DRIVELINE M I C H I G A N I N D E P E N D E N T A U T O D E A L E R S A S S O C I AT I O N FALL 2017
DOES YOUR SALES PROCESS
MEASURE UP? Time to Fine Tune PAGE 14
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INSIDE
06.................................................... Social Media Lessons 08...................................................Data Security Warning 09..........................................Remembering Rocky Rogers 10........................................... NIADA Government Report 13.......Tips to Secure Vehicle Service Contract Financing 14......................... Does Your Sales Process Measure Up?
WHAT’S NEW
NATIONAL POLICY CONFERENCE SESSIONS CATCH THEM ON NIADA.TV
Get caught up on the latest national regulations on the NIADA.tv Compliance/Legal channel! There was an impressive lineup of federal compliance and regulatory educational sessions during the recent National Policy Conference in Washington, D.C., including updates from the FTC, CFPB, and Small Business Administration. These sessions will be available for viewing on NIADA.tv October 16.
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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 2017 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
Christopher Hanley • chris@niada.com PRINTING
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ASSOCIATION NEWS
PRESIDENT’S LETTER Association Update Greetings members, Here we are approaching Fall 2017! The used car industry has been moving at a fast pace. I want to give you some feedback from the NIADA Convention and Expo. The classes were awesome, there were plenty of vendors on hand, and there were many classes tailored for each style of dealership, whether you’re a Buy Here-Pay Here or a conventional dealer, with a large focus on compliance and cyber security. While at the convention I attended the state presidents’ meeting to discuss ways to increase membership and new ideas to improve our fantastic dealer organization. One of the highlights of the convention was watching the presentation of each state’s Quality Dealer of the Year. Congratulations to our very own Jerry Drouillard for being recognized as our outstanding dealer of the year and receiving an award from NextGear Capital.
The NIADA Convention and Expo had several of our members in attendance. I’d like to thank all who came. One of the values of being a member of NIADA is that we fight legislative issues constantly in an effort to create a better environment for our entire dealer body. Please join us September 25-27 at our 2017 National Policy Conference & Legislative Summit in Washington, D.C. Last year I enjoyed being able to lobby our issues to senators and representatives. I want to thank everyone for nominating me to serve as your president again. I truly enjoy this position and will continue to give back to our members and industry. We can always use volunteers to help with our organization. I certainly want to thank all of our members, including our board members, for all you’ve done to contribute. Tickets to our annual awards banquet are still available through Lisa. You won’t want to miss this one! Ruth Johnson, Michigan’s secretary of state, will be our guest speaker. Most of the raffle tickets are sold, so please check with Lisa before they’re all gone! If anyone has any questions or concerns, please feel free to call anyone at the MIADA office or myself and we’ll help you as best as we can. Best Wishes, Otto Hahne President
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 Dennis Craig Instant Car Credit PO BOX 146 Acme, MI 49610 231-938-2627 dcintc@gmail.com
PRESIDENT Otto Hahne City of Cars 1695 Stutz Dr Troy, MI 48084 248-458-1500 otto@cityofcars.com
Rick Rynberg Rynberg’s Car Co. 3880 Holton Rd Muskegon, MI 49445 231-744-1441 rickandwendy1@verizon.net
VICE PRESIDENT Ted Cooper Genesys Systems Inc 360 E Maple Rd Troy, MI 48083 248-597-1003 ted@gensystem.com 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
Tony LoBretto Alamo Valley A/S 6100 West D Ave Kalamazoo, MI 49009 269-344-8250 alamovalley@gmail.com Darvin Mileski NextGear Capital 11799 N College Ave Carmel, IN 46032 Maurice VanCoillie Van’s Used Cars 23509 Little Mack St Clair Shores, MI 48080 586-773-0560 586-773-0660
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
Bob Vincent Automotive Dealer Services LLC PO Box 102 Milford, MI 48381 586-477-8282 robertvincent@live.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.
