NEBR ASK A INDEPENDENT AUTOMOBILE DE ALERS ASSOCIATION | NOVEMBER / DECEMBER 2019
DEALER
UPDATES
NIADA UNVEILS 2019 USED CAR INDUSTRY REPORT MOST COMPREHENSIVE PICTURE OF THE USED VEHICLE INDUSTRY
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COMPLIANCE MATTERS | By Zach Klempf
TCPA AND TEXT MESSAGING
Are Your Dealership’s Texts Up to Code? Could your auto dealership bounce back from a $2.5 million mistake? Sounds daunting, doesn’t it? Well, the executives at Lithia Motors faced that very real question just a few years ago. The source of their troubles was a text messaging law called TCPA. In 2011, Lithia Motors of Medford, Oregon, sent a short text message to 57,800 consumers. A week later, they sent a second message to 48,000 of those people. What followed was a class action lawsuit that forced Lithia to settle for $2.5 million. Luckily for Lithia, they are one of the country’s largest auto groups. But could your dealership take a blow like that? For most independent dealers, the answer is a resounding “no.” How can dealers avoid this fate? The answer is simple, although not always easy. Complying with TCPA text messaging rules can be challenging if you don’t have the right tools in place. TCPA Text Messaging Laws and Lawsuits TCPA, or the Telephone Consumer Protection Act, is a 1991 law that prohibits companies from sending any form of unsolicited communication to customers via telephone technology. TCPA applies to prerecorded messages, robocalls, faxes, and, yes, text messages. For a dealership to call or text a customer, they must have prior written consent. But that’s not all. Business communication must also comply with several other conditions as outlined by TCPA. Lithia Motors is not the only dealership that has paid for violating TCPA. In 2016, Interstate National Dealer Services agreed to a $4.2 million class action settlement after sending robocalls to customers with unsolicited offers. In 2017, another dealership faced legal action for texting customers about a vehicle recall. This message seems innocent enough, but because the recall wasn’t covered under the car’s warranty, the plaintiff claimed it was a scam to get her to buy more services. The lawsuit was unique because it expanded TCPA law to “service-related” communication instead of just marketing. The latter case illustrates just how fine a line dealers must walk with texting customers. If only one of your salespeople makes a mistake, the penalty could be steep. Fines for violating TCPA can cost up to $500 per text message. How to Keep Text Messages TCPACompliant One of the biggest risks for dealerships is salespeople messaging customers from their personal phones. Those messages are not TCPA-compliant, which means your dealership is at risk of facing legal action.
Maintaining TCPA-compliant text messages takes a lot of work. Luckily, there is a shortcut for dealers to maintain compliance without all the hassle. But before we get to the shortcut, here are the guidelines dealers should follow to adhere to TCPA. • Acquire written consent. First and foremost, GMs should ensure all communication with a customer has been agreed to beforehand. Consent must be in written form and consist of a double opt-in. In other words, when a customer agrees to share their phone number with you, dealerships need to send a follow-up message that asks them to confirm. That message could look something like this: “ABC Motors News and Deals Updates. Messages sent weekly. Reply HELP for help. Reply YES to confirm your sign up.” A customer must reply with a Y or YES to start receiving messages. This is to ensure customers are not signed up without their permission. • Be specific and share important information. Customer consent is not universal. Dealerships need what’s called “contextual consent,” which means customers agree to specific types of communication, like marketing or service-related messages only. Dealerships need to be specific when requesting permission. Instead of asking customers to simply “subscribe,” dealers should ask them to, “subscribe to weekly promotional deals and updates.” Dealers also need to make customers aware of any fees they might incur. With some cell phone data plans, customers must pay for each text message received, so dealers need to include “message and data rates may apply” in their opt-in messages. A dealership’s privacy policies should be easily accessible on their websites. Add a link to your company’s privacy policy in the footer of your website. Make sure an attorney reviews the policy. • Stick to your word. Even after obtaining consent from a customer, dealerships can still violate TCPA by not sticking to their word. Remember, customers must consent to specific types of communication. If they sign up to receive vehicle recall messages, you cannot send them marketing messages without consent for those, too. Consent is also broken by sending more messages than promised. If you say messages will be weekly, but you send them out daily, those extra messages are considered unsolicited and in violation of TCPA. The rule regarding contextual consent is simple: Do what you say you were going to do and nothing more.
• Allow customers to opt out at any time. Just as important as opting in is giving customers the opportunity to opt out at any time. Every message sent by your dealership should include, “Reply STOP to cancel” at the end. Dealers need to maintain a Do Not Call list of all customers who have opted out. It is critical this list is maintained and followed. Many TCPA class action lawsuits are filed because dealers ignored customers’ requests to be removed from call lists. • Stay up to date on changing regulations. Since becoming law in 1991, TCPA has evolved several times. The most recent example is the “services-related messaging” lawsuit mentioned above. With each new case, TCPA’s interpretation changes. It’s important to stay up to date with the latest reading of the law to avoid unknown pitfalls. Take the TCPA Shortcut: Use a CRM System If maintaining TCPA text messaging compliance sounds like a lot of work, you are right. From managing opt-ins to auditing messages to keeping up with new regulations, TCPA compliance is a full-time job in itself. Luckily for busy independent dealers, there’s to a shortcut to TCPA compliance that will save you significant time, money, and headache. The secret is using an automotive CRM with built-in, TCPA-compliant text messaging. CRM systems automate the process so you and your salespeople can focus on the customers. When you add a phone number to your CRM, the customer automatically receives an opt-in message. Each message after that includes optout instructions, and the CRM keeps your Do Not Call list up to date. Additionally, all text messages are stored inside the system, not in a salesperson’s private phone. If a salesperson ever leaves the dealership, they won’t take any sensitive customer information with them. CRMs also make sure your salespeople stay TCPA-compliant with phone calls. No matter the method of communication, using a CRM ensures your dealership stays on the right side of the law and away from lawsuits. Using a CRM to Stay TCPA-Compliant It’s smart to use text messaging to communicate with customers. However, dealerships absolutely need to protect themselves from expensive TCPA violations. The steps to staying TCPA-compliant are clear, but implementing them on a regular basis is difficult and time-consuming. The better way is to rely on a CRM system to take care of it for you. With the right tools, TCPA-compliant text messaging is easier than you think. Zach Klempf is founder & CEO of Selly Automotive. He can be reached at 415-562-7104 or zach@a1softwaregroup.com.
