Nj 0616 by NIADA

Dealer News NEW JERSEY INDEPENDENT AUTOMOBILE D E A L E R S A S S O C I AT I O N

J U N E / J U LY

2 0 1 6

Inside:

Seven Essentials for Your Reputation Newest Rules of Online Marketing Acquire More Customers Predictive Analytics

BECOME A MEMBER AND RECEIVE $5,000 IN AUCTION COUPONS!

page 4

S T A T E

A F F I L I A T E

REGULATORY COMPLIANCE STARTS WITH

DATA ACCURACY

Page

DON’T OMIT THIS CRITICAL DETAIL

DALLAS, TEXAS Permit No. 2079

PAID

PRSRT Standard U.S. Postage

W W W.NEWJERSEYIADA.ORG

Inside

2016 MEMBER DISCOUNT BOOK

WASHINGTON UPDATE

20 1 6 M EM ER D I SC OU N T B OOK $5,000 INBAUCTION DISCOUNTS

J U N E / J U L Y

2 0 1 6

NIADA Government Report | PAGE 06

SEVEN ESSENTIALS FOR YOUR REPUTATION

$5,000 IN AUCTION DISCOUNTS

2016 DISCO UNT $50 BUY FEEDISCO ONE PER MONTH 2016 MEMBER MEMBER UNT BO BO O OK K

Building and Repairing Your Dealership Reputation | PAGE 08

$50 BUY FEE ONE PER MONTH

$5,000 IN AUCTION DISCOUNTS $5,000 LIN AUCTION DISCOUNTS ong IsLand new Jersey

NEWEST RULES OF ONLINE MARKETING

Long IsLand

Helping You Accomplish Sales Goals | PAGE 10

new Jersey

syracuse

(TWO) $100 OFF FEE /$100 (TWO) $100 OFF SELLFEE FEE ––TOTAL $400 FROM FROM EACH AUCTION = AUCTION TOTAL $1,600= TOTAL $1 (TWO) $100 OFF BUY FEE / BUY (TWO) OFF SELL TOTAL $400 EACH $50 BUY FEE ONE PER MONTH

ACQUIRE MORE CUSTOMERS

$50 BUY FEE ONE PER MONTH

DealerSocket Data Reveals Untapped Strategies | PAGE 12

PREDICTIVE ANALYTICS

Long IsLand Long IsLand

How it Can Make or Break a Dealership CRM System | PAGE 14

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

Don’t Omit This Critical Detail | PAGE 18

What’s New

BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION BUFFALO AUCTION $100 OFF BUYOFF FEEREGISTRATION / $100 OFF SELL FEE BSCAUTO AMERICA, BEL –AIR, MD – $50

BHPH DEALER MAGAZINE

NIADA now has a magazine devoted to Buy Here-Pay Here! The BHPH DEALER Magazine is published bi-monthly on the even months of the year and is included as a supplement to NIADA’s Used Car Dealer magazine. Visit www.niada.com/bhph_dealer_magazine.php to check out the inaugural issue.

GARDEN SP T Auto Auction

GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE BUFFALO AUTO AUCTION – $100 OFF BUY FEE / $100 OFF SELL FEE Auto Auction Auto Auction

Auto Auction

ADESA..................................................................................IFC Auto Auction of New England ...............................7 Auto Use.................................................................................9 Autotrader....................................................................... IBC AutoZone............................................................................14 Black Book............................................................................3 Manheim .................................................................. 10, 11 Manheim New York........................................................5 Manheim Pennsylvania..........................................13 NextGear Capital..........................................................12 PassTime ..............................................................................8 STARS GPS.........................................................................17 VAuto................................................................ Back Cover Wolters Kluwer ..............................................................15

Office

For information on how to become a member, please contact Paula Frendel: 855.694.2324 or njiada.pfrendel@gmail.com

YO UR PR OF SP IT OT YO UR PR OF SP IT OT

YO UR PR OF SP IT OT

MANHEIM ALBANY – $100 OFF BUY/ $100 SELL GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE

GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE MANHEIM NEW JERSEY – 1–FREE POST SALE INSPECTION MANHEIM ALBANY $1007-DAY OFF BUY/ $100 SELL MANHEIM ALBANY – $100 OFF BUY/ $100 SELL

MANHEIM ALBANY – $100 OFF BUY/ $100 SELL MANHEIM NEWBURGH, YORK – $100 OFF BUY/ $50 SELL MANHEIM NEW JERSEY –NEW 1 FREE 7-DAY POST SALE INSPECTION MANHEIM NEW JERSEY – 1 FREE 7-DAY POST SALE INSPECTION

MANHEIM NEW YORK SKYLINE – (TWO) OFF OFF BUY BUY/ / (TWO) $50 OFF SELL MANHEIM NEWBURGH, NEW YORK$50 – $100 $50 SELL MANHEIM NEW JERSEY – 1 FREE 7-DAY POST SALE INSPECTION MANHEIM NEWBURGH, NEW YORK – $100 OFF BUY/ $50 SELL

MANHEIM PENNSYLVANIA $100 SELL MANHEIM NEW YORK SKYLINE – (TWO) – $50 OFFBUY/ BUY $100 / (TWO) $50 OFF SELL MANHEIM NEW YORK SKYLINE – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL

MANHEIM NEWBURGH, NEW YORK – $100 OFF BUY/ $50 SELL

NIADA Headquarters

MANHEIM PHILADELPHIA – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL MANHEIM PENNSYLVANIA – $100 BUY/ $100 SELL MANHEIM PENNSYLVANIA – $100 BUY/ $100 SELL

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.

