NEW JERSEY INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION
DEALER
DECEMBER 2018
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MARKETING MATTERS | By Kenny Atcheson
NEWSLETTERS
Which Type is Best for You?
Customer newsletters will transform your dealership from a faceless, personalitylacking business into a group of human beings customers can relate to, trust, and refer to others. Communicating with customers on a regular basis strengthens relationships. It puts your brand top of mind, which will lead to more referrals and repeat purchases. Regular communication is something that happens in a relationship, not a onceevery-so-often message when you want to sell something or when one party needs something. A newsletter: • Builds trust as customers get to know your dealership as people, not a logo. • Changes and improves customer perceptions of your business by humanizing your dealership. • Is perceived as a publication, not advertising. • Has pass-along value because it gets shared in the break room at your customers’ jobs. • Is a place to thank customers for referrals – encouraging more referrals. • Is good for making announcements that get noticed due to high readership since it is a publication rather than an advertisement. • Can be a place to highlight an employee. • Is like advertising in a vacuum. The competition can’t see all the reasons for your success. These benefits can be earned by sending any type of newsletter, but there are differences.
• You have to get someone to sign up for your email newsletter, versus a print newsletter you can just start sending.
8.5X11 PRINTED NEWSLETTER Pros: • Print newsletters have more space, which allows for more information to be shared. Emails have to be shorter to be read, but a printed newsletter can be enjoyed over time. • Your customer may read part of the newsletter one day, then set it down on the counter to pick up later to read another portion. It has staying power. • There are psychological benefits to giving your customer something to hold in their hands. They are more likely to appreciate it and remember. • When done correctly, your printed newsletter will be opened more often than email newsletters. The open rate may be 10 times higher. Your customer’s postal mailbox is usually empty, but their email inbox likely gets 50 messages per day. Cons: • Printing and postage increases cost. • That’s about it.
POSTCARD NEWSLETTER Pros: All the same pros as the 8.5x11 printed newsletter plus… • Postcard newsletters arrive already opened. • Because it is already opened there may be something that catches your customer’s eye immediately, such as an announcement. • Other people see the postcard while it’s delivered or sits on a desk or in a break room. • A postcard that sits around a break room or on a coffee table can stay in better condition than a piece of paper as postcard quality is higher. EMAIL NEWSLETTER • Print and postage costs are about 20 Pros: percent less. • Email newsletters can be shared with Cons: the click of a button. This could put your • Although it costs 20 percent less than dealership in front of potential customers other printed newsletters, it is still more at no cost. money than an email. • You can protect your brand by putting What Type of Newsletter is the Winner? a link to your feedback system in All of the above can contribute to profits every email newsletter, such as on when done correctly. If possible, pick a print ThanksForFeedback.com. If there comes newsletter style and send email newsletters. a time your customer is not happy, they If the only con of printed newsletters can vent internally instead of publicly on (postage and printing costs) is still more than Google or Facebook. • Though you still need to prepare the email you want to pay, do them every other month and send email newsletters in between. This newsletter to be effective, you won’t pay cuts costs by half. printing and postage charges. People react to different media in different • Your customers’ physical addresses can change frequently, but they may have the ways. Some people would rather get a quick email, but some would rather enjoy their same email address forever. coffee or lunch break with paper in hand. Cons: Why leave anyone out? Do both and reap • Low open rates could be 5-20 percent. the benefits. • Open rates continue to drop. It could get worse. Kenny Atcheson is the founder of Dealer Profit • Emails have zero staying power. If they Pros and author of Marketing Battleground: How to Deploy Under-the-Radar Strategies are not opened on the day they are sent, to Explode Your Profits. Kenny teaches workshops and speaks at conventions and 20 they disappear into a black hole. Groups. His company offers several marketing • Emails must be short or they won’t get and advertising programs found at www. DealerProfitPros.com. read.
PRODUCTS & SERVICES
PASSTIME UPDATES CONNECTED VEHICLE PORTAL
Device Management Portal
PassTime has launched InTouch Summit, an all-new device management portal for its InTouch product line. InTouch is a GPS solution connecting vehicles for dealers and consumers. Dealers use InTouch to monitor inventory on their lot, keep track of test drives, and as a theft recovery tool. Consumers who purchase InTouch from an authorized dealer can use InTouch’s connected car features for vehicle monitoring and theft recovery. InTouch Summit, the customer portal where dealers manage their InTouch devices, features a completely redesigned interface, faster actionable items, enhanced data analytics, and a better overall user experience. Along with the companion suite of InTouch mobile apps, InTouch Summit will give customers a great experience when managing their InTouch connected vehicles. InTouch Summit is currently available to select customers. SAFETY WATCH
800,000 TOYOTA PRIUS HYBRIDS RECALLED
Stall Risk
Toyota recently said it will recall about 800,000 of its popular Prius hybrids in the U.S. and about 1.6 million more worldwide over a concern the vehicles may lose power and stall while being driven. Toyota said the recalled vehicles – 20122014 Toyota Prius and Toyota Prius V models – were designed to enter a failsafe driving mode that cuts engine power dramatically if their engine computer systems detected a serious fault. In isolated cases, the automaker said the vehicles stalled although their power steering and brake systems still functioned. The latest recall builds on two earlier recalls the automaker issued in 2014 and 2015. Toyota said “previous recalls did not anticipate this new condition.” Toyota dealers will update the vehicles’ engine control computer software for free. No start date to the recall has been announced. Globally, the recall includes other models that use the Prius’ two-mode hybrid system. In Japan, more than 1.2 million hybrids are covered under the recall. Approximately 400,000 additional recalled vehicles were mostly sold in Europe, Asia, Africa, and Australia.
