DEALER NEWS MAGA ZINE
O F F I C I A L P U B L I C AT I O N O F N I A DA N E VA DA
J U N E / J U LY 2 0 17
MANAGEMENT MATTERS BY DALE POLLAK
RETHINK HOW YOU SOURCE AUCTION VEHICLES Adapt to Market Shifts PAGE 0 4
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06............................... Seize the Leads You Wish You Had 08...............................................NIADA Government Report 10...........Facebook Marketing Key Performance Indicators 12.....................NIADA Plans Bigger and Better Convention 14.................When Exceptions Overtake Showroom Rules
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NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 The Nevada Dealer News is published bimonthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of Nevada Dealer News or NIADA. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2017 by NIADA Services, Inc.
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DEALER NEWS June/July 2017
MANAGEMENT MATTERS BY DALE POLLAK
RETHINK HOW YOU SOURCE AUCTION VEHICLES Adapt to Market Shifts
How has your auction-sourcing process changed in the past 12 to 18 months? About a third of dealers say things are pretty much the same when it comes to sourcing auction vehicles. In many instances, dealers believe their used vehicle managers and buyers could do a better job, but they don’t feel a compelling need to make any dramatic changes. These are dealers who’ve expanded their wholesale acquisition net beyond local sources. Their focus is at least regional, if not multi-state. Managers and buyers are traveling further to find the right auction inventory for their dealerships. Other dealers are buying more online. These dealers fall into two categories: those who are learning the ropes of acquiring auction vehicles through online channels, and those who want online purchases to make up a majority share of their wholesale acquisitions. In both cases, dealers say they see online auctions as more cost-effective and efficient than sending managers to auctions to acquire wholesale inventory. I’d estimate about 20 percent of dealers have transitioned to buying solely online. Typically, the shift involves the hiring and/or training of acquisition specialists – tech-savvy individuals who spend the majority of their time researching vehicles and managing live and proxy bids to acquire cars. Here again, dealers say the change resulted from a desire to make auction sourcing less costly and more efficient. I worry the most about dealers who fall in the first group. If auctions were like fishing, these dealers would be the guys who are basically bringing the same bait and tackle to the same fishing holes, hoping to bring home the best fish. They see enough occasional success to maintain the same routine, even as the law of diminishing returns erodes their potential for success. They may even justify less-thanoptimal results with a purist-type position – the guys with the fancy baits, high-tech fish finders and tackle aren’t really “fishing,” at least not in the traditional sense. But today’s wholesale market is anything but traditional. Consider the following factors. Increased Supply Not long ago, dealers bemoaned what they considered a dearth of decent cars available at auctions. Today, we have the opposite problem – an unprecedented, and growing, level of wholesale supply that will bring a commensurate rise in vehicle value volatility and risk.
Increased Competition In the months ahead, analysts say dealers will see fewer trade-in opportunities from new vehicle customers – a by-product of rising levels of leasing in recent years. Edmunds reports that fewer than half of new vehicle deals involved a trade-in. This market dynamic means more dealers will look to auctions to acquire the inventory they need to drive their retail sales and profit objectives. Increased Market Insight New technologies and tools are helping dealers efficiently pinpoint the auction vehicles that offer best retail potential for their dealerships, based on the front-end gross profit the vehicle might generate as well as how fast it will sell, given the number of competing units available in the market. For these dealers, there’s little, if any, guesswork involved when they make a decision to acquire an auction vehicle. Increased Margin Compression Unfortunately, the trend of the past several years will continue in the months ahead – pricing transparency and rising costs will continue to erode used vehicle profit margins. Add in the aforementioned volatility due to increased wholesale supply, and it is an ever-greater imperative to consistently buy the right auction car on the money. To me, these factors indicate a wholesale market where change is ever-present, and tomorrow’s opportunities will likely look different than they do today. That’s why I’m more confident about the future success of dealers who’ve actively been changing the way they source auction inventory. In the months ahead, they’ll be better positioned to adapt to market shifts and gain advantage. Their competitors, meanwhile, will still be arguing over whether something needs to change. Dale Pollak is founder of vAuto and has published several books on his Velocity Method of Management.
