DRIVING FORCE
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MAGAZINE
T H E O F F I C I A L M A G A Z I N E O F N E W Y O R K I N D E P E N D E N T A U T O D E A L E R S A S S O C I AT I O N MAY/JUNE 2017
NEW GPS LAW IN NEW JERSEY NYIADA Ready to Protect Dealers PAGE 0 6
DALLAS, TEXAS Permit No. 2079
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VISIT US AT W W W.NE W YORK IADA.ORG
INSIDE
2017 MEMBER DISCOUNT BOOK 2016 ME MB E R D IS C OU N T B OOK
06......................................................................New GPS Law 09.............................................High Supply, Higher Demands 10................................................. NIADA Government Report 14..............Facebook Marketing Key Performance Indicators 16..............................................Innovative Warranty Program 18.................................When Exceptions Overtake the Rules
$5,000 IN AUCTION DISCOUNTS
2 0 1 6 M E M BE R DI S COUNT BOO K $50 BUY FEE ONE PER MONTH
$5,000 IN AUCTION DISCOUNTS
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.
Long IsLand
new Jersey
syracuse
(TWO) $100 OFF BUY FEE / (TWO) $100 OFF SELL FEE – TOTAL $400 FROM EACH AUCTION = TOTAL $1,600 $50 BUY FEE ONE PER MONTH Long IsLand
new Jersey
syracuse
(TWO) $100 OFF BUY FEE / (TWO) $100 OFF SELL FEE – TOTAL $400 FROM EACH AUCTION = TOTAL $1,600 BLOOMBERG AUTO AUCTION – (TWO) $50 OFF BUY FEE (TWO) $50 OFF SELL FEE
ADVERTISERS INDEX
BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION BLOOMBERG AUTO AUCTION – (TWO) $50 OFF BUY FEE (TWO) $50 OFF SELL FEE
Alliance Inspection Management........................................ 15 Auto Auction of New England.............................................IFC Auto Use................................................................................. 9 AutoZone...............................................................................14 Black Book.............................................................................. 3 BMW Group Direct................................................................. 7 Manheim................................................................................11 Manheim New York.............................................................IBC Manheim Pennsylvania ........................................................13 NextGear Capital...................................................................12 The Warnock Agency............................................................. 5 VAuto......................................................................Back Cover
BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION BUFFALO AUTO AUCTION – $100 OFF BUY FEE / $100 OFF SELL FEE
GARDEN SP T Auto Auction
YO UR PR OF SP IT OT
GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE BUFFALO AUTO AUCTION – $100 OFF BUY FEE / $100 OFF SELL FEE
GARDEN SP T Auto Auction
YO UR PR OF SP IT OT
MANHEIM ALBANY – $100 OFF BUY/$50 $100 SELL GARDEN SPOT AUTO AUCTION – (FIVE) OFF BUY FEE
OFFICE
For information on how to become a member of NYIADA, please contact Paula Frendel at 855.694.2324 or nyiada.pfrendel@gmail.com
ALBANY – $100 OFFPOST BUY/ SALE $100 INSPECTION SELL MANHEIM MANHEIM NEW JERSEY – 1 FREE 7-DAY
NIADA HEADQUARTERS
MANHEIMNEWBURGH, NEW JERSEYNEW – 1 FREE INSPECTION MANHEIM YORK 7-DAY – $100POST OFF SALE BUY/ $50 SELL
NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838
MANHEIM NEWBURGH, NEW YORK – $100 OFF BUY/ $50 SELL MANHEIM NEW YORK SKYLINE – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL
For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. The New York Driving Force is published bimonthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of New York Driving Force 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.
MANHEIM MANHEIM NEW YORKPENNSYLVANIA SKYLINE – (TWO) $50 OFF BUY / (TWO) – $100 BUY/ $100 SELL $50 OFF SELL
MANHEIM PENNSYLVANIA $100 BUY/ $100$50 SELL MANHEIM PHILADELPHIA – (TWO) $50 –OFF BUY / (TWO) OFF SELL
STATE MAGAZINE MGR./SALES
Troy Graff • troy@niada.com
MANHEIM PHILADELPHIA – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35)
EDITORS
Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT
Christopher Hanley • chris@niada.com
ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35) ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT
PRINTING
Nieman Printing
ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT STATE LINE AUTO AUCTION – 12 MONTHLY COUPONS FOR REGISTRATION
$5,000 in Auction Discounts! Buy and Sell Fees...SAME AS CASH! inMONTHLY Vendor Coupons! STATEPLUS...$4,000 LINE AUTO AUCTION – 12 COUPONS FOR REGISTRATION $5,000 in Auction Discounts! Buy and Sell Fees...SAME AS CASH! PLUS...$4,000 in Vendor Coupons!