WWW.NEWJERSEYIADA.ORG DECEMBER 2018 DEALER NEWS 3
DECEMBER INSIDE
2018
05..... Drive Drama-Babies from Your Dealership 06................................................. 20,000 by 2020 06.......................................... Earning Trust in F&I 08..................... How to Compete with Online Ads 10................................NIADA Government Report 14.............................................Social Media Study
ADVERTISERS INDEX
Condition Now..................................................... 7 Manheim............................................................. 11 NextGear Capital ...............................................12 UVeye................................................................IFC vAuto................................................... Back Cover
WHAT’S NEW
NABD SESSIONS ONLINE Check it Out on NIADA.TV All sessions from the NABD Buy Here, Pay Here Subprime Conference powered by NIADA are now available online. The robust offering of education sessions from the BHPH industry’s premier event includes topics such as Facebook Marketplace, underwriting, the effects of the new tax laws, social media, internal controls, industry benchmarks and more from industry leaders. Check it out at NIADA.TV.
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 For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com.
The New Jersey Dealer News is published bimonthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 760065203. 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 © 2018 by NIADA Services, Inc.
STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITORS Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT Christy Haynes PRINTING Nieman Printing
2018 Member Discount Book 2016 MEMBER DISCOUNT BOOK $5,000 IN AUCTION DISCOUNTS
2016 M EM B ER D ISC OU N T B OOK 2016 M EM B ER D ISC OU N T B OOK $50 BUY FEE ONE PER MONTH $5,000 IN AUCTION DISCOUNTS $5,000 IN AUCTION DISCOUNTS Long IsLand
new Jersey
syracuse
(TWO) $100 OFF BUY FEE / (TWO) $100 OFF SELL FEE – TOTAL $400 FROM EACH AUCTION = TOTAL $1,600
$50 BUY FEE ONE PER MONTH $50 BUY FEE ONE PER MONTH Long IsLand
new Jersey
syracuse
AUTO AUCTION – (TWO) $50 BUY FEE (TWO) $50 OFF SELL FEE (TWO) $100 OFF BUYBLOOMBERG FEE / (TWO) $100 OFFLong SELL FEE – OFF TOTAL AUCTION = TOTAL $1,600 IsLand new $400 J ersey FROM EACH syracuse
(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 BLOOMBERGBUFFALO AUTO AUCTION – (TWO) $50 OFF (TWO) $50FEE OFF SELL FEE AUTO AUCTION – $100 OFF BUYBUY FEE FEE / $100 OFF SELL
GARDEN SP T YO UR PR OF SP IT OT
Auto Auction BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION
SPOTBEL AUTO AUCTION (FIVE) $50REGISTRATION OFF BUY FEE BSCGARDEN AMERICA, AIR, MD –– $50 OFF
MANHEIM ALBANY – $100 OFF BUY/ $100 SELL BUFFALO AUTO AUCTION – $100 OFF BUY FEE / $100 OFF SELL FEE
SP BUY T FEE / $100 OFF SELL FEE BUFFALO AUTO AUCTION –GARDEN $100 OFF Auto Auction YO UR PR OF SP IT OT
GARDEN SP T YO UR PR OF SP IT OT
MANHEIM NEW JERSEY – 1 FREE 7-DAY POST SALE INSPECTION Auto Auction
GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE MANHEIM NEWBURGH, NEW YORK – $100 OFF BUY/ $50 SELL
MANHEIM ALBANY – $100 OFF BUY/ $100 SELL
MANHEIM ALBANY – $100 OFF BUY/ $100 SELL MANHEIM NEW YORK SKYLINE – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL
MANHEIM NEW JERSEY – 1 FREE 7-DAY POST SALE INSPECTION MANHEIM NEW JERSEY – 1 FREE 7-DAY POST SALE INSPECTION MANHEIM PENNSYLVANIA – $100 BUY/ $100 SELL
MANHEIM NEWBURGH, NEW YORK – $100 OFF BUY/ $50 SELL MANHEIM PHILADELPHIA – (TWO) $50 OFF BUY /OFF (TWO) $50 $50 OFF SELL MANHEIM NEWBURGH, NEW YORK – $100 BUY/ SELL
MANHEIM NEW YORK SKYLINE – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35)
MANHEIM NEW YORK SKYLINE – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL
MANHEIM PENNSYLVANIA – $100 BUY/ $100 SELL ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT
MANHEIM PENNSYLVANIA – $100 BUY/ $100 SELL
MANHEIM PHILADELPHIA – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL STATE LINE AUTO AUCTION – 12 MONTHLY COUPONS FOR REGISTRATION
PHILADELPHIA – (TWO) $50 OFF Sell BUY / Fees...SAME (TWO) $50 OFF SELL $5,000 MANHEIM in Auction Discounts! Buy and AS CASH! PLUS...$4,000 in Vendor Coupons! ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35) 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 SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT
STATE LINE AUTO AUCTION – 12 MONTHLY COUPONS FOR REGISTRATION STATE LINE AUTO AUCTION – 12 MONTHLY FOR REGISTRATION AS CASH! $5,000 in Auction Discounts! Buy andCOUPONS Sell Fees...SAME $5,000 in Auction Discounts! Buy and Sell Fees...SAME AS CASH! PLUS...$4,000 in Vendor Coupons! PLUS...$4,000 in Vendor Coupons!
