D E C E M B E R 2 016
DEALER NEWS
S TAT E A F F I L I AT E
MAGA ZINE
N E W J E R S E Y I N D E P E N D E N T AU T O M O B I L E D E A L E R S A S S O C I AT I O N
F E B R U A R Y / M A R C H 2 0 17
RIGHT-NOW ACTIONS to Improve Your Online Reputation
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06......................................... Improve Your Online Reputation 09..................U.S. Proposes V2V Mandate to Avert Crashes 10................................................. NIADA Government Report 12.................................Embracing the #Hashtag Generation 14.............................................. When Good Recon Goes Bad 16.................................Hiring the Most Important Sales Role
WHAT’S NEW
CMD Dates Announced
Class dates for NIADA’s industry leading Certified Master Dealer program have been announced for the upcoming year! Look for a class coming to your area! Dates include Feb. 9-11 in Portland, Ore.; May 15-17 in Atlanta; Sept. 12-14 in Dallas; and Dec. 11-13 in Tampa, Fla. Visit www. niada.com or contact Diann Flanders at 888-906-8283 or diann@niada.com for more information.
ADVERTISERS INDEX
Auto Auction of New England............................................. IFC Auto Use.................................................................................18 AutoZone................................................................................ 8 Black Book................................................................................3 BMW Group Direct.................................................................. 7 CarMax Auctions ................................................................. IBC Manheim ................................................................................11 Manheim New York..................................................................5 Manheim Pennsylvania..........................................................13 NextGear Capital ...................................................................15 STARS GPS...............................................................................9 VAuto....................................................................... Back Cover
OFFICE
For information on how to become a member, please contact Paula Frendel: 855.694.2324 or njiada.pfrendel@gmail.com
NIADA HEADQUARTERS NATIONAL INDEPENDENT AUTOMOBILE
DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 The New Jersey Dealer News 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 New Jersey Dealer News 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 © 2017 by NIADA Services, Inc.
STATE MAGAZINE MGR./SALES
Troy Graff • troy@niada.com
2017 MEMBER DISCOUNT BOOK 2 0 1 6 M E M B E R D IS C O U N T B O O K $5,000 IN AUCTION DISCOUNTS
2016 M EM B ER D ISC OU N T B OOK BUY FEE ONE PER MONTH INER AUCTION 2016 $5,000 M EM$50 B D ISCDISCOUNTS OU N T B OOK Long IsLand
new Jersey
syracuse
$5,000 IN AUCTION DISCOUNTS
(TWO) $100 OFF BUY FEE / (TWO) $100 OFF SELL – PER TOTAL $400 FROM EACH AUCTION = TOTAL $1,600 $50 BUY FEEFEE ONE MONTH Long IFEE sLand new Jersey $50 BUY ONE PER MONTH
syracuse
(TWO) $100 OFF BUY FEE / (TWO) $100 OFF SELL FEE – TOTAL $400 FROM EACH AUCTION = TOTAL $1,600 Long IsLand$50 OFFnBUY ew Jersey syracuse BLOOMBERG AUTO AUCTION – (TWO) FEE (TWO) $50 OFF SELL FEE
(TWO) $100 OFF BUY FEE / (TWO) $100 OFF SELL FEE – TOTAL $400 FROM EACH AUCTION = TOTAL $1,600 BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION BLOOMBERG AUTO AUCTION – (TWO) $50 OFF BUY FEE (TWO) $50 OFF SELL FEE
BLOOMBERG AUTO AUCTION – (TWO) $50 OFF BUY FEE (TWO) $50 OFF SELL FEE BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION BUFFALO AUTO AUCTION – $100 OFF BUY FEE / $100 OFF SELL FEE
GARDEN T OFF REGISTRATION BSC AMERICA, BEL AIR, MD SP – $50 Auto Auction YO UR PR OF SP IT OT
GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE BUFFALO AUTO AUCTION – $100 OFF BUY FEE / $100 OFF SELL FEE
GARDEN SP T Auto Auction
YO UR PR OF SP IT OT
BUFFALO AUTO AUCTION – $100 OFF BUY FEE / $100 OFF SELL FEE MANHEIM ALBANY – $100– OFF BUY/ $100 GARDEN SPOT AUTO AUCTION (FIVE) $50 OFF SELL BUY FEE
GARDEN SP T Auto Auction
YO UR PR OF SP IT OT
GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE MANHEIM ALBANY $1007-DAY OFF BUY/ $100 SELL MANHEIM NEW JERSEY – 1–FREE POST SALE INSPECTION MANHEIM ALBANY – $100 OFF BUY/ $100 SELL MANHEIM NEW JERSEY –NEW 1 FREE 7-DAY POST SALE INSPECTION MANHEIM NEWBURGH, YORK – $100 OFF BUY/ $50 SELL MANHEIM NEW JERSEY – 1 FREE 7-DAY POST SALE INSPECTION MANHEIM NEWBURGH, NEW YORK$50 – $100 $50 SELL MANHEIM NEW YORK SKYLINE – (TWO) OFF OFF BUY BUY/ / (TWO) $50 OFF SELL MANHEIM NEWBURGH, NEW YORK – $100 OFF BUY/ $50 SELL MANHEIM NEW YORK SKYLINE – (TWO) – $50 OFFBUY/ BUY $100 / (TWO) $50 OFF SELL MANHEIM PENNSYLVANIA $100 SELL MANHEIM NEW YORK SKYLINE – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL MANHEIMMANHEIM PHILADELPHIA – (TWO) $50 OFF BUY (TWO)SELL $50 OFF SELL PENNSYLVANIA – $100 BUY// $100
