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INSIGHT

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MAGAZINE

THE OFFICIAL MAGA ZINE OF NE W ME XICO INDEPENDENT AUTOMIBILE D E A L E R S A S S O C I AT I O N MARCH/APRIL 2017

DEALERS BEWARE! Thieves Using New Technology PAGE 08

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INSIDE

04...............................................NIADA Government Report 06.............................................. Is Your Sales Process a Hit? 07.........................................Tips for a Subprime Slam Dunk 08................................................................. Dealers Beware 10............................ Reasons Your Facebook Page Is Failing 18.................................... 2017 Expected to Be Record Year

WHAT’S NEW

Tire Safety Week Dates Announced

The dates for National Tire Safety Week 2017 are May 28-June 3. An initiative of the Rubber Manufacturers Association, the event promotes tire safety among consumers. Auto dealers join the tire and auto industry to encourage drivers to “be tire smart.” For more information, or to request print materials, visit www.betiresmart.org.

ADVERTISER’S INDEX

CarMax Auctions................................................................. 7 AutoZone........................................................................... 17 Lobel Financial...................................................................IFC Manheim............................................................................ 11 Manheim Pennsylvania..................................................... 13 NIADA CPO...................................................................... IBC Precision Auto Inspections................................................. 5 Spireon................................................................................ 9 VAuto................................................................... Back Cover

OFFICE

New Mexico Independent Automobile Dealers Association 608 Chama NE • Albuquerque, NM 87108 Phone: 505.232.0809 • Fax: 505.232.0810 email: james@nmiada.com website: www.nmiada.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 NM Dealer Insight is published bimonthly by the National Independent Automobile Dealers Association Services Corporation. 2521 Brown Blvd., Arlington, TX 76006-5203. 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 NMIADA or NIADA. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2017 by NIADA Services, Inc.

PRODUCTS & SERVICES

ROUTEONE ADVANCES THE FUTURE OF ECONTRACTING Remote Document Delivery RouteOne recently announced the launch of remote document delivery. It is a new technology that securely and compliantly gives consumers electronic access to their eContracted documents. At the same time, it reduces printing costs and paper shuffling for dealers. Paradoxically, the eContracting process still involves paper, and can result in printed review and signed copies of retail and lease contracts. Paper has remained part of the process, partially because of compliance requirements surrounding providing consumers with copies of their contracts they can take with them. Previously, the only way to accomplish this requirement was the paper option.

BOARD MEMBERS Chairman

Secretary

Associate Board Members

President

Dealer Board Members

Alan Clark Zurich Direct Markets PO Box 30846 Albuquerque, NM 87190 (505) 328-2387 Alan.clark@zurichna.com

Vice President

Luis Soto Sun City Motors 8504 Central Ave SE Albuquerque, NM 87108 (505) 256-1200 suncitymotors@yahoo.com

Pat Martinez All Star Auto Center Inc. 2307 E Main St Farmington, NM 87401 (505) 325-2300 pmatrinez@allstarcars.net James Santistevan Zia Auto Wholesalers LLC 4913 Menaul Blvd NE Albuquerque, NM 87110 (505) 889-9653 ziawhsl@cs.com

Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com

Felicia Richesin A Quality Auto Sales 921 Eubank Blvd Albuquerque, NM 87112 (505) 275-9999 aqualityautosales@gmail.com

MAGAZINE LAYOUT

Treasurer

STATE MAGAZINE MGR./SALES

Troy Graff • troy@niada.com EDITORS

Christopher Hanley • chris@niada.com PRINTING

Nieman Printing

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With RouteOne’s remote document delivery technology, the need to print review and final copies of retail and lease contracts is alleviated. Now with a click of a button and the consumer’s email address, dealers can send their customers a secure link to access their files. Customers can also review the documents in the dealership on their own smartphone or tablet, or log in at home to review, save or print them for later reference. “We listened, we heard and we responded,” RouteOne CEO Justin Oesterle said. “Our dealers told us they love eContracting, but they wanted less paper. Remote document delivery came from listening to our customers. We often refer to RouteOne as the company that is designed by dealers for dealers, and this is a great example of how we strive to make that happen.” More information is available at www. routeone.com.

Aaron Flores A-Star Motors LLC 5700 Menaul Blvd NE Albuquerque, NM 87110 (505) 503-6846 aaron@astarmotors.com

Rob Martinez ABQ Auto Deals, LLC 169 Griegos NW Albuquerque, NM 87107 (505) 554-2428 rob@abqautodeals.com Thomas Hawkins AutoMax Farmington 5210 E Main St Farmington, NM 87402 (505) 327-0500 thomas@4automax.com

James Schrimer The Car Store, Inc. 1650 N. Valley Las Cruces, NM 88007 (505) 524-2283 thecarstorelc@gmail.com Dan Fiske Airport Auto Center 130 Airport Drive Farmington, NM 87401 (505) 325-3799 dfiske@goautoairport.com

Gene Lujan Manheim Auto Auction-NM 3411 Broadway SE Albuquerque, NM 87105 (505) 400-6965 Eugene.Lujan@manheim.com

Alan Rumm ION GPS 5925 Phelan Blvd, Suite G Beaumont, TX 77706 (409) 866-6116 alan@ionmycar.com Ken Star Sunstar Capital Inc. PO Box 53279 Albuquerque, NM 87153 (505) 292-0611 ken@sunstarcap.com Mike Godin Godin Dealer Services PO Box 67440 Albuquerque, NM 87193 (505) 710-7295 mike@godindealerservices.com

March/April 2017 / DEALER INSIGHT

WASHINGTON UPDATE

NIADA GOVERNMENT REPORT Latest Government Issues and Activity

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.

