce, consumers are quickly adopting m-commerce and expecting businesses to be on board.
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Independents Remain Profitable in Challenging Environment BY TO M WEB B
Our team at Manheim Consulting had the pleasure of interviewing NIADA President Anthony Underwood for a question and answer session discussing the state of the used vehicle market from the perspective of independent dealers as we compiled the recently released, 16th annual Used Car Market Report (UCMR).
Underwood framed the challenges facing independent dealers in a way that confirmed what our data was telling us: independents are encountering higher prices for inventory at the wholesale level and finding fewer pre-owned vehicles in the marketplace. In response, these dealers are focusing on sound inventory management practices, and using all available sales channels – including online – to source just the right inventory to meet their customers’ needs. We examined these and other trends in the UCMR, which is Manheim’s annual
analysis of the forces shaping the used auto industry. As part of the ManheimNIADA Dealer’s Edge partnership, I’m happy to let you know you can download the entire report free of charge by taking a very brief survey at www.surveymonkey. com/s/manheim. As a comprehensive analysis of the trends shaping the automotive industry, the 2011 UCMR contains much more valuable information pertaining to independent dealers, as well as chapters on other aspects of the industry, including rental, leasing, fleets, repossessions and salvage. I encourage NIADA members to download their free copy of the UCMR, and as always, please e-mail me any time with your questions. Tom Webb is chief economist for Manheim Consulting. Contact him at Thomas.webb@manheim.com, follow him via Twitter at www.twitter. com/TomWebb_Manheim and read his blog at www.manheimconsulting.typepad.com.
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Carfax Debuts Mobile App for iPhone Carfax launched the first mobile app dedicated to providing on-the-go dealers with access to Carfax Vehicle History Reports. The ‘Carfax for Dealers’ app is available for free download to all dealers on the App Store. With an iPhone or other Apple mobile device, dealers can run Carfax Reports using their existing Carfax account to better evaluate used cars anytime, anywhere. “The free ‘Carfax for Dealers’ iPhone app is just what our business needed,” said Justin Villa, pre-owned sales manager with David McDavid Automotive in Irving, Tex. “We downloaded it the day it came out and already we’re saving a ton of time evaluating cars. It’s helping us win at auction and evaluate a customer’s trade faster. After all, time is money.” Running Carfax Reports is a key component to a dealer’s acquisition process. Users start by entering the 17-digit vehicle identification number (VIN) or scanning the vehicle barcode to run the Carfax Report. Any vehicle run through the ‘Carfax for Dealers’ app is automatically added to the dealer’s inventory manager at carfaxonline.com. The reports are saved for up to 30 days and dealers can mark vehicles they’re most interested in as favorites within the app. “We’ve always been quick to embrace new technology to help maintain our competitive edge,” said Michael Townsend, used sales manager at Townsend Honda in Tuscaloosa, Ala. “When we heard about the new ‘Carfax for Dealers’ app, we went and got it immediately. The app is fast and makes appraising cars easy. It’s my new favorite tool on my phone.”Free access to Carfax Reports also is available through apps from several wireless technology providers. Dealers looking for additional pricing and product integration functionality can visit:
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AutoRevo www.autorevo.com eCarList TrueTarget www.ecarlist.com VIN Viper www.vinviper.com vAuto www.vauto.com
Sorting Through Exceptions to the Risk-Based Pricing Notice Curbstoned cars are often cheap, but state and local governments pay a high price. The FTC’s risk-based pricing notice requirements became effective Jan. 1. To
comply with these requirements, dealers must alert consumers when they are getting different credit terms than others based on credit information. The good news is the requirements give options for how and when you provide the notice. That’s also the bad news because the options and exceptions can make it difficult to figure out if you’re in compliance. To help you sort through the maze, here are some of the important exceptions and how they apply to you. Your dealership doesn’t need to provide a notice if: l
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You don’t use credit reports in any way to make a credit decision. If your dealership directly contacts employers and other references and is not otherwise using any third party information, then the risk-based pricing notice is not required (it sounds rare, but there are dealers who qualify for this exception).
A notice isn’t required for a specific transaction if: l
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“Our customers tell us how important immediate access to Carfax Reports is to their success, especially at acquisition,” said Larry Gamache, Carfax communications director. “The ‘Carfax for Dealers’ app now puts the power of this information in the palm of your hand. And, you can run as many reports as you need through the app if you’re on the Unlimited Carfax Reports Program for dealers.” Dealers not attending the convention may contact their Carfax account manager or call 800-274-2277. To download the app for iPhone, visit http://itunes.com/apps/ CARFAXInc/CARFAXforDealers. An Android version of the ‘Carfax for Dealers’ app is coming soon.
You don’t do risk-based pricing of credit terms. This applies if every consumer whose application is approved is offered credit on the same terms.
The credit requested is not for a consumer purpose (personal, family or household use). The transaction is a consumer lease. Th e consumer applies for a specific credit product and is approved for those terms. Y ou offer specific terms to a pre-screened group and extend credit on the offered terms to one of them. Th e consumer is a co-signer (which is different from a coborrower), guarantor, surety or endorser in the transaction. Th e consumer’s application is denied and you provide an adverse action notice. Y ou provide the consumer with the credit score disclosure instead of the risk-based pricing notice. The disclosure is an alternative form authorized by the regulations. If you use it, you must provide it to all consumer applicants instead of providing a risk-based pricing notice only to the portion of applicants who are not receiving your most favorable credit terms.
It is likely some of these exceptions apply to your dealership and its transactions. Before relying on an exception, review the regulation or discuss it with your legal counsel to be sure you implement it correctly. The regulation can be found at 16 CFR §§ 640.1-.6. BY C H I P Z Y VO LOSK I Chip Zyvoloski is senior attorney for indirect lending at Wolters Kluwer Financial Services. For more information, visit www.wolterskluwerfs.com/indirect.
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