MANHEIM PENNSYLVANIA – $100 BUY/ $100 SELL MANHEIM PHILADELPHIA – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35)
EDITORS
Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT
Christy Haynes • christy@niada.com PRINTING Nieman Printing
MANHEIM PHILADELPHIA – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35) ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35) ROCHESTER AUCTION – ONE FREE BUY / ONE SELL NO LIMIT STATE SYRACUSE LINE AUTO AUTO AUCTION – 12 MONTHLY COUPONS FORFREE REGISTRATION
$5,000 in Auction Discounts! Buy and Sell Fees...SAME AS CASH! ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT PLUS...$4,000 in Vendor Coupons! STATE LINE AUTO AUCTION – 12 MONTHLY COUPONS FOR REGISTRATION
$5,000 in Auction Discounts! Buy and Sell Fees...SAME AS CASH! STATE LINE AUTO AUCTION – 12 MONTHLY COUPONS FOR REGISTRATION PLUS...$4,000 in Vendor Coupons! $5,000 in Auction Discounts! Buy and Sell Fees...SAME AS CASH! PLUS...$4,000 in Vendor Coupons!
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DEALER NEWS February/March 2017
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February/March 2017 DEALER NEWS
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Make it easy for your happy customers to write reviews. Implement a proactive, automated process with the help of online reputation management software like Grade.us. SOCIAL MEDIA BY KATHI KRUSE
RIGHT-NOW ACTIONS TO IMPROVE YOUR ONLINE REPUTATION It Pays Off
Online ratings are what brought me to digital marketing. It was 2008 and I could see the 4-way intersection of social media, online ratings, customer experience and dealership operations becoming the foundation to build a modern business. Online ratings are one of the first places people go when they’re looking for solid, trustworthy advice, so staying informed on the latest ways to improve your online reputation could actually increase business. I’ve stayed in touch with a lot of my colleagues from my days managing car dealerships. Back in 2008, one of my friends had moved to a BMW store in Orange County and I became a customer. One day after picking up my car from service, I decided to post a Yelp review. I discovered the dealership had a rating of 1.5 stars. Surprised (because I knew this dealer was a good operator and the store had high CSI ratings through the manufacturer), I decided to do a “mini market study” on my couch. There were 50 or so BMW stores in California at the time and, shockingly, I found all but about four had less than two stars on Yelp. I saw an opportunity to leverage my years of auto retail experience and bring value to companies who needed guidance with social media marketing. Now, social media and online reputation have merged. In fact, SEO, content marketing and social advertising all work together to provide dealers with lucrative ways to attract, engage and sell to their target customers. I’m a natural networker. Word of mouth referrals have always been my go-to source for finding trusted sellers, and online
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DEALER NEWS February/March 2017
ratings sites are where most people turn today. • 90 percent of consumers read online reviews. • 88 percent trust online reviews as much as personal recommendations. • 86 percent will hesitate to purchase from a business that has negative reviews. • Customers are likely to spend 31 percent more with a business that has positive reviews. • 92 percent will use a local business if it has at least a 4-star rating. Reviews are Insanely Influential We live in what Forrester Research has dubbed “The Age of the Customer.” Empowered customers are more demanding than ever, and they have the ability to make or break your business. They don’t trust what you say about your product or service, and they really don’t trust your ads. Instead, they trust other people like themselves. I’ve seen numerous car dealerships that have over 400 reviews and a 2-star rating. To me, this would constitute a call to 911. When you’ve got a large amount of reviews and your overall reputation reads negative, that’s a consensus... not just the opinions of a few unhappy customers. Myth: My Reputation Can Take Care of Itself Online ratings and reviews have the potential to be the single most effective and rewarding marketing channel for small and local businesses, and yet most marketers and business owners do very little to foster and shape reviews because they assume it’s out of their hands. They take a wait-and-see approach – forever. RIGHT-NOW ACTIONS TO IMPROVE YOUR ONLINE REPUTATION Improving, protecting, and promoting the company’s online reputation should become part of daily operations. Negative reviews deter buyers. If you have even one negative review, it’s impossible to gauge how many sales you lost because of it. Use the following eight actions to improve your online reputation and give your store every chance to reach its revenue goals. Remove the obstacles that stymie reviews. Ninety percent of consumers read online reviews. Six percent write them.