MANHEIM NEW YORK SKYLINE – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL MANHEIMAUTO PHILADELPHIA (TWO) $50 OFF BUY$200 / (TWO) SELL ROCHESTER CENTRAL AUCTION ––$200 OFF BUY FEE; OFF $50 SELLOFF FEE; ENTRY FEE ($35) MANHEIM PHILADELPHIA – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL

The New Jersey Dealer News is published bi-monthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone 817-640-3838. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of New Jersey Dealer News or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2016 by NIADA Services, Inc. All rights reserved.

ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; BUY $200 OFF SELL ENTRY FEE ($35) MANHEIM PENNSYLVANIA – FREE $100 BUY/ $100 SELL ROCHESTER SYRACUSE AUTO AUCTION – ONE / ONE FREE FEE; SELL NO LIMIT ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35)

STATE SYRACUSE LINE AUTO AUTO AUCTION – 12 MONTHLY COUPONS FORFREE REGISTRATION ROCHESTER AUCTION – ONE FREE BUY / ONE SELL NO LIMIT

MANHEIM PHILADELPHIA – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL

SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT $5,000ROCHESTER in Auction Discounts! Buy and Sell Fees...SAME AS CASH! PLUS...$4,000 in Vendor Coupons! STATE LINE AUTO AUCTION – 12 MONTHLY COUPONS FOR REGISTRATION STATE LINE AUTO AUCTION – 12 MONTHLY COUPONS FOR REGISTRATION

$5,000 in Auction Discounts! Buy and Sell Fees...SAME AS CASH! $5,000 in Auction Discounts! CASH! ROCHESTER CENTRAL AUTO AUCTION – $200Buy OFF and BUY Sell FEE; Fees...SAME $200 OFF SELL AS FEE; ENTRY PLUS...$4,000 in Vendor Coupons! PLUS...$4,000 in Vendor Coupons!

STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITORS Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT & GRAPHIC ARTIST Chantae Arrington • chantae@niada.com ART DIRECTOR Christy Haynes • christy@niada.com PRINTING Nieman Printing

| J U N E / J U LY

YO UR PR OF SP IT OT

BUFFALOBUFFALO AUTO AUCTION – –$100 OFF BUY $100 AUTO AUCTION $100 OFF BUY FEE FEE / $100/ OFF SELLOFF FEE SELL FEE GARDEN SP T GARDEN SP T GARDEN SP T

Advertiser’s Index

DEALER NEWS

syracuse syracuse

BLOOMBERG AUTO AUCTION – (TWO) $50 OFF BUY FEE (TWO) $50 OFF SELL FEE

COMPLIANCE STARTS WITH DATA ACCURACY

new Jersey new Jersey

(TWO) $100 OFF BUY FEE / (TWO) $100 OFF SELL FEE – TOTAL $400 FROM EACH AUCTION = TOTAL $1,600 (TWO) $100 OFF BUY FEE / AUTO (TWO)AUCTION $100 OFF – OFF TOTAL $400 AUCTION = TOTAL $1,600 BLOOMBERG – SELL (TWO)FEE $50 BUY FEE FROM (TWO) EACH $50 OFF SELL FEE

FEE ($35)

ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT

2016

W W W. N E W J E R S E Y I A D A . O R G

STATE LINE AUTO AUCTION – 12 MONTHLY COUPONS FOR REGISTRATION

WA SHING T ON UP DAT E

NIADA Government Report

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.

LEGISLATIVE REPORT S.2663, Reforming CFPB Indirect Auto Financing Guidance Act Efforts are still ongoing to generate support, especially among Democrats, for S.2663 as introduced by Sen. Jerry Moran (R-Kan.). The bill – the Senate’s version of H.R. 1737, which passed the House by a wide margin in 2015 – would rescind the controversial auto financing guidance action regarding dealer discretion on interest rates taken by the CFPB in March 2013 and provides for a more transparent and accountable process for dealing with the issue. It appears S.2663 likely will not be considered on its own but will be included within the context of some other legislation – presumably a must-pass bill. That is the strategy going forward, pending continuing discussions between the CFPB and various stakeholders for a possible administrative

resolution of the issue. To that end, on April 14, NIADA submitted a statement for the record to the Senate Committee on Banking, Housing and Urban Affairs regarding its April 7 hearing on the CFPB’s semiannual report. The statement expressed the association’s concerns regarding the 2013 guidance and urged members of the Banking Committee to vote for S.2663. NADA also submitted a statement for the record. In addition, Sen. Cory Booker (D-N.J.) and Sen. Sherrod Brown (D-Ohio) have drafted a letter in support of the CFPB after the hearing, in which a number of Senate Republicans and one Democrat took issue with the bureau. We are monitoring that effort. Blumenthal Safety Recall Amendment On April 27, the Senate Commerce Committee held a markup on the FCC reauthorization bill. Sen. Richard Blumenthal (D-Conn.) filed 12 amendments, one of which was the same safety recall amendment that he offered to the committee last year and was rejected. NIADA, NADA and NAAA began gearing up for a letter in opposition to the amendment as well as possible grassroots efforts, but after meetings and discussions with Blumenthal’s staff in D.C. and Connecticut, the senator decided not to refile the amendment. NIADA will continue