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SOCIAL MEDIA
BY KATHI KRUSE
SOCIAL MEDIA LESSONS FROM MY PE TEACHER Exercise These Tips for Success
Teachers can affect our eternity. In fact, it’s hard to tell where the influence stops, if at all, even many years later. On today’s social web, our values appear front and center. As the saying goes, reputation is everything, and there are social media lessons to be learned from our days in gym class. Not every teacher has a profound effect but most of us remember what it was like in PE. My teacher was a short, spunky lady named Mrs. Betty Bruno who was also my cheer coach. The best teachers teach from the heart and Mrs. Bruno’s lessons continue to resonate in my world today. I learned each of these lessons from Mrs. Bruno. Let me know how many resonate with you. Failure is not fatal. But failure to change might be. Marketing in the social era can be scary, especially if you’re new. People don’t know what to post or where to even start. The smart thing to do is begin with a strategy, not tactics. Then, keep failing until you succeed. Whatever you do, don’t do nothing. You need to be where your customers are, and that’s social media.
If you find a path with no obstacles, it probably doesn’t lead anywhere. Today we hear a lot of noise urging us to buy a particular social media solution. Don’t believe everything you hear. Social media and managing your digital reputation takes hard work, commitment, talent and a budget. There will be obstacles, but none that can’t be overcome. Once you’re on the right path, you’ll find your sweet spot. Enthusiasm is everything. Social media succeeds because we are social animals. Sharing great information with other humans is embedded in our DNA. Enthusiasm plays a major role in a company’s culture. Empower your employees to create content for your social channels. An enthusiastic team is contagious. Customers will catch it and spread the “awesome.” Teachers teach more by what they are than by what they say. The same is true for your dealership’s brand. It’s no longer viable to just advertise low prices or great service. Your brand is what consumers tell each other it is. Social media affords you the opportunity to show proof of what makes your company unique – to illustrate why customers continue to choose you over the competition. Never mind what others do. Do better than yourself – beat your own record and you’re a success. Many dealers still put a lot of weight on how many Facebook fans or Instagram
followers their competitors have and they judge themselves by it. What matters today in social media is a highly engaged audience that wants to talk about you to their friends. It’s better to have a smaller, engaged group than thousands of followers who’ll never think about becoming customers. Keep score on yourself. Set goals, track KPI’s and measure your progress. That’s how you succeed in social media. People rarely succeed unless they’re having fun at what they’re doing. I can’t begin to tell you the facial expressions I’ve seen when business owners bring up the subject of social media. Whether you agree or not, having fun on social media is one of the keys to success. Drop your preconceived ideas and go have some fun! Experience is a great teacher. I had a client who recently got their first “hater” on their Facebook page. We rode out the storm by remaining patient. Often just having faith your regular, engaged fans will right the ship is all that’s required. It worked this time and the client proved to themselves social media can boost company image. In the future, there will be other haters, but each time you experience these situations, you become better at recognizing how to handle them. Don’t limit yourself. What you believe, you can achieve. With a developed social media strategy, you can engage customers on social media. Many dealers tell me they have to be on social media because everyone else is. While that’s true, they’re limiting themselves by not making an investment. Isn’t your business worth more than a halfhearted effort? It’s not where you start but where you finish. Social media is a seismic shift for every auto retailer. It’s turning companies, especially retail, upside down because operations must be restructured to accommodate customers’ expectations. Wherever you are right now is a good place to start. It’s a moving target – taking swift action matters. Don’t just stand there. Ready. Set. Go. KATHI KRUSE is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc. Kruse Control coaches, trains & delivers webinars focused on integrating social media and online reputation management into dealership operations.
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ASSOCIATION NEWS
ASSOCIATION NEWS
BOARD MEMBER WINS LOCAL RACE
NEW DEALERS Welcome
Tony Lobretto Stock Champion
Tony Lobretto owns Alamo Valley Auto Sales in Kalamazoo, Mich., and is a MIADA board member. Tony recently raced in the Flip Flop Cyber Stock Championship at the Kalamazoo Speedway and won first place! Congratulations, Tony!
Welcome to the following new dealers! • 1st Choice Financial Services, LLC, Grand Rapids. • AutoCar Inc., Lenox. • Consumer Service Corp., Kalamazoo. • Dealers Supply Company, Troy. • Metro Auto Broker LLC, Inkster.