Happy customers don’t often write reviews. They’ll say they forgot to, never thought to do so, got too busy or that it’s just too difficult. Make it easy for your happy customers to write reviews. Implement a proactive, automated process with the help of online reputation management software like Grade. us. This not only makes reviewing your business easy, it simplifies the tasks required within daily operations. Earn the privilege of a positive review. Every customer is looking for a “guide.” One of the most important things a guide does in a customer’s life is participate in their transformation. They help the customer become somebody better than they used to be. Rather than sell them products, you actually position your products as tools they can use to win the day. Positive reviews are a natural extension of your customer’s transformation. Respond to every review honestly, openly and with enthusiasm. Responding to online reviews is an art form. Positive reviews deserve acknowledgement. Respond to each one with a sincere note of thanks. If you’re familiar with the transaction or can do some behind-thescenes research, mention a detail the customer will remember. Everyone likes to feel important. When someone writes something negative about your business, it’s easy to become reactionary. Cooler heads always prevail so stand back, take a deep breath and give yourself time to regroup. Be open, honest and conciliatory. Be humble and offer to do whatever you can to solve the problem. Recognize that online reviews are a company asset. Happiness and enthusiasm about your company is a valuable advantage. A flock of glowing reviews greases the gears of search engines to greatly increase your authority in local search. Combined with the powerful word-ofmouth effect, positive online reviews deserve a place on your company’s balance sheet. After all, if you’ve put in the time and effort to improve your online reputation, positive reviews are worth their weight in gold.
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CONTINUED FROM PAGE 6 Acknowledge that software can help but it’s not a replacement for hard work. There are providers who promise to “manage your online reputation” but let’s get the facts straight. No one truly manages your company’s reputation but you and your staff. Software automates your process but that’s only if you have a process to begin with. Within your company are the seeds from which a stellar reputation blooms. Sustain your process by creating a review funnel, invite customers to provide feedback and recover unhappy customers before they vent online. Engage employees in your process. Customers are Googling salespeople. Reviews equate to online authority and when employees are mentioned it increases their value to the customer and the company. Trustworthy employees make the company appear trustworthy. When employees see their names in online reviews, it’s very powerful. Use this as a leverage point to engage them in the review process. Improve your sales process to build online reputation: • Establish WIIFM (what’s in it for me). • Inspire. • Motivate. • Recognize. • Incentivize. • Reward.
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Craft the right message when inviting reviews. One of the benefits of using software to support your efforts to improve your online reputation is that it guides the customer through the review funnel with a simple choice of either, “I had a good experience” or “I had a bad experience.” If they choose “I had a good experience,” here are two examples of the right way to ask for a review: • “Our business is based on referrals and we’d really appreciate you sharing your experience with others online.” • “Thank you for the awesome opportunity to serve you. We’d love to hear about your experience and no doubt, others would too.” If they’ve chosen the “I had a bad experience,” they will click over to a landing page that helps recover unhappy customers before they vent online. Here’s an example of the right message for this scenario: • “Thank you for alerting us to your bad experience. We don’t like bad experiences either. Please allow us make things right. We’ll contact you within 24 hours (often sooner) to find a solution that works for you! (and humbly ask how we could’ve done better).” Offer an incentive to engage. I don’t mean to suggest that you ever offer an incentive in exchange for a positive review, a practice that is not only unethical, but
violates the terms of service on many review sites… and may lead to FTC fines, getting banned, named and/or publicly shamed. However, you might offer a no-strings incentive to get customers a step further into your review funnel. For example, Grade.us clients can attach an offer to the landing page they drive customers to for feedback (NOTE: I’m not a paid endorser of Grade.us. There are other similar solutions available). The no-strings offer is simply a way of getting more people to the landing page. The offer – maybe a discount coupon or a free download – is available to anyone, whether or not they post a review. But making the offer available there, on a page otherwise designed to guide customers through the process of submitting a review, increases the odds of getting that review. Next Steps... The data shows taking the necessary steps to improve your online reputation pays off. Reviews are insanely influential. If you find you’re still not comfortable with rolling out an internal process to capture your happy, loyal customers’ feedback, contact me and I’ll be your Sherpa. 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.