REGULATORY REPORT By Shaun Petersen

CONSUMER FINANCIAL PROTECTION BUREAU The CFPB released a report drawn from its first national survey of consumer experiences with debt collectors. The report found: • 27 percent of consumers approached about debt said they felt threatened by the conduct of the creditor or collector who most recently contacted them. • 40 percent of consumers contacted about a debt in collection said they asked at least one debt collector or creditor to stop contacting them. Three in four of those consumers said the debt collector did not honor the request. • 53 percent of consumers contacted about a debt said at least one collection effort was mistaken in some way. • 36 percent of consumers reported being contacted at inconvenient times. • 40 percent reported a debt collector attempted contact four or more times per week. • 15 percent of consumers contacted about a debt in collection during the prior year reported being sued. DEPARTMENT OF JUSTICE Dealer sentenced: Kenneth Smith, who operated Cars Unlimited in Lebanon, Mo., was sentenced to 18 months in federal prison and fined $50,000 for a mail fraud scheme in which he sold dozens of vehicles with fraudulent titles that underreported the vehicles’ actual mileage. After buying cars at auction, Cars Unlimited requested duplicate titles that

DEALER INSIGHT / March/April 2017

showed a lower mileage, and replaced the vehicles’ instrument clusters. Takata pleads guilty: Takata Corporation agreed to plead guilty to wire fraud and pay a total of $1 billion in criminal penalties $975 million in restitution and a $25 million fine – stemming from its alleged fraudulent conduct in relation to sales of defective airbag inflators. An indictment was also unsealed charging Takata executives Shinichi Tanaka, Hideo Nakajima and Tsuneo Chikaraishi, all Japanese citizens, with wire fraud and conspiracy in connection with the scheme. DOJ claims Takata induced its customers to purchase airbag systems it knew were faulty by submitting false and fraudulent reports and other information that concealed the true condition of the inflators. Volkswagen pleads guilty: Volkswagen AG agreed to plead guilty to three criminal felony counts and pay a $2.8 billion criminal penalty as a result of the company’s sale of approximately 590,000 diesel vehicles in the U.S. equipped with a defeat device to cheat emissions tests, and allegedly lying and obstructing justice to further the scheme. VW will also be on probation for three years under an independent corporate compliance monitor. In addition, six VW executives and employees have been indicted for their roles in the conspiracy, with charges including conspiracy, wire fraud and violations of the Clean Air Act. VW also agreed to pay $1.5 billion in separate civil resolutions of environmental, customs and financial claims. FEDERAL TRADE COMMISSION Resignations: Edith Ramirez announced her resignation as the commission’s chair on Jan. 13. Commissioner Maureen Ohlhausen was named acting chair. On Feb. 8, Jessica Rich, director of the FTC’s bureau of consumer protection, also resigned. Rich, who joined the FTC in 1991, had spearheaded a series of major enforcement actions against businesses, including car dealerships. Among them were Operation Steer Clear and Operation Ruse Control, which led to almost 300 enforcement actions involving allegations of deceptive advertising, fraud and other violations. Volkswagen settlement: The FTC settled litigation with Volkswagen Group of America to fully compensate consumers who purchased 3.0-liter TDI diesel vehicles through a combination of repairs, additional monetary compensation and buybacks for certain models. Under the order, owners of model year 2009-2012 vehicles will be able to sell their cars back to Volkswagen and obtain full compensation for their losses. Consumers are eligible to receive $26,000-$58,000 for a buyback, depending on the model, mileage and trim of the car. Those owners can also choose to keep their cars and receive a modification that

would improve their vehicle’s emissions, if a modification is approved by the Environmental Protection Agency and the California Air Resources Board. Consumers receiving an emissions modification will also receive monetary compensation. Owners and lessees of model year 20132016 vehicles will get their cars fixed to bring them into compliance with originally certified emission standards as well as compensation ranging from $8,500 to $17,600. Owners can determine if they are eligible for compensation and submit claims at VWCourtSettlement.com and AudiCourtSettlement.com.

LEGISLATIVE REPORT By Sante Esposito

REFORMING CFPB INDIRECT AUTO FINANCING GUIDANCE ACT The bill, which would rescind the controversial auto financing guidance action regarding dealer discretion on interest rates issued by the CFPB in March 2013 and provide a more transparent and accountable process for dealing with the issue, passed the House last year but must be reintroduced in the new Congress. With Sen. Jerry Moran (R-Kan.), the sponsor of the Senate version of the bill last Congress, no longer on the Banking Committee, action on the issue is pending guidance from Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee, and any action taken by the Trump Administration regarding the CFPB. During the last Congress, Hensarling introduced The Financial CHOICE Act, which would bring sweeping reforms to the CFPB – including a repeal of the auto finance guidance. One of the major changes proposed in Hensarling’s bill is replacing the CFPB’s single director with a bipartisan five-member commission. The term of the current director, Richard Cordray, runs until July 2018, but his fate is up in the air in the wake of a federal appeals court ruling that the bureau’s structure – one director who can only be fired for cause – is unconstitutional. In January, Sens. Ben Sasse (R-Neb.) and Mike Lee (R-Utah) told the President in a letter that he should fire Cordray, saying his tenure has been a “disaster” because of policies that have hurt small banks and limited consumers’ credit availability. If Cordray is ousted, recently retired Rep. Randy Neugebauer (R-Texas), a cosponsor of the auto finance guidance bill, is reportedly a candidate to fill that post, having met with Trump during the transition. HOUSE AND SENATE AUTO CAUCUSES Rep. Mike Kelly (R-Pa.) and Rep. Marcy Kaptur (D-Ohio) will continue as co-chairs of the House Auto Caucus, which is starting to recruit new members. Sens. Rob Portman (R-Ohio) and Sherrod Brown (D-Ohio) remain co-chairs of the Senate Auto Caucus.