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ASSOCIATION NEWS
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03.................................... TCPA & Text Messaging 05.........NIADA Unveils Used Car Industry Report 06..................................Preparing for a New Year 10................................NIADA Government Report 12...............Safeguarding Social Media Accounts 14............Foundation for Top Sales Achievement Manheim............................................................. 11 NextGear Capital............................................. 8-9 vAuto................................................... Back Cover
What’s New
S AV E T H E D AT E F O R 2 0 2 0 WA A C : M AY 1
Save the Date for the 2020 World Auto Auctioneers Championship! It will be held at Manheim Dallas Auto Auction on Friday, May 1. The event will be streamed live on NIADA.tv. To learn more, visit autochampionship.com.
Office
For information on how to become a member please contact Kathy Robbins at kathyrobbins@niada.com or 800-682-3837
NIADA Headquarters
NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838
For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. Nebraska Dealer Updates is published bimonthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of Nebraska Dealer Updates or NIADA. Likewise, the appearance of advertisers, or their identification as members of 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 Christy Haynes • christy@niada.com PRINTING Nieman Printing
For information on how to become a member please contact Scott Erikson: eriksons@aol.com or 402-639-0664
1) Manheim Omaha: $10 off buy or sell once a week. 2) Auto Owners Insurance: Up to 10% discount off select lot insurance. 3) Auto Services: $90 coupon on warranty service, one year or more. 4) Lincoln Auto Auction: Two $25 coupons for buy or sell fee, one per visit. 5) N ebraska Auto Auction: New member: $100 gift certificate for a buy or sell fee. Renewing member: $100 gift certificate for buy or sell fee. 6) Salina Auto Auction: Two $25 coupons for buy or sell fee. One per visit. 7) N ational IADA Membership: Includes subscription to Used Car Dealer magazine.
BOARD MEMBERS PRESIDENT
Conrad Neverve Conrad’s Auto Center 718 3rd Ave. Kearney, NE 68845 308-236-2088 www.conradsautocenter.com
PRESIDENT ELECT
Mike Bockmann Bockmann Auto Sales 217 2nd St. St. Paul, NE 68873 308-754-5645 www.bockmannauto.net
SECRETARY/TREASURER
Chad Tessman Velocity Auto Sales 2801 N Lincoln Ave. York, NE 68467 402-362-2886 www.velocityautosales.com
EXTENSION OFFICER
Deb Chesterman World Auto Sales 1651 S. 11th St Nebraska City, NE 68410 402-873-6925 www.worldautosalesneb.com
DIRECTORS
Ray Biltoft 420 E 4th Street Superior, NE 68978 402-879-4287 Chuck Borgmann Borgmann Auto Sales 105 13th Street Norfolk, NE 68701 402-379-4553 www.borgmannauto.com Joel Kershner Kershner’s Auto Korner 220 West South Street Hastings, NE 68901 402-461-3161 www.kershnerautokorner.com Arlan Kuehn Kuehn Auto Sales, Inc. 495 Old Hwy. 20 South Sioux City, NE 68776 402-494-2677 www.kuehnauto.com Chuck Rogers Chuck Rogers Auto Sales 675 Hwy. 75 Tekamah, NE 68061 402-374-2400 www.chuckrogersauto.com
Clint Jones 805 23rd St. Columbus, NE 68601 402-563-3602 www.clocktowerauto.com Frank Penate 708 Locust St. Grand Island, NE 68801 308-675-3133 islandautogi.com Denny Vetter Angus St. Gretna, NE 68028 402-332-2700 402-332-2014 doveauto.com
ADVISORY DIRECTORS Karl Jensvold 25505 W 12 Mile Rd. Southfield, MI 48034 402-480-2571
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ASSOCIATION NEWS
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A PUBLICATION OF THE NATIONAL INDEPENDENT AUTOMOBILE DE ALERS ASSOCIATION
Section 06 LOOKING
AHEAD:
Most Comprehensive Picture of the Used Vehicle Industry
THE USED
TIPPING Used vehicles POINT have finally to new, and market factors emerged as a compelling Growing new-vehicle in 2019 alternative used vehicles transaction will only increase new-vehicle their prices and have expanded transaction vehicles. Additionally, an oversupplyappeal. percent the savings APR and steeply prices more palatable, of advantage route since consumers such as zero in pre-owned Without these incentives,discounted leases, late-model give up less the body styles cars to used vehicles going have dried we expect Americans are rich in technology the used up. shoppers for the significant SUVs. At the While the gravitate will gravitate and come same time, new incentives toward, namely trucks in million sales vehicle market is savings they present. that have expected and made record-high to vehicle sales, for the first time in five years, fall below 17 strengthen which crossed 40 we million units expect used and grow. in 2018, to SHARE OF FRANCHIS E USED SALES BY VEHICLE AGE
SOURCE:
3-YEAR-OL D VEHICLES ALL FRANCHIS MAKE UP ED USED 23% OF SALES
Edmunds
The composition of sales has transformed franchised used vehicle old vehicles dramatically. Three-yearmore sales accounted for 8.5 percentage in points representing 2018 than they did five margin. As the most-sold vehicle years earlier, a lease returns consequence of the age by a wide record number expected expected in 2019, this of to generates increase. And this flood figure is only more opportunities of inventory vehicles to for dealers differentiate to certify sales of vehicles their 5 years and inventory. Meanwhile, in volume, older creating a vehicles. scarcity of have dropped off more affordable used
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FOR MORE INFORM www.cox autoinc.c ATION, VISIT om/news
To view the room full 2019 Cox & Outlook Automotive (CAMIO) flipbook, Market newsroom and click CAMIO. go to www.coxaut Insights section for Visit the Market oinc.com/ regularly-up a comprehens Insights dated data and information ive list of industry affect the on new- and used-vehicle drivers and topics that markets.
