DRIVELINE
THE OFFICIAL MAGA ZINE OF MICHIGAN INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION
S U MME R 2 019
MICHIGAN DEALER NAMED NATIONAL QUALITY DEALER OF THE YEAR OTTO HAHNE | PAGE 14 |
DALLAS, TEXAS Permit No. 2079
PAID
PRSRT Standard U.S. Postage S TAT E A F F I L I AT E
W W W. M I A DA .US
ONLINE MARKETING |
By Adam Tobias
HOW TO BUILD A BETTER DEALERSHIP WEBSITE
3 Steps
In the increasingly competitive car dealership industry, brand loyalty is more important than ever. It’s also harder than ever to build. Cutting through the noise requires a clear message and focus on the customer experience. Standing out and building a loyal customer base may seem impossible. But small and mid-sized dealerships around the country are punching back and delivering amazing experiences that win lifetime customers. Brand loyalty is still possible for dealerships to attain. And when they do, the benefits are incalculable. A dealer’s website is their first impression with a potential customer. That’s where our brand loyalty journey begins. The Purpose of Every Dealership Website Dealership websites have one job: Get customers to visit the dealership. Car buyers today spend over 60 percent of their time conducting research online and visit only 1.2 dealerships on average. If your website doesn’t convince a buyer to visit your dealership, you have lost a deal, and potentially a lifetime customer. The problem is most dealers try to do too much with their website. Instead of focusing on their sole job – getting customers into the dealership – dealers load their sites with financial services, their life story, and vehicles that customers don’t want to see. EXAMPLE: A
EXAMPLE: B
For this reason, most dealership websites are hard to navigate. The customer doesn’t know what to do, so they leave your site and go on to the next one. The best dealership websites – those that effectively drive customers to the dealership – show customers only the information they need to know. Everything else is a distraction. I M PR OVI N G YO U R WE B S IT E IN 3 ST EP S Here are three elements that matter most for your website. By focusing on these three elements, you can cut out the junk that distracts customers and turns them away. Element 1: Value Proposition Oli Gardner is a master of building great websites. As co-founder of Unbounce, Oli spends his days thinking about and testing how websites can convert more users into customers. In a recent podcast, Oli discussed dealership websites and the importance of clearly communicating your value proposition to your customers: “If you can’t communicate [your value proposition] quickly, your competitor will,” said Oli. “If you can’t communicate quickly, your competitor will.” Oli said you have less than five seconds to make your value proposition clear to visitors. If you don’t, they will move on to the next site. When a customer first visits your website, they have one question on their mind: What can you do for me? The answer to that question is your value proposition. Dealerships should put their value proposition at the top of their homepage. Remove other messages that might distract from it, including financing deals, weekend sales, and messages from the dealer. Most dealers struggle to do this, but when they do, the difference is clear. The dealership website in “Example A” is easy to read and has a clear value proposition: “Family owned for 35 years. 5 minute approvals.”
Your value proposition is a signal to your target customer they are in the right place. Remove clutter from the homepage so your most important message stands out. Element 2: Testimonials/Social Proof Customers are always on the lookout for scams and bad companies. They want to see proof you’ve made customers happy in the past. Testimonials are the best way to put a wary customer’s mind at ease. Testimonials should be honest, authentic, believable and relatable. Here’s an example of an excellent testimonial for a dealership in Oregon: “Amber and the team were extremely helpful. No pressure and they were attentive to our needs. Great experience. We will definitely be back for our next purchase. Amber answered all our questions, even met us on her day off and followed up the next day via text to ensure we were happy. Financing was quick and painless. The whole process was under two hours.” Reviews that seem over-the-top, or even fake, can do more harm than good. Dealerships should encourage customers to leave honest reviews. Never create fake testimonials or encourage customers to write “favorable” reviews. People can sniff out inauthenticity a mile away. They will steer clear of your dealership and find another. Element 3: Call to Action Button Finally, your website needs a call to action: a clearly-defined next step for customers to take. Most websites look like “Example B.” This homepage has at least 10 different calls to action, with everything from “Shop inventory” to “Claim your Offer!” With so many elements vying for your customer’s attention, the action they’re most likely to take is leaving your site. When it comes to CTAs, clarity is king. Your homepage should have no more than three “actions” for customers to take. Ideally, your website offers a single CTA. Brand loyalty starts with the dealership website. If you promise an excellent carbuying experience, make sure your website provides an excellent experience, too. Dealership websites should be clear, trustworthy, and easy to navigate. Focus on the most important elements of your site and remove the clutter. Dealers who do this will be best positioned to build brand loyalty and earn lifetime customers. Adam Tobias is the co-founder and COO of Dealercue, which provides dealerships with real-time, intelligent, market-driven vehicle appraisal, pricing, inventory management, and sourcing solutions. He can be reached at adam@dealercue.com.