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MANAGEMENT GAMEPLAN BY SCOTT BERGERON

IS YOUR SALES PROCESS A HIT? OR HIT AND MISS? Increase Your Batting Average Louis Pasteur said, “Chance favors the prepared mind.” When it comes to sales, this is the most important driver to long term success. Selling a vehicle comes down to two essentials. First, having someone to talk to who can buy. Second, being prepared so you don’t ruin your chances when you do have someone to talk to. All this means being organized in how you manage your sales process. The ultimate goal is to turn every opportunity into a sale. But since a 100 percent closing ratio never happens, the goal is to increase your batting average by consistent and correct execution of the basics. Shooting from the hip strategies never work as a game plan for success. These off-the-cuff processes typically rely on force of personality, which can be hit and miss depending on the salesperson’s mood. Charm may captivate one prospect and turn off the next, who feels as if it’s a put on. It can enthrall and entertain people in short bursts, but will only seal the deal with a select number of people. Salespeople accustomed to this type of selling may achieve a certain level of success, but it won’t ultimately rival what a well-organized, prepared salesperson can accomplish over the long term. Another analogy helps drive home the point even further. I call Denver home. Here, the Denver Broncos are as close to a religion as a sports team can be. In January, the Broncos’ coach, Gary Kubiak, resigned, citing health issues creating an inability to put in the amount of preparation time necessary for his standards. For him, that was a 5 a.m. to 10 p.m. regimen. The results of this approach are significant – in his first year as head coach, the Broncos won Super Bowl 50, proof the guy knows his stuff. There are likely very few salespeople who want to spend 17 hours a day preparing to sell cars. So it’s important to find other ways to help sales teams achieve. Here are a few important tips to develop an effective preparedness plan that doesn’t micromanage salespeople or make them feel like they’re stuck doing unnecessary hours of “homework”: Clarify objectives and goals by quantifying a sales funnel featuring prospects, sales, and activities needed for both. While this can get really detailed, the basics are straightforward. First, look at the forecast. To hit a certain forecast, the initial step is to reverse-engineer the process. Second, determine the historical average of how many prospects (UPs) it takes to make a sale. Let’s say it’s 4:1, or a 25 percent closing ratio. If that’s the case, you’ll likely need 100 prospects to make 25 sales. Third, determine historically what you have averaged per sale in commission (or gross if you’re the dealer) to determine how many prospects (UPs) you would need to hit your forecast. In the real world a salesperson who wants to earn $5,000 consistently each month needs to know exactly how to do that. If a salesperson historically earns $280 per sale, then he needs to sell 18 cars to make over $5,000. If his closing ratio is historically 29 percent, he needs to talk to 62 prospects (UPs) to sell 18 cars. The key here is getting accurate data to be able to do the math. Look at how to improve on historical numbers. For example, sales training can improve closing ratios, as can listening and learning body language. The key is to be able to give the salespeople all the tools they need to be consistently successful. Many email prospecting campaigns, as an example, fail miserably because of over-communication or coming across as pushy and selfserving. Today’s prospects want to know what’s in it for them and how you can help them get there. Use a CRM tool to track and help assess your sales team’s opportunities. I always try to get consistently better, whether I’m managing or selling directly, and to do that I need real data on my capabilities.

DEALER INSIGHT / March/April 2017

AVOID THE TRAPS OF ASSUMING “THERE’S AN APP FOR THAT.” Creating a doable plan is only half the battle. Fulfilling it is the other half. How many New Year’s resolutions are kept? Therein lies the difficulty, and the challenge. Keep the plan on track. Identify ways to improve it. Spot and repair weak links (e.g., sales team members not following through, either with their objective or reporting of it). Streamline processes further to make it even easier for your team to follow. Avoid the traps of assuming “there’s an APP for that.” When processes, especially sales processes, are overly complicated, technical, or not easily inspected, it almost always leads to failure. Sometimes, the simplest solutions are the best – particularly when they gain easy acceptance from the team. Two major considerations outweigh all others: A) Does the system provide basic key performance indicators (KPI) that managers can easily pull up and track? B) Is it easy for salespeople to learn, adopt and use consistently? Installing any new or exciting sales process can be tricky. The first step is to make sure it fits your dealership’s current selling style. There’s no need to reinvent the wheel here. Just make sure it fits. For example, older salespeople may be more inclined to use paper-based sales management systems, while digital processes via smartphones or workstations may be the overwhelming millennial preference. Keep your options open as both have strengths and weaknesses. Balance all this out by maintaining consistency. Sales processes and systems are all about improving the customer and salesperson experience so nothing is left to chance. Overall, make sure your processes are workable and well thought out, so they can become a cornerstone of your success. By deploying a consistent, balanced, and inspected sales system, you can steadily increase your bottom line and build a solid sales team for the long haul. Former dealer executive Scott Bergeron is the founder of Daily Gameplan.com, a sales team performance company. Scott can be reached at 303.918.3169 or scott@dailygameplan.com.

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ACCELERATE

BY GWC WARRANTY

TIPS FOR A SUBPRIME SLAM DUNK Ensure Your Subprime Business Doesn’t Fluctuate

As the pendulum swings with subprime lending, it becomes increasingly difficult for dealers to give their subprime customers the best deal possible. But regardless of which way the subprime breezes are blowing, there are certain steps used car dealers can take to ensure their own subprime business doesn’t fluctuate with the annual ebbs and flows of the subprime market. The Right Inventory It starts with selection of inventory and moves on to the inventory you present to each individual customer. Head to auction with the subprime customer in mind. Do some research with your lenders beforehand to see which vehicles they’ve had subprime success with and target a few of those each time you’re acquiring inventory. Once they’re on your lot, present them to customers who pre-screen with subprime credit. Once you engage with the customer, try something along these lines: “Thanks for reaching out, Mr. Smith. I have three great vehicles here that match what you’re looking for and they’re vehicles I know we can get financed for you.”

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The Right Lenders Part of being able to select, present and finance the right vehicle for a subprime customer is having strong lender partnerships. Seek out lenders who know the subprime space well and operate in it frequently. Many can be local providers, so finding lenders who know your area well will help, too. Lenders that meet these criteria will be more consistent with their decisions and help you get more subprime deals approved on a regular basis. The Right Protection A common struggle on a subprime deal can be adding a vehicle service contract on the back end with a limited subprime advance. This is an obstacle you can certainly overcome – especially if you’ve worked on the first two points we’ve discussed. It’s a simpler solution than you might think, too. Just ask. And you might have to ask more than once, but good subprime lenders will understand the value of a service contract on a vehicle. Remind them of that if you need to. A service contract will keep a car on the road, protect a customer’s monthly budget and, in turn, lower the likelihood of a default. As you look at ways to breathe some life into your subprime business, remember three keys to successful subprime sales: the right inventory, the right lenders and the right protection.