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Fall 2017 / Driveline
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MANAGEMENT MATTERS
BY AUTO REMARKETING STAFF
DATA SECURITY WARNING Your Dealership May be Vulnerable
Helion Automotive Technologies has a new data security warning for auto dealerships. In recent weeks spear phishing hackers have been busy planting malware inside social media posts designed to lure employees of organizations to click on them. Dealership employees are ideal targets for spear phishers looking to grab personally identifiable information and bank account information. “This is the same spear phishing scheme that hackers have been using successfully in targeted email messages for several years now,” Helion president and chief executive officer Erik Nachbahr said. “The problem is that although most employees have been told and know not to click on emails from people they don’t know, they don’t think twice when it comes to clicking on a message or offer in their Facebook feed. They are more trusting in a social media environment.” If employees take the bait of hackers and click on infected links, malware can be downloaded onto the employee’s computer, compromising the entire organization’s network. Helion recently conducted a phishing test at an auto dealership by sending emails to 125 employees. Three employees took the bait. When prompted by
the website the email drove them to, they entered both their usernames and passwords. If the attack were real, the consequences could cost a dealership thousands of dollars. “That test was a good sample that revealed auto dealerships are very vulnerable to this type of attack and need to do a better job at educating their employees,” Nachbahr said. Nachbahr’s tips for preventing a spear phishing attack: • Instruct employees to never click on links in social media posts and messages from their computers or personal devices while at work. • Require employees to change their network login passwords every 90 days. • Encourage employees to keep social media profiles private and not accept friend or connection requests from people they don’t know. • If employees receive a phone call, email message or social media message from a banking institution, vendor or other entity asking for personal information, do not give this information verbally or via email. Contact the institution directly. • Get cyber liability insurance, which covers costs associated with a data security breach and loss of data. • Regularly apply software updates to Microsoft Windows, Internet Explorer and all software applications on every PC.
DEALERSHIP EMPLOYEES ARE IDEAL TARGETS FOR SPEAR PHISHERS LOOKING TO GRAB PERSONALLY IDENTIFIABLE INFORMATION AND BANK ACCOUNT INFORMATION.
MARKETING MATTERS
BY KATIE BARTH
ADVERTISING SMARTER Focusing Ad Spend Where It Counts
2016 was a record year for the automotive industry. After a year of great sales, many dealers are left with a big question: what’s next? We all know the importance of digital advertising, but many spent 2016 just checking the boxes of search, display, and social advertising. The true test comes from a potential customer’s simple search. Is your dealership showing up when they’re looking for you? Advertising successfully online starts with strategy. Far too often we hear things like, “My budget is too small,” “We don’t see much ROI with our ads,” or “We’re competing against a huge dealership down the street – our budget doesn’t allow us to keep up.” Sure, budgets are important, but how you spend them makes all the difference. Advertise the Cars that Need it Sounds simple, right? When it comes to execution, many find it difficult. Think about the vehicles on your lot right now. How many have been there 60 days or more? Which ones are you advertising? Why
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did you pick that vehicle over the one you’ve had for two weeks with little engagement? What about the hottest car of the season that’s getting all of the page views? All inventory is not created equally. Focus your spend on the cars that need the boost. Do you have 10 silver sedans on your lot? Spotlight those over the hot rod you’ve had for three days. The hot rod will inevitably sell itself. Focus on the vehicles that need the boost and you’ll see big results. Strategy in Media Buying The average car shopper spends 75 percent of their product search time on the Internet. Google, Bing, Facebook, Instagram, YouTube, Waze, and the list goes on and on! Successful spending – and advertising – lies in the ability to determine which platform is the most relevant for your target audience and the vehicle you’re advertising. Is your zip code a heavy-traffic area? Hit the customers looking for a route around the traffic with Waze. Wanting to boost your fixed operations sales? Serve an ad for a discounted oil change to the DIYers searching for oil change how-to’s on YouTube. Focus on the Customer Now that you’ve determined what and where to advertise, it’s time to focus on the customer. It wouldn’t make sense to serve
an ad for a sports car to a mom of three watching YouTube videos for installing car seats, but often the focus is more on getting the ad out there than strategy in who the ad is being shown to. Connect the dots between your stocking and advertising, and make sure you’re hitting the right audience with the right message. Instead of worrying about how many zeroes are in your budget, focus your efforts on your strategy. Everyone is checking the boxes of digital advertising, but very few are focused on the details. If your focus is where it should be – the right inventory, the right place, and the right customer – even the smallest dealerships can compete with the large stores for the sale. Set your dealership up for success with strategy! KATIE BARTH is the senior marketing manager at PureCars.