WWW.MIADA.US SUMMER 2019 DRIVELINE 3
ACCELERATE |
By GWC Warranty
VEHICLE PHOTOS SUMMER THAT SELL INSIDE
2019
03.......How to Build a Better Dealership Website 05.................................................. Legal Roundup 06.............World Auto Auctioneer Championship 09.................................CFPB Targets Collections 12...................Be the Coach Your People Deserve 13................................NIADA Government Report 14.............................Michigan Dealer Named NQD
ADVERTISERS INDEX
Greater Kalamazoo AA........................................ 7 Manheim ............................................................. 11 NextGear Capital ............................................ 8-9 VAuto................................................... Back Cover
WHAT’S NEW
NABD SUBPRIME CONFERENCE S AV E T H E D AT E : OC TOBER 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!
OFFICE
For information on how to become a member of MIADA please contact us at (248) 828-7010 or www.miada.us.
NIADA HEADQUARTERS
NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838
Driveline is published by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006. Periodical postage is paid at Arlington TX, and at additional offices. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of the Michigan Independent Automobile Dealers Association or NIADA. Likewise, the appearance of advertisers, or their identification as members 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
4 DRIVELINE SUMMER 2019 WWW.MIADA.US
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.
BOARD OF DIRECTORS CHAIRMAN OF THE BOARD Ray Campise Certified Motors 23509 Little Mack St Clair Shores, MI 48080 586-775-7000 sales.cmotors@gmail.com
DIRECTORS Tony LoBretto Alamo Valley A/S 6100 West D Ave Kalamazoo, MI 49009 269-344-8250 alamovalley@gmail.com
PRESIDENT Otto Hahne City of Cars 1695 Stutz Dr Troy, MI 48084 248-458-1500 otto@cityofcars.com
Darvin Mileski NextGear Capital 11799 N College Ave Carmel, IN 46032
VICE PRESIDENT Kelly Herb Tom Stehouwer Auto Sales 7000 S Division Ave Grand Rapids, MI 49548 616-455-7000 TREASURER Joe Kuhta GWC Warranty 8865 Reese Rd Clarkston, MI 48348 248-670-1133 JKuhta@gwcwarranty.com SECRETARY Ed Ophoff Ophoff Motor Sales Inc. 2921 S Division Wyoming, MI 49548 616-452-7761 edwoph@aol.com
Maurice VanCoillie Van’s Used Cars 23509 Little Mack St Clair Shores, MI 48080 586-773-0560 586-773-0660 Bob Vincent Automotive Dealer Services LLC PO Box 102 Milford, MI 48381 586-477-8282 robertvincent@live.com
Jerry Drouillard Autohaus of Royal Oak 4411 Delemere Royal Oak, MI 48073 248-549-3636 gdro999@hotmail.com Jeff Baker Muskegon Car Credit Inc. 1515 28th St SW Wyoming, MI 49509 616-249-2000 EXECUTIVE DIRECTOR Lisa Michael 5119 Highland Rd PMB 393 Waterford, MI 48327 248-828-7010 lisamichaelmiada@gmail.com
Nicole Renee Rite On, Inc 4680 W Jefferson Ave Ecorse, MI 48229 313-649-7308 nicole.riteon@gmail.com
MISSION STATEMENT
THE MICHIGAN INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION IS COMMITTED TO PROMOTING GROWTH AND PRESERVING THE VITALITY AND INTEGRITY OF THE INDEPENDENT MOTOR VEHICLE INDUSTRY THROUGH EDUCATION AND LEGISLATION AS ADVOCATES FOR CONSUMERS AND DEALERS.