Automotive lending has been robust Auto loan originations throughout in dollar volume this growth billion, breaking cycle. in 2018 increased the previous In the fourth according record of to $584 quarter of to the $569 billion 2018, the to subprime set in 2017, loan originations, Federal Reserve Bank share of auto borrowers loan origination of New York. was 19.3%, 2018 was down from of the data For auto the highest up volume its recent for auto loan year in the peak of 25.4% from 18.9% the prior originations 19-year history in used sales year and in the second Of consumers (in nominal more than quarter of terms). Growth offset the with active prices for 2015. decline in defines them both new credit, 20% new, and and used have a score as subprime, higher vehicles drove that according Judging from up loan amounts. to Equifax. The share the of subprime readily available, new loan origination lending to be healthy volumes, which is helping and sustainable today appears credit remains to keep demand subprime as it is normal borrowers SUBPRIME robust. for to be represented LENDING according AT HEALTHY A key measure to their proportion in auto LEVELS of health and of the population. loans number of stability in Auto lending loans being auto lending is diverse, made to subprime there was is resilient and Auto lenders the plenty of credit reactive to borrowers. can 2017 and available in market trends. Overall, lending markets tolerate more risk consumers compared because the took advantage 2018 compared to borrowers to other types valuation and risk is worth were of that. More of recovery help the reward. used vehicles able to obtain loans subprime limit losses Ease of on both new in 2018 – even A first auto a leading in the event vehicles and The implication loan, reason for of default. is that lenders overall sales the beginning especially for a young, loans given lower-incom growth. of low unemploym saw advantages e borrower, building credit. the move up the social in subprime ent and low is often ladder and Data from delinquenci are correlated. a crucial part Equifax show es. of that age and An adult under have a credit credit scores 35 is more score under than 50% 620 compared more to the broader likely to AUTO LOAN population. ORIGINATI ON $ BY CREDIT SCORE
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NIADA presents its 2019 Used Car Industry Report, an annual array of facts and statistics that provide the clearest, most comprehensive picture available of the state of the used vehicle industry and the trends shaping its future. The report, which was unveiled in September at the NIADA National Policy Conference in Washington D.C., was delivered to association members along with the October edition of Used Car Dealer. It’s also available online – free for NIADA members and for purchase by non-members – at www.niada.com. The report includes new insights into familiar areas, including the 2019 Car Buyer Journey Study from Cox Automotive, an important look at the customers purchasing used vehicles and how they shop; Edmunds’ Used Vehicle Outlook, including CPO data; GoldStar by Spireon’s look at GPS technology’s effect on the impact of impound fees; CarGurus’ section on auto buying patterns by body style; and the latest on digital consumer
experiences in auto finance from RouteOne. The report also explores new areas, such as Dominion/Cross-Sell’s look at Carvana’s business model and how to compete with it, Carfax’s research into merchandising in today’s digital world, tips from Home Loan Investment Bank to help customers get credit application approvals, TrueCar’s study of trade-in process trust issues, insight into dealer ROI from Autosoft and a section detailing the rise of mobile chat and lead generation data through that growing marketing medium from new NIADA industry partner OfferUp. And, of course, the Used Car Industry Report includes the staples – NIADA’s member and business confidence surveys, Buy Here-Pay Here benchmarks from NABD, Subprime Analytics and NIADA Dealer 20 Groups, used car sales by channel by month from J.D. Power/NADA Used Car Guide, information on the auto finance market from Equifax, Black Book’s retention values analysis and Auction Perspectives from industry leaders.
MARKET WATCH | By Auto Remarketing Staff
BEWARE OF HURRICANEDAMAGED VEHICLES
Bureau Promotes VINCheck Tool In the wake of Hurricane Dorian and Tropical Storm Imelda, which flooded vast areas of the East Coast and Texas, thousands of damaged and flooded vehicles are emerging. The National Insurance Crime Bureau said fraudsters may start trying to scam innocent car buyers, selling them vehicles impacted by flooding. NICB warns to do your homework before purchasing a used vehicle, which includes acquiring accurate information about certain aspects of the vehicle's history. To help, NICB offers VINCheck. With the free tool, consumers can check a vehicle for “red flags.” NICB designed the tool to help consumers determine if a car has been reported as stolen, but not recovered. It also helps determine if the vehicle has been reported as a salvage or total loss vehicle. The tool, NICB vice president of communications Brooke Kelley said, “is a clear and easy way to protect consumers and one of the most utilized resources on our website.”
The story of VINCheck started in 2005, after Hurricane Katrina made initial landfall in south Florida and hit New Orleans soon afterward. NICB personnel assisted state and local law enforcement and insurance claims professionals. Officials recognized the threat to consumers from a large number of flood vehicles in the area. NICB agents knew many of these vehicles would reenter the market presented as adequate used vehicles. However, NICB said, those vehicles “could potentially become rolling caskets for any unsuspecting buyer.” The bureau worked to identify and catalog many of those abandoned vehicles before tow operators with bad intentions took them to locations where cosmetic surgery would present them as attractive vehicles priced well below market value. NICB created an online tool to access all the vehicle identification numbers of damaged vehicles, an estimated 300,000 to 500,000 of them, resulting from claims data NICB member insurance companies provided
electronically. The bureau worked to enable the general public to access the data and at the same time protect each insurance company’s proprietary information. The bureau secured member-company authorization and support for the idea and on Oct. 17, 2005, launched its “Flood Vehicle Database.” With the database, free of charge, anyone at any location could query a VIN to check for Hurricane Katrina damage. Since its creation, the bureau has enhanced and expanded the Flood Vehicle Database twice, changing its name to VINCheck in 2007. At that time, the database added total loss and salvage records. The next enhancement took place in June 2008 as the database provided access to unrecovered insured stolen vehicles. NICB said the VINCheck service became the NICB website’s most popular feature, and it boasts more than 2.5 million page views since July 1, 2018. More than 1.1 million VINCheck queries have taken place since Oct. 1, 2018. “Testimonials from users demonstrate that VINCheck remains one of the industry's best methods of providing public safety and consumer protection,” said Kelley. “The information helps to prevent innocent people from being victimized through the purchase of damaged and potentially deadly used vehicles.”