For complete membership information please visit
www.newjerseyiada.org
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DEALER NEWS DECEMBER 2018 WWW.NEWJERSEYIADA.ORG
MANAGEMENT MATTERS | By Dave Anderson
DRIVE DRAMABABIES FROM YOUR DEALERSHIP
Don’t Let Drama Limit Your Potential
There is little that is less productive for a team member to engage in than drama, and to subsequently become a “drama-baby” in the process. In fact, there is little that equals drama’s ability to distract from priorities, waste time, drain energy, and make Alps out of anthills. “Drama” is the result of immature acts, committed by small-minded and selfish people who are either indifferent or oblivious to the negative value they inflict on both culture and teammates. While any of us may be prone to fall into the drama trap occasionally by overreacting to a simple event or conjuring up exaggerated and gloomy scenarios unlikely to ever occur – and normally doing so based on limited information – the drama-babies I’m addressing in this piece are those who are known for it. When you see him or her walking down the hall you can almost smell drama and a headache. Some drama-babies have perpetrated drama for so long they don’t even realize they’ve become a cultural contagion of toxic behavior. The following points are designed to create self-awareness and strategies to help stop drama in your workplace, and to curtail the development of drama-babies. While you won’t ever eliminate drama completely from entities populated by human beings, you can do more to model productive behaviors personally, and to leverage peer awareness and peer pressure to demonize and minimize drama throughout your dealership. THREE QUICK THOUGHTS ON DRAMA AND DRAMA-BABIES · To create context for this piece, consider that Urban Dictionary defines drama as “A way of relating to the world in which a person consistently reacts to or greatly exaggerates the
importance of benign events.” Dramababies have a predictable knack for overreacting to everyday events, for choosing to be offended, and for making everything possible be all about them. · Typically, drama-babies are those who are chronically bored, or who have an inordinate craving for attention. They covet sympathy and continually bait others into “rescuing” them in some manner – normally through inordinate attention, sympathy, counseling, or helping. The bottom line: drama-babies don’t really have much of a life, so they endeavor to create a false reality that feeds their fancies and dramatic appetites. · Drama-babies enjoy manipulating others, often dragging them into their hyperbolic fantasyland to gain attention or make their own dullard existence more interesting. FIVE EVIDENCES OF DRAMA Following are five evidences of drama in general, and of drama-babies specifically, followed by five suggested remedies. Be aware of these symptoms. Watch for them. Address them when they manifest. And encourage peer accountability to discourage dramatic behavior from top to bottom in your dealership. · Having one supposedly serious crisis after another. Example: Over time, drama-babies communicate an unlikely and immense trail of crises in their lives that may include exaggerated family, health, or relationship issues. · Constantly telling other people about one’s personal or career problems. Example: You normally know far too much information about drama-babies – every headache, heartache, and hemorrhoid is described in agonizing detail. · Claiming to have experienced negative experiences that are highly implausible. Example: They’ve been personally affronted, offended, insulted, dismissed, disrespected, or slandered by an array of haters and bullies they encounter in their everyday lives – in traffic, at the drive-thru, from law enforcement and flight attendants, in attacks by social media trolls or Russian hackers, and even the occasional stalking or kidnapping by little green men in UFOs. · Making claims without sufficient facts, or lack of detail about supposedly serious events. Example: Starting or hearing rumors and blowing them out of proportion or presenting with authority what they have minimal – if any – facts to base their claims on. · A pattern of irrational behavior and reactions to everyday events. Example: Someone took Sue’s Diet Dr. Pepper from the breakroom refrigerator and she’s convinced a teammate is set on destroying her. Or, John didn’t get the credit he thought he deserved for the project’s success so now he’s updating his resume because he “knows” he’s about to be fired.