LEGAL NEWS |
By Allison Harrison
LEGAL ROUNDUP
CARS E-SERVICES Earlier this year the state launched its CARS e-services website. Now, all temporary registrations are completed electronically through the CARS system. The new electronic process eliminates the need for dealers to handwrite temporary registrations and BFS-4 logs. Now, the CARS system will maintain the BFS-4 log for dealers and will print the temporary registration. The CARS system is an improvement, but it does leave some questions. Can I use my old stock of BFS-4’s? No. As of March 8, the only recognized proper registration is the CARS generated BFS-4. Do I have to use special paper? No. You can use generic 8 1/2” x 11” printer paper. You can, if you so choose, purchase waterproof paper or wrappers. Can I void a temporary registration issued through CARS? No. All cancellation requests must be submitted to the Regulatory Monitoring Division (fax number 517-335-3192). Cancellations must be complete prior to the delivery of the vehicle to the customer and with a completed TR-34 Certification Statement. The state has made it clear that cancellations for failure to obtain financing or a buy-back program will not be granted. What if the CARS website is down – can I issue a temporary registration the next date it is up? Maybe. The date the temporary plate is issued must match the date of delivery on the RD-108. If the vehicle has already been delivered and RD-108 processed, you must process the temporary registration that day. If the temporary registration cannot be processed that day, no temporary registration may be issued. What are all these different sections on the Temporary Registration? The temporary registration from CARS contains three parts: 1) top portion with permit number in large font, 2) Michigan Temporary Registration with customer information, and 3) dealer copy with permit number, vehicle information, and issue date. The top portion should be displaced in the vehicle’s rear window or where a rear licensing plate would be displayed. The Michigan Temporary Registration is given to the customer as registration for the vehicle. The dealer copy must be retained in the applicable vehicle’s deal jacket.
INDUSTRY NEWS | By Used Car News
CHANGES IN FIRST HALF OF 2019 Is there a lien fee? Yes. If there is a lien on a motor vehicle title a $1 fee is added to the title transfer fee.
NEW CFPB DEPUTY DIRECTOR
BRIAN
JOHNSON
How many users can issue a Temporary Registration? Two. Only two individuals for B-Licensed dealers are permitted to issue temporary registrations. Do I need to maintain a separate BFS-4 Log? No. Your BFS-4 Log is kept electronically through the CARS portal. TRADE IN CREDIT Effective January 1, 2019, the sales tax tradein credit amount is the price agreed upon by the dealer and purchaser, not to exceed $5,000. DEALER TRAINING All new B-dealer applicants submitted on or after March 20, 2019, are required to complete a pre-licensing training within six months of submitting their application. All used dealers must complete a continuing legal education once every 24 months. The state has not created any new or different training course to fulfill the continuing education requirement. MIADA is actively working on your behalf to become an approved vendor for both new dealer training and continuing legal education. To learn how you can help MIADA become an approved dealer vendor call MIADA at 248828-7010. DEALER PLATE REMINDER As the weather gets nicer and members start heading up north, remember you cannot use your dealer plate for everything! Do not use a dealer plate to tow a boat! As a friendly reminder, it is appropriate to place dealer plates on: (1) Dealer-owned vehicles being driven to and from repair facilities, storage lots, and other locations where vehicles are being held prior to sale; (2) Dealer-owned vehicles being moved to locations where they may be bought or sold; (3) Dealer-owned vehicles driven by employees, servants, or agents of the dealership for any use except as a service vehicle; and (4) Dealer-owned vehicles may be driven by a prospective customer of a dealership for testing or demonstration purposes for up to 72 hours. Also, someone who has purchased a vehicle from a dealership may operate the vehicle with a dealer plate for up to 72 hours after taking delivery of the vehicle.