www.niada.com/nv.php
PRODUCTS AND SERVICES
PROTECTIVE ASSET PROTECTION LAUNCHES PROGRAM New Higher Mileage Service Contract Program
Protective Asset Protection has launched its new Protective Auto Care Plan program. This new service contract program is focused on providing a service contract solution that meets the needs of higher mileage vehicles. The Protective Auto Care Plan provides coverage for vehicles up to 200,000 miles, with numerous coverage plans and deductible options, allowing dealerships to better meet the needs of pre-owned auto buyers. Additionally, the program provides terms to support late model vehicles and “wrap” plans to add coverage to existing warranties. The Auto Care Plan includes other benefits such as rental car reimbursement and emergency roadside service.
www.niada.com/nv.php
“We worked closely with dealers and independent agents, in addition to conducting research to develop a plan tailored to the needs of higher mileage vehicles. The Protective Auto Care Plan is the result of these efforts and we feel this is the service contract program that will meet the needs of the industry today and into the future,” said Protective Asset Protection vice president for independent auto sales Mark Edmundson. The new Protective Auto Care Plan provides dealerships with an opportunity to provide greater peace of mind for car buyers, while point-of-purchase and digital materials are available to help inform customers of the program’s value. Protective Asset Protection senior vice president for distribution Rick Kurtz said, “With the average age of vehicles on the road remaining high and the projected growth of pre-owned inventories, we see this program serving an important role in dealerships’ F&I offering.” About Protective Asset Protection Protective Asset Protection provides vehicle protection plans, GAP, credit insurance, training and other F&I services through vehicle dealerships. Protective Asset Protection has been serving dealers for 55 years and currently provides products and services to automobile,
marine, RV and powersports dealers. Protective Asset Protection is part of the financial services holding company, Protective Life Corporation. For more information about Protective Asset Protection call 800-323-5771 or visit www.protectiveassetprotection.com.
June/July 2017 DEALER NEWS
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ACCELERATE
BYGWC WARRANTY
SEIZE THE LEADS YOU WISH YOU HAD Generate Your Own Leads
As a dealer you’ll search high and low for the next great source of leads. At times, you might even pay for services that cut into your profits. But what if you could generate new, repeat and referral business all on your own? It may seem like a daunting task, but you have everything you need on your computer or stashed away in a filing cabinet – it’s your own network of past customers. If you’re looking to generate your own leads and save the cost of an outside vendor, nothing is more important than an up to date rolodex. It starts with gathering contact information up front and maintaining regular communication to gather any updates. This way, you never lose touch with satisfied customers and simultaneously open a potential window into their wide networks. A BrightLocal survey found consumers find word of mouth referrals to be just as reliable as online reviews, so maintaining constant contact with customers will keep you front of mind as they encounter others in the market for a vehicle.
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DEALER NEWS June/July 2017
If you make getting accurate contact information a habit, you can chase lead sources that have seemed like a distant dream for far too long. Expired Vehicle Service Contracts If you like selling longer-term service contracts, knowing which customers are about to run out of coverage gives you a perfect reason to give them a call. You can use the expired contract as a segue to bring them in to browse for a new vehicle. If they’re not interested, a VSC renewal opportunity could bring in some revenue as well. You can build a process to find these customers on your own, or your VSC provider may be able to alert you to these opportunities. GWC Warranty elite dealers get free access to the elite lead generator, which puts this list of customers just a click away. Regular Email Communication and Social Activity You’d be surprised by the value of staying front of mind with customers. Regular email newsletters or simple timely messages can help your dealership stay on the tip of every customer’s tongue. Even if a customer who comes across your content in an email or on social media isn’t in the market for a vehicle, they may have just spoken with a friend or family member who is. Before you know it, your phone will ring with referral customers who heard about you from a past customer
who just so happened to read your email the week before. Ask for Referrals Sounds simple enough, right? At the end of a transaction or service visit, don’t be afraid to ask if someone a customer knows might be in the market for a new vehicle. The BrightLocal survey mentioned earlier also discovered that seven of 10 consumers will leave a review if they were only asked. The same concept can be applied to referrals. Just a simple ask can go a long way, not to mention if you build promotions and discounts around referring friends who go on a test drive or purchase a vehicle.