FIVE REMEDIES FOR DRAMA · Start with your own example. Go to work to work smart, and focus on the aspects of your job you can control. Speak more in terms of what is positive, possible, and productive. Stop being consumed with what someone else is doing or getting and mind your own business. Don’t gossip and reject gossipers. Look for ways to add value, bring solutions to the table and positively impact team members and customers alike. · Get your mindset right and keep it healthy during the day. My book, Unstoppable, goes into extensive detail on how to develop this essential discipline. In a nutshell: limit your intake of garbage media, websites, and conversations, and replace it with a structured routine that inspires, motivates, and educates. And start it before you get to work in the morning. Get in the zone before you leave your house for the dealership. · Keep yourself and others so busy with high expectations and the productive activities necessary to achieve them that there is no time for drama. Remember that human beings, including yourself, develop to their potential within the confines of a structured and effective daily routine – one that leaves no time to initiate or listen to drama-baby nonsense. · Conversationally, firmly, and respectfully address drama and refocus the perpetrator on something more productive, and encourage team members to do likewise. This type of peer accountability is essential to driving out drama. Set the example with words like: “This is starting to sound like drama, I’m getting back to something more productive.” “This is starting to sound like drama, let’s both get back to something more productive.” “You can’t control it or affect it, so get back to something you can control and affect.” “Let’s get back in the zone.” “Let’s leave the drama zone and do something productive.” “Let’s make today about performance, not excuses.” · Stop pandering to dramatic people with constant hugging, coddling, pep talks and rescuing. You teach people how to treat you, so if you respond to drama unproductively, you’ll encourage more of it. What you reinforce with positive attention, including drama, you can expect to see more of. And if you are a leader who engages in drama personally, you are giving those in your charge license to do likewise. Inevitably, if it hasn’t happened already, you will become the unofficial momma or papa of a whiney and miserable family of drama-babies in your department. As a leader you’ve got to do better, and you’ve got to start now. Dave Anderson, “Mr. Accountability,” is a leading international speaker on personal and corporate performance improvement. He is also the author of 14 books and host of the podcast, The Game Changer Life.
WWW.NEWJERSEYIADA.ORG DECEMBER 2018 DEALER NEWS 5
COVER STORY
ASSOCIATION NEWS | By Paul John
The NIADA Begins New Membership Initiative The National Independent Automobile Dealers Association has begun a new nationwide membership initiative. Its goal is to reach 20,000 members by 2020. The organization will reach this goal by focusing on the states with the highest growth opportunity. This simple strategy measures current market share – number of members compared to number of licensed dealers. NIADA state-affiliated associations that provide more dealer educational programs and effective advocacy at the state capital – and are able to negotiate exclusive member discounts for their members – generally have a bigger footprint, typically between 30 and 60 percent market share penetration. NIADA has already begun working with the state organizations by working closely with the state directors and their board members to understand their state-specific challenges as
ACCELERATE |
well as develop a clear understanding of their goals. And more importantly, NIADA is working with states’ leadership on specific strategies that will pave the way for state associations to grow and stay relevant. Paul John is NIADA’s vice president of national field operations. He can be reached at paul@niada.com or 770-616-5156.
By GWC Warranty
EARNING TRUST IN F&I
Showing Customers the Value of F&I Products
Perhaps the most difficult obstacle to overcome in the F&I office is getting your customers to trust that the products you’re offering will be worth the added cost. Establishing that trust is the first step in building the foundation for long-term F&I success. But how do you go about gaining the trust of someone whose money you’re looking to spend on additional products like a vehicle service contract? Just like most things in life, honesty is the best policy in the F&I office. Being upfront about monthly costs, coverage limitations and the company backing your products will help customers feel the confidence they need to feel to make a service contract purchase. Payment Transparency For the vast majority of customers, you’re negotiating on monthly payment and getting them on board with how the cost of a service contract impacts what hits their bank accounts each month. At a glance, the added cost can be staggering, especially in a world where 78 percent of people are living check to check. But breaking it down by daily cost could help overcome this hurdle. For example, the daily cost of a $300 payment is roughly $10 a day. If you add $50 per month for a service contract, that daily cost is just over $11 a day. This nominal daily increase compared to the cost of major repairs can help customers see the value in added vehicle protection.
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T H E O R G A N I Z AT I O N W I L L R E A C H THIS GOAL BY FOCUSING ON THE S TAT E S W I T H T H E H I G H E S T G R O W T H O P P O R T U N I T Y. T H I S S I M P L E S T R A T E G Y MEASURES CURRENT MARKET SHARE – NUMBER OF MEMBERS COMPARED TO NUMBER OF LICENSED DEALERS.
DEALER NEWS DECEMBER 2018 WWW.NEWJERSEYIADA.ORG
Coverage Transparency Not all coverage levels were created equally. It’s important to impart this on your customers. If you’ve mastered your menu selling strategy, working backwards from the highest level of coverage achieves this goal for you. Focusing on what customers miss out on and using this technique in tandem with highlighting small daily cost differences, it’s easy to spell out value that will help your customer see you have their long-term financial interests in mind. Provider Reputation Customers may object to a service contract due to the industry’s reputation. But working with a reputable partner has its benefits – most notably your ability to showcase that reputation to customers. When you can show customers the product you’re selling is backed by a company with decades of experience and billions in claims paid, peace of mind will come easily – and quickly. Showcase Past Results Does your customer still not trust your F&I process? Even the most difficult customers can’t deny real-life results. Keep close a file of past work orders or a claims paid report and show that difficult buyer all the money VSCs have saved your past customers. No customer can refute the value of a VSC after seeing exactly what it’s done for people in their shoes.