SEN. CORY BOOKER (D-N.J.) AND SEN. SHERROD BROWN (D-OHIO) HAVE DRAFTED A LETTER IN SUPPORT OF THE CFPB. 6

DEALER NEWS

| J U N E / J U LY

2016

W W W. N E W J E R S E Y I A D A . O R G

to monitor Blumenthal’s activity on the issue. H.R.4715, RPM Act NIADA is working to support the bill, in conjunction with NADA, the Specialty Equipment Market Association, Harley Davidson and others. The bill, introduced March 7 by Rep. Patrick Henry (R-N.C.) with 57 bipartisan cosponsors, and its Senate companion S.2659, introduced on March 9 by Sen. Richard Burr (R-N.C.) with nine bipartisan cosponsors, are a result of a July 2015 rule issued by the Environmental Protection Agency that would have banned the conversion of street cars into race cars meant solely for competition if the vehicle no longer remains in its certified configuration for emissions purposes. NIADA, as well as several state attorneys general, opposed the rule for multiple reasons, including a flawed process. As a result, the EPA rescinded that part of the rule. But it continues to assert its authority under the Clean Air Act to regulate modification of vehicles for use in competition – which means converting and racing competition vehicles, and the parts and services industries that support them, are still considered illegal activities by the EPA. H.R.4715 and S.2659 would clarify that such activity is legal and beyond EPA’s reach. Military Pay Allotment On April 15, a staffer from the House Armed Services Committee said the committee staff has met with the Defense Department regarding the department’s decision to prohibit military personnel from using their pay allotments to purchase personal items, including motor vehicles, and does not anticipate a change at this time. He urged NIADA to monitor the situation and keep a record of any problems or issues with military sales to report to the committee for future consideration. REGULATORY REPORT Consumer Financial Protection Bureau PHH Corporation v. CFPB: The D.C. Circuit Court of Appeals heard oral arguments involving PHH’s appeal of CFPB director Richard Cordray’s June 2015 decision affirming an administrative law judge’s ruling

that found PHH in violation of certain provisions of the Real Estate Settlement Procedures Act. In addition to substantive arguments challenging the conclusions on violations of law, PHH argued the CFPB does not have authority to undertake an enforcement action because the bureau’s structure violates the U.S. Constitution’s separation of powers principles. PHH claimed the Dodd-Frank Act put legislative, executive and judicial power in the hands of a single director who is not accountable to the President or Congress. PHH specifically argued that the limitation to remove the CFPB director only “for cause” and funding of the CFPB through the Federal Reserve rather than the congressional appropriations process make the bureau unconstitutional. Several of the judges on the panel asked pointed questions to the CFPB on the constitutionality arguments, providing hope a decision might be issued rendering the CFPB unconstitutional. Of course, any such decision would surely be appealed to the Supreme Court. CID invalidated: The Federal District Court in Washington D.C. issued a ruling invalidating the CFPB’s civil investigative demand to the Accrediting Council for Independent Colleges and Schools. The CFPB denied the council’s request to set the CID aside in October 2015, then filed a motion to compel compliance with the CID, arguing the purpose of the investigation was “to determine whether any entity or person has engaged or is engaging in unlawful acts and practices in connection with accrediting forprofit colleges.” The CFPB claimed because it has authority to investigate forprofit schools in relation to their lending and financial advisory services, it also has authority to investigate whether any entity has engaged in any unlawful acts relating to accrediting such schools. The Court rejected the CFPB’s argument and said it exceeded its authority because the council was not involved in financial aid decisions and the CFPB’s requests “clearly reveal the investigation targets the accreditation process generally. This the CFPB was never empowered to do.”

M A N AG E MEN T M AT T ERS

Seven Essentials for Your Reputation

a customer becomes. Manage your Customer Satisfaction Index (CSI) follow up process with integrated e-surveys. The immediate feedback will allow you to respond in real time. Track all incidents. Develop a clear process for complaint management, including detailed tracking of each incident. Escalate negative survey responses, buyer complaints and outstanding open items to a senior-level manager at your dealership. Whatever you do, don’t send the customer back to the employee they originally dealt with so the two of them can “work it out.” That’s a recipe for further trouble. Acknowledge angry customers. An ignored complaint is one of the quickest paths to a downhill reputational slide. As much as you want to just delete that email or hang up the phone, you must face the music when a customer is mad. Start by acknowledging their outrage and putting yourself in their position, as hard as that may be. Even if you know they are 100 percent wrong, ask yourself how you would like to be treated if you were in the customer’s shoes.

BUILDING AND REPAIRING YOUR DEALERSHIP REPUTATION BY DEALERSOCKET

When was the last time you Googled your dealership? If you’re like many dealers, you may be scared by what you find. The Internet is awash in harsh reviews written by frustrated customers who believe it’s their only way to move the needle. Some reviews may be accurate — others, not so much. The problem is your future customers can’t tell the difference. How can you maintain a pristine online reputation and minimize any damage already done? Ask for customer opinions. By proactively gathering buyer comments, you can pinpoint successes and opportunities for improvement ahead of time. The more an issue festers, the angrier

DEALER NEWS

| J U N E / J U LY

2016

W W W. N E W J E R S E Y I A D A . O R G

Swallowing a little pride may mean the difference between a scathing online review and the customer not bothering to pursue it further. Squelch the concerns. Of course, if your dealership was in the wrong you should do what it takes to correct the situation. However, what about gray areas? In those cases, ask yourself what you would lose by helping the customer out. Is that expense worth more than what you would lose from another negative review or, even worse, a potential lawsuit or regulator audit? The headache and expense of legal ramifications may make it more cost-efficient to just give the buyer what they’re asking for (assuming it’s reasonable) and move on. Even in cases where the customer clearly has no case, consider what you could offer that would still make them feel as if they won something. That’s usually enough to satisfy an angry buyer, and it will save you serious time and money down the line. Calmly respond to negative reviews. Some sites will remove or suppress negative reviews for a fee, but you can’t count on that.