www.newjerseyiada.org
REGULATORY UPDATE BY AUTOMOTIVE NEWS
U.S. PROPOSES V2V MANDATE TO AVERT CRASHES Technology has Significant Safety Potential
U.S. auto safety regulators proposed requiring all new vehicles to be equipped with vehicle-to-vehicle communication systems, citing the technology’s significant potential to reduce crashes. The proposed mandate, recently released by the Department of Transportation, would require all new cars and light trucks to have dedicated short-range communication systems that transmit and receive basic messages about the vehicles’ speed, location, braking and other data. DSRC systems allow cars to “talk” to other vehicles on the road and to infrastructure equipped with the systems, allowing drivers to “see” around corners and be warned of a potential crash. “This technology has enormous safety potential to prevent hundreds of thousands of crashes and save lives,” transportation secretary Anthony Foxx said. Under the proposal, automakers would be required to equip half of all new cars with the technology two years after the National Highway Traffic Safety Administration issues a final rule. Full penetration would be required within four years after the rule is final. U.S. officials have said the technology could potentially reduce non-impaired traffic crashes by 80 percent once fully deployed. Regulators signaled their intent to mandate V2V systems in August 2014. Under this most recent proposal, the DSRC systems would be required to use a common set of communications protocols to ensure all vehicles “speak the same language,” the DOT said. The proposal also contemplates the technology working alongside crash avoidance technologies like automatic emergency braking to help prevent collisions. The proposed rule also has privacy and security requirements, including 128-bit encryption on vehicle data transmissions. In addition, the department said it plans to soon issue guidance on vehicle-toinfrastructure communications. Saving Lives Last year, there were 6.3 million U.S.
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vehicle crashes. In October, NHTSA said U.S. traffic deaths jumped 10.4 percent in the first six months of 2016. The jump followed a spike in 2015, when road deaths rose 7.2 percent to 35,092, the highest full-year increase since 1966. The rule would not require vehicles currently on U.S. roads to be retrofitted with the technology. Foxx said owners couldn’t turn off the technology but could turn off warnings. The Alliance of Automobile Manufacturers, a trade group representing General Motors, Toyota Motor Corp., Volkswagen AG and other major automakers, noted the system is already
being tested. The group said it would study the proposal. Automakers are pushing to ensure that a portion of the spectrum reserved for connected vehicles is not used by other companies for other wireless device use. The U.S. Federal Communication Commission has begun testing potential sharing options. Separately, the Federal Highway Administration plans to issue guidance for vehicle-to-infrastructure communications, which will help planners allow vehicles to “talk” to roadway infrastructure such as traffic lights. Reuters contributed to this report.
February/March 2017 DEALER NEWS
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WASHINGTON UPDATE
NIADA GOVERNMENT REPORT
July 2016, the CFPB issued proposals it was considering for a debt collection rule for third-party collectors. They are not intended to apply to a first-party creditor collecting its own debts. In the agenda, the CFPB said it will convene a panel of small businesses to consider rulemaking focused on companies that collect their own debts sometime in 2017.
Here’s a rundown of some of the latest governmental issues and activity affecting the used car industry from NIADA senior vice president of legal and government affairs Shaun Petersen and NIADA lobbyist Sante Esposito of Key Advocates.
DEPARTMENT OF JUSTICE Volkswagen settlement: DOJ, the EPA and the state of California announced a settlement with Volkswagen AG, Audi AG, Porsche AG and related entities regarding 3.0-liter diesel vehicles sold or leased with emissions defeat devices. For 2009-12 Volkswagen Touareg and Audi Q7 models, Volkswagen is required to offer to buy back the vehicles or terminate leases, and must also offer a modification to substantially reduce emissions, if one is proposed by Volkswagen and approved by regulators. For 2013-16 vehicles affected, including the Touareg, Q7, Porsche Cayenne and Audi A6 Quattro, A7 Quattro, A8, A8L and Q5, if VW demonstrates it can make the vehicles compliant with the certified exhaust emission standards, it will have to fix the vehicles and will not be required to buy them back. Volkswagen is also required to spend $225 million to fund projects that will reduce emissions of nitrogen oxide. Vehicle owners and lessees will receive updated information from Volkswagen, Audi and Porsche concerning their available buyback or modification options once the settlement is approved by the court. Information is also available at www.vwcourtsettlement.com and www. audicourtsettlement.com. Dealer arrested: A New Jersey auto dealer was charged with allegedly defrauding $2 million from more than 140 Russian citizens who were customers of his auto sales business. Sergey Kapustin, owner and president of Global Auto Group, Effect Auto Sales and G Auto Sales in Elizabeth, N.J., had Russian language websites that offered for sale luxury vehicles, including Mercedes and Lexus models priced below market value that could be shipped to Finland for easy delivery to Russian citizens – if they agreed to pay full price up front for the vehicles. Kapustin is Russian and his websites were geared to buyers in Russia, the Ukraine and other former Soviet republics who believed they were getting a “good deal” from a countryman who could be trusted to follow through once the purchase price had been paid. After the buyers wired the full price to one or more bank accounts controlled by Kapustin, he allegedly gave them a litany of excuses for delay in delivery. Allegedly, Kapustin had neither possession of nor title to the vehicles being sold.