ONLINE MARKETING | By Adam Tobias
HOW TO COMPETE WITH ONLINE ADS
5 Steps for Small Dealers
Car buying has become a primarily online activity. According to Cox Automotive’s Car Buyer Journey Report, customers spend just a third of their time at dealerships. The rest is devoted to online research. Only after careful research do car buyers proceed to a dealership to test drive and purchase. The challenge, therefore, is to be found online. Dealerships might have the right inventory and prices, but if they can’t get traffic to their listings, they won’t get buyers onto their lot. Online advertising is the answer, but most small and mid-size dealerships can’t justify the cost. But there is a right way and a wrong way for small dealerships to advertise online. And it’s expensive if you do it the wrong way. The Benefit of Being Big Large dealerships dominate advertising on third-party websites like Cars.com and Autotrader. They can afford the exorbitant costs of buying ad space there and can blanket the Internet with ads. Sure, they waste a lot of money on visitors who don’t buy from them, but with enough traffic, only a tiny fraction of visitors need to become customers to make the ads worthwhile. That’s the benefit of being big. When small dealerships try the same “spray and pray” approach, they undoubtedly fail. If you can’t compete on budget, you have to use other tactics to get found online. When They Go Big, You Go Small Small dealers can’t afford to blanket the Internet with ads, but anyone can afford to run a few highly targeted ads to the perfect customer. If you have $100, you can effectively advertise any vehicle online. Here are five steps to developing a highvalue advertising campaign. These principles are universal for any dealership, but they’re especially powerful for smaller dealerships trying to compete with large companies.
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DEALER NEWS DECEMBER 2018 WWW.NEWJERSEYIADA.ORG
1. What is your niche? Who is your audience? Most dealerships already focus on specific vehicles. That’s called a niche. Maybe your niche is broader, like trucks, European cars or used vehicles. Maybe it’s narrower: a specific brand, price point or customer segment. Having a niche is important. It allows you to define your target audience, the people who are most likely to purchase a vehicle from you. Instead of advertising to any car buyer, focus on advertising to this niche. But how do we find these people on the Internet? And how do we show them our ads? 2. Ad targeting. Ad targeting means creating rules or criteria about who should see your ad, when they should see it and on what platform. Using the tools available on ad platforms, you can target your specific niche. Targeting saves you money by showing your ads only to those people who are most likely to purchase from you. Your conversion rates will be higher, which means more people are clicking on your ads. This, in turn, gives you a better chance to make a sale. For small and mid-size dealers, the secret to online advertising is quality not quantity. You want each ad to make a big impact, and that starts with ad targeting. 3. Choose the right platform. Advertising platforms vary widely on cost, features and targeting ability. Choosing the right one is often the most difficult step. • Third-Party Car Websites Third-party websites – like Cars.com, Autotrader and CarGurus – are the most popular platform for dealer ads. They get the lion’s share of car search traffic and are often the first place buyers look. But because of this, they are also the most expensive platforms. Only large dealerships can afford to advertise effectively on these sites. Every ad is in competition with thousands of other car ads, putting a premium on top ad space. • Google Ads Google Ads (formerly AdWords) lets you run ads on Google searches. Advertisers target the keywords relevant to their product and their ads are shown on the results pages. Google Ads can be affordable or extremely expensive. Broad terms like “used cars” get hundreds of thousands of searches every month, but the cost is prohibitive for most small dealers. Plus, this keyword attracts a wide audience, most of whom won’t be interested in your vehicle anyway. Specific terms like “Honda HR-V 2016 Atlanta” are less expensive and more effective for a small dealer. This type of Google search shows buyer intent – they have done their research and are looking to purchase. This is the perfect time to show them your ad and get them to your website. • Social Media Like Google Ads, advertising on social media can either be cost-effective or
expensive. Instead of keywords, though, sites like Facebook group audiences based on their interests. You can choose a broad or niche audience, which will determine the cost and impact of your ads. • Display Network Display networks partner with websites and online publishers to deliver banner ads to visitors based on their search history and interests. When you target a specific audience, the display network will show them ads when they visit a website that is part of the network. For example, your audience could see your ad on USA Today, DrivingSales.com and Lifehacker.com. Display network ads are among the most affordable and effective. The ad space itself is inexpensive, and your ads don’t have to compete with hundreds of others. Since they are based on search history and interests, you know you’re targeting a highquality audience. 4. Ad content. The content of your ad has a monumental impact on its success. The right targeting is only half the battle. We’ve grown so used to seeing ads everywhere our minds have become very effective at ignoring them. To win visitors, your ads need to be creative and provoke people to action. If you’re not using the right language, or your ad is not visually appealing, chances are visitors will not click on your ad. Creating compelling ads is tough work. If you don’t have experience, you are probably better off seeking the help of a marketing professional. But even pros aren’t perfect, which leads us to our final step. 5. A/B testing. A/B testing is a method to gauge the performance of an ad before you spend too much money on it. Create two different versions of the same ad and run a limited campaign for each while measuring their effectiveness. Then choose the topperforming ad to run a larger campaign. Repeat this process over time to refine your ads. A/B testing helps advertisers ensure they are running effective ads that generate high-quality leads and, eventually, sales. It’s truly an invaluable tool. It’s hard and scary, but you’re not alone. Online advertising can be a full-time job on its own. It’s only natural to feel overwhelmed by the amount of work and choices involved. Large dealerships make it hard to get the premium ad space on a small budget. And if you’re not in the premium ad spot, it’s easy to get lost in all the noise. However, by targeting your niche audience with engaging ads on the right platform, even small dealers can compete with the big players. Take your time, get it right and watch your sales soar. Adam Tobias is the co-founder and COO of Dealercue, which provides dealerships with real-time, intelligent, market-driven vehicle appraisal, pricing, inventory management, and sourcing solutions. He can be reached at adam@dealercue.com.