For complete membership information please visit vwww.newyorkiada.org 4
THE NEW YORK DRIVING FORCE / May/June 2017
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AUCTION NEWS
CENTRAL AUTO AUCTION CELEBRATES 11 YEARS Celebration Featured Cars and Pizza
Central Auto Auction celebrated their 11-year anniversary on March 7, 2017. Founder and president Peter Saldamarco began the sale with his annual State of the Auction and State of the Industry address. “2017 will be a year of many exciting changes for the auction,” Saldamarco said. “Central Auto Auction will be opening a brand new vehicle evaluation center, a service department with specialization in both new and used tires, along with a much-anticipated fourth lane in our facility.” With over 400 vehicles and 250 dealers in attendance, the sale featured new car trades, fleet-lease, repossessions, and donations in the busy lanes. Central Auto Auction completed their successful anniversary event with an 83 percent conversion rate. To thank their valued customers, Saldamarco treated everyone to gourmet Italian pizza from the Big
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Mrs. Sal (office manager) and Tony Sal (sales manager) serving pizza to Central Auto Auction’s valued customers.
Green Pizza Truck, served straight from the back of a 1947 International fire truck. Since commencing operations in 2006, Central Auto Auction has expanded to nine acres. Most recently, Central Auto Auction purchased Chet’s Auto Parts, an adjacent automotive scrap processing facility. Saldamarco said, “To my knowledge, we are the only auction in the U.S. with a
licensed vehicle dismantling facility on the premises. This addition benefits our INOP sales and donation vehicle processing, as it allows us to pay our consignors considerably more for scrap.” Central Auto Auction is the closest independent auction to New York City. As the first Connecticut sale of the week, Central offers the advantage of fresh cars and fresh buyers every Tuesday at 10:15 am Eastern Time.
May/June 2017 / THE NEW YORK DRIVING FORCE
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LEGAL NEWS
NEW GPS LAW IN NEW JERSEY NYIADA Ready to Protect Dealers Message from NYIADA president Fred Donnelly regarding the new GPS law in New Jersey: NYIADA is ready to protect our dealers! NYIADA will work with New York legislators should this legislation be proposed in New York. Statements from NJIADA press release: NJIADA worked with legislators to amend the original bill banning GPS usage. The original bill would have banned GPS usage for used cars in the state of N.J., halting financing for some subprime borrowers, among other potentially damaging provisions. With some consumers unable to secure financing, many car dealers’ businesses would have been negatively impacted. NJIADA executive director Paula Frendel said, “The amended bill is now advantageous for both dealers and consumers. It allows transparency for dealers and allows right to cure for consumers, which was never possible in New Jersey before.” Frendel testified before both the Assembly Consumer Affairs and Senate Commerce committees to voice NJIADA’s concerns over the provisions of the legislation that were not beneficial to used car dealers in New Jersey. Moriarty, Coughlin & Mukherji Bill Requiring Advance Notice Prior to Remote Disabling of Automobiles Signed Into Law Legislation sponsored by Assembly Democrats Paul Moriarty, Craig Coughlin and Raj Mukherji that would require sufficient warning before a consumer’s vehicle is disabled remotely for failure to make a payment was recently signed into law. The bill, A756, which was originally sent to the governor in December, was sent back to the legislature as a conditional veto with several recommendations altering various provisions but maintaining the key priorities that consumers receive ample warning and vehicles may not be turned off while in use. The assembly signed off on the changes in February. “These devices are akin to having a predatory debt collector riding in the car with the borrower, ready to strike at the slightest mistake,” said Moriarty (Dem., Gloucester/ Camden). “It’s incredibly unsafe. We need this law to protect consumers. While I would have liked it to be slightly more consumer friendly, this law still preserves our ultimate goal, which is protecting the driver’s safety.” The law will require automobile dealers and lenders to provide a consumer with at least 72 hours-notice before remotely disabling a motor vehicle via a payment assurance device. The law defines a “payment assurance device” as a device, installed pursuant to a consumer’s financing agreement or lease agreement on