Many other review sites, including Google Reviews, offer little to no way of removing critical feedback. Your best course of action is to respond quickly and thoughtfully. The original reviewer may or may not see your public response. However, people searching for your dealership will see it and form an opinion based on how you address criticism. Be polite, apologetic and gracious, even if the customer is rude. Other readers will remember how you handled a tough situation with class, and they’ll feel confident you will treat them fairly should they ever have an issue. Keep your responses brief, and never publicly rehash details of the customer’s situation. Instead, acknowledge their frustration, sincerely apologize, and invite them to engage offline. If possible, give them a direct line to call so it’s clear they are receiving special attention. Fight the bad with the good. If you can’t remove negative reviews and you’ve already responded to them, the next step is to bury them. Try to get as many positive reviews on as many sites as possible. While you should avoid offering incentives, you can still:

INDUS T R Y NE W S • Direct positive survey responses via automated emails to Google Reviews, Facebook, Yelp, DealerRater, and/or any websites where you currently have negative reviews. Buyers who shared their happy experiences in a survey will be more likely to share on a review site. • At the time of sale, ask customers if they were pleased with your service. If they answer yes, encourage them to share their experience on a specific review site. Consider printing a handout with instructions to make it as easy as possible. • When customers visit in person to make a payment, ask them about their satisfaction with their purchase. Use that as another opportunity to ask for reviews. In your quest to garner positive reviews, resist the temptation to write them yourself or ask employees to post fake customer reviews. Shady tactics like these will come back to bite you, I promise. If you really need to boost your online rankings, you could ask

team members to leave a review but only with full disclosure that they work at your dealership and are sharing their experience as an employee (not a customer). These kinds of stories aren’t as compelling as someone with no vested interest in the dealership, but they still boost your overall rating. Ramp up your community involvement. Run your dealership as an upstanding corporate citizen by sponsoring local events or donating to worthwhile charities. Then, share your community involvement through social media, photos and thank you certificates hung at your store. You may even wish to give a shout-out to your most satisfied customers on Facebook. Take pictures with happy car buyers holding their new car keys, and publicly congratulate them on their purchase. While it’s impossible to stop every single complaint, you still have an arsenal of options. If you treat customers right, and make sure your community knows it, your dealership’s reputation can endure for the long haul.

Cox Names Tech Execs MARK O’NEIL NOW COO

Cox Automotive Inc. has appointed Mark O’Neil to the newly created position of chief operating officer. O’Neil will be responsible for the company’s day-to-day operations of Cox Automotive’s software, media, inventory and financial services groups, reporting to Sandy Schwartz, president of Cox Automotive. O’Neil was previously president of Dealertrack, which was acquired by Cox Automotive last fall, and subsequently president of the Cox Automotive Software Group. He began his career in the automotive industry in the late 1980s. O’Neil began serving Dealertrack in 2001 as a member of the board of directors, and in 2005 became chief executive officer. He holds a bachelor of science in industrial engineering from Worcester Polytechnic Institute and an MBA from Harvard Business School. Keith Jezek will succeed O’Neil as president of the Cox

DEALER NEWS

| J U N E / J U LY

Automotive Software Group. Jezek, currently serving as president of software solutions for Cox Automotive, has been responsible for the strategic direction and overall success of the company’s software division, which includes vAuto, HomeNet Automotive, Haystak, VinSolutions and XTime. Rick Gibbs was named Cox Automotive chief product officer, a new position, with the responsibility for creating product strategy and the technology development road map that will enable Cox Automotive to go to market as a unified product company. Both Jezek and Gibbs will report to O’Neil.

2016

W W W. N E W J E R S E Y I A D A . O R G

SO CI A L MEDI A

Newest Rules of Online Marketing

HELPING YOU ACCOMPLISH SALES GOALS BY KATHI KRUSE

It’s hard to believe, but we are almost through the first half of the year. How far along are you in achieving your dealership’s goals for 2016? The digital marketing landscape continues to evolve. SEO, social media, content marketing and online reviews are no longer standalone strategies. All

DEALER NEWS

| J U N E / J U LY

2016

these intertwine and support each other, and it’s extremely important to clarify exactly how you’ll leverage these online marketing pillars to grow your business. Where does your store fit in the digital marketing landscape? I continue to be concerned about dealerships’ reluctance or slow adaptation to Google’s requirements and customers’ needs, especially when it comes to digital presence. There’s a lot of conversation (both online and off) postulating how some dealerships or business models won’t survive in the next 5-10 years. I’ve been helping dealers navigate social media, content marketing, SEO and online reviews for years and sometimes it

W W W. N E W J E R S E Y I A D A . O R G

seems like the needle has barely moved. Everything else is moving at such a fast pace and, judging by what I hear from a lot of dealers, sitting on the sidelines seems to be the common go-to strategy. A manager in one of my conference sessions said, “Car sales are at an alltime high. What do I need with online marketing?” Warren Buffett said, “In the business world, the rear view mirror is always cleaner than the windshield.” Just a few short years ago, every dealership was struggling to figure out what to do in the Great Recession. Using the above mindset – “Car sales are at all-time highs” – as an example, all-time highs mean the end of growth is near. Also, subprime delinquencies are at 20-year highs (and there’s a bubble happening similar to the mortgage meltdown). Add these indicators to all of the outside pressures on the dealership business model (Uber/Lyft, ride-sharing, self-driving cars, etc.) and you’ll see it would be prudent to forecast for the coming downturn – no matter what it looks like. From my years as a dealership manager, 60 percent of which was as a CFO, I can’t ignore trends. Online is how we all communicate today and becoming savvy in this arena will ensure your store has every chance to reach today’s buyers. THE 7 NEWEST RULES OF ONLINE MARKETING Getting and keeping customers is proving to be more and more difficult. Many dealership marketers seem to be ignoring a basic fact: people like to buy from businesses they know, like and trust. That isn’t just some cliché. Selling to people who actually want to hear from you is more effective than interrupting strangers who don’t. These newest rules of online marketing will help you understand what it takes to win customers and make informed decisions about how to drive more leads and sales to your store. Assume nothing. • Consumers. They’re getting a 5-star experience with online sellers like Amazon. How are you delivering the same experience, or better? • Competitors. What are your competitors doing better than you? Nothing short of fearless assessment and measured improvement will do. • Google. What exactly are you serving up to search engines? Search strategies today compared to even just a year ago are drastically different. Google is wickedly adept at recognizing quality content to serve its users. Do you know the ranking factors Google employs? Invest. Resolve to build stronger relationships with current and new customers. The