ASSOCIATION NEWS
NIADA PARTNERS WITH DEALERSHIPS TO OFFER CPO VEHICLES Two New Dealerships Added to the CPO Family
RLB Sales & Leasing and 6th Gear Auto – both of Fort Worth, Texas – are now proud members of the NIADA Certified family. To celebrate, NIADA held kickoff launches at both dealerships. “It’s important to us to be here,” said Warrantech business development manager and program administrator Mike Sims. “Not only to us as a whole, but to these dealerships as clients, as partners of ours with NIADA.” Scott Lilja, NIADA’s senior vice president of member services, was also on hand to offer support and explain the benefits of partnering with NIADA. “We’ve been around for 73 years protecting dealers’ interests, putting together programs to help them get to that next level in terms of differentiation and quality, and trust and transparency with consumers. And that’s what the NIADA CPO program is really about.” The NIADA Certified Pre-Owned Program offers high-quality used vehicles backed by a powerful warranty with nationwide reach, and backed by NIADA – a national association whose more than 15,000 members are dedicated to integrity and subscribe to a strict code of ethics. For a vehicle to be considered “NIADA Certified,” it must undergo a 125-point inspection conducted by a licensed repair facility and be backed by a rigorous vehicle history report. Once all requirements have been met, dealers are then able to offer these vehicles to their customers along with a number of features and benefits, including the following: • A CARFAX vehicle history report. • Special financing for qualified customers. • Flexible, fully customizable warranty options. • Roadside assistance, towing, vehicle rental and lost key/lockout service. Offering these benefits is already paying big dividends for both dealerships. “My turnover is in the 40s now and that’s what I’m really proud of,” said 6th Gear Auto Sales owner Chris Johnson. “We’re selling cars faster, but more importantly, our systems, our procedures and our policies through Warrantech have helped us sell more cars through our training processes.” “It adds value to what we’re doing here,” said RLB Sales & Leasing general manager Shane Collins. “It adds value to every vehicle we sell. We’ve already seen the uptick. We’re pacing 60 cars this month when last month we did 30, so we’re excited. It’s going to be a long, happy journey.” To learn more about how your dealership can become NIADA Certified, visit niadacertified.com/dealers or call 1-877-3100288 to sign up today.
6th Gear Auto – Fort Worth, Texas
RLB Sales & Leasing – Fort Worth, Texas
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Latest Government Issues and Activity
NIADA is your voice in Washington D.C., advocating for independent dealers, the used vehicle industry and small business. Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities.
for a visit; Florida IADA past president Lisa Compagno, who hosted Rep. Brian Mast (R-Fla.); and BHPH Commission member Steve Taylor, who brought Rep. Mike Bost (R-Ill.) to visit Auto Credit of Southern Illinois. In addition, Baker and Michigan IADA president Otto Hahne met with Rep. Mike Bishop (R-Mich.) and House Ways and Means Committee chairman Kevin Brady (R-Texas) at an event in Lansing, IADA of California past president Gus Camacho met with his Congressman, Rep. Steve Knight (R-Calif.), and NIADA secretary John Cousins met with Rep. Ted Yoho (R-Fla.).
PAC In October, NIADA co-hosted an event in Dallas for Rep. Steve Scalise (R-La.), currently the House Majority Whip. While that position will soon change after the Democrats won control of the House, he remains one of the highest ranking Republicans in the House of Representatives. Scalise, who was one of four people wounded when a gunman opened fire on the Republican team’s practice for the annual congressional baseball game in 2017, won re-election easily last month. In the weeks leading up to election day, NIADA member dealers from around the country took the opportunity to meet with their congressional representatives at campaign events, fundraisers or private meetings or at their dealerships. Inviting your elected representatives – at the federal, state and local levels – to visit your dealership is the single best thing you can do as a dealer to educate those representatives about what you do, how your business works and how the laws and regulations they create affect you and your business in the real world. Among the dealers who did so are NIADA BHPH Commission member Jeff Baker, who hosted Rep. Jackie Walorski (R-Ind.) at his location in South Bend, Ind.; Mid-Atlantic Regional IADA president Michael Brill, who had Rep. Brian Fitzpatrick (R-Pa.) in
L E G I S L AT I V E In the runup to the midterm elections, President Trump announced he was working with Republican congressional leaders, including Rep. Brady, on a plan for a 10 percent tax cut for the middle class. According to a White House spokesperson, the cut would be “revenue neutral,” and was to be voted on after the election as an extension of the Tax Reform 2.0 bills that were passed by the House this year. Following the election, the President said he will continue to seek that tax cut, but with Democrats now in control of the House, he is willing to consider raising some tax rates – including corporate rates – to get the break for the middle class. “If the Democrats come up with an idea for tax cuts – and I’m a big believer in tax cuts – I would absolutely pursue something even if it means some adjustment,” he said. “I would certainly be willing to do a little bit.” Tax reform was one of Trump’s top priorities upon taking office, and the Republican Congress acted by passing the Tax Cuts and Jobs Act in 2017, which dropped the corporate tax rate from 35 percent to 21 percent and slashed taxes and increased deductions for individuals. But many of those changes are scheduled to expire after 2025. Any proposals now will need bipartisan support to pass the divided Congress.