Latest Government Issues and Activity
REGULATORY REPORT BY Shaun Petersen
CONSUMER FINANCIAL PROTECTION BUREAU On Dec. 1, the CFPB released its rulemaking agenda through Oct. 19 – before the election. The results of the election could have drastic impact on the agenda. Some of the highlights include: Arbitration rule: The agenda said the CFPB is reviewing and considering comments on its proposed rule banning pre-dispute arbitration agreements with class action waivers and is considering February 2017 as an estimated date for a final rule. Payday, title and deposit advance loans: The CFPB released a proposed rule in June. NIADA filed comments to express our position that the rule did not apply to retail installment contracts for purchase money security interests. Debt collection: In November 2013, the CFPB issued an Advance Notice of Proposed Rulemaking concerning debt collection, about which NIADA filed comments. In
On Dec. 1, the CFPB released its rulemaking agenda through Oct. 19 – before the election.
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DEALER NEWS February/March 2017
At some point, the victim was offered a different, often inferior car, burdened with added shipping and storage costs. The victims often wired additional money in an attempt to rescue the car from storage. Many of the vehicles that did make it to customers were allegedly salvage or flood vehicles. DEPARTMENT OF LABOR Whistleblower rule: OSHA finalized its rule for handling retaliation complaints filed by whistleblowers in the automotive industry, which became effective Dec. 14. In accordance with legislation passed by Congress in 2012, motor vehicle manufacturers, parts suppliers and dealerships are prohibited from retaliating against employees who provide information about motor vehicle defects or violations of safety standards; file, testify or assist in any proceeding concerning alleged motor vehicle defects; or object to or refuse to participate in any activity that person believes is a violation of a safety standard. Retaliation includes firing, reduction in pay or hours, discipline or similar sanctions. Employees who believe they have been subject to retaliation have 180 days from the date of alleged retaliation to submit a complaint to OSHA. OSHA recordkeeping: A final rule that took effect Jan. 18 backs OSHA’s longstanding position that an employer’s duty to record an employee’s injury or illness continues for the full five-year record-retention period. The amendments in the final rule add no new compliance obligations and do not require employers to make records of any injuries or illnesses for which records are not already required.
LEGISLATIVE REPORT BY Sante Esposito
CFPB REFORM Rep. Jeb Hensarling (R-Texas) is talking about including his Financial CHOICE Act in the reconciliation bill Republicans are considering using to repeal Obamacare and introduce tax reform. Hensarling’s bill would rein in the CFPB’s authority by, among other provisions, making the bureau subject to the annual Congressional appropriations process, replacing its single director with a fivemember commission, requiring it to obtain permission before collecting personally identifiable consumer information and limiting its authority to prohibit consumer financial services or products it deems “abusive” and to prohibit the use of arbitration agreements. With the new Congress in session, all of the bills and the bills not enacted by the previous Congress have “died” and must be re-introduced – including a House-passed bill that would rescind the CFPB’s controversial 2013 auto financing guidance and specify a more transparent and accountable process. That bill’s language is included in the Financial CHOICE Act.
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MANAGEMENT MATTERS BY ALISHA STEWART
EMBRACING THE #HASHTAG GENERATION
How to Retain Talented Millennials in the Workplace
CHART
YOUR COURSE
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DEALER NEWS February/March 2017
Millennials get a bad rap. We’re called loud and opinionated, lazy and entitled… the list goes on. And employers seem wary of hiring us, especially given reports about our low loyalty, making it hard to find the right job. As a millennial employee, I have experienced the backlash of these assumptions, but I think a lot of our negative press misses the point: Our opinions may challenge your dealership, but we want to bring our passion for change and innovation to the workplace! And it’s going to happen. The truth is that we are the future of business, and by 2020 millennials will make up 50 percent of the world’s workforce. Here are a few suggestions to help your dealership retain your talented millennial employees and embrace the cutting-edge ideas that they bring with them. Pay us fairly and give us room to grow. Fair pay and growth opportunities are paramount to the retention of millennials. As a group, we expect to progress in your company – and achieve leadership roles – faster than Gen X or older groups. When we don’t achieve this, we leave. A business’s failure to offer advancement results in costly and constant turnover. While it may seem easy to take the cheaper route, there are many employers out there who will provide fair compensation and a clear career path, and millennials are eager to find them. Embrace social media in all aspects of business. We all know millennials live their lives
online. Whether you’re looking to hire or looking to engage, I can’t stress enough the use of online tools that are available to you, and 99 percent of them are free! Let your employees write for the company newsletter or blog. Use LinkedIn and Indeed to recruit talent. Post employee recognition or business events on Twitter, Facebook, and Instagram. Other ideas include purchasing a custom Snapchat filter for company parties and hosting a weekly vlog on YouTube. The options are truly endless, and they all help your millennial employee feel engaged with your dealership! Allow us to use our voice. I’d say millennials have a deep desire or, more appropriately, a need to let our voice be heard and share our views. Why do you think we’re so active on social media? A few ways to encourage that: • Give us opportunities to lead in roles that bring active change to the company, such as seats on committees and inclusion in forums. • Listen to us and be open to ideas! Just because something has been done a certain way for an extended amount of time does not mean it is the most effective or efficient way to keep doing things. Use our creativity to advance your business. • Allow us to be creative by embracing technology. • Let us be involved. Here at NCM, we have an Ownership Culture Committee that not only plans social events for the company but also participates in charity and giving back. Believe it or not, millennials do care about things bigger than themselves. Allowing them to give back and get involved will reap huge rewards in employee morale and culture. Alisha Stewart began her career at NCM Associates in September 2015. She graduated from California Baptist University in 2010 with a Bachelor of Arts degree in Communications and Public Relations. This article originally appeared on NCM’s Up to Speed blog (blog.ncminstitute.com) and is reprinted with permission.