amount of time and effort spent is directly proportionate to the results achieved. We live in a world where no one wants to see ads from brands they don’t know. Why? Zero trust. Ad blocking is up 48 percent in the U.S. and growing. However, your ads are welcome in cases where you’ve invested in customer relationships and built a strong following. Profit isn’t a purpose, it’s a result. Empathize. A brand that can put themselves in their customers’ shoes, and deliver the information needed to make the right choice, secures a customer for life. Teach. With so much content on the web and very little trust, it’s overwhelming for consumers to research even the most common products. That’s why we’ve all turned to our social networks and online ratings sites for answers. The days are gone when you could walk into a store and get a trustworthy recommendation. A business today must leverage its assets to be a teacher not a seller. Social selling (using social media to build a network by providing value to give and receive referrals) is a fantastic solution to grow your business. Incorporate social selling within your sales process: • Differentiate yourself from the “sales sharks.” • Don’t be all about making the deal. • Pass on valuable information. • Use social media to teach, not sell. • Be a publisher (all good sales people are content marketers too!). • Develop your network through giving and getting referrals. • Leverage paid social to drive leads. • Don’t be afraid to ask for the sale. Curate. Everyone loves valuable information. People who consistently deliver solid, original, high quality content are considered thought leaders. Spend 30 minutes per day consuming content that’s helpful to your business growth and helpful to your customers. Schedule posts (via Hootsuite, Post Planner, Buffer or others) on social media sites to broaden your thought leadership. Advocate. Create a community online that mirrors your offline community. I’m always delighted to find a brand on social media that listens to their customers. Brand loyalty is born when someone at the store is there monitoring, responding and advocating for customers should they have an issue or want to give feedback. Listening > Advocacy > Loyalty. Care. A step further from advocacy is to

authentically care. Every time I fly JetBlue, they see my check-in at the airport and tweet me a nice message. They make me feel special and I feel like they care. When they announced they would abandon their “first bag free” policy, it wasn’t the best news, but their previous efforts to make me feel special softened the blow. Evidence that you care can only come from authentic action. Being able to document that well in the form of blog posts and social media content is a musthave strategy in 2016. Your goals for the second half of 2016: It all boils down to this: Attracting,

DEALER NEWS

CREATE A COMMUNITY ONLINE THAT MIRRORS YOUR OFFLINE COMMUNITY. engaging and selling to today’s hyperconnected buyers requires focused attention and a solid plan to drive leads and sales. These seven new rules will guide you to accomplishing your sales goals and finishing the year strong. 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.

| J U N E / J U LY

2016

W W W. N E W J E R S E Y I A D A . O R G

S A L ES M AT T ERS

Acquire More Customers

Implementing phone sales training and call management technology can help narrow the competitive gap. 2. The problem: Traditional marketing no longer works. Radio spots, TV ads, DEALERSOCKET DATA REVEALS billboards and tent sales are UNTAPPED STRATEGIES mainstays of most dealerships’ BY DEALERSOCKET marketing plans. But the DealerSocket has unveiled a ROI just isn’t there anymore. five-step customer acquisition Conventional media now bring plan for independent car in an average total profit of dealers, backed by the $1,702 per vehicle, while digital company’s most recent marketing rakes in $2,514 per internal data and a survey of sale. In today’s increasingly dealerships nationwide. The digital world, dealers must plan highlights low-hanging- relinquish preconceived ideas fruit strategies dealers can and embrace the media that implement right away to work. attract and convert more leads. The solution: Digital media “It’s tempting for result in more sales and cost independent dealers working less. in the trenches every day In many cases, a lower to get ‘tunnel vision’ about price translates to lower their marketing efforts. If the performance. But it’s just numbers aren’t where they the opposite with digital need to be, the automatic marketing, which includes response is to just try harder,” websites, social networks, said Matt Redden, chief email, smartphones, tablets marketing & sales officer at and kiosks. According to DealerSocket. “Instincts and DealerSocket data, it costs $150 subjective observations are of digital marketing to sell one helpful, but dealers must also car. Compare that to $1,581 of prioritize reliable, black-and- traditional media. If you stick white data. It can reframe with conventional methods, challenges and uncover you’ll pay 10 times more than solutions they may have never necessary. noticed otherwise.” 3. The problem: ThirdDealerSocket recommends party lead generation can be implementing the following expensive. strategies for the quickest Some dealers believe they results in lead acquisition and must directly pay for more conversion: leads. They don’t think they 1. The problem: Phone can produce new prospects leads are underperforming. organically through resources With lower close rates, already in place. While longer sales cycles and lower third-party lead generators profit margins, phone-sourced can certainly work, the leads provide tremendous question boils down to cost opportunities for growth. effectiveness. Independent dealers take 37 The solution: Optimize percent longer to close phone your website for maximum leads. In addition, phone leads visibility and efficiency. result in a mere 14 percent of About 35 percent of independents’ sales. Perhaps independent dealers’ leads most challenging of all, phone arrive through their website, leads bring in about $307 less making it the No. 1 lead profit per sale than other lead generator. It’s also one of the sources. easiest to optimize for even The solution: Focus on more impressive results. phone training and call Invest in organic search management efficiencies. engine optimization and Independent dealers make marketing so customers can an average of 2.86 outbound find you. Also keep in mind calls to each phone prospect, inventory pages are the most while focusing more time on visited section of any dealer floor leads (4.13 calls) and website. They should be well Internet leads (3.82 calls). As organized and fully searchable, a result, phone leads have while offering multiple calls to only a 5 percent close rate. action.