WASHINGTON UPDATE |
By Shaun Petersen
NIADA GOVERNMENT REPORT
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R E G U L ATO RY State AGs protest CFPB: A group of 14 state attorneys general challenged the CFPB’s stance on disparate impact discrimination in the wake of Congress striking down the bureau’s indirect auto lending guidance in May. In a letter to acting CFPB director Mick Mulvaney, the AGs said the bureau is “unlawfully refusing to protect residents of our states against credit discrimination … by suggesting the CFPB is ‘no longer allowed’ to enforce the Equal Credit Opportunity Act’s prohibition against disparate impact discrimination with regard to auto lending.” The CFPB was one of five federal agencies that issued a joint statement in September making it clear supervisory guidance issued by the agencies does not have the same effect as law and they will not take enforcement actions based on that guidance. The guidance document, issued under former CFPB director Richard Cordray, used the concept of disparate impact to claim dealer discretion in auto lending created a risk of racial discrimination. But many experts found the methodology to be flawed, and industry leaders protested the lack of input from stakeholders and the public before the guidance was issued. In 2017, an opinion from the Government Accountability Office defined the guidance document as a CFPB rule – in part because it was used as the basis of enforcement actions – allowing Congress to repeal it through the Congressional Review Act. Small business cybersecurity campaign: The Federal Trade Commission, along with the Department of Homeland Security, the National Institute of Standards and Technology and the Small Business Administration, has launched a national education campaign to help small business owners understand common cyber threats and how they can protect their businesses. The FTC said the campaign grew out of last year’s series of roundtable discussions the agency held with small business owners to discuss cybersecurity issues. The new campaign includes fact sheets, videos and quizzes covering 12 topics: cybersecurity basics, understanding the NIST cybersecurity framework, physical security, ransomware, phishing, business email imposters, tech support scams, vendor security, cyber insurance, email authentication, hiring a web host and secure remote access. For more information, visit www.ftc.gov/ tips-advice/business-center/small-businesses/ cybersecurity. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
REGULATORY MATTERS |
By Anthony Cacciatore & Adam Steele
FTC USED CAR BUYER’S GUIDE
Three Things Auto Dealers Need to Know
Though its usage rules may seem straightforward, the Federal Trade Commission’s Used Car Buyer’s Guide includes several requirements that seem to catch many auto dealers off guard. First and foremost, the FTC requires it be displayed on all used cars sold by a dealer. The guide must contain details concerning the vehicle’s background along with any warranties available to the buyer. Failure to perform these steps can lead to private class action lawsuits and FTC enforcement penalties reaching $41,484 per incident. Don’t Forget to Display the Entire Guide The FTC requires the guide be affixed to the vehicle in such a way that both sides of the guide are easily readable by potential buyers. This rule, however, presents an initial challenge because the guide is two pages long. Per the FTC, compliance can be accomplished by: • Displaying the guide on one of the vehicle’s windows so that both sides may be read. • Hanging the guide from the vehicle’s rearview mirror. • Placing the guide in a plastic sleeve on the outside of the vehicle so buyers may remove and read it. • Another creative solution that doesn’t prevent the consumer from seeing the full document for the vehicle. What doesn’t work? • Using a double-sided print so that the
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reverse is only available by looking through the other side of the car window. • Placing the guide in the glovebox or under the seat. “As Is” Provisions Don’t Prevent All Consumer Claims Another area that is particularly sticky for the Buyer’s Guide is warranties. Many dealers are under the false impression that checking the “as is – no dealer warranty” box prohibits all consumer claims. Unfortunately, that isn’t the case. The reality is that a dealer selling a car “as is” only prevents claims arising from implied warranties. Implied warranties can be disclaimed. There are two so called “implied warranties” involved whenever a car is sold – implied because they exist whether they are ever spoken aloud or written. They are the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. In laymen’s terms, this means warranties that a car is fit for sale (i.e., merchantability) and will be useable for driving (i.e., fitness for the particular purpose). Express warranties, on the other hand, cannot be disclaimed through the use of an “as is” provision or some other expression the car is offered without warranty. Dealers, and especially sales personnel, have to be particularly careful when selling a used car not to cross the line from sales puffery to an unintended warranty. Express warranties are created when a salesperson makes a verbal or written statement that essentially guarantees product performance or quality. Example of express warranty: “This car will last you 200,000 miles!” Example of sales puffery: “This car is in good condition and a great value!” Express warranties also obligate the dealer to claims concerning those representations. Dealers need to be careful about what representations they make about a car to buyers because an “as is” provision doesn’t nullify those representations. Upcoming Enforcement Arguably, the most important thing dealers need to be aware of concerning the Buyer’s Guide is that regulators will be cracking down. The guide has been on the FTC’s watch list ever since rules governing the guide were revised in 2016. Earlier this year, the FTC performed a random compliance audit of more than 2,300 vehicles nationwide to see if dealers were following the rules. They weren’t. In fact, over 50 percent of those vehicles failed to either include the guide or display it properly. Seeing such a huge red flag, the FTC is surely signaling an increase in regulatory crackdowns. Savvy dealers will take steps to ensure compliance with these regulations and avoid potentially substantial fines by working with experienced automotive counsel that can advise and audit their guide use and related consumer compliance obligations. Anthony Cacciatore and Adam Steele are attorneys with Ohio law firm Mac Murray & Shuster LLP. For more information, call 614.939.9955 or visit www.mslawgroup.com.