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MANAGEMENT MATTERS |
By Jennifer Finlay
PREPARING FOR A NEW YEAR
Evaluate Where You’ve Been and Where You’re Going We are coming to the end of 2019. Don’t let one year fade into another without really evaluating where you have been and figuring out where you are going. How was your year? Did you achieve your goals? Did you even have goals in place? What were your biggest struggles? Were you able to stay within budget? These are some of the questions you should be asking yourself in preparation for the coming year. Having a structured plan of action is one of the best ways to get started with a new year. Running a business is time-consuming and at times exhausting. Staying in front of potential problems or shortcomings that could sabotage your growth is critical to your success. I know firsthand how easy is it is to neglect things. Sometimes it’s tough to just get through the regular day-to-day tasks. You have bills to pay and payroll to handle. Then you have finding the right inventory, selling sufficient vehicles and the list goes on and on. But just keeping up will not push you forward. You know the saying, “You can’t keep doing the same thing and expect a different outcome.” If you want to sell more, grow the business, be more in compliance, build your reputation, etc., you have to work at it. The end of the year is the perfect time to create a plan that will work for you. Set aside some time and determine where you want to be this time next year. Here are a few tips and ideas to get you started. THINGS TO RE-EVALUATE Spending: One of the best ways to evaluate this is to look at your P&L and vendor statements. Highlight the non-fixed expenses. For example, your electric and water bills will not fall into this category. Non-fixed expenses would be things like water delivery, uniforms, printing expenses, office supplies, interest rates, bank fees and title services. Shop these items – see what else is out there. None of these vendors or suppliers will ever call you and offer you a better deal because you
have been with them for however many years. It doesn’t work that way. If you find a better deal, call your current vendor and give them an opportunity to match or beat what you found. You will be shocked at the amount you can shave off your accounts payable. Internal processes: This could include anything from sales procedures to advertising methods, hours of operation, the amount of your dealer fee and any policies concerning deposits, money back guarantee or in-house warranties. Do you recall there being any issues with any of them in the past year? Is your dealer fee still enough to cover what you need it to? Do you not have a dealer fee but wish you did? Are customers’ deposits refundable if they change their mind? Is that working for you? All of these things can be adjusted. I don’t advise you change these things back and forth throughout the year, however. That shows inconsistency and overall is not a good practice. But the end of the year is a great time to make these decisions and have a plan ready for January 1. Your exposure: Surprisingly I see many dealers fall short in this area. Of course, the end goal in this business is selling inventory. It’s how the money comes in to sustain operations. Too often I see dealers with tunnel vision focusing solely on that. There is a proper path to that end goal, and if you don’t recognize it you will never be as successful as you could be. Exposure is simple. It goes hand in hand with relationship building. It doesn’t have to cost a lot or consume a great deal of your time but it must be addressed consistently and frequently. So, what is this exposure I am talking about? Easy – get involved! There are so many ways to get your business in the spotlight. A great way to get started is by joining your local IADA. They have a huge network of dealers as well as industry resources that benefit dealers significantly.
They also host events throughout the year that provide opportunities to build relationships with others in the industry. Another way to gain exposure and achieve brand recognition is to sponsor things in your community. This could be a toy or food drive, blood drive, a little league team or even have staff members trade off volunteering at an animal shelter or food bank. Most of these events will have some sort of literature printed to promote them. Your company name will be on it and given to their target market. This type of exposure has a dual outcome. First, it gets your name out there. Second, it makes everyone know you are the type of business they want to do business with. How will you get new and different exposure this new year? Training and education: This too is an area I see dealers neglecting. Don’t make that mistake. Proper and ongoing training and education is a must, starting with the onboarding of new employees. You should have a detailed description and job outline in place for each employee. This reduces confusion about what you expect and how you expect duties to be carried out. It seems like a simple concept but you would be surprised how important it is. You know how you want the business to run. You have a vision of sales and customer service. Put a training process in place that will ensure your employees understand that vision and then give them the tools to make it happen. Continuing education is equally important, not just for employees but also for owners and managers. Regulations, laws, and statutes change more frequently than most dealers realize. Staying on top of changes in these as well as industry trends will keep you at the front, and out of trouble as well. Trying to stay in compliance with the DMV, the Department of Revenue, the Trade Commission, the attorney general and the IRS can be time-consuming and tedious when attempted on your own. There are several
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MANAGEMENT MATTERS | By Alan Brown
PROPER AND ONGOING TRAINING AND EDUCATION IS A MUST, STARTING WITH THE ONBOARDING OF NEW EMPLOYEES. companies that offer training in these areas. Don’t try to go it alone. It’s more efficient when you have help. Think about what you need to learn in the coming year that will help protect your business. Safety: As a business owner, of course you want your employees to have a safe, hazard-free work environment. A safety manual is a good start, as well as regularly scheduled maintenance checks around the property. In addition, customer safety should be a priority. One injury could potentially cost you what you’ve worked so hard to build. An end of year physical inspection of the property and any equipment will determine if any repairs need to be made. Appearance: Take the time to pull up to your dealership slowly and thoughtfully. Look at everything. I mean, really look. Are things overgrown? Is the paint faded? How is your signage? We tend to overlook these things as we focus on getting other things done. Do the same thing when you step in the office. Is there clutter? Sit on the other side of your desk where your customer sits. See things from their perspective. How does it look? Do you have things to make your customer comfortable while they are there? Do you have an area for children to be occupied? The more comfortable your customer is the more you will keep their attention. So think about what you could improve. These are just a few things to think about when closing out a year and moving into a new one. It’s about striving to be better than the previous year. List your goals and changes you want to make and put a plan in place to make it happen. Jennifer Finlay CPFS is director of marketing and sales at Sure Title. She can be reached at jennifer@flatags.com.