March/April 2017 / DEALER INSIGHT

SAFETY WATCH SOURCE: NICB

DEALERS BEWARE! Thieves Using New Technology The National Insurance Crime Bureau (NICB) says new technology is being used to not only unlock and open vehicles, but to also start and steal them. NICB recently obtained one of the so-called “mystery devices” the public was first warned about over two years ago. At the time, thieves were seen on security cameras across the country, using unknown devices to unlock vehicles and steal valuables inside. In recent months, NICB has noted reports of thieves not only opening the vehicles, but also starting them and driving away. The device obtained by NICB was purchased via a third-party security expert from an overseas company. It was developed by engineers in an effort to provide manufacturers and other antitheft organizations the ability to test the vulnerability of various vehicles’ systems. Called a “Relay Attack” unit, this particular model only works on cars and trucks that use a keyless remote and push-button ignition. In a series of unscientific tests at different locations over a two-week period, 35 makes and models of cars, SUVs, minivans and a pickup truck were tested. We partnered with NICB member company CarMax because they are the nation’s largest used car retailer and have nearly every make and model in their inventory. Tests were also done at a new car dealership, an independent used car dealer, at an auto auction and on NICB employee vehicles and ones owned by private individuals. The vehicles were tested to see if the device could: • Open the door. • Start the vehicle. • Drive it away. • Turn off and restart the engine without the original fob present. The NICB was able to open 19 (54 percent) of the vehicles, and start and drive away 18 (51 percent) of them. Of the 18 that were started, after driving them away and turning off the ignition, the device was used to restart 12 (34 percent) of the vehicles. NICB said there are a number of different devices believed to be offered for sale to thieves. Some use different technology and may work on different makes and models and ignition systems. More expensive models may have a greater range and better capabilities for opening and starting a vehicle. “We’ve now seen for ourselves that these devices work,” said NICB president and CEO Joe Wehrle. “Maybe they don’t work on all makes and models, but certainly on enough that car thieves can target and steal them

DEALER INSIGHT / March/April 2017

Mystery Device

Device in Action

with relative ease. And the scary part is that there’s no warning or explanation for the owner. Unless someone catches the crime on a security camera, there’s no way for the owner or the police to really know what happened. Many times, they think the vehicle has been towed.” Wehrle said it’s important for law enforcement officers to be aware of this threat and be on the lookout for thieves who may be using the technology. According to NICB chief operating officer Jim Schweitzer, who oversees all NICB investigations, vehicle manufacturers must continue their efforts to counter the attacks on anti-theft technology. “Vehicles are a valuable commodity and thieves will continue to wage a tug of war with the manufacturers to find a way to steal them,” said Schweitzer. “Anti-theft technology has been a major factor in reducing the number of thefts

over the past 25 years. The manufacturers have made tremendous strides with their technology, but now they have to adapt and develop countermeasures as threats like this surface.” While there may not currently be an effective way of preventing this kind of theft, NICB advises drivers to always lock their vehicles and take the remote fob or keys with them. Drivers should also be on the lookout for suspicious persons or activity and alert law enforcement rather than confronting a possible thief. It’s also a good idea to never invite a break-in by leaving valuables in plain sight. And once thieves get inside, they can easily steal a garage door opener and valuable papers such as the vehicle registration that could lead them to your home. So take the garage door opener with you and take a picture of your registration on your cell phone rather than keeping it in the glove compartment.

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MARKET WATCH BY USED CAR NEWS

AUTOTRADER NAMES TOP TECH

Trending Auto Technology

With new automotive technology constantly emerging and 2017 model-year vehicles now flooding dealer lots, the editors at Autotrader recently named their Must-Have Automotive Technology for 2017. Automakers like Mercedes-Benz, Tesla and Volvo are rolling out self-driving systems that can put many autonomous features together in one advanced package, appealing to even the most die-hard auto enthusiasts, especially when it comes to the more boring parts of driving like commutes or long highway trips. While Tesla’s Autopilot may currently be among the most advanced (and

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better-known) of these systems, several other automakers offer an impressive look at the future, including Volvo’s Pilot Assist system. Formerly only seen on ultra-high-end sports cars, adaptive suspension is making its way into other models, allowing you to custom tailor your car’s suspension based on the experience you want to have, with modes like “comfort” and “sport.” For drivers who often find themselves critiquing a car’s ride, or for those who spend a lot of time on rough roads or driving tight corners, the ability to change your driving experience with the push of a button can be well worth the cost. Many new vehicles now offer a suite of autonomous safety tech, including lane keep assist, automatic forward collision braking and adaptive cruise control - and the great news is that these systems are getting more affordable and are no longer only reserved for pricey luxury cars. Affordable new compact models like Honda Civic, Hyundai Elantra and Mazda Mazda3 all feature impressive autonomous safety tech features. Say goodbye to the little sticker on the corner of your windshield that reminds you of your next oil change - now many cars deliver this information and more in a handy app, making it easier to keep track of everything. Some automakers like Hyundai even have the Hyundai Assurance Car Care

App, which not only tells you when your vehicle needs its next service, but it can even schedule it for you. Gesture control is the wave of the automotive future. It allows you to control various features of your vehicle using gestures instead of pressing a button, touching a screen or using voice commands. Currently BMW is the only automaker to offer this feature (and only on its high-end 7 Series), but expect this to reach more vehicles in the coming years. Huge screens seem to be replacing many gauges and buttons in the cockpit of new cars, operating similarly to a smartphone with ultra-sensitive touch and the ability for details to be reconfigured. While some may worry about the future reliability of such screens in lieu of simple buttons, experts praise the more clean presentation and easier-to-use infotainment systems versus former complex controls or tiny buttons. Electric drivetrain technology is now becoming more widespread and delivers not only the obvious fuel-economy benefit, but also performance benefits. Modern exotic sports cars like the Acura NSX, BMW i8, Porsche 918 Spyder and LaFerrari all feature electric drivetrains. For everyday drivers, features ranging from fully electric to plugin gas/electric hybrids mean several options for the driving masses.