SOCIAL MEDIA | By Kathi Kruse
SOCIAL MEDIA A PREFERRED CUSTOMER SERVICE CHANNEL
Recent Study Results
Social media is one of the first channels consumers head to when they have a question or an issue. In fact, 45 percent of consumers have done so. A recent Sprout Social study cited the disconnects between social marketers’ goals and consumer preferences, but there is one area they found marketers and consumers agree cannot be left out of the mix: customer service. On the front lines with customers and prospects every day, an overwhelming majority (88 percent) of social marketers understand the importance of customer service on social. Nearly half (45 percent) of consumer respondents have reached out to a company on social. Social media is a unique customer service channel. Handling customer service through social media is tricky. The same marketing individual or team is often expected to wear the customer service hat, and situations can quickly go awry when specific skills and focus are absent. Given that many dealership customer messages go unanswered on social media, it’s clear dealers haven’t put enough attention on designating someone to oversee their digital reputation, which is fast becoming their only reputation in their customers’ eyes. In many cases, customer care is left to a group of busy people who view it as an afterthought. Great social media customer service has a strong impact on the dealership’s bottom line. Social customer care doesn’t just contribute to brand perception. It impacts your bottom line. Twenty-one percent of consumers are more likely to buy from businesses they can reach on social. The same percentage would rather message a brand or business on social media than call customer service. This tells us that social customer service has a financial impact and is swiftly becoming the consumer’s preferred care channel. Done well, social customer care means customers will spend more. It improves efficiency and generates data you can use to improve services and benchmark against your competitors. Done poorly, you will
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be faced with spending precious resources digging your store out of a hole. Research published in Harvard Business Review found customers who received a response to their query on social media were more likely not just to remain a customer, but to spend more money with the brand, and recommend it to others. The research from Sprout Social showed answering a customer’s question on social media prompted 49 percent of consumers to purchase.
A rapid response is now standard. Facebook Messenger, already widely used for customer service, is setting the standard for response times on social media. It’s also a new channel for advertising. Forty-eight percent of those surveyed valued a quick response on social media above any other action a brand could take. Dealers have a lot of work to do to meet these expectations. According to Sprout
Social, the average brand response rate is just 12 percent. On average, a response takes 11 hours. That’s far short of the Facebookrecommended 15 minutes, and a lot of potential sales lost. The top reasons consumers reach out to brands on social: • They had a question (57 percent). • They had an issue with the product or service (45 percent). • They wanted to commend a company on their product or service (34 percent). When a customer reaches out with a question (their number one reason for reaching out on social) use this as an opportunity to form a relationship – not just resolve an issue. There is a wide range for how many customer service requests a business receives via social, though 58 percent of marketers surveyed receive between one and 50 requests in a week. There is also a wide range in response times, though the majority (78 percent) responds to a customer request within 12 hours. Social has matured as a communication channel and consumers have blended it into their lives. They expect dealers to do the same. While many dealerships now use social media regularly, very few take social customer service seriously. Quality customer service – regardless of channel – relies on a meaningful, efficient, solution-focused exchange between dealers and their customers. The consumer preference for social media as a communication channel requires your store to rethink its customer service policies and procedures, and integrate them with your business strategy. The best social customer service keeps your store in the conversation and doesn’t allow malcontents and competitors to speak for you. All this data makes it crystal clear how important social customer care is to your social and overall business strategy. How can dealers and their social marketers actually improve their efficiency and strategy in this area? More than half of social marketers say the answer is a bigger team. Large, small or somewhere in between, a dealership must allocate the right resources into social media. Given the data, it’s clear that customer service cannot be left out of your social media strategy. Every dealership needs to reassess how their customers prefer to communicate and adjust resources to meet ever-changing customer expectations. Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc., which coaches, trains and delivers webinars focused on integrating social media and online reputation management into dealership operations. She can be reached at kathi@ krusecontrolinc.com.