www.niada.com/nv.php
! E R E H S IT’
THE HIGHER C S V E G A E L I M S R E L A E D M A PROGR R O F G N I T I A HAVE BEEN W
. D E V I R R A S HA INTRODUCING THE NEW PROTECTIVE AUTO CARE PLAN Higher mileage vehicles need a higher mileage protection plan. The Protective Auto Care Plan provides coverage for vehicles up to 200,000 miles, with numerous coverage plans
STAY FOCUSED ON YOUR CUSTOMERS Visit protective-acp.com
or call 866 924 7513 to learn more.
and deductible options, allowing dealerships to better meet the needs of pre-owned auto buyers. The plan includes other benefits such as rental car reimbursement and emergency roadside service providing true peace of mind.
Protect Tomorrow. Embrace Today.™ VEHICLE PROTECTION PLANS | GAP COVERAGE | CREDIT INSURANCE | LIMITED WARRANTY PRODUCTS DEALER PARTICIPATION PROGRAMS | F&I TRAINING | ADVANCED F&I TECHNOLOGY Limited Warranty Products, Vehicle Protection Plans (VPPs) and GAP are backed by Protective Property & Casualty Insurance Company in all states except NY. In NY, VPPs are backed by Old Republic Insurance Company, Limited Warranty Products are backed by Western General Insurance Company and GAP is not available. Credit Insurance is backed by Protective Life Insurance Company in all states except NY, where it is backed by Protective Life and Annuity Insurance Company.
WASHINGTON UPDATE BY SHAUN PETERSEN
NIADA GOVERNMENT REPORT 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 an update on the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities. Legislative The Financial CHOICE Act – the Republican replacement for the Dodd-Frank law that includes major changes to the Consumer Financial Protection Bureau – made it through the House Financial Services Committee on May 4 and has been sent on for consideration by the full House of Representatives. The current version of the bill, introduced April 26 by Rep. Jeb Hensarling (R-Texas) with seven cosponsors, would eliminate bailouts of so-called “too big to fail” banks, exempt well-capitalized financial institutions and community banks from certain regulations and reduce regulations overall, and increase penalties for financial fraud. Its biggest impact, though, would be felt by the CFPB, which would be drastically overhauled. To begin with, its name would be changed to the Consumer Law Enforcement Agency, and it would be funded through the regular congressional appropriations process – currently it’s funded automatically through the Federal Reserve – as well as subject to congressional oversight and expanded judicial review. The agency would lose its supervisory authority over financial institutions and its enforcement authority regarding unfair, deceptive and abusive acts and practices, among other restrictions to its authority. The bill would allow the CLEA’s director to be fired at will by the President, rather than only for cause as is currently the case. The bill would also void the CFPB’s controversial 2013 guidance on indirect auto lending, which claimed dealer discretion on interest rates creates a “significant risk” of unintentional disparate impact discrimination. Regulatory In April, the New York attorney general’s office announced settlement agreements with 104 auto dealerships in the state that were alleged to have sold vehicles with open recalls without disclosing those recalls. Attorney General Eric Schneiderman said in a statement the charges were based on checking dealership ads and identifying dealers who advertised vehicles with unrepaired recalls.