March/April 2017 / DEALER INSIGHT

SOCIAL MEDIA BY KATHI KRUSE

REASONS YOUR FACEBOOK PAGE IS FAILING Make It Work For You, Not Against You

Not all Facebook pages are created equal. It’s hard to ignore the opportunities available with Facebook to engage would-be customers, but building a highconverting Facebook page has been elusive for many dealers. It’s important to know the elements of a successful Facebook page and it’s even more crucial now to recognize the reasons your Facebook page is failing. Engaging customers on Facebook is challenging because it requires publishing the type of content they want to engage with. This means employing a content strategy that works for your store both culturally and operationally. In addition, Facebook ads promote your content, increase clicks to your website and, ultimately, turn fans into customers. Is achieving consistent engagement on Facebook a struggle for your store? Here’s a list of reasons why your Facebook page is failing with tips to make it work for you rather than against you. You Don’t Publish Regularly Consistency is a cornerstone of Facebook (or any other) marketing. Users need to see your posts in their newsfeeds for you to stay relevant. It’s a battle right now for attention, and inconsistency will kill you. Posting a few times per week or per month is not going to capture anyone’s attention. Post two to three times per day during the week and one to two times per day on the weekend. Your Page Lacks the Human Touch Facebook pages fail because posts focus on products instead of people. There’s a complete disconnect from the human side on most dealership Facebook pages. Content that demonstrates why people choose you seems to be nonexistent. If you approach Facebook with the sole mindset of “making money” you will end up wasting your time. Facebook is first and foremost a social network, not a business network. You’re Not Using the Three-Geared Content Approach Facebook is a powerful tool for engaging customers. The challenge lies in producing high quality, original content on a consistent basis. Use our three-geared approach to increase engagement: • Entertain. Most people who engage with your page are not immediately inmarket. The inability to engage this type of prospect is where many pages fail. • Educate. Fans who are thinking

DEALER INSIGHT / March/April 2017

about a purchase appreciate answers to their questions. • Excite. Offer something worthy of their time. Exciting offers compel people to click in anticipation. Your Posts Look and Feel Counterfeit Every dealership has a personality – characteristics, features, and traits – that makes it unique. Customers prefer dealers who communicate exactly who they are and the impact they want to have in their customers’ lives. Publishing benign content that can be found anywhere is the shortest distance to the bottom. This happens when dealers hire outside providers (and sometimes shady vendors) to “do social media” for them. The provider’s lack of personality comes through and it’s obvious someone other than you is doing the work. It’s not a good look for those who want to engage real people. Real people are behind your brand so let that shine through in your content. You’re Not Targeting In-Market Customers Facebook Ads’ deep data allows dealers to laser-target customers who are in-market. Building target audience profiles improves your Facebook marketing tenfold. • Determining the “buyer personas” of your core audience improves the way you solve problems for your customers. • Establishing customer pain points helps create content that’s useful to your prospects (and builds authority with search engines). • Useful, high quality content increases engagement and builds your social presence. • Website content (i.e. blog posts) published on Facebook and clicked through to your site increases search ranking. You Don’t Regularly Conduct a Facebook Page Audit Whether your social media marketing is in-house or outsourced, it’s difficult to know where the gaps are between your current successes and where you need to be. There are many ways to benefit from a social media audit. Given today’s accelerated rate of Facebook failures, a social media audit will help you engage more customers and achieve goals faster. You’re Ignoring Comments and Messages Facebook is a communication channel just like email and phone. Customer service via social media is a game changer, but if you don’t have a process to monitor, listen and respond to messages, you’re dead in the water. • 71 percent of consumers who experience positive social customer care are likely to

recommend the brand to others, compared with just 19 percent of customers who do not get a response. • Today’s tech-savvy consumers want their online questions to be addressed promptly – 42 percent expect a response within one hour. • 83 percent of respondents in a recent survey said they liked – or even loved – when a company responded to them on social. You Lack Clear Goals Highly-engaging Facebook pages start with clear, well-defined goals. At Kruse Control, we begin with an outline of four goals and then build out the specific strategies that help each client achieve them: 1. Attract. 2. Engage. 3. Convert. 4. Retain. You’re Not Leveraging the Power of Facebook Ads Facebook has become one of the most powerful platforms to engage customers and build business. Facebook pages fail because they either aren’t using Facebook Ads correctly or they’re not using Facebook Ads at all. No Facebook page will work without Facebook Ads. Why? Because you must pay Facebook to reach your target audience and deliver the right content to the right customer at the right time. No pay, no play. You’re Not Measuring and Analyzing Your Results Dealerships that don’t review their Facebook results are doomed to repeat their mistakes over and over again. Facebook Insights is your best friend. It provides all the metrics you need to judge how your page is doing. You can see which content got the most organic and paid interaction, what you did right, and what didn’t work so well. Analyzing results lets you deliver a better experience for fans, make better decisions on your content and determine if you’ve reached your goals. Next Steps... If you’re not getting the results you want, review your page using these tips. If your page doesn’t size up and you need help to improve, reach out to me (www. krusecontrolinc.com). We’ll work together to create social media strategies that work! Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc. Kruse Control coaches, trains & delivers webinars focused on integrating social media and online reputation management into dealership operations.

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MANAGEMENT MATTERS BY ALISHA STEWART

EMBRACING THE #HASHTAG GENERATION

How to Retain Talented Millennials in the Workplace

Millennials get a bad rap. We’re called loud and opinionated, lazy and entitled… the list goes on. And employers seem wary of hiring us, especially given reports about our low loyalty, making it hard to find the right job. As a millennial employee, I have experienced the backlash of these assumptions, but I think a lot of our negative press misses the point: Our opinions may challenge your dealership, but we want to bring our passion for change and innovation to the workplace! And it’s going to happen. The truth is that we are the future of business, and by 2020 millennials will make up 50 percent of the world’s workforce. Here are a few suggestions to help your dealership retain your talented millennial employees and embrace the cutting-edge ideas that they bring with them. Pay us fairly and give us room to grow. Fair pay and growth opportunities are paramount to the retention of millennials. As a group, we expect to progress in your company – and achieve leadership roles – faster than Gen X or older groups. When we don’t achieve this, we leave. A business’s failure to offer advancement results in costly and constant turnover. While it may seem easy to take the cheaper route, there are many employers out there who will provide fair compensation and a clear career path, and millennials are eager to find them. Embrace social media in all aspects of business. We all know millennials live their lives