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PRODUCTS & SERVICES BY USED CAR NEWS a motor vehicle with GPS capability or starter interrupt capability, that allows for the remote enabling or disabling of the vehicle. A recent uptick in auto loans to borrowers with subprime credit scores has led some creditors to use payment assurance devices to ensure high-risk borrowers lose access to their vehicles should they fail to make a payment on time. An estimated two million vehicles are equipped with the devices, but, as detailed in a New York Times article, safety concerns have arisen as borrowers have reportedly had their vehicles disabled during emergencies, while idling or even while driving on the highway. Presently, New York, Pennsylvania, Rhode Island and Virginia are all considering similar legislation. “While it’s reasonable for a lender to expect a loan to be repaid in a timely fashion, having a vehicle shut off while the driver is on the road is a safety issue both for that particular driver and for other motorists,” said Coughlin (Dem., Middlesex). “This law will protect consumers who purchase cars that come installed with payment assurance devices by preventing dealers from shutting cars off while they are being operated.” Under the law, a creditor may only install a payment assurance device if the following criteria are met: • The installation of a device is accompanied by an enhanced written disclosure acknowledged in writing by the consumer. • The consumer is not charged a fee for installation of the device. • The consumer receives a warning at least 48 hours before the vehicle is disabled. • The device cannot shut down the vehicle while in use. • The consumer has the ability to start a vehicle for a period of 48 hours after it has been disabled. “A disabled vehicle is more than a simple inconvenience. When a car stops in the middle of a busy road or if there’s no way to get help during an emergency situation, it becomes a serious public safety concern,” said Mukherji (Dem., Hudson). “Implementing this law will ensure that creditors use this technology responsibly.” Under the law, a violation of the aforementioned provisions would constitute an unlawful practice under the Consumer Fraud Act, punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense. Assembly, No. 756 State of New Jersey 217th Legislature Pre-Filed for Introduction in the 2016 Session
BLACK BOOK INTRODUCES USED VEHICLE RETENTION INDEX Designed for More Accurate Report of Market
Black Book has unveiled the Black Book Used Vehicle Retention Index. The index is designed to offer an unbiased, accurate view of the strength of used wholesale market values. The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on twoto six-year-old used vehicles, as a percent of the original typically equipped MSRP. The index is weighted based on used vehicle registration volume and adjusted for seasonality, vehicle age, mileage, condition, segment mix and inflation. Aggregated from daily vehicle value updates, and captured throughout hundreds of wholesale physical and online auto auctions across the country, the Black Book Used Vehicle Retention Index represents data across all regions of the U.S. The index is based on a list of vehicles included in the Black Book wholesale database, and includes no bias toward any brand, auction or region, ensuring a more accurate reporting of the used vehicle market.
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INDUSTRY NEWS
NIADA.TV TO STREAM WORLD AUTO AUCTIONEERS CHAMPIONSHIP May 12
For the sixth consecutive year, NIADA.TV will webcast the World Automobile Auctioneers Championship live, courtesy of the National Auto Auction Association and co-sponsor NextGear Capital. The competition will be held May 12 at Manheim Pennsylvania in Manheim, Pa. NIADA.TV’s coverage will begin at 8 a.m. EDT. Watch the rapid-fire action as the best auctioneers, ringmen and teams in the business compete for prize money and the coveted titles of World Champion. Michael Riggins is the defending champion auctioneer, while Aaron Brown won the 2016 ringman title and Blake McDaniel and Dustin Taylor earned
the team championship. This year’s judging panel consists of the following industry executives: • Eric Authenrieth, general manager of Carolina Auto Auction, ServNet vice president and treasurer. • Brad Bollman, vice president of remarketing solutions at GM Financial. • Kevin Brown, president and owner of Missouri Auto Auction, president of ServNet. • Frank Hackett, CEO of National Auto Auction Association. • Grace Huang, Manheim senior vice president of inventory services. • Lori Jones, Texas Auction Academy
vice president. • Shane O’Dell, president of Cox Automotive Financial Solutions and NextGear Capital. • Rich Perkowski, national auction manager at BMW Financial Services. • Frank Stapleton, 1991 Reserve World Champion Auto Auctioneer. • Stephane St-Hilaire, ADESA president and CEO. • Laura Taylor, Charleston Auto Auction general manager. • KAR / ADESA Judge • Alternate Judge: Chad Bailey, general manager of Akron Auto Auction and vice president of NAAA.