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ASSOCIATION NEWS
REMEMBERING ROCKY ROGERS A Detroit Legend
Rocco “Rocky” Rogers, Jr., was a self-made legend in the auto business in Metro Detroit as one of the most knowledgeable independent used car dealers. Born in Pennsylvania, his immigrant parents moved to Detroit when Rocky was young. His entrepreneurial ambition beckoned to him at a young age. Rocky quit high school and soon bought his first business, a Sunoco gas station, where he taught himself to repair cars. Rocky applied for his first dealer license in 1963, and that’s when his used car business began. Rocky wholesaled quality detailed cars from his location in Detroit and shipped them to Butler Auto Auction in Pennsylvania. He began to achieve a reputation as a respected dealer. He was hired as the used car manager at Ver Hoven Chevrolet, and was quickly promoted to general manager, overseeing every aspect of retail operations. Rocky dreamed of owning his own dealership, and in 1976 opened Rocky’s Auto Sales on Gratiot and 15 Mile in Clinton Township. The lot became a high volume used car lot, moving dozens of vehicles each month with the help of his dedicated employees and many local dealers and wholesalers. Rocky retired in 2007, but maintained an active dealership license.
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“My dad was a big man who could be a little rough around the edges but had a big heart,” said Rocky’s son Danny. “He was respected by anyone who did business with him. His word was 100 percent written in stone – if he said he would do something it was done.” Rocky’s reputation extended beyond the car business. His second passion became horse racing and enjoying his farm with his growing
family in Jeddo, Mich. Rocky’s bigger than life personality captivated his friends, whether they knew him from the car dealerships, race tracks or casinos. A loving family man, Rocky always provided for his seven children. He leaves behind 19 grandchildren and four great-grandchildren. Rocky passed away on July 7, 2017, the day after his 82nd birthday, but his legend lives on.
Fall 2017 / Driveline
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WASHINGTON UPDATE
BY SHAUN PETERSEN
NIADA GOVERNMENT UPDATE Latest Government Issues and Activity
NIADA is your voice in Washington D.C., advocating for independent dealers, the used vehicle industry and small business. Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities. PAC The featured speaker at NIADA-PAC’s upcoming event will be the Speaker. Paul Ryan (R-Wis.), Speaker of the U.S. House of Representatives, will be the highlight of a business roundtable discussion hosted by the NIADA’s political action committee on Oct. 17. Ryan will discuss issues related to business and the used vehicle industry with industry leaders in an informal setting.
on the Senate Committee on Commerce, Science and Transportation – recently sent a letter of inquiry to several Buy Here-Pay Here dealers and subprime finance companies across the country. While Sen. Nelson acknowledged what we in the industry have been pointing out for years – the use of the devices allows creditors to extend more credit on better terms for better vehicles to customers who otherwise might not qualify for those terms – his letter expressed concerns of consumer advocates about data privacy and safety. Nelson cited unsubstantiated claims from consumers who said their vehicles were shut off while they were driving. He also attempted to link the use of the devices and an alleged rise in subprime auto loan delinquencies to the 2008 mortgage crisis. In response, I traveled to Washington D.C. with NIADA ucti legislative committee and BHPH commission member Mike Brill to meet with the senator’s staff. We spent an hour educating the staff about the use of the devices in BHPH
Rep. Steve Stivers (fourth from left) was joined at his fundraiser by (left to right) Shaun Petersen, Steve Jordan, Columbus Fair Auto Auction owner Alexis Jacobs, David Andrews and Andrew Gabler. For more information about the event and how to attend, contact me at 1-800682-3837 or shaun@niada.com. On Aug. 23, NIADA CEO Steve Jordan and I, along with NIADA president David Andrews and president-elect Andrew Gabler, attended a fundraising event for Rep. Steve Stivers (R-Ohio) at Columbus Fair Auto Auction in Columbus, Ohio, and presented Rep. Stivers with a contribution of $4,995 from the NIADA-PAC fund. Stivers serves on the House Financial Services Committee and is a member of the Congressional Automotive Caucus. He has been a proponent of policies to strengthen small business and was a featured speaker at NIADA’s 2014 National Leadership Conference and Legislative Summit. LEGISLATIVE Payment assurance devices have attracted attention on Capitol Hill. Sen. Bill Nelson (D-Fla.) – the ranking Democrat
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dealerships and their related finance companies. We explained the devices are a tool for dealers and finance companies to communicate with customers to assist in account servicing, rather than immediately repossessing a vehicle. We assured them it is not possible for payment assurance devices to shut off vehicles while they are in operation because the devices are not connected to the engine. NIADA will continue to monitor the situation. REGULATORY Near the end of the Obama administration, the Department of Labor issued a rule that would have significantly changed the salary threshold for white-collar employees to be exempt from overtime compensation, raising it from $23,660 annually ($455 per week) to $47,476 ($913 per week). But in November, just before the Dec.