ENHANCING CUSTOMER EXPERIENCE FROM THE INSIDE OUT 3 Ways to Enhance Customer Experience at Your Dealership
As a car dealership or detail facility, you’re always looking for ways to add value by creating a more meaningful, memorable customer experience. You want to attract repeat business while bolstering your customers’ confidence in your brand. One way to do so involves giving them a clean car experience, from the inside out. Let me explain. Your customers are begging for a tangible experience in an otherwise intangible world. You can’t feel an oil change, an exterior car wash, or a tire rotation. But you can immediately feel the effects of a cleaning treatment that actually removes resins, allergens, and other issues filling your vehicle. And your customers are willing to pay for this feeling. According to a 2015 Customer Experience and Impact survey sponsored by Synchrony Financial, 53 percent of consumers would pay a higher price for the experience they value most. Are you delivering premium products that actually clean the interior of your customers’ cars, or are you just masking the issue with cheap coverup products? Giving your customers what they deserve will help you differentiate your business in a crowded marketplace of consumers hungry for a positive – and clean – experience. Think safe. Think eco-friendly. Thanks to easy access to Internet research, consumers are better informed today than at any time in the past. They are aware of what’s in their cleaning products. They care what their families are breathing in. Carpool moms don’t want harsh chemicals near their kids. Smart customers see right through slick marketing for inferior products. Do customers a favor when reconditioning their vehicles – give them a safe, reliable product line that gets the job done.
Don’t mask the problem. Solve it. Odor removal and interior vehicle cleanliness has been a decades-long challenge for operators of dealerships and detailing companies. That’s because so many products on the market are only meant to cover up the cause of odors rather than truly eliminate them. As a dealership owner, you spend big bucks on all sorts of things in hopes of growing your business – equipment and employees to name a couple. Don’t forget to invest in product quality. If customers aren’t happy with the look, smell, or cleanliness of their vehicle’s interior once it’s been detailed, you’ve wasted an opportunity to make a positive impression where it matters: Product effectiveness. Satisfy. Retain. Repeat. There is no getting around it. Retention is your lifeblood. To keep recurring revenue flowing, find ways to generate return customers. Partner with vendors who will help throw a new-product party at your dealership. Suggest loyalty programs for customers with the vendors selling your most popular products. Make sure these vendors are truly your partners, and that they are offering a reliable product you can stand behind. In the end, customers are more educated and selective than ever before. If your dealership or detail shop delivers anything short of outstanding service, the customer has multiple other businesses to try. As an owner/operator, you must make it a priority to deliver quality products. Your customers demand it. Alan Brown is the executive vice president of NuVinAir Global, a Dallas-based company offering a patented cleaning process and proprietary product line to automotive businesses and service centers across the United States. Email info@nuvinair.com for more information.
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ACCELERATE | By GWC Warranty
IT’S TIME TO MAKE TIME FOR TRAINING
Get Started on a More Successful Dealership With everything you handle on a given day, it’s easy to dismiss training for you and your staff. You understand the value, but always find a reason to put it off. But that can end today. Sure, your main goal is to sell cars. That goes without question. Without finding ways to keep things fresh and continuing to evolve, however, you risk falling behind the competition. You probably already understand this and therefore see the value in dealership training, but it’s easy to watch the busy days, weeks and months fly by without pursuing the training your dealership needs. That said, there’s no better time than the present to overcome these common reasons for putting training on the back burner and get started on a path to a more successful dealership today. Not Enough Time This is the easiest excuse when it comes to avoiding a training program. It’s also the easiest to overcome.
There are countless options for online training you can complete on your own time. Convenience is just the first step though. Setting deadlines is on you. Give you and your team goals to complete certain coursework and you can begin holding each other accountable to chip away at the training iceberg. Not Enough Money Training can be expensive. But it doesn’t have to be. Looking in unexpected places for ondemand training (like your vehicle service contract provider) might be your ticket to affordable – or even free – training resources. A quality VSC provider will value your loyalty and be able to provide training for your entire dealership that will help you be more successful and efficient in every aspect of your business. Not Enough People So you have a small team, maybe even a team of one, and you think training would be
a waste of your time, right? Wrong. Small teams need training that can maximize success and efficiency more than any others. If you’re running a small shop, you need to maximize all your resources. Learning best practices, pro tips and processes that diversify your skills could actually be the best use of your time. Not Enough Opportunity You might be more of a numbers person and you’ve historically had trouble quantifying the opportunity training holds. When overcoming this objection, think about if you had two more upsells in the F&I office each month. Or if you sold five more cars. Or if you learned about a new product that could double F&I revenue. Unless you train on the processes and methods you can employ to achieve these goals, you’ll have no path to get there. There is always opportunity and room for improvement in your dealership, and training is the road to get there.
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MARKET WATCH | By The Car Connection
AGING CARS Americans aren’t saying goodbye to their vehicles like they used to. The average age of a car in the U.S. hit a new record, according to the results of a study recently released from IHS Markit. The average age of a vehicle is 11.8 years old as of 2018. A few factors have likely contributed to the climbing age of vehicles. To start, longer-term loans are available with many consumers financing cars for six or seven years. Thus, they’re hanging onto cars and maintaining them longer.