DEALER NEWS

| J U N E / J U LY

2016

W W W. N E W J E R S E Y I A D A . O R G

4. The problem: Digital efforts do not account for user demographics. Many businesses build websites for themselves rather than their end user. Do you know who is visiting your site, what they prefer in a user experience, and how your content displays on each person’s device? The solution: Pay special attention to mobile and tablet users. Independent dealer websites receive about half of their traffic from mobile devices, and another 10 percent from tablet users. So dealers must prioritize responsive web design that optimizes the user experience, regardless of how the user accesses the Internet. Also, get to know your online shopper base, which typically consists of 65 percent males and 35 percent females. While age ranges are distributed fairly evenly, the majority of online shoppers are between the ages of 25 and 44. 5. The problem: Many leads aren’t yet ready to buy. Try as you might to bring in new customers, you may find the majority of your leads are earlier in the purchase process – making it seem even your strongest closing efforts fall on deaf ears. The solution: Leverage a data mining solution to boost trade-ins and intercept customers when they’re most likely to purchase. Data mining tools have long been a staple of the franchise auto industry. The results are clear – 75 percent of deals generated from a data mining solution result in a trade-in. On the contrary, only one out of every 10 independent dealers take advantage of data mining, and the small number of trade-ins follow suit (about 19 percent of deals). Today’s market includes affordable solutions geared specifically toward independents. By leveraging data mining to identify and target customers for vehicle buy-back programs, dealers accomplish two desirable goals: 1) Aid inventory acquisition efforts by purchasing quality vehicles from past customers and 2) Increase sales as customers replace their old vehicle.

M A N AG E MEN T M AT T ERS

Predictive Analytics

in several areas. Forecasting Likely Customer Behaviors There’s an old saying in sales: “buyers are liars.” Unfortunately, salespeople are forced to enter notes based on what the customer tells them. Besides these basic notes, which are often unreliable, it’s almost impossible for a CRM system to determine a consumer’s actual behavior. However, predictive analytics software comes with a certain level of assumptions. In this case, the assumption is the future will continue to be like the past. Often, however, behaviors change. That’s why it’s critical to have a system that can not only change with your customers but also learn and adapt to their new actions to make predictive calculations based on the past, present and future behaviors. Enhancing Customer Relationships It’s very difficult to build a true customer relationship if you have no way of accessing and analyzing their prior behavior with your company. Unfortunately, a CRM system cannot automatically track customer actions. It relies

HOW IT CAN MAKE OR BREAK A DEALERSHIP CRM SYSTEM BY LANG SMITH

For an automotive sales organization, it isn’t the size of your data that matters but what you do with it. No longer a discretionary luxury, predictive analytics are now the name of the game for dealerships that seek to utilize customer metrics in a meaningful way to establish a tremendous competitive advantage, gain notable market share and significantly boost bottom lines. Just what exactly is predictive analysis? Simply put, it’s the ability to more precisely predict a customer’s future spending based on their past behaviors. Of course, there’s no way to actually predict the future but predictive analysis can give companies invaluable insight that can make or break a CRM system. If your dealership isn’t using predictive analytics, your current CRM system is likely falling short

DEALER NEWS

| J U N E / J U LY

2016

W W W. N E W J E R S E Y I A D A . O R G

heavily on manual human interaction and cultivation relying heavily on the accuracy of a salesperson’s notes, which are often less than desirable. The most common use of predictive analytics is to increase and improve customer relationships. The better you know your customer, the more sales you can ultimately make. Using sophisticated algorithms to reveal how your customer behaves also allows you to better communicate with your customer. For instance, isn’t it nice to hear your name when you walk in to your local coffee shop? Isn’t it nice they already know what you’re drinking without you saying anything? On a larger scale, this is how predictive analytics enhance a company’s sales efforts. Many direct marketers have it figured it out – mailing you offers you are likely to actually want as opposed to the ones you consider junk. This is all done with predictive analytics. Another great thing about predictive analytics data is that it doesn’t have to be “big” at all. In fact, sometimes the data can be just a

small concentrated section of just a few hundred actions. Maximizing Marketing Budget ROI If you’re like most companies and have an actual marketing budget, however big or small, it’s best to first make sure the audience you’re targeting actually wants what you’re selling. On its best day, a CRM system can only give you an educated guess. If you want to maximize your marketing dollars, solely using a CRM platform to determine the best suited marketing audience is not the best direction. With predictive analytics, you can maximize your return on investment no matter the budget. For example, if you seek to spend $10,000 on a campaign for delivery to 10,000 customers or prospects, predictive analytics will curate that audience to deliver your message to 10,000 consumers who specifically want what you’re offering at the time. Conversely, CRM solutions alone have very limited filters that prevent a business owner from drill-down targeting the correct audience and, as a result, are undermining their ROI with