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According to the settlements, each dealer will pay a $1,000 fine and will be required to notify consumers of any existing and unrepaired recalls on their vehicles. Other terms include: •D ealers who advertise used vehicles online must include information to allow consumers to check the advertised vehicles for recalls, including NHTSA’s safercar.gov website. •A ds in print or other media must also disclose if the vehicle is subject to a safety recall. •A decal must be placed in the window of used cars with information allowing consumers to check their recall status, including safercar.gov and NHTSA’s mobile app. •T wo days prior to any sale, dealers must provide consumers with a copy of any recalled vehicle’s NHTSA recall status report and obtain a written acknowledgment from the consumer. •D ealers must send notices to customers who purchased vehicles from January 2016 to present that have safety recalls that are still unrepaired. Franchise dealers must also cover up to five days of a loaner car for consumers if their vehicle requires repairs that will take longer than one day. PAC In early May, our colleagues at the National Auto Auction Association held their annual Day on the Hill. Like the NIADA-PAC during the National Leadership Conference and Legislative Summit, NAAA’s event included a fundraiser for key members of Congress – Sen. Mike Crapo (R-Idaho) and Rep. Bob Latta (R-Ohio). In conjunction with those fundraisers, the NIADA-PAC fund contributed $2,495 to each of their campaigns. Sen. Crapo is the new chairman of the Senate Banking Committee, the committee of jurisdiction for all things related to the CFPB. He has been a proponent of reforming the CFPB and any bill proposing to make changes to the bureau will go through his committee. Rep. Latta is chairman of the House Energy and Commerce Committee’s Subcommittee on Consumer Protection. That subcommittee has jurisdiction over motor vehicle safety and recalls. Any recall-related legislation or initiatives goes through Chairman Latta’s subcommittee before going on to the main committee. The NIADA government affairs team has met with Sen. Crapo’s and Rep. Latta’s staffs on those important issues. The PAC fund also contributed $495 to Nevada Attorney General Adam Laxalt (R). Laxalt has been a friend of NIADA through the Republican Attorneys General Association. We reached out to him as part of the new battle we are facing against Nevada’s proposed overregulation of payment assurance devices. He is a strong ally of small businesses and independent dealers.
NIADA IMMEDIATELY MADE ATTEMPTS TO CONTACT THE BILL’S SPONSOR TO BEGIN DISCUSSIONS ABOUT THE BILL AND TO EDUCATE HIM ABOUT THE DEVICES AND THEIR USE. Grass Roots In February, NIADA got wind of a bill about to be introduced in the Nevada legislature that would ban payment assurance devices. NIADA immediately made attempts to contact the bill’s sponsor to begin discussions about the bill and to educate him about the devices and their use. Notwithstanding those attempts, the bill was formally introduced in Nevada’s Senate Commerce Committee. NIADA rallied the troops and coordinated a coalition of dealers, finance companies and device manufacturers – including PassTime and Spireon – to fight the legislation. I flew to Las Vegas to testify against the bill. After NIADA’s opposition testimony, the Senate committee agreed to amend the bill from an outright ban to one that would place significant regulations on the devices. But many of the requirements in the amended bill, which passed the Senate, are unworkable for creditors using the devices. The bill has now moved to the Nevada Assembly and has been assigned to the Assembly Transportation Committee. NIADA, working with its coalition and a retained lobbyist, met with members of that committee and other key Assembly leaders to oppose the bill’s provisions. I also appeared before the committee to testify against the bill. Our objective is for the Assembly to agree to our proposed changes or kill the bill entirely. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
www.niada.com/nv.php
SOCIAL MEDIA BY KATHI KRUSE
TOP 10 FACEBOOK
MARKETING KPI’S Key Performance Indicators
Facebook marketing done right communicates your store’s core message and personality, attracts and engages your target customers, and converts fans into customers. Too often dealers jump onto Facebook without a plan or clear idea of what success really means for them. Most of us have experienced how planning improves our endeavors, and marketing is no exception. A solid social media strategy plan saves time, money and precious resources. It also puts the company in touch with target customers on a more meaningful level. Time spent on strategy planning is evident in the results. “Tactics without strategy is the noise before defeat.” - Sun Tzu In my everyday travels, I see a lot of dealers using the “trial and error” method of Facebook marketing. Example: “Let’s post this random picture of a vehicle for sale so everyone will see how fantastic it is!” The number one reason they use this tactic is because they’ve seen another dealer do it. Random pictures of cars have been posted by dealers throughout the country for years. Isn’t it time to hold up on that and do something unique? There’s nothing about benign vehicle photos and “sales jargon”that promises value to the customer. Now, if there was a story behind the image that told of a fantastic customer experience, then telling that story would bring you a big step closer to a quality post. Otherwise, it’s just noise, and noise is something we can all do with less of these days. The ability to recognize the difference between a random, useless post and a quality piece of content is rooted in strategy. Specific goals and their corresponding strategies make Facebook marketing click. What you post is governed by why you post. Defined within your social media strategy plan should be: • Goals you want to reach. • A timeframe to reach those goals. • A roadmap of how you’ll achieve goals. • Definitive metrics. Look for success markers along your Facebook marketing journey. Just like the maps app on your phone shows the best route to take toward your destination, key performance indicators guide you to what success looks like for your Facebook marketing. KPI’s give you a solid foundation from which to measure results.