THE AVERAGE AGE OF A CAR IN THE U.S. HIT A NEW RECORD, ACCORDING TO THE RESULTS OF A STUDY RECENTLY RELEASED FROM IHS MARKIT. THE AVERAGE AGE OF A VEHICLE IS 11.8 YEARS OLD AS OF 2018.
Average Age of a Car on US Roads Hits Record High
Secondly, IHS Markit said vehicles are simply built far better than they were in the past. Both factors have helped the fleet of cars on American roads stick around longer. The auto industry also experienced a boom throughout this decade. Many buyers likely won’t be swapping into a new vehicle until sometime next decade. Even then, the study said the average age should climb past 12-years-old next decade. Breaking down the information by region, western states have the oldest vehicles at 12.4 years old. The northeast’s fleet of vehicles is younger at 10.9 years old, which busts the myth that New Englanders keep their cars forever. Although there isn’t conclusive evidence, weather conditions could play a part in helping cars stay on the road longer in the west than in the wintry northeast. State-by-state, Montana is home to the oldest vehicles on the road with an average age of 16.6 years. The state with the youngest vehicles is Vermont at 9.9 years.
THAT’S MY PATH TO +MORE ALEX BALK | CARite | FORT PIERCE, FL
We’re turning inventory an average of 12-14 times a year, which wouldn’t be possible without our floor plan. Not only does NextGear Capital provide me with financing, but they support my business with technology that keeps it moving.
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*This testimonial was received via interview, audio and/or video submission. This testimonial is based on this dealer’s individual experiences, reflecting real life experiences of a NextGear Capital dealer. NextGear Capital does not claim they are typical results that dealers generally will achieve. This dealer’s experiences may not be indicative of future performance or success of any other dealers. Some of the testimonial has been shortened so the whole message is not displayed due to length and/or relevance.
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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. LEGI SL AT I VE On Sept. 20, the House of Representatives passed H.R.1423 – the Forced Arbitration Injustice Reform (FAIR) Act – by a 225-186 vote that went virtually according to party lines, with two Republicans voting for it and two Democrats against. The bill, which was introduced by Rep. Hank Johnson (D-Ga.), would ban all pre-dispute agreements that require arbitration and prohibit class-action lawsuits in employment, consumer, antitrust and civil rights disputes. Arbitration was one of the key issues on NIADA’s agenda during the recent National Policy Conference in Washington D.C. During the Day on Capitol Hill, dealers advocated against the proposal, explaining to members of Congress it would hinder their ability to slow the onslaught of frivolous classaction lawsuits and adversely impact consumers’ ability to get a faster, more efficient resolution through arbitration. Data compiled by the Consumer Financial Protection Bureau shows consumers received considerably more in arbitration than in class-action cases. While attorneys took in more than $400 million in fees in the class-action cases studied, consumers averaged less than $33 in awards in those same cases. In addition, a recent study by the U.S. Chamber Institute for Legal Reform found employees prevailed three times more often in arbitration, recovering twice as much money and resolving their claims more quickly than in litigation. The bill would also result in increased consumer costs, as dealers and finance companies would pass on the expenses associated with defending class-action cases to their customers. A similar bill (S.610) has been introduced in the Republican-controlled Senate by Sen. Richard Blumenthal (D-Conn.), and NIADA is urging senators to oppose the measure. NIADA has had success in the area of arbitration before. In 2017, NIADA pushed for Congress to take action against the CFPB’s rule eliminating arbitration agreements. Later that year, Congress voted to repeal the Arbitration Rule using its power under the Congressional Review Act.
R E G UL ATO RY The Department of Justice has filed a lawsuit against a Maryland independent dealership for alleged discrimination in its financing practices. Guaranteed Auto Sales, owner Kelly Ann West and general manager Robert Chesgreen are accused of violating the federal Equal Credit Opportunity Act by offering different terms of credit to potential car buyers based on race. The suit is based on DOJ’s Fair Housing Testing Program, in which individuals pose as prospective car buyers to gather information about possible discriminatory practices – in this case, the dealership allegedly “engaged in a pattern or practice of discrimination” by offering less favorable finance terms to African American testers than white testers. According to the complaint, employees of Guaranteed Auto Sales told African American testers they needed larger down payments than white testers for the same vehicles. African American testers were also required to make their down payments in one lump sum, while white testers were given the option of paying in two installments. The lawsuit asks for a court order barring Guaranteed Auto Sales from discriminating against customers on the basis of race “with respect to any aspect of a credit transaction,” as well as unspecified monetary damages to compensate any victims of the dealership’s alleged discriminatory practices. PAC Car City, the Grand Rapids, Mich., dealership owned by NIADA secretary Jeff Baker, hosted a visit by Rep. Bill Huizenga (R-Mich.), a member of the key House Financial Services Committee. Huizenga took a tour of the dealership and met with its management. He was also presented with a campaign contribution from the NIADA-PAC fund for his efforts to protect the interests of the used vehicle industry and small business. The PAC fund also made contributions during the National Policy Conference to 2019 NIADA Legislator of the Year Rep. Blaine Luetkemeyer (R-Mo.) and Reps. Andy Barr (R-Ky.) and Stephanie Murphy (D-Fla.).