opportunity loss. Allowing Data-Driven Decisions The core success benchmark of any company is its numbers. A CRM system cannot show you exact sales numbers broken down by each individual customer over time with any ease. A significant amount of training is usually involved in trying to properly access and formulate these tasks. This often requires a lot of time, which means less time spent making actual sales. Fortunately, good predictive analytics software will allow you to specifically identify where all your money is being made and where the areas of your business are lacking. It should also be able to provide you with a specific customer spending list based on what you’re asking for. Adept systems can actually categorize all your customer’s spending and break it down for you in an easy to read format that allows you to properly make future predictions. Formulating Offer Intelligence Unlike a predictive analytics platform, CRM systems cannot recommend specific offers

unique to customer spending habits. This is a huge downside. It is very difficult to maintain and engage repeat customers without knowing what they want. CRM solutions are mainly a lead management system but, let’s be honest, who wants leads when you can have buyers? Predictive analytics not only analyzes customer actions and habits but also “learns” as it goes. For instance, when an online offer is sent out to customers, or even different offers sent to varying customer segments, a predictive analytics platform can tell you who opened a particular offer, who clicked through on that offer, who redeemed that offer and, when they did, how much that customer spent. The data can also be finely filtered down further to key metrics like which date and day of the week a customer redeemed a particular offer. With the rich data predictive analytics provides, customers can be sent highly meaningful offers tailored specifically to their needs and, as a result, companies can more readily build stronger customer relationships

PREDICTIVE ANALYTICS NOT ONLY ANALYZES CUSTOMER ACTIONS AND HABITS BUT ALSO “LEARNS” AS IT GOES. that bolster the bottom line. Lack of quality data is usually the greatest barrier a salesdriven organization can face when deciding to implement predictive analytics. Getting the most out of a predictive analytics platform requires there is actually available data on customer spending habits, the attributes of the products or services they’re buying (other than the “people who buy this also buy this” type of model), date ranges of their spending, and how much they spend on average. Some demographic information wouldn’t hurt either. If it’s really good, the

DEALER NEWS

| J U N E / J U LY

predictive analytics platform will automatically track all your customer actions from start to finish. And, although it can be very difficult to find in current predictive analytics software, a really good system will also automatically capture this data for you to create unique profiles of your individual customers. With this weapon in your proverbial sales arsenal, prepare to grow your sales revenue and overall company profitability in kind. Lang Smith is the founder of Cloud Signalytics, a first-of-its-kind predictive intelligence software platform helping major franchise auto dealerships create highly precise, individualized customer profiles to maximize sales. He may be reached online at www.cloudsignalytics.com.

2016

W W W. N E W J E R S E Y I A D A . O R G

S T A T E

DEALER NEWS

| J U N E / J U LY

2016

W W W. N E W J E R S E Y I A D A . O R G

A F F I L I A T E

L EG A L NE W S

State Sues Dealer for Multiple Violations NJ DEALER IN LITIGATION

The New Jersey Division of Consumer Affairs has filed an action against European Auto Expo, LLC, a used car dealership in Lodi, alleging the dealership, among other things, failed to honor its advertised prices for vehicles, omitted important explanatory disclaimers from advertisements, and obscured pricing details with misleading fine print.

The state’s eight-count complaint alleges European Auto Expo violated the Consumer Fraud Act, the Motor Vehicle Advertising Regulations, the Automotive Sales Regulations, the Used Car Lemon Law and UCLL regulations. The state seeks consumer restitution, reimbursement of attorneys’ fees and costs, and civil penalties for each violation of the statutes and/or regulations committed by European Auto Expo. The complaint also alleges European Auto Expo engaged in several other deceptive business practices in connection with the operation of its used motor vehicle dealership, including: • Selling a consumer a used motor vehicle without disclosing the odometer had been rolled back more than 60,000 miles.

• Failing to disclose accident damage or other mechanical problems to consumers before purchase of used motor vehicles. • Requiring consumers to finance used vehicles by retail installment contracts, or purchase aftermarket service contracts, to get the vehicle at its advertised price. • Selling used motor vehicles without providing the required statutory written warranties. • Offering used motor vehicles for sale at the dealership location that did not have prominently displayed the Federal Trade Commission Used Car Buyers Guide. • Charging fees for documentary services without itemizing the price for each actual documentary service performed. • Requiring consumers to sign blank sales documents.

AUC T ION NE W S

ADESA Helps Raise Record Amount for Dogs

RE-AUCTIONED HARLEY RAISES $127,000

An ADESA auction raised a record $128,000 to train service dogs for wounded veterans at the recent NADA Convention & Expo in Las Vegas. One winning bidder after another donated back a 2014 Harley-Davidson Dyna Street Bob FXDB motorcycle to be re-auctioned. Mike Dullea placed the winning bid of $25,000. Dullea is CEO of AutoAlert, with locations in Irvine, Calif., and Raytown, Mo. Joe Verde, president of Joe Verde Group in San Juan Capistrano, Calif., matched the bid with $25,000. But then Dullea surprised everyone by donating the motorcycle back to ADESA to be re-auctioned. Lewie Card was the top bidder at $20,000. Card is director of Carlister.co in Bonita Springs, Fla. Verde decided to also match that bid with another $20,000. Then Card donated the motorcycle to be re-auctioned. Justin Becker placed the third winning bid of $12,000. Becker is director of logistics for Wholesale Express in Mt. Juliet, Tenn. But Dullea, the first winning bidder, announced he would match Becker’s bid of $12,000. The final surprise came when it was time to write the check to ADESA and Dullea kicked in another $13,000. Another $1,000 was raised in cash donations to bring the final contribution to $128,000. This was the fifth year ADESA has auctioned a motorcycle at the NADA convention. Funds from the event benefit the NADCF Frank E. McCarthy Memorial Fund, which supports the Wounded Veterans Initiative of Canine Companions for Independence. McCarthy served as NADA president for more than 30 years. DEALER NEWS