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ACCELERATE
BY GWC WARRANTY
WHEN GOOD RECON GOES BAD Solve Your Recon Woes
Few things can be more of a headache for used car dealers than the reconditioning process. Far too often, it can lead to delays, forfeited front-end gross, poor relationships within your dealership and other consequences that ultimately hurt the overall bottom line. It sounds simple enough: Acquire vehicle. Prepare vehicle. Sell vehicle. So how can something so simple cause so many problems? It’s when good recon goes bad. You can solve your recon woes, however, by making small tweaks to your dealership that will have a tangible payout at the end. It’s all about culture. Too many times you hear stories of the back and forth between those acquiring the inventory and those getting it ready to go on the lot. Good recon starts when everyone stops pointing fingers. Cultivate a culture of collaboration. If you’re acquiring inventory, ask your service team what you should look for in a vehicle at
auction. If you’re getting a vehicle frontline ready, ask about deadlines and find out why a specific turn time is so important. Don’t get overconfident. If you’re estimating how long it will take to recondition a vehicle, be honest with yourself. Time is money, and you can’t accurately appraise and price your vehicle if you’re building in five days of holding costs when it will really take 10. Having a trusting and cooperative culture will help everyone feel comfortable enough to be transparent with these types of details. Know the dollars and cents. It’s estimated that holding costs can range from $30 to $50 dollars per day. Take the average figure from that range ($40 per day) and do the math for what you spend regularly on reconditioning costs. At an average of six recon days for 40 vehicles a month, you’re looking at $9,600 per month in holding costs alone. At that rate, that’s over $115,000 per year. You can even think of this on a per vehicle basis. At that same holding cost, a vehicle that takes five extra days to recondition cuts a $3,000 gross profit into a $2,800 gross profit – all this without even factoring in the actual parts and labor costs of the reconditioning itself. Knowing these numbers will help everyone in the dealership be accountable for their role in reconditioning.
Communicate. It sounds simple, but so many reconditioning processes go bad when management, sales and service simply aren’t on the same page. Things like repair approval delays and misplaced vehicles can add days to the reconditioning process (see above for how much that costs you). Getting all your departments on the same page can help in this process. It can be as simple as creating a spreadsheet that tracks each vehicle’s progress. This way, you’ll be able to see where delays happen and quickly get your reconditioning back on the rails.
MANAGEMENT MATTERS BY CHRIS KAHRS
BUILDING YOUR BENCH STRENGTH
Create Future Leaders Ready to Step In
Addressing personnel changes and challenges can occasion lengthy conversations. I’d say that the most often asked question is, “Where do I find my next manager?” As dealerships continue to experience rapid turnover and acquisitions – and promote good employees into management – many organizations struggle to find replacements for vacancies. Prepare for the unavoidable. It’s generally when they’ve lost an employee that dealers realize they have no one in their organization to assume that
particular role. Dealers are forced to search outside their organizations for a candidate who shares their business’ values, culture, work ethic and vision. This hunt can be exhaustive, and the process is disruptive to the daily operations of the organization. Why your team is critical. To use a sports analogy, each team has its starters suited up and ready to go for each game. When one of those starters gets hurt, a “bench player” is the next man up to assume that role. That bench player has been preparing for a scenario like this and is ready to perform. Yet in a lot of automotive organizations, there isn’t a bench player who has been coached to assume the role of the starter should there be the need. How to create a strong bench. Weak bench strength is a problem for a number of reasons. First, it means you must spend time and money to find an outside replacement. And, more important, that unnoticed bench player is likely to leave. I honestly believe one the greatest threats to
your dealership is for an overlooked bench player – one who is not being groomed for advancement – to leave. And they will. Sensing the lack of opportunity, individuals like this will typically depart for greener pastures should they have the opportunity, thus leaving your organization searching for yet another replacement. Here are my suggestions to improve your bench strength: • Train and educate from the top down to develop future organizational leaders. • Cross train for diversity. • Create peer-leader relationships. • Create a career path with clear and defined advancement opportunities. • Train, coach, motivate and encourage personal development. Filing managerial vacancies can be challenging for many organizations. However, you may already have an individual eager and ready to perform if given the opportunity. By building your bench, you can create future leaders from within your organization. Work on developing one to strengthen your overall talent pool. Chris Kahrs brings more than 17 years of experience to NCM, with extensive expertise in multi-facility management and dealer operations. This article originally appeared on NCM’s Up to Speed blog (blog. ncminstitute.com) and is reprinted with permission.