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TOP 10 FACEBOOK MARKETING KPI’S Every social media strategy plan should outline the metrics you’ll analyze for best results. These are Kruse Control’s top 10 Key Performance Indicators we use with our clients: 1. Audience Growth • How quickly are your fans growing? • What are you doing to increase growth? • Are you setting growth goals? • Are you achieving those goals? 2. Audience Profile • Have you defined your target audience? • What type of audience are you building? • How close is the audience you’re building to your target audience? 3. Audience Engagement • Is your audience interacting with your content? • If so, how are they engaging (i.e. comments, likes, shares)? • If they’re not engaging, why not? • Are you responding to comments on posts? • Are you equipped to engage leads when they comment on posts? 4. Content Reach • How many people are seeing your content each week? • What are you doing to improve reach? • What’s the optimal time of day to reach fans/followers? • Are you getting “referral traffic” (website visits) from Facebook (especially blog posts)? • Is referral traffic being tracked for remarketing? 5. Engagement by Content Type • What types of content are getting the best results? • Have you tried different types of content that you haven’t before (example: live vs. recorded video)? • Are you prepared internally to produce that new type of content? • What organizational changes need to happen to produce content? 6. Leads • What is the click through rate to each vehicle display page or landing page? • What is the CTR from each social media channel? • Number of leads per landing page (how many filled out lead form)? • Number of clicks to landing page that did not fill out the lead form? • Paid vs Organic Leads (organic leads are the result of networking and relationship building)? 7. Conversions • What’s your conversion rate? How many leads converted on landing pages? • Number of “organic” leads that converted (leads earned, not paid for)? • Which landing pages had the highest conversions? 8. Response Rate & Quality • How quickly are you responding to comments and messages? Facebook grades your page for response time. • Is your lead form response time (follow up
to lead form inquiries) reasonable? • How effective are you at social customer service? Currently, 92.5 percent of brands fail to meet customer expectations on social media and these failures can have big implications. Bad social customer service isn’t just embarrassing. It’s bad for business: • 38 percent will feel negatively toward the brand without a response, and a full 60 percent will tweet about their negative experiences. • Two thirds of customers with poor customer experience reduce their spending with a brand. • 55 percent of Americans have switched brands due to poor customer service. Customers turn to social media when issues arise, expecting a response. Thirtythree percent prefer to contact brands using social media rather than the telephone. How equipped are you to embrace social media as a customer service channel? Any opportunity to hear customer feedback is a gift. 9. Sales Marketing’s job is to serve up leads. Conversions are tracked to determine if the message is resonating. Marketers, however, rarely track sales, because it’s a hand off of sorts. Other organizational processes come into play and many on both sides of the equation don’t bother communicating about sales results. As a company leader myself, I’ve always thought of marketing and sales holistically. Tracking marketing through to sales results will only improve both. 10. Negative Feedback • How much negative feedback have you received? • Do you know how much is to be expected (i.e. unfollows, hide posts, etc.)? • What is your process for dealing with negative Facebook reviews? Facebook, at this point, doesn’t offer even a rudimentary process for appealing a review. Your 4.8 stars can quickly become 2.0 with a few negative reviews, regardless of whether they’re real. Next Steps Examine your own Facebook marketing results using these top 10 KPI’s. If you haven’t yet determined your social media strategy, we’re here to help. There’s no sense in waiting. A solid plan with proven strategies takes the guesswork out of social media so you can engage more customers. Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc. Kruse Control coaches, trains & delivers webinars focused on integrating social media and online reputation management into dealership operations.