DEALER INSIGHT / March/April 2017

online. Whether you’re looking to hire or looking to engage, I can’t stress enough the use of online tools that are available to you, and 99 percent of them are free! Let your employees write for the company newsletter or blog. Use LinkedIn and Indeed to recruit talent. Post employee recognition or business events on Twitter, Facebook, and Instagram. Other ideas include purchasing a custom Snapchat filter for company parties and hosting a weekly vlog on YouTube. The options are truly endless, and they all help your millennial employee feel engaged with your dealership! Allow us to use our voice. I’d say millennials have a deep desire or, more appropriately, a need to let our voice be heard and share our views. Why do you think we’re so active on social media? A few ways to encourage that: • Give us opportunities to lead in roles that bring active change to the company, such as seats on committees and inclusion in forums. • Listen to us and be open to ideas! Just because something has been done a certain way for an extended amount of time does not mean it is the most effective or efficient way to keep doing things. Use our creativity to advance your business. • Allow us to be creative by embracing technology. • Let us be involved. Here at NCM, we have an Ownership Culture Committee that not only plans social events for the company but also participates in charity and giving back. Believe it or not, millennials do care about things bigger than themselves. Allowing them to give back and get involved will reap huge rewards in employee morale and culture. Alisha Stewart began her career at NCM Associates in September 2015. She graduated from California Baptist University in 2010 with a Bachelor of Arts degree in Communications and Public Relations. This article originally appeared on NCM’s Up to Speed blog (blog.ncminstitute.com) and is reprinted with permission.

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REGULATORY NEWS

MANAGEMENT MATTERS

BY USED CAR NEWS

BY ADAM ROBINSON

RECRUITING STRATEGIES TO ATTRACT MILLENNIALS Key Traits

By the year 2020, the U.S. workforce will be comprised almost entirely of millennials. What’s more, Generation Y accounted for aproximately 30 percent of new vehicle sales in 2016, and that number could double in 2017. Millennials are much more apt to make a purchase from a company with whom they identify and are even more trusting of purchases from employees who are like them. As a result, companies must now clearly communicate their viewpoints and company culture to potential millennial customers, and, perhaps most importantly, employ individuals who connect with that target audience. Unlike previous generations, millennials care more about fulfillment from their careers and evaluate potential jobs on a number of factors that can cater to this need. To retain these workers, organizations must tailor internal positions and programs to meet the needs of this growing workforce demographic. Also, recruitment strategies must be updated accordingly, to attract the best candidates effectively. Companies must first identify what millennials want. Here are key traits of what they look for in potential jobs, and how that plays a role in the recruitment process. What does millennial recruitment mean for dealerships? The dealership model has been in play for decades with little to no change. But these days, millennials want to work for a company that is not only profitable but making a difference in society and providing them with perks that will fit into their personal lives. Millennial needs from employers include the following. Income Reliability Due to the challenges of making large student loan payments and covering basic living expenses, millennials as a demographic are not interested in a commission-based position where pay is unreliable. Rather, they are interested in a base pay plan that gives them the confidence of a guaranteed stream of income. In the auto industry, providing base salary positions in lieu of commission will not only attract better talent but can provide a better customer experience as well. Work Flexibility Fewer millennials today believe in the 9-5 workday but prefer instead the flexibility to integrate their personal and professional lives. In an interview with Forbes, chief strategy officer Jamie Gutfreund said 88 percent of millennials consider how a potential job will cater to their work-life balance. While it may seem more challenging to provide scheduling

DEALER INSIGHT / March/April 2017

flexibility in your dealership, there are a number of options that can work for your organization. Examples include running two shifts – 9 a.m. to 3 p.m. and 3 p.m. to 9 p.m. – and perks such as giving every other weekend off. Some innovative dealerships have even moved to a “four days on, three days off” format where sales associates work four 10-hour workdays. Clear Job Titles and Descriptions Job descriptions and position titles must be updated for the millennial audience, highlighting the aspects that will fulfill their wants and needs. Outside of salaries and benefits, millennials are looking for a job with a higher purpose – one that makes them feel fulfilled. As a result, they are interested in companies focused on helping solve problems in society. In addition, because millennials are still relatively early on in their careers, they want job titles and responsibilities to outline the scope of the work clearly. They are interested in learning as much as they can to advance in their careers and want to know if a company is willing to invest in them through ongoing training and development programs. Lastly, when placing job openings online, be sure to use concise keywords and descriptors your target audience will most likely type into search engines when looking for open positions to help better connect you with ideal candidates. Consistent Communication In addition to clear communication of job responsibilities, millennials are interested in real-time feedback on the job. Because they appreciate knowing where they stand, along with the opportunity to consistently learn, maintain engagement with them by providing periodic, consistent check-ins as opposed to an annual review. A Bigger Picture As mentioned, millennials consider a number of factors from a potential position so as to feel fulfilled, maintain a work-life balance, continue career advancement and align with a company’s values. In exchange for their productivity and devotion, millennials are looking at what a company can offer them not just in monetary compensation, but how a job will fit into their overall life and society. Once you’ve successfully recruited top talent, it becomes imperative your dealership retains that employee. This is a particular challenge with the Gen Y employee. In fact, according to a recent 2016 Gallup report, 21 percent of millennials have changed jobs within the past year – more than three times the number of other generations. This turnover is estimated to cost the U.S. economy $30.5 billion annually. One of the biggest complaints millennials have is a lack of opportunities to move their career paths forward. One explanation for this is a company’s

FTC UPDATES PENALTIES

Increase in Maximum Penalties for Violations

The Federal Trade Commission has adjusted the maximum civil penalty dollar amounts for violations of 16 provisions of law the FTC enforces, as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The act directs agencies to implement annual inflation adjustments based on a prescribed formula. The new maximum civil penalty amounts will take effect upon publication in the federal register. The maximum civil penalty amount has increased from $40,000 to $40,654 for violations of Sections 5(l) and 5(m)(1)(A) and (B) of the FTC Act, Section 7A(g)(l) of the Clayton Act and Section 525(b) of the Energy Policy and Conservation Act. The maximum civil penalty amount has increased from $1,138,330 to $1,156,953 for violations of Section 814(a) of the Energy Independence and Security Act of 2007. The maximum civil penalty amounts for other law violations within the agency’s jurisdiction are listed in the Federal Register Notice.

preference to hire externally rather than promote from within. Hiring from within is more cost efficient and provides your millennial employees the chance to further engage with, and invest in, your company. Tailoring recruitment strategies to attract top talent to your workforce, and providing them with ongoing opportunities for advancement and support, will help ensure your millennial employees will connect with your company and provide loyalty and dedication for years to come. Adam Robinson is the co-founder and CEO of Hireology and a noted recruiting industry expert, speaker and author with more than 20 years of experience in the field of hiring and selection management. This article originally appeared on NCM’s Up to Speed blog (blog.ncminstitute. com) and is reprinted with permission.