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DEALER NEWS February/March 2017
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Hiring the right individual for a service advisor position will yield lasting benefits, including an increase in repair order count, CSI and owner retention.
MANAGEMENT MATTERS BY ADAM ROBINSON
HIRING THE MOST IMPORTANT SALES ROLE Service Advisors There is no question a successful dealership has both skilled technicians and knowledgeable salespeople to maintain profit margins. But an oft-overlooked – and equally (or arguably even more) important – component is the service advisor. When people take their cars to a dealership, the service advisor is the first face they see. The service advisor quarterbacks the entire service experience and serves as the critical link between the customer and the work. This dynamic means service advisors have a heavy influence on customer experience, which can either keep them coming back or drive them away. While a basic understanding of how cars work is essential to helping the customer navigate their needs, communication skills are even more crucial in ensuring the customer has a positive experience and feels confident about the work and service your dealership provides. Critical conversations between the advisor and customer include such topics as explaining invoices, deciphering warranty coverage, explaining necessary or suggested additional repairs and providing the customer with updates on the progress of the work. All these conversations require someone with good people skills as well as excellent car skills. Here are key elements I recommend to identify quality service advisor candidates and how to hire them.
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DEALER NEWS February/March 2017
Recognize the Traits of a Solid Service Advisor As mentioned above, a service advisor is the first face your customer sees and the person with whom they communicate the most, if not exclusively, throughout their service experience. A good service advisor should possess the following traits: • Mechanical knowledge and ability to articulate. Because the service advisor is the one to communicate with the customer from start to finish, it is important they understand the industry enough to be able to answer questions, suggest options and explain the process to a customer who may otherwise be unfamiliar with the work needed. Additionally, the service advisor should be able to relay the information without overusing technical jargon, making it simple for every customer to follow and understand. • People skills. The service advisor should have the ability to read and adapt to different customers’ communication preferences: some like a plethora of details while others prefer to be in and out. The service advisor must also possess good listening skills to clearly understand what the customer needs or wants and be able to relay that information correctly to the technicians doing the work. • Integrity. In addition to communicating information between customers and technicians, service advisors have a responsibility to provide the client with accurate information that is in their best interest, instead of using every interaction as an opportunity to upsell extra work. A service advisor with honesty and integrity will quickly earn the confidence of your customers, ensuring they look to your dealership as a trusted place of business, returning for additional needs and sending friends and family your way. Also, a good service advisor will provide updates or call customers back in a timely fashion, keeping them looped in every step of the way.
Things to Consider When Hiring a Solid Service Advisor Now that you know what to look for in a service advisor, there are some factors to keep in mind when you’re considering hiring one. For starters, consider how your dealership and employment brand will appeal to women candidates. Half of your customers are women, so having at least one female service advisor on staff will help you better connect with that demographic. Consider advertising the job with a title other than “service advisor,” so as to appeal to a larger number of applicants. Alternate titles can include customer service representative, service secretary or customer service associate. While technical knowledge is beneficial, you might consider advertising the position with “no experience required” to welcome applicants who have all the other necessary skills without potential bad habits that will require much more aggressive retraining to break. Lastly, consider the number of service advisors your dealership needs to meet demand and give your customers the full attention and service required. Benefits of a Solid Service Advisor Hiring the right individual for a service advisor position will yield lasting benefits, including an increase in repair order count, CSI and owner retention. It will also increase your technicians’ productivity, resulting in a boost of customer loyalty. A service advisor typically touches a customer five times more than a sales person, making proper candidates for this position a crucial component for your dealership’s success. Preparing for 2017 means staffing up with skilled service advisors who can create a lasting, positive impact. Adam Robinson is the co-founder and CEO of Hireology and a noted recruiting industry expert, speaker, and author with over 20 years of experience in the field of hiring and selection management. This article originally appeared on NCM’s Up to Speed blog (blog.ncminstitute.com) and is reprinted with permission.