www.niada.com/nv.php
ASSOCIATION NEWS BY ANDY FRIEDLANDER
MORE WHERE THAT CAME FROM
NIADA Plans Bigger and Better Convention
The 2016 NIADA Convention and Expo was the largest in the event’s 70-year history. It was incredibly well received by attendees – 94 percent of those surveyed said the information they took away from the Convention was very useful, and 99 percent said they are likely to attend again in the future. There’s only one way to follow a tough act like that. Make it bigger and better. NIADA’s 2017 Convention and Expo, coming up June 12-15 at The Mirage in Las Vegas, aims to do just that, helping you Chart Your Course toward success with a packed agenda that includes even more extensive education offerings than those of last year – which were NIADA’s largest and most diverse ever. Last year’s expanded Buy Here-Pay Here agenda has been expanded again for 2017, featuring NIADA national director of 20 Groups Chuck Bonanno, NIADA 20 Group moderator/ consultants David Brotherton and Mark Dubois, and some of the top operators and trainers of the BHPH sphere offering training on everything from inventory acquisition and recon to underwriting to collections. Plus, for the first time ever, NIADA presents an industry exclusive: BHPH industry benchmarks for 2017, provided from NABD and NIADA industry data. That’s not the only new item on the agenda. In fact, in addition to Retail, BHPH and Operational Standards, there’s an entire new educational area of focus for the 2017 Convention. Certified pre-owned is the hottest thing in the used vehicle market. CPO sales set a record for the sixth consecutive year in 2016 and are on pace to break that mark again this year, and thanks to programs like NIADA Certified, independents can now get in on the action. Find out how to get your share of the red-hot CPO market and learn its best practices in an array of sessions led by industry experts and some of the nation’s top CPO dealers, including 2016 NIADA CPO Dealer of the Year Todd Hoagey. Everything begins Monday with an indepth look at the many training opportunities offered year-round by NIADA. Bonanno gives dealers a chance to “test drive” NIADA Dealer 20 Groups, as well as Bootcamps, consulting and more, in his workshop “The Power of 20.” That’s followed by a “Power Through
Education” workshop, as acclaimed sales and leadership trainer/consultant Dave Anderson of LearnToLead shows how the best performing independent dealers are achieving success. While providing dealers the education they need to thrive in the rapidly changing used vehicle industry is a primary focus of the NIADA Convention and Expo, there is far more to it than that. Start with the keynote speaker, Captain Richard Phillips, whose dangerous and dramatic encounter with Somali pirates as skipper of a merchant ship in 2009 inspired a best-selling book and the hit movie Captain Phillips. He’ll be on hand to tell his story Tuesday afternoon, courtesy of Carfax. Capt. Phillips will also appear for autographs at Carfax’s booth in the Expo Hall, which is again sold out and will include more than 165 exhibitors representing the latest cutting-edge technology, products and services designed to help your dealership stay on top of the ultracompetitive used car market. As always, we’ll honor the industry’s best at Wednesday night’s National Leadership Awards banquet – including Crystal Eagle membership awards, the coveted Ring of Honor and the NIADA and Cox Automotive Community Service Award – leading up to the climactic announcement of the National Quality Dealer of the Year on Thursday. Of course, there’s also time for fun, beginning with the popular Cigars and Martinis welcome reception Monday night, with a “Havana Nights” theme and the band South Beach. And we’ll close the event in style in Treasure Cove with a rocking After Party featuring live music. All of this is happening at the spectacular Mirage, with its 17 restaurants, eight bars and lounges including the exclusive 1OAK nightclub, Cirque de Soleil’s Beatles LOVE show, the Secret Garden and Dolphin Habitat, a tropical pool with waterfalls, lagoons and cabanas, and the famous Volcano. To be a part of the used vehicle industry’s event of the year – and NIADA’s biggest event ever – register online at www.niadaconvention.com. Use the promo code VOYAGE17 before June 9 for a discounted rate of $449 – a $200 savings. Be sure to click on the “Travel & Accommodations” tab to book your hotel now at our discounted room rate of $150 per night, which includes the nightly resort fee, in-room Internet and fitness center access. Rooms are limited, so don’t wait. You can also get the discounted rate by calling The Mirage at 800-627-6667 and mentioning “NIADA Annual Convention 2017.” For more information about the 2017 NIADA Convention and Expo, visit www.niadaconvention.com or call 800-682-3837.