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SAVE•THE•DATE 1,670

attendees

173

exhibitor partners

NIADA’S 71st Annual Used Car Dealer Convention And Expo For 70 consecutive years, since 1946, NIADA has produced the NIADA Convention because we are committed to serving and assisting our dealers, whether you are a dealer or you do business with dealers. The convention includes dealer training, exhibitors, tremendous networking and entertaining events while maintaining our association’s time-honored traditions. However you’re connected to the industry, NIADA has something for you!

46 The Most Successful Used Car Professionals Attend This states 76%

decision makers

332

first time attendees

Convention And Expo Every Year To:

• Gain critical training • Face-to-face interactions that drive new ideas and build connections • Receive updates on federal, regulatory and compliance issues that affect you • Share best practices • Learn about the most current technologies, products and services offered by our top-notch exhibitor partners to accelerate your dealership ahead of the competition

Featuring: 4 Tracks of Education • Retail • BHPH • Compliance • CPO

Who Attended In 2016:

• 1,670 Attendees • 173 Exhibitor Partners • 46 States represented, as well as Grenada and Canada • 76% of dealer attendees are owners, principals or general managers, in other words, decision makers!

• 332 First time attendees

THE MIRAGE•L AS VEGAS•JUNE 12-15

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March/April 2017 / DEALER INSIGHT

SALES MATTERS BY JOHN CHAPIN

CONQUERING THE BIGGEST ENEMY OF THE SALESPERSON Distractions

A salesperson’s most important activity is talking to qualified prospects. The biggest enemy of the salesperson is anything that distracts him or her from working on that most important activity. Distractions come in many forms, some obvious and some not so obvious. Cellphone, email, false emergencies, and other similar items. Recently I was helping a call center increase their number of calls. The first thing I did was observe everyone to see how they typically make calls. I watched one individual pick up the phone, start to dial, then stop because he got a text message. He read it, responded, and then went back to the phone and started to redial. Just then an email chime sounded and he looked to see who it was from. Once again, he hung up, then redialed. He got voicemail, left a message, then brought up his CRM to enter the information for that call. For the next half hour I watched as callers got distracted by everything from the above items, to trips to the bathroom, to trips to fill up water bottles and cups of coffee. As a group, they averaged 2.5 calls in the 30 minute period. Yes, one call every 12 minutes. The key here is single minded focus. Ideally you are timeblocking as many items as possible, but especially your most important: prospecting calls. If you’re in the office, put together a prospect list and remove all distractions. Shut off your cellphone and email, clear all paperwork and other items off your desk, and focus. Make notes right on the list and enter notes into the CRM later. You may even put up a sign saying you cannot be interrupted. In any case, you have one focus for at least the next hour: make as many calls as possible. Do not be distracted by the phone or other items that may prevent you from making as many prospecting calls as possible. The group above, once they removed all distractions, was able to average 13 calls in 30 minutes, as opposed to 2.5. Paperwork. Paperwork, other than filling out an order with a customer, is for after or before prime prospecting hours. It’s okay to make a quick note, record something on an order form, or write down something you need to work on later, but you are never working on letters, proposals, or doing anything that can be done offhours. Servicing accounts. You may occasionally need to service accounts, but this should be kept to a minimum and it should only be done for the 20 percent of your accounts that are giving you 80 percent of your revenues. I see many salespeople get adamant about servicing every aspect of every account. While they justify this as taking care of the customer, they are really doing it to avoid the hard work of prospecting. You may have to do some servicing, just do as little as possible. Looking for a quicker, faster, easier way to prospect other than picking up the phone or calling in person. All prospecting should be done either in person or by phone. Skype and other similar methods are also okay. The point is to be talking live, in real time with prospects. Email, social media, mailings, and other similar indirect methods that don’t allow you to actually talk to someone, are distractions from effective prospecting and nothing more than another way to avoid the hard work of making live calls. You can and should still use these methods, but only after you have reached out via phone or in person.

DEALER INSIGHT / March/April 2017

Talking to prospects who are not qualified. Stop pretending that ugly duckling is a swan. You know the truth in your gut. Either get rid of them immediately or give them one last chance to do business with you. Majoring in minor things. Minor things include: cleaning your desk, rereading the letter you’re about to send out, doing preparation work, and all other “minor” items you should be doing before or after prime time. Anything else that gets in the way of calling on qualified prospects. This could be a doctor’s visit, a car accident, an earthquake, weather, friends wanting to chat, or anything else under the sun. Regardless of what happens during the day, your primary focus needs to remain on hitting your daily number of qualified prospects. Make sure anything you have control over does not interfere with “prime time.” Do not schedule doctor or dentist appointments, the plumber, the electrician, or anything similar during prime hours. When something unexpected arises that you don’t have control over, like a car accident, weather, or similar event, ask yourself, “How can I still get all my calls in?” Your most important task every day is hitting or exceeding your prospecting numbers. Period. It is always the most important thing you do. Your creative brain will either come up with excuses to avoid this hard work or find ways to get it done regardless of what comes up in your day. Use your head and find all ways, both obvious and creative, to prevent distractions and get as many calls in as possible. John Chapin is a sales and motivational speaker and trainer. He has over 27 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. For more information, visit www.completeselling. com or email johnchapin@completeselling.com.