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February/March 2017 DEALER NEWS
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ASSOCIATION NEWS
NJIADA WELCOMES NEW AFFILIATE MEMBER 88 Security Group DORMAN T-Key Transponder Copy System is a Game Changer for BHPH Dealers
Originally intended to reduce auto theft, automotive transponder keys have presented numerous barriers in their creation and duplication, and have escalated costs for Buy Here-Pay Here dealers. Specialized equipment requirements and restrictions on key and pin codes have historically prohibited cost effective solutions to obtain keys. Now any BHPH dealer can offer transponder key copy services and Keysurance! No advanced knowledge or expensive equipment, programmers or key blank inventory required. The T-Key Copy System by Dorman Products requires only a computer using a Windows-based operating system (except version 8) and allows dealers to capture existing transponder key images
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DEALER NEWS February/March 2017
and chip data from their desktop. Dorman Products, Inc. is a leading supplier of dealer “exclusive” automotive products. Key Machine or Copy System? The T-Key unit is a capture device that transfers data via the Internet to a remote key center to generate a fully-cut and programmed key. Currently the T-Key system covers 60 percent of the vehicle market. High Security keys, known as track keys or laser keys, are also included for certain vehicles. The software will provide an image of the transponder key you are seeking to capture and immediately determine availability. How it Works 1. Select year, make & model or use VIN# in the software provided. 2. Insert key (remove from key ring) into the unit. 3. Click “Capture.” Once the process is complete, a printable Transponder Key ID (TKID) number and Part Number will be shown. Next, contact the authorized distributor (88 Security Group) with the information captured to match and execute the order. Your key order will be shipped to you or directly to your customer within two to four days. Keys will operate the vehicle straight out of the envelope! Key Insurance? Each time a key is captured, a TKID ID# is
issued, whether an order is placed or not. BHPH dealers could capture every possible key for future replacement in lost key situations, customer duplicate requests, or even in repossession efforts. The BHPH dealer would have to print or record the captured data for future reference since Dorman will, appropriately, have no means of matching the data with a vehicle or owner. The supplied software does allow for transaction recording. Show Me the Money The Dorman T-Key Copy System is a revolutionary way to lower operating expenses, earn missed income, increase customer engagement and satisfaction, and improve your time management. BHPH dealers can reduce or eliminate the cost of outsourced transponder key services and within seconds order wholesale-priced keys. Offering your clients a key insurance service can be another tool (and revenue stream) in your customer care arsenal. Eliminate the expense of keeping duplicates of keys in case of repossession and use the saved money to grow your business. Buy Here-Pay Here… It all gets done here! Visit www.88SecurityGroup.com, call 845-445-5238 or email sales@88security group.com for more information.
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MARKETING MATTERS BY KENNY ATCHESON
ELIMINATE WASTE IN ADVERTISING Data-Driven Decisions
When consulting with a dealer, I usually find waste in their advertising. A multilocation dealer tends to have a bigger budget and may have more waste. That’s not always the case, but a multi-location dealer with a larger advertising budget sees media salespeople who are after his full budget. It’s how they get paid. I prefer to see dealerships with larger budgets spend their budget only if it’s working. This is why tracking and measuring as much as possible helps define what the budget actually is or should be. It may be fluid throughout the year, not just during tax time. The marketing director for the current winning presidential candidate said, “We used digital data to decide where to spend the budget offline.” Data-driven decisions remove human bias from budget decisions. Recently, we launched a new message with media to help dealers who are already using a program to generate new business before tax returns arrive. A dealer called me
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to ask about it, and I said, “I expect it to work, but we are testing it. The data will answer that question.” At my recommendation, several of our larger clients have saved money on advertising by moving a portion of their budget to media and delivery that is more effective… and it’s trackable. For example, $20,000 per month may be reallocated to a different strategy, but I want to track effectiveness. We may find the last $5,000 of that spend is not working out because it is used to reach a potential customer base that is geographically too far away. So that portion of the budget is cut and the same or more cars are sold with less investment. Dealers with smaller budgets have their share of waste in advertising. The culprit is often the geographical area in which they advertise. Much of the time their radius is too large. There is a slight chance someone who lives 100 miles away will buy from them if given the chance, but they shouldn’t spend money trying to lure them in. That’s like management in a steakhouse spending good money on advertising targeting vegetarians just in case there is a chance they may come in for a fancy salad. Whatever you do, track and measure so you can tweak or cut it.
Kenny Atcheson is the president of Dealer Profit Pros and author of Marketing Battleground: How to Deploy an Army to Battle for Your Business. Kenny teaches workshops, speaks at conventions and 20 Groups, and his company offers several marketing and advertising programs. His website is www.DealerProfitPros.com.
February/March 2017 DEALER NEWS
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