National Independent Automobile Dealers Association
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DEALER NEWS June/July 2017
www.niada.com/nv.php
MANAGEMENT GAMEPLAN BY SCOTT BERGERON
The term showroom control has been around for years, and it exists for good reason. For example, on a busy Saturday when deals are happening left and right, it’s easy to lose control and start making exceptions and, as a result, mistakes. Many of us have been taught the rules of the road. But how many times have we taught the rules of our dealership, and our showroom? Why do they exist? What happens when they aren’t followed?
customer experience and the profitability of a dealership, as well as contribute to the lackluster reputation of our industry. My wife and I bought an SUV last month. As usual, it wasn’t from a salesperson I knew, although I’d purchased from the dealership 10 years before and had actually hired several of their top brass in the 1990s. It was a bigbox store. The salesperson was a “veteran,” having been there six years. Even though I’ve been in the business for close to 30 years, and can get a quick and easy fleet deal, I enjoy seeing how the retail side of dealerships is progressing in the eyes of a retail customer. Specifically, I like to see if we’re improving our reputation or holding onto our long held “traditions.” What struck me most about our visit was it was way too impersonal for either of us to quickly “fall in love” with our new car. Sure, we liked the salesperson, and he did a great job building rapport, but we were in the showroom cubicle for at least an hour
When exceptions to the rules overtake the rules themselves, what do you do to get them back on track? Start by identifying them, and the process it takes to make sure they’re being followed consistently. Recently the Academy Awards had one of their biggest screw-ups ever – announcing the wrong Best Picture winner to over 50 million viewers. The reasons it happened were simple: Details were overlooked and there were distractions. While most of us won’t suffer a worldwide embarrassment and lose all credibility, our industry does when missed details and distractions start adding up. It can ruin the
searching inventory on the computer since they had at least 100 in stock. Getting a proper walkaround and sitting in a car, let alone driving it, didn’t happen for well over an hour and a half. Six and a half hours later we took delivery. It was a snowy Thursday in Denver with no customers and I had a trade. I will give them an hour off since it took that long to get my fleet price and negotiate on the trade. They were all very nice and had a really nice delivery person, but over five hours if you take out the trade/negotiations?! I had helped family friend Patricia buy from another dealership only two months
WHEN EXCEPTIONS OVERTAKE THE RULES OF YOUR SHOWROOM How to Get Back on Track
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DEALER NEWS June/July 2017
earlier. They were a local dealership, with an awesome reputation, and the experience was incredible. They didn’t miss a beat. Every “I” was dotted and every “T” crossed, and she was in and out in just a couple of hours. As complicated as some like to make it, showroom control isn’t rocket science. A deal is made up of a lot of little pieces, and if those pieces aren’t spelled out time is lost and so are deals. With defined rules everyone knows, business can flow through quickly. In my friend’s case, her salesperson and dealership had every process done from start to finish with no room for mess ups. Her sales rep had only been in the business for six months. She worked through a sales manager but also had a “modified four square” as well. The sales rep didn’t have a finance person, but sold every aftermarket and finance product I’d ever seen, and did a great job of it, even though she was fairly inexperienced. My friend bought a warranty, even though it was a certified used car. It made sense, and her salesperson took the time to build the value. Pat is the happiest customer and is still talking up her great deal and how nice and respectful they all were. She still tells me how much she appreciates me walking her through the process and helping her get such a great deal. Coincidentally, it was a one price store, and I didn’t get her a penny off. Her deal was quick, easy, and was profitable for the dealership. My six-hour deal included recopied state documents, and a credit app that was virtually impossible for all of us to read. We kept taking pictures of the application, just so we could blow it up on our phones to see what they really needed. When we got to the finance manager, he didn’t even attempt to sell us anything, and immediately slashed his warranty price because, in his words, “You’re from the business so I won’t try to sell you anything. I’ll just give you the warranty at cost plus $100.” I didn’t buy it. It might have been a good deal, but he never showed me what it included other than a “6-year, 100k” and an internal price sheet. In our business, it’s all about the details. In key ways, it’s like football. When a team executes on its game plan consistently, touchdowns happen. When it doesn’t, interceptions leading to an opponent’s touchdown can result. That’s a 14-point swing. In your market, the difference in the details can mean finishing at the top of the heap, or struggling to make payroll and keep your franchise or lease. Don’t let the little things make or break your store. Stay on the details and finish strong. 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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