G R AS S RO OTS Illinois IADA held a Town Hall meeting Oct. 8, during the NABD BHPH Subprime Conference at the Marriott Marquis in Chicago, to discuss a state law scheduled to take effect Jan. 1 that would cap the sales tax trade-in exemption at $10,000, significantly increasing the amount of tax paid on many vehicle purchases. The meeting was attended by some 60 independent dealers and affiliated industry partners, who heard from – and shared their thoughts with – three state senators: Republicans Don DeWitte and Sue Rezin and Democrat Ram Villivalam. IIADA has joined with the state’s new car dealers association to fight the tax increase before it takes effect. With the state seeking revenue to fund its skyrocketing budget, IIADA has proposed replacing the trade-in change with an increase in the sales tax on private sales, which are currently taxed at a lower rate than dealer sales. In addition, the association would work with lawmakers on drafting legislation to crack down on curbstoners. “The idea is if we catch more curbstoners we can get taxes out of them,” IIADA chairman and NIADA treasurer Gordon Tormohlen said. “They’re just skirting around the system right now.” The outlook, Tormohlen said, is promising. At press time, the Illinois Legislature had a veto session – a special session called to review and reconsider previously passed legislation – scheduled for Oct. 28-30 and Nov. 12-14. Bills have already been introduced by state Reps. Tom Bennett (R) and Ryan Spain (R) that would eliminate the new trade-in tax change. “The takeaways from the Town Hall were positive,” Tormohlen said. “It was a very productive meeting and our ideas were very well received.” After the meeting, Tormohlen said the IIADA board of directors planned to continue discussions with legislators leading up to the veto session to “really put an exclamation point on it.” Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
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SOCIAL MEDIA | By Kathi Kruse
SAFEGUARDING DEALERSHIP SOCIAL MEDIA ACCOUNTS Make Sure Your Business Page is Secure
Even though social media has become mainstream, there are surprisingly many dealers who haven't secured their social media accounts. I’m regularly asked by dealers about the best ways to safeguard their social media accounts. Rather than leave things up to chance, let’s discover the best practices for securing your online accounts so you can feel more comfortable about one of your most valuable company assets. We've all witnessed at least one of the embarrassing or dangerous debacles that happen when social media accounts are not secure. I want to make sure this doesn’t happen to you.
SECURING YOUR SOCIAL MEDIA PROFILES I break this down into easy-to-digest parts. You can examine each one, determine if you're on the right track and make a course correction if necessary. Step 1: Always use work emails for social media admins. Provide your social media manager (or any employee) with a work email address, one that you as the owner have control over, such as [employeename]@ [yourwebsiteURL]. The email must be hosted on your own server and your IT department should always have control of it. Some employees want to use their private emails. This should be avoided at all costs. Why? If they ever leave, they have access to your social media accounts and you do not. Step 2: Periodically confirm your admins. Make sure your social media manager and other social profile admins are using their specific work email addresses. If something happens – they leave, you terminate them, they become unable to perform their job, etc. – you'll have control over that email and, if necessary, you can change the password immediately. Step 3: Setting up Facebook. All Facebook Business pages are created and set up using a personal profile. You log in through a personal account to access the business page. I recommend using an email address similar to what I suggested above or socialmediamanager@[yourwebsiteURL] to set up the personal profile for company use. You may also use the owner’s personal Facebook login if he or she is using Facebook. Since the email address will always stay with the profile (you cannot change it), you’ll want to keep the email address accessible
should you change personnel. Next, you'll “create a page” (as Facebook calls it) while logged into that personal profile. Once the Business Page is set up, you’ll make 3-4 more trusted people admins of the page, such as: • Your social media manager. • You, your GM or CEO. • Your CFO or HR manager. • IT manager. ProTip: If your Facebook page and other profiles are already set up and/or you’ve been using them for a while, perform an audit of the “admins” on each platform to make sure you’re following these best practices. Don’t wait until it’s too late – after someone has left and you’ve inadvertently given up control of your page to nonstakeholders. Again, the social media manager should only be able to use their work email address to access any profile. If they ever leave, you'll have control over it and change the password immediately. If someone such as your social media manager has accidentally or unknowingly made himself or herself an admin using a personal email, you can easily remove them as an admin and invite them back using their work email address.
ADDITIONAL SAFEGUARDS It's important to cover all your bases when it comes to dealership assets and reputation. Safeguard against common catastrophes by including these steps in your overall digital strategy. Hire the right person. I know that sounds obvious but I always mention it to reinforce the importance. Here's what nobody tells you: hiring a social media manager is a challenge. During the hiring process, you'll need to figure out who measures up and who doesn't. Many owners or HR managers don't spend a lot of time on social networks so it's quite a challenge to figure out who the best candidate may be. When you're ready to hire your social media manager, pose specific questions to your candidates. Their answers will inform your decision and help you pick the right person. Ask candidates questions such as: • What social media platform(s) is/are best for our dealership? Why? • What's the most important thing a social media manager should be doing? • Have you ever had to handle a social media crisis? If so, explain the outcome. • What social media strategies do you plan to use to generate leads? • What should your first goals be?
Implement a policy for employee use of social media. Things happen. Even good employees are capable of going to the dark side. The name of the game is to provide an environment that mitigates it. Negative environments often reflect company culture, employee morale and job satisfaction. Most owners/GMs believe they are providing a safe, productive, supportive and enjoyable workplace. However, employee perceptions don't always align with management assumptions. Regardless of the reasons negative outcomes happen, it's best to have a clear cut social media policy that everyone agrees to and adheres to. Should something go wrong – such has a disgruntled employee taking over your social media accounts – a policy for employee use of social media itemizes the penalties for specific behavior, creating a deterrent should things not go as expected. At Kruse Control, we provide such policies for clients. Your social media policy should: • Set the parameters for employee use of social media. • Describe the value of social media. • Briefly outline each platform and best practices. • Describe any unique, company-specific situations where a problem can arise. • Establish protocol when a situation calls for escalation. • Discuss how to handle a problem or crisis. The target outcome of a social media policy should help your dealership market itself successfully on social media while protecting it from precarious situations that lead to outright debacles. The social media policy should be included in your hire package for all new employees, along with a signed acknowledgement to store in their personnel file. For current employees, I would have a meeting explaining you're planning on implementing a social media policy and convey why it's important. Pass out a copy of the new policy and allow a few days for each employee to review it (and for you to answer their questions). Then, within a week or less, require them to return the signed acknowledgement to the HR manager. A word of caution... Under no circumstances should a dealership ask for access to employees’ personal social media accounts. Many state legislatures have drawn a firm line on the matter. Nearly half of states have passed laws prohibiting employers from asking applicants and employees for their social media login information, to bring
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MARKET WATCH
MAGAZINE TOUTS BEST USED CARS FOR TEENS
up their social media pages in the employer’s presence, to change their privacy settings to make the page accessible to the employer, or to add anyone as a “friend” or contact to a social media page. This practice also sends very negative messages to your rank and file that you don't trust them. There's no real benefit to asking and it does a lot of harm. Instead, allow your social media policy to do its job. Every dealership has distinct and important needs. To create the best possible outcomes, it's crucial to incorporate a company's unique needs, specific daily operational situations, and employee relations into each social media policy. There have been far too many situations where dealership social media accounts have not been secured. Please use these steps to assess your own process and policies. As always, I’m happy to answer your questions.