Consumer Financial Protection Bureau director Kathleen L. Kraninger recently announced Brian Johnson will serve as the deputy director. Mr. Johnson first joined the bureau in December 2017 as senior advisor to the director and was named principal policy director in April 2018. He has served as acting deputy director since July 2018. “I’m glad to announce officially that Brian will be the bureau’s deputy director,” said Kraninger. “Not only has he done a fantastic job serving in the acting capacity, he has been an invaluable part of the team. Brian’s extensive experience on consumer and financial policy will continue to serve the bureau in its focus on preventing consumer harm and using all of the tools Congress gave us to protect consumers.” Johnson joined the bureau from the House Financial Services Committee, where he spent over five years serving in various capacities, including senior counsel, chief financial institutions counsel, and policy director. During his time on the committee, Mr. Johnson led the policy and legislative work for the Financial Institutions and Consumer Credit Subcommittee on issues related to consumer protection and credit, mortgage origination, credit reporting, banking and data security. Prior to joining the committee, Johnson worked for the attorney general of Ohio and the White House Domestic Policy Council. He received his B.A. in economics, as well as his J.D., from the University of Virginia. WWW.MIADA.US SUMMER 2019 DRIVELINE 5
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 DRIVELINE SUMMER 2019 WWW.MIADA.US
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.”
ACCELERATE | By GWC Warranty
3 HURDLES TO VSC SALES
HOW
TO
CLEAR
THEM
The numbers are in. Consumers have spoken. There are three main reasons customers don’t protect themselves with service contract coverage. The good news is dealers can easily clear these hurdles with the right program in place. A study recently released by Pegasystems surveyed more than 1,000 consumers to understand whether or not they saw value in service contract coverage and what stops customers from purchasing a VSC with their vehicles. Overall, the study found 63 percent of customers do not have a service contract despite seeing the value in one. Why is this? Let’s dive into what stops customers from buying a VSC and how you can overcome those obstacles. Cost Thirty-five percent of customers say
they can’t afford a service contract. But when you compare the small increase in monthly payment to what a major repair could do to a tight monthly budget, it’s easy to see which scenario is easier to withstand. With so many used car buyers on tight monthly budgets, a service contract’s monthly investment can easily pay off in the long run. Not Thinking They Need One Thirty-two percent customers think they’ll never encounter the need for a service contract, but trends say otherwise. A simple question of how long the customer plans on owning the vehicle he or she is purchasing is just what you need to clear this hurdle. With the average length of ownership on the rise, chances are your customers will be in their vehicles for a long time. Used cars are inherently more likely to break down, especially as they approach
and surpass 100,000 miles, making it more likely than ever a customer will need a VSC at some point during his or her ownership. Lack of Availability at the Time of Purchase To solve for the 29 percent of customers who aren’t offered a VSC at the time of purchase, all you have to do is turn to the 300 percent rule. The first step is having a service contract provider that offers the product versatility – from both a vehicle and term perspective – that fits your inventory. Once that’s in place, it’s vital you present 100 percent of your products to 100 percent of your customers 100 percent of the time. You’ll never bat 1.000, but you’ll get better at your presentation as you continue to get real-world practice and you’ll inevitably see the results in your F&I profits.
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WWW.MIADA.US SUMMER 2019 DRIVELINE 7
INDUSTRY WATCH | By Auto Remarketing Staff
LATEST SAFETY FEATURES PIQUING INTEREST
RECENT
SURVEY
BY
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
8 DRIVELINE SUMMER 2019 WWW.MIADA.US
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.
WWW.MIADA.US SUMMER 2019 DRIVELINE 9
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,
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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.