1 date when it was supposed to take effect, a federal judge in Texas issued a temporary injunction against the effective date of the rule. After hearing arguments in the case, Judge Amos Mazzant permanently struck down the rule on Aug. 31, saying the government had overstepped its authority. And last month, the Department of Justice asked the court to dismiss its pending appeal of the judge’s temporary restraining order. Just before the judge’s ruling, the Department of Labor published a new request for information asking for feedback on questions defining the duties and appropriate salary level one must have before being exempted from overtime, including whether nondiscretionary bonuses and incentive payments should be considered a portion of the salary. One of the issues from the struckdown rule being examined by the request is whether that salary level should be automatically updated. NIADA is reviewing the request and will submit appropriate comments. GRASS ROOTS New York Attorney General Eric Schneiderman, who has targeted dozens of car dealers with allegations of regulatory violations over the past year, has put another dealership in his crosshairs. In August, Schneiderman announced a $298,000 settlement with Nissan of New Rochelle for deceptively charging 298 consumers for what he called an “unwanted and bogus anti-theft product that cost up to thousands of dollars per consumer.” The cost of the product – a windowetch program that included a “Total Loss Protection” benefit – was tacked on after customers had agreed to a price for the vehicle and often without their knowledge or consent, Schneiderman said. In addition to refunding the cost of the product, which ranged from $215 to more than $5,000 per vehicle, the dealership agreed to pay the state $22,084 in penalties, fees and costs. It also agreed to fully disclose that any and all after-sale services or products are optional and that the price is negotiable, to clearly explain after-sale services or products being offered to customers, and to only add an after-sale service or product to the final bill with the knowledge and full consent of the consumer. SHAUN PETERSEN is NIADA’s senior vice president of legal and government affairs.
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MANAGEMENT MATTERS
BY DALE POLLAK
HOW LITTLE THINGS DETERMINE YOUR SUCCESS Details Matter “It’s life by a thousand little things, or death by a thousand cuts.” A dealer recently shared this line as we were discussing how the car business has changed in the last 25 years. The dealer’s observation strikes me as a perfect, cleareyed summation of how efficiency, technology and transparency have made retail automotive a much different environment for dealers. Consider the following common, everyday tasks and how much the little things matter more than ever before. Stocking Vehicles For years, many franchise dealers have followed a fairly reasonable strategy as they order factory vehicles: Stock as many of the cars they know they can sell, based on what they’ve sold. But here’s the problem with this strategy today: It’s too passive. It relies too much on history, and your factory partner. It can ignore, and miss, faster-moving retail trends that help you maintain, if not gain, sales and market share. It’s also imprecise. The situation is very much the same in used vehicles. Variances in vehicle color, condition, mileage and specific equipment make the difference in determining a vehicle’s wholesale or retail value, and its likely appeal among potential buyers, given competing vehicles in the market. It’s easy for an appraiser or buyer to make costly mistakes if they’re relying solely on what they know, rather than augmenting their intelligence with market data. Pricing Vehicles It wasn’t that long ago pricing vehicles was fairly easy. In new vehicles, you pretty much only needed the MSRP or “Call for a Great Price!” In used vehicles, your retail price was just a standard mark-up away from the cost of the unit. Pricing cars didn’t require much critical thinking and, if you made a mistake, buyers forgave you, and they were none the wiser. Today, it’s so very different. Many consumers know almost exactly how
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much they should pay for a vehicle and get a fair deal. They know if your vehicle’s price is in, on or off the market, given the car’s color, condition, equipment and other particulars. They won’t even bother if your prices don’t fit their perception of fair purchase parameters for that vehicle. The environment means that if your prices fit in the context of a consumers’ competitive set, you’re in the game. If not, you’re out. Likewise, if you’re too deeply in the game, you stand a good chance of giving up gross. On top of all this, you’ve got the constant ticktick-tick of inventory age undermining your gross profit potential. Simply put, it’s impossible to price effectively without some kind of technology or tool to help you optimize each vehicle’s market price position. Engaging Buyers It’s easier than ever for consumers to find the vehicle(s) they want to purchase, and the price they think they should pay. It’s also fairly easy for them to find at least one dealer, in virtually every market, who claims to offer a different, hassle free car buying experience. We also know most consumers will only visit one, possibly two, dealers before buying a vehicle. As a result, some dealers take every customer engagement very seriously. To them, every customer conversation, email, instant chat or text message could be the last. “We truly believe that it’s almost as if the customer is looking for a reason not to do business with us,” said the COO for a West Coast dealer group. “We work very, very hard to make sure they don’t find that reason.” Today’s car business may be different, and arguably more difficult, than it used to be. But it’s still a healthy, viable business where success awaits those who properly apply themselves to its pursuit. My dealer friend is correct. The little things matter more than ever. To paraphrase an old saying, “The devil is in the details, and so is your next deal.” DALE POLLAK is the founder of vAuto and an executive with Cox Automotive. This column ran on his blog on June 19. For this story and all his posts, visit www.dalepollak.com.