| J U N E / J U LY

2016

W W W. N E W J E R S E Y I A D A . O R G

DE A L ER B ES T P R AC T ICES

M A RK E T WAT CH

Regulatory Compliance Starts with Data Accuracy

between the dealer and its retail lender. Today, however, with advancements in technology the stakes are higher for dealers as lenders now see this behavior as a red flag. Lenders can easily audit a dealer’s entire portfolio by using technologies that use vehicles’ VIN numbers to access the actual manufacturer’s build sheet for a vehicle in question, leaving no doubt as to exactly which loans contained “power booking.” This could result in the lender terminating their relationship with the dealer and requesting a larger demand letter. Compliance and accuracy go hand in hand. Repeatedly making simple mistakes when completing forms, or using the wrong forms to document a transaction, can appear to be predatory or deceptive. Inadvertent noncompliance with state and federal guidelines when preparing loan documents can be another area where risk can accumulate over time. A typical retail installment contract can contain more than 150 fillable fields. Making sure the correct information goes into each field may seem like a no-brainer, but what if you’re selling four aftermarket products and your retail installment contract only provides three lines to disclose the information? Some dealers simply combine two of the products or include the product in the selling price. These aren’t good ideas! This approach may pass a lender’s due diligence process, so it must be compliant, but don’t rely on the lender to be your failsafe. Lenders are not perfect and they don’t catch everything. This issue could be caught months or years later during an audit of the lender’s indirect loan files or it could be questioned by your customers. What was a simple solution to a problem caused by not having enough lines on the contract could easily be viewed as nondisclosure or as deceptive and predatory practices, which can carry large financial penalties or be the basis of a consumer lawsuit. Choosing the right loan documents that are up to date with current legislation along with the enhanced market features needed to support the sale of the many insurance and

DON’T OMIT THIS CRITICAL DETAIL BY CHET HEUGHAN

How many times have you heard the phrase “The devil is in the details”? That statement has never been more applicable to automotive dealers than it is today. When considering financial risks to their businesses, most dealership owners and managers tend to spend more time focused on issues such as hidden damage on vehicles purchased at auction, aging inventory, contracts in transit and the possibility of another downturn in the economy while often omitting an issue of critical importance to their business. One of the largest risks to a dealer’s financial future is accuracy – or better stated, the lack of accuracy – in loan documentation. Inaccurate sales documentation in financed transactions can create a lingering risk to your business. Your risk starts from the time you submit a credit application to the lender. Something as simple as an incorrect bookout submitted along with the credit application to a lender can create an ongoing financial liability. For example, if you submit a credit application that incorrectly states a Nissan Altima has an SL trim package when really it was an S trim package, your dealership could be responsible for the difference between the stated value and the actual collateral value. Many lenders will audit the loan documentation when a loan results in a repossession and subsequent charge-off. If the lender finds the dealer overstated equipment, which inflated the stated value of the collateral, the dealer will likely be requested to compensate the lender for the difference. In the past this could cost dealers several hundred dollars to a few thousand dollars, in addition to creating tension

DEALER NEWS

| J U N E / J U LY

2016

W W W. N E W J E R S E Y I A D A . O R G

Gen Z Prefers Face-to-Face Interactions AUTOTRADER AND KELLEY BLUE BOOK STUDY

ONE OF THE LARGEST RISKS TO A DEALER’S FINANCIAL FUTURE IS ACCURACY — OR BETTER STATED, THE LACK OF ACCURACY — IN LOAN DOCUMENTATION. aftermarket products available in the market today is a sure way to reduce noncompliance and ultimately financial risk. Using the same old loan documents you’ve always used or the free documents made available from your lender may not be the best practice. Choosing a loan documentation supplier that warrants their product, has a comprehensive program for monitoring pending and enacted regulations, and completes timely revisions of their products can go a long way to reducing your compliance risks. Of course, there are many more risks to your business – market conditions, competition and availability of inventory, just to name a few. Many of these risks are outside your control, but you can control a large portion of your risk by demanding data accuracy from your staff and the vendors who provide you with products and services. Chet Heughan is director of AppOne® Risk Mitigation Services and Indirect Lending for Wolters Kluwer. For more information, please visit www.wolterskluwerfs.com.

Generation Z – individuals up to 17 years of age – may have grown up with more access to technology than Millennials, but buying online isn’t in the cards for this emerging demographic, according to a joint study conducted by Autotrader and Kelley Blue Book. “Gen Z accounts for nearly a quarter (23 percent) of the population right now, and by 2020 this group will translate to $3.2 trillion in purchasing power, which is larger than the GDP of some small countries,” said Isabelle Helms, vice president of research and market intelligence for Cox Automotive. “While they will have access to some serious cash, they will be cautious about how they spend their money, a trait that makes Gen Z markedly different than their Millennial counterparts.” While Gen Z is full of technology natives, only 26 percent of them said they wanted to buy a car online in the future. Sixty-eight percent of them said face-to-face interactions during their vehicle transaction was important and 54 percent claimed they would need to test drive a vehicle before making a purchase. The study further found that while the environmental impact of a vehicle is important to Gen Z the majority of respondents said cost was the most important aspect of a vehicle purchase. When asked on their opinion, more respondents said it was the gas savings rather than impact on global warming that would sway them toward environmentally friendly vehicles. “What worked for marketing to Millennials will not work for Generation Z because some of the defining traits of Millennials do not hold true for the next generation of car shoppers,” Helms said. “The best news from this research is that auto sales are not going to take a hit because of this generation. In fact, it may prove to be quite the opposite. Their love for cars and driving is very much alive.”