MANAGEMENT MATTERS | By Dave Anderson
BE THE COACH YOUR PEOPLE DESERVE
ARE
YOU
A
CRITIC
Ken Blanchard called feedback the “breakfast of champions,” and rightfully so. We all need feedback to grow and develop to our fullest potential. When done properly, coaching those on your team and giving them quality feedback is one of the highest return uses of your time. However, when it comes to giving feedback, many leaders today are more of a critic than a coach. They point out what’s wrong without offering the individual any coaching that would allow them to adjust and bring better performance day in and day out. Criticism without coaching doesn’t elevate people – it frustrates people. What follows are some key principles of coaching, and some steps to make sure you’re the coach your people deserve, and not just a critic of them. But first, let’s discuss what it means to be a critic and what it means to be a coach so you can better assess your style of giving feedback. A critic is defined as “one who expresses displeasure or an unfavorable opinion about someone or something.” Simply put, criticism without coaching is merely expressing displeasure and leaving it at that – not exactly the balanced feedback “breakfast” necessary to grow, develop, and invest in the people on our team. A coach, on the other hand, is “someone who gives private teaching, a trainer or coach.” Make no mistake, a coach will also express displeasure concerning poor behaviors or performance, but the difference is he or she will also provide instruction on how to improve. With a better understanding of what it means to be a critic and a coach, let’s look further at the differences between them. To improve performance, a coach will provide feedback concerning poor performance and immediately follow it up by redefining a performance expectation. The coach will do this both conversationally and sincerely, without getting personal, profane, loud, or reminding the offender of their past flaws and faults as the critic does. To improve performance a good coach will show the person what good performance looks like. By redefining the performance expectation with the individual, you’re setting the standard. By modeling and demonstrating the good performance you’re looking for, you’re setting the example. To further reinforce his or her point, the coach will explain why it’s
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OR
A
COACH?
important to perform the task or duty in the manner prescribed. A great demonstration of what you’re looking for, by itself, is not enough to help coach the individual to greater levels of performance. This is why the best leaders in any field explain the “why” behind it. They understand people are more likely to apply the “how,” and live with the “what,” if they first understand the “why.” To test the individual’s comprehension of the feedback and the example demonstrated, a coach will ask the person to perform the task again to demonstrate their understanding of the proper technique. The only way you can know for sure that people get it is to test them, and let them show you they’ve got it. If the person requires further training to be able to perform the task or create the desired outcome, the coach will provide the resources necessary to support the person. Strong cultures understand talent doesn’t arrive fully developed, and a ferocious dedication must be made to training, coaching, and mentoring employees. Identifying and resourcing a team member’s growth by providing tools, experience, mentors, training or additional practice are key ways the coach supports and helps build the skillset necessary for the person to perform well. Once the performance improves, a coach will reinforce the change or improved behavior. This is because behaviors that are reinforced and rewarded are more likely to be repeated. But remember, the longer you wait to reinforce the behavior, the less impact it has. Reinforce often and quickly when you’re trying to influence behavioral and performance changes. If necessary, the coach will establish consequences for the performer if the poor behavior or performance continues. If you want to change a behavior, you must change the consequence for that behavior. As the saying goes, “If nothing changes, nothing changes.” Even when establishing consequences, a good coach will affirm belief in the performer and his or her ability. This is because the coach understands the consequence being established is something they’re doing for the person, not to the person. The sole objective of a consequence
is to improve performance. In summary, a critic is good at finding and pointing out faults or flaws. While a coach does likewise, his or her primary objective is to create the structure and tools necessary to eliminate the flaws. The coach is not just a “finder” but a “fixer.” With these points in mind, are you more of a critic or a coach? If you were to randomly survey team members on your coaching and feedback abilities, would they agree? If not, or if you’re unsure, the good news is you can fix that by bringing more focus to applying the principles shared here and adding value to your people, so they in turn can add more value to the organization. If you have good people who are being hamstrung by criticism without coaching, don’t expect them to endure or stay in your ranks for long. They won’t put up with the abuse, nor should they. Step up and be the coach they deserve – don’t wait until it’s too late to do so. Dave Anderson, “Mr. Accountability,” is a leading international speaker on personal and corporate performance improvement. He is also the author of 14 books and host of the podcast, The Game Changer Life.
WASHINGTON UPDATE
| By Shaun Petersen
NIADA GOVERNMENT UPDATE 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
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.