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ACCELERATE
BY GWC WARRANTY
TIPS TO SECURE VEHICLE SERVICE CONTRACT FINANCING How to Convince and Reassure Lenders
If you’ve heard it once, you’ve heard it a million times: “There’s no room on this deal for a vehicle service contract.” It’s a struggle so many dealers face when trying to secure the funding for not just the vehicle sale but also back end F&I products. But there’s no need to fret. Knowing some tricks of the trade can help you convince lenders of the value of a vehicle service contract while also reassuring them that including one on the deal won’t diminish their chances of receiving regular payments. Ask multiple times. Sometimes, all it takes to get a lender on board with funding a service contract is to ask again. If the initial reaction is a “no,” you can remind your lender why a service
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contract is beneficial to them and ask again if it’s possible to find a touch more for the back end. Show a Certified checklist. A lender’s primary concern is ensuring they continue to get paid. Nothing can stop that more quickly than a broken down vehicle. Don’t be afraid to show a hesitant lender the checklist from your Certified program to help get them over the edge and on board with a service contract on the deal. It will demonstrate the effort you put into reconditioning and make the lender more comfortable with the quality of the vehicle. Provide protection from delinquencies. Like you and your lender know, a broken down vehicle usually leads to a broken down loan. And what better way to keep a vehicle on the road than a service contract that protects customers from budgetbusting repair bills. Remind your lenders of this fact when attempting to secure back end funding. Stress the importance of protecting subprime customers. One objection you might hear is a customer’s credit score is preventing you from securing additional funding. In this case, you can reference the tight monthly budgets of many subprime customers
as further evidence a service contract is needed. It’s assurance that an already tight budget won’t get tighter because of an unexpected repair, hence keeping the payments rolling into your lender. Build a great relationship. The more you and your lender work together and succeed on deals with a service contract, the more confident you will get with each other. And the more confident you are with each other, the better the prospects for a prosperous and profitable future together. Highlight for your lenders that making a deal work today could lead to many more deals down the road.