Used Car Rankings
U.S. News & World Report has unveiled its list of Best Used Cars for Teens. Used car rankings are based on model categories, rather than price. • Large car category: 2016 Buick LaCrosse • Midsize car category: 2016 Toyota Camry/Camry Hybrid • Small car category: 2016 Toyota Prius • Small SUV category: 2016 Hyundai Tucson • Midsize SUV category: 2015 Chevy Traverse To be named a Best Used Car for Teens, U.S. News required a vehicle be from the 2014 through 2016 model years, as cars from earlier years don't have enough advanced driver assistance technology to be considered the best for inexperienced drivers. Also considered were high dependability, safety ratings, ownership costs and positive reviews, as well as available tech that can help prevent crashes or lessen their severity. The 2019 Hyundai Accent topped the list of best new cars for teenage drivers, according to U.S. News.
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.
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SALES MATTERS |
By John Chapin
THE FOUNDATION FOR TOP SALES ACHIEVEMENT
Ingredients to Build a Solid Sales Foundation As the saying goes, “A house is only as strong as its foundation.” It takes a strong foundation to ensure sales success. Following are six high-achievement ingredients necessary to build that strong foundation. Be in sales for the right reasons. The first thing I look for in a potential new sales rep is people skills. To have longterm success and become a top achiever, you must be able to understand and communicate with people while also having a great capacity for empathy. Genuine care and a desire to serve and help people is a must. One must also have a burning desire to succeed. A desire to make a lot of money is a good place to start. But it’s also important to know why making a lot of money is important. These reasons should be ones that enhance the life of the salesperson as well as the lives of those around them and the world as a whole. The right attitude and beliefs. What is your daily attitude like? Do you always see solutions when you face problems? Do you stay positive in the face of all challenges? Looking for the positive side of a situation is a habit, and, like most good habits, it can be developed. I’m not saying you need to have a smile on your face 24/7 and believe issues never arise in life. I am saying don’t allow yourself to go to the other extreme of complete negativity and get overwhelmed to the point where you can’t act. When you see a tough situation, recognize it, try to find some positives, keep a good attitude, and ultimately resolve the situation as quickly as possible. What is your motivation level? You need to be highly motivated and ready to work as hard as you have to in order to reach the top and remain there. How about self-confidence? To get to the top in selling requires high self-confidence and high self-esteem. Are you a self-starter or do you need someone to give you a push? To get to the top in sales, you must be a self-starter. You must be motivated from within rather than needing someone to keep pushing you or keep you driven to succeed. To get to the top, you must also be a consummate professional and exude integrity – at all times. Finally, do you see yourself as a person who is completely responsible for your life and what happens in it? This kind of
responsibility is the cornerstone needed for great achievement. A willingness to pay the price for success. How far are you willing to go to be successful? There is a price for success and top salespeople have chosen to pay it. Are you willing to do whatever it takes, ethically, to get to and stay at the top? “Hanging out” with the right people. Who do you hang around with and where are they going? You must hang around successful people who are growing personally and professionally and who support your goals and dreams. Birds of a feather do flock together, and the wrong group of people can drag you down quickly. This doesn’t mean you need to immediately discard your friends and family if they aren’t completely supportive of you. However, as you progress toward your goals, you may find yourself gathering a new group of friends and hanging out with certain negative people less often. Let friends and family know the track you’re on and ask them to help or even to join you in the adventure. Good health. How is your health? It isn’t possible to operate at your highest levels, both mentally and physically, if your health isn’t good. If you are tired, run down, or frequently ill, you will not be motivated, and you will not perform well. You need to get plenty of sleep, eat properly, and exercise on a regular basis to be a consistently top salesperson. Good health also includes your overall mental condition. While sleeping, exercising, and eating right will help your mental state, you must also develop the ability to handle stress, unexpected problems, and other similarly negative things that may affect your emotions. A life with balance and growth. While the beginning of your sales career, or a new job, will be heavily weighted toward your career for the first three to five years, you don’t want to go all-in on your career at the expense of everything else. You must still make time for health, the people in your life, and other things that are important to you. Considering you have 168 hours in a week, there is time to spend 70 hours, or more, at work, and still take care of the other areas your life. But it’s going to require you be a master of your time.
THESE SIX INGREDIENTS ARE NECESSARY FOR CONSISTENT, LONG-TERM TOP PERFORMANCE. IF YOU DON’T HAVE THESE SIX ESSENTIAL INGREDIENTS IN PLACE, YOU WILL FACE SOME DAUNTING CHALLENGES. For short periods, you can devote an inordinate amount of time to one area of your life and neglect the others. However, if you do that for too long, your attitude will suffer tremendously, along with your health and relationships. You may not get to each area every day, but in the course of a week be sure each area of your life is getting its share of attention. Finally, you must be passionate about what you are doing, and you must always be growing personally and professionally. These six ingredients are necessary for consistent, long-term top performance. If you don’t have these six essential ingredients in place, you will face some daunting challenges. The good news is all of these can be learned. Granted, few of them are mastered easily if you haven’t already developed them. However, if you are truly committed to becoming a top salesperson, you can develop them. There is always hope. John Chapin is a sales and motivational speaker and trainer. He has over 31 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. For more information, visit www.completeselling.com or email johnchapin@completeselling.com.
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