ACTIVITY
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.
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COVER STORY
ASSOCIATION NEWS
OTTO HAHNE NAMED 2019 NIADA NATIONAL QUALITY DEALER
MICHIGAN DEALER’S JOURNEY FROM A TROUBLED YOUTH LEADS TO ASSOCIATION’S HIGHEST HONOR
Otto Hahne, president of City of Cars in Troy, Mich., was named the 2019 National Quality Dealer of the Year during NIADA’s 73rd annual Convention and Expo in Las Vegas. In a ceremony at the Venetian Resort on the Convention’s final night, Hahne was chosen from the 13 State Quality Dealers nominated for the highest honor awarded among NIADA’s dealer members. “I am so, so humbled. I love this industry and I can’t thank everyone enough,” Hahne said in accepting the award. “I never expected to be here.” Hahne’s remarkable journey began with a troubled childhood that eventually led to Boysville of Michigan, a youth crisis rehabilitation center run by the Brothers of the Holy Cross. That, he said, was exactly what he needed to help him get his life on the right track and build the foundation for his career. From there he enrolled at the Michigan Career Institute and graduated at the top of his class as a master mechanic. After working as a service technician for auto dealers, he opened his own independent shop, repairing and restoring Jaguars and other exotic cars. Soon the owners of those cars began to ask him for advice about buying other high-end vehicles, a spark that ignited his passion for buying and selling cars. Eventually that led him to become a buyer for auto dealerships, and in 1994 he took the leap of opening his own dealership, Factory Executive Motor Cars, with $20,000 and an inventory of just three vehicles. That dealership, which was renamed City of Cars when Hahne moved it from Pontiac,
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Mich., to Troy in 2011, now has two locations with a combined inventory of 250 vehicles and $28 million in sales last year. The family business – Hahne’s wife Jerrianne and children Lauren, Leah and Evan are all involved – has grown from two employees to 17. That success is a result of Hahne’s dedication to providing the best possible customer experience, including everything from giving his staff “carte blanche” to take care of any customer issues that come up to giving dealership visitors what Jerrianne calls “the famous Otto hug.” “We don’t really ‘sell’ cars,” he said. “We connect our customers with the right car for them. “We can come in each morning with a smile, leave each day able to look ourselves in the mirror – and even have a little fun in between.” Hahne is happy to pass along that business philosophy and the operational aspects of his dealership – including his favorite quote, “Every minute a car is not online is a minute of lost opportunity” – to others. He has served as a mentor not only to his team members – six of whom have gone on to own their own independent dealerships – but to employees of other dealerships, many of whom have been sent to Hahne by the dealerships’ owners to be trained in his methods. Hahne said his commitment to teaching others began with coaching his children and their teams in youth sports. “I realized my job as coach was to put my team in the best possible position to win,”
he explained. “That is my mission today. I’ve trained so many dealers, many of whom have sent their team members to me. I’ve trained them and helped them. I always want to be transparent and give back.” Hahne’s mission extends to himself – he continues to constantly educate himself on the industry’s latest trends and techniques. He is an active member of an NIADA Dealer 20 Group and in 2018 he completed the course to become a Certified Master Dealer. He also gives back to his national and state independent dealers associations, the used vehicle industry and his community. Hahne is currently serving his second term as president of the Michigan IADA, having previously served as vice president and on every MIADA committee. In those roles, he was instrumental in MIADA’s successful campaign to enact legislation requiring pre-licensing and continuing education for the state’s used vehicle dealers and in setting up an internship program with Northwood University. He has been involved in NIADA lobbying efforts at the federal level at the National Policy Conference in Washington D.C. Hahne has given his money and time to community and charitable organizations including youth sports, Boy Scouts, Care House, St. Jude Children’s Hospital, the Lions Club and, of course, Boysville. He has also helped numerous individuals, donating money, vehicles and Christmas gifts to families in need. For the past 10 years, he has given each patient at Detroit’s Qualicare Nursing Home a Christmas gift bag.