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REGULATORY UPDATE BY AUTOMOTIVE NEWS

U.S. PROPOSES V2V MANDATE TO AVERT CRASHES Technology has Significant Safety Potential

U.S. auto safety regulators proposed requiring all new vehicles to be equipped with vehicle-to-vehicle communication systems, citing the technology’s significant potential to reduce crashes. The proposed mandate, recently released by the Department of Transportation, would require all new cars and light trucks to have dedicated short-range communication systems that transmit and receive basic messages about the vehicles’ speed, location, braking and other data. DSRC systems allow cars to “talk” to other vehicles on the road and to infrastructure equipped with the systems, allowing drivers to “see” around corners and be warned of a potential crash. “This technology has enormous safety potential to prevent hundreds of thousands of crashes and save lives,” transportation secretary Anthony Foxx said. Under the proposal, automakers would be

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required to equip half of all new cars with the technology two years after the National Highway Traffic Safety Administration issues a final rule. Full penetration would be required within four years after the rule is final. U.S. officials have said the technology could potentially reduce non-impaired traffic crashes by 80 percent once fully deployed. Regulators signaled their intent to mandate V2V systems in August 2014. Under this most recent proposal, the DSRC systems would be required to use a common set of communications protocols to ensure all vehicles “speak the same language,” the DOT said. The proposal also contemplates the technology working alongside crash avoidance technologies like automatic emergency braking to help prevent collisions. The proposed rule also has privacy and security requirements, including 128-bit encryption on vehicle data transmissions. In addition, the department said it plans to soon issue guidance on vehicle-toinfrastructure communications. Saving Lives Last year, there were 6.3 million U.S. vehicle crashes. In October, NHTSA said U.S. traffic deaths jumped 10.4 percent in the first six months of 2016. The jump followed a spike in 2015, when road deaths rose 7.2 percent to 35,092, the highest full-year increase since 1966.

The rule would not require vehicles currently on U.S. roads to be retrofitted with the technology. Foxx said owners couldn’t turn off the technology but could turn off warnings. The Alliance of Automobile Manufacturers, a trade group representing General Motors, Toyota Motor Corp., Volkswagen AG and other major automakers, noted the system is already being tested. The group said it would study the proposal. Automakers are pushing to ensure that a portion of the spectrum reserved for connected vehicles is not used by other companies for other wireless device use. The U.S. Federal Communication Commission has begun testing potential sharing options. Separately, the Federal Highway Administration plans to issue guidance for vehicle-to-infrastructure communications, which will help planners allow vehicles to “talk” to roadway infrastructure such as traffic lights. Reuters contributed to this report.

March/April 2017 / DEALER INSIGHT

MANAGEMENT MATTERS BY ROBERT NEUMAN

ARE YOUR EMPLOYEES ACTUALLY WORKING AT WORK? Gauge Productivity and Share Your Expectations

Five or six times a week, your employees get up in the morning and say to themselves: “I have to go to work today.” That’s good because you hired workers to produce – or assist in producing – gross in the first place. Here is the big question, though: Do your work expectations match your employees’ work expectations? You likely want your employees to put in a full day of activity at work – you know, working while at work. On the other hand, your employees may believe “as long as I am at work, I am working.” Notice the difference?

Gauge Productivity How do you know if you are getting the full work production out of your employees? Be observant. Compare the numbers produced by your departments against industry production benchmarks: How are you doing? Is one department falling behind? Then inspect all departments in the dealership, at all time slots, to see if or when there are pockets of idle time or non-productivity. Create Productive Employees If your departments are not producing as they should, it’s time to make sure your employees work at work! First, evaluate your employees. Here are some questions to consider: • Are your sales people producing the volume and gross you would expect a professional sales person to achieve? • Is your used vehicle manager producing the inventory turn you need to achieve your return on investment? • Does your service department produce the simple key performance indicators, such as gross as a percentage of sales, increasing your effective labor rate and selling more hours per RO? Once you’ve identified any problems, you need to develop a correction plan. One of the first things I recommend is educating your staff, especially if you haven’t yet invested in

formal training for your team. If you’ve already taken the time to train your people, there may be some process issues happening. Is Downtime OK? You may say, “It’s OK to have some employees have idle time, as long as they produce to a set production standard or expectation.” I agree with that statement to a point. Just make sure your employees are achieving – or exceeding – industry benchmarks. I recommend you keep an eye on it. Accountability Helps Everyone Obviously, everyone must work at what they were hired to do. Let’s make sure we are getting our fair share out of the employees we have hired. Share your expectations with them. Show them the industry benchmarks or standards, train them in the skills they need to achieve these standards and then hold them accountable. Times are getting leaner, and now is not the time to allow employees in your business to not work at work. Robert Neuman is an automotive executive with 32 years of diverse experience in the automotive industry. He currently serves as an executive conference moderator for NCM Institute conducting 20 Group meetings around the country. This article originally appeared on NCM’s Up to Speed blog (blog. ncminstitute.com) and is reprinted with permission.

INDUSTRY WATCH

BY NATIONAL AUTO AUCTION ASSOCIATION

2017 EXPECTED TO BE RECORD YEAR

NAAA Economic Report

AUTO AUCTIONS The strength in new light vehicle sales during the 2010 to 2016 period created a large number of off-lease, off-rental, and off-fleet vehicles that have, and will, come back to the market in the form of commercial consignment to auctions. Dealer consignment growth, which is closely timed with new sales and the related trade-ins, declined slightly last year and is expected to drop by a bit more this year. We had expected auction volume to come in at 9.7 million in 2016, but it appears to have been a bit stronger at 9.8 million. This year, we forecast continued growth in auction unit volume, but at a slower pace than in recent years as declines in dealer consignment will to some extent offset strong gains in commercial consignment. In total, 2017 unit auction volume is anticipated to be 10.1 million, a 3 percent increase and a new record. LIGHT VEHICLES Although the overall recovery/expansion has been significantly below average, light

DEALER INSIGHT / March/April 2017

vehicle sales have experienced a normal recovery and expansion. After bottoming out at 10.4 million in 2009, light vehicle sales moved up at a double digit rate for three years and then increased consistently through 2015 when they hit a record level of 17.4 million. Last year light vehicle sales increased slightly to a new record of 17.5 million. Recently, higher sales have been boosted by increased incentives, suggesting underlying demand is weakening as pentup demand has been worked off. The lack of pent-up demand and the need for increased incentives has resulted in a small decline in our expectations for 2017 light vehicle sales to 17.2 million units, a 1.5 percent decline from 2016.