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MANAGEMENT GAMEPLAN
BY SCOTT BERGERON
DOES YOUR SALES PROCESS MEASURE UP? Time to Fine Tune
Are you fed up with your sales team? Your processes? If you’ve watched your salespeople get too comfortable and satisfied with their own performance, maybe it’s time to shake things up. And I’m not talking about sweeping house and starting over. One of the best salespeople I ever met was Jeff Barber. He’s now retired and living an awesome life, fishing and hunting in the Colorado Rockies. Jeff would always give me advice when I was working my way up, first as a green-pea, then in management. Jeff is a former drag racer. He said, “Selling cars is a lot like drag racing – everyone’s got an engine, and if they’re all built the same way, the one who does the best job of fine tuning his car will win. If you lose a race, you don’t tear apart the engine – you fine tune the obvious problems. “Besides, spark plugs are a lot cheaper than an engine rebuild. We all have the same opportunities in sales, but it’s the guys who work smarter and fine tune themselves and their daily routines who will win.” There’s huge danger in thinking you’ve got everything dialed in – especially when it comes to fundamental items in your dealership. For example, have you reviewed your contract and financing forms to make sure they’re easy to read, navigate and understand? Coasting along without conducting basic inspections of basic processes will lead to problems. Without this step, you’re likely letting profits walk out the front door – in many cases without even knowing it. Then, there’s the other side of the equation – where your processes are so bad everybody knows about it. United Airlines is an example. Their “established” policies led to a firestorm of public criticism and severely damaged their reputation when they dragged a bleeding passenger off a plane. Lack of knowing or lack of inspections will harm your dealership. In the long run, it could damage its reputation, which could take years to bring back to glory days. Here’s an example. One of the nation’s largest dealers recently sold me and my wife a car, but not without many hours of illegible paperwork, and frustrating old school 4-square processes that didn’t even pertain to my situation. If a customer brings in a 60 percent down payment of a free and clear trade, and the salesperson says, “They can’t calculate the payments unless you put cash down,” it can
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Driveline / Fall 2017
be a little frustrating to say the least. And no, this wasn’t a green pea. It was an eight-year veteran, and yes the desk required a cash dollar down before they would work up figures, apparently to adhere to established policies. After this silly process, the paperwork was hard to read and looked like it had been copied repeatedly since 1993. Finance processes and slowdowns also can lead to hours of unproductive time for staff, not to mention the reputation it’s putting into your customer’s head. If it can happen in a big box store, it can happen anywhere. Here’s where and how to fine tune your sales engine without large amounts of cash or time investment. Who are you selling to? Whether business is good, decent, or falling off a cliff, look at where sales are or are not coming from. If your dealership has a loyal base of aging customers, you’d better start planning for the next generation of buyers – who have demands, expectations and values different from your older customer base. Ask around, talk to Millennials and find out what they want, what would bring them in the dealership, and what turnoffs exist. Many younger generation buyers don’t believe in the dealership model at all, so you’d better have your Internet department bulletproof, and start thinking outside the box. The dealership model is changing in many ways, and if we rely on “doing things as we’ve always done” you can find yourself kicked to the curb. In fact, there’s nothing wrong with a salesperson asking an UP, “What do you hate most about buying a car?” At least it isn’t the same old, “Can I help you?” It gives customers a chance to vent, and gives the salesperson an opportunity to show off why your store is different, and they’ve just found someone who listens. Salespeople and Performance First, look at your sales board and who’s selling the most cars and why. Then do the same with the bottom of the board. If you have good information, either from a CRM or a paper-based system, you can tell why the top guys are leading and the bottom guys are trailing. It usually stems from a “sales process glitch.” Your top guy who talks to 50 people is usually demo-ing at least 35 of them. What are your bottom guys demoing? How many are they writing up? Raw data on the basics can convey a lot you may have skipped over. Getting a handle on the basics gives you a place to start but it’s a long way from the finish line. For example, good sales performers always can be made better with improved prospecting, tracking and accountability techniques. Poor sales performers likewise can improve with these same steps. There’s always room for improvement. Factor in
THERE’S ALMOST NOTHING WORSE THAN HAVING A HAPPY CUSTOMER GO BAD BECAUSE OF BAD PAPERWORK OR A SLOW PROCESS DURING DELIVERY. the ideas, insights and idiosyncrasies of the up-and-coming customer base and address how to best handle different buying groups – the older, more established and loyal crowd and the younger generation. Finance and Delivery Processes and Procedures There’s almost nothing worse than having a happy customer go bad because of bad paperwork or a slow process during delivery. This is what happened to me at the big box store with my wife. Frankly, I was amazed. Given this dealership’s size, the last thing I expected was hardcopy paperwork where type was illegible and agreements were poorly written. Obviously, I wasn’t alone in this situation. Most people usually don’t wait for the question about what they hate about a dealership experience. Most will tell us without asking – they hate that the process takes so long, even when they do most of the homework ahead of time online. It leaves me asking the following question: How many people will not return, or show consistent loyalty, to a dealership because their last impression was unfavorable? Today’s sale is a chance to do one of two things: Solidify a long term customer, or make them wonder why your dealership isn’t keeping up with the times. Former dealer executive SCOTT BERGERON is the founder and principal at Daily Gameplan (www.dailygameplan. com), a sales team performance company. Daily Gameplan’s “Red Book,” cloud-based CRM, and direct consulting have been used in thousands of dealerships throughout the United States. Bergeron can be reached at 303.918.3169 or scott@dailygameplan.com.
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