MANAGEMENT MATTERS BY NEXTGEAR CAPITAL
MANAGING DEALERSHIP REVIEWS
Best Practices for Your Customer’s Digital Experience
Encouraging a car buyer to shop at a particular dealership is no longer just a matter of simply being the closest dealership. For today’s customer, the car buying experience begins online. According to a study from Autotrader and Kelley Blue Book, car buyers spent 60 percent of their time online in the vehicle purchasing process. The time to influence where a customer shops begins with a dealership’s digital presence, and when a customer is deciding on a dealership to visit they are bound to run across a number of dealership reviews. Feedback should always be appreciated, and review sites make earning dealership feedback easier than ever. In an industry where the digital experience can make or break a potential customer’s decision to purchase at a location, it’s important to monitor and respond to dealership reviews. Take the below best practices into consideration to ensure your dealership’s reviews encourage, and don’t discourage,
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potential customers from visiting your lot. Monitor reviews. Take note of the review sites where your dealership has earned reviews. What are customers saying about the dealership? Are there any issues mentioned in the dealership reviews that can be addressed? Every dealer and dealership will have to decide how frequently they monitor and respond to reviews. Find a cadence that works best for the team member in charge of monitoring and responding to reviews. Comment on reviews, both good and bad. Every customer leaves a dealership either satisfied or dissatisfied with their experience. For the customers that leave positive dealership reviews, make sure to thank them for their feedback. They took the time to share their positive purchasing experience with the rest of the digital world. While it might be tempting to just ignore negative dealership reviews or tell the
reviewer why their opinion is misguided, it will better serve the dealership if the response asks to reconcile the negative experience with the reviewer. Encourage feedback. Feedback can give dealers an idea of what they need to do to improve service for their customers. Be willing to ask customers if they would like to contribute a dealership review after their purchase. Their feedback can lead to valuable insights on ways to improve the dealership experience. Dealerships that ask for and implement feedback are more likely to be in tune with the wants and needs of their customers. Though dealership reviews have the potential to influence a potential customer’s visit, when managed correctly, those reviews can bring out the best qualities of a dealership, provide insight on dealership processes that could be improved and encourage customers to visit and purchase.
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ACCELERATE
BY GWC WARRANTY
HIGH SUPPLY, HIGHER DEMANDS You Need Not Fear
The surge of off-lease vehicles set to hit the market – 3.6 million as estimated by Manheim – is a great source of excitement for used car dealers. But it can also be a cause for concern. Will such a supply flood push down prices and compress margins? Will competition within the market make it difficult to maintain strong profits per unit? These are all valid questions dealers need to prepare for. To combat margin compression from an overloaded used market, it’s important to first know what vehicles you can move most quickly. Go back in your books and see what vehicles sat on your lot for the least amount of time. Try to identify any trends for what types of vehicles you should seek out at auction. Moving more vehicles each month will help combat outside forces applying pressure on your margins and help you stay price
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competitive within your market. The protection you offer on your vehicles can help you safeguard your profits as well. Offering vehicle service contract protection provides profit opportunities on the back end of deals that can make up for any margin compression you feel on the front end. This allows you to price competitively without putting profits at risk. A bonus benefit is the confidence you’re giving customers to drive off your lot worry-free. But a service contract only provides these benefits if it’s presented to every customer, every time. Perhaps the most straightforward way to put all these pieces into motion is to offer a certified pre-owned program.
Statistics published in Auto Remarketing show certified pre-owned vehicles can demand, on average, $700 more per unit. Similar statistics report they are sold an average of 12 days more quickly. Simply by offering a certified pre-owned program, you can meet all the demands of a higher used car supply: move vehicles more quickly; protect your margins; and earn extra profit per unit through service contract protection. A massive supply surge doesn’t need to be feared if you have the right plan in place. By acquiring inventory you can move quickly and providing service contract protection that preserves your margins, you can bask in this rare opportunity to move mass quantities of high quality used inventory.
May/June 2017 / THE NEW YORK DRIVING FORCE
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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 settled an action with Experian and its subsidiaries for allegedly deceiving consumers about the use of credit scores it sold to consumers. Experian claimed the credit scores it marketed and provided to consumers were used by lenders to make credit decisions, but the CFPB said the lenders did not use those scores in making lending decisions. The CFPB also alleged Experian violated the Fair Credit Reporting Act for making consumers view advertisements before providing them with a free credit report through AnnualCreditReport.com. Experian was fined $3 million. DEPARTMENT OF JUSTICE Raymond L. Rodriguez, Jr. was sentenced to three years and one month in federal
prison for money laundering and assessed a monetary judgment of more than $1.75 million—the amount of the proceeds traceable to the offense. According to court documents, Rodriguez, owner and operator of Rodriguez Auto Wholesale, sold 87 vehicles over a four-year span for a total of more than $1.75 million to individuals who paid him with proceeds from the sale of illegal narcotics and/or stolen identity refund fraud offenses. Rodriguez knew the funds had been illegally derived and agreed to disguise the large cash transactions from the government by accepting large cash payments for vehicles without filing Forms 8300 with the Internal Revenue Service, as required by law and by placing vehicles in the names of straw buyers so law enforcement and other governmental entities would not be aware of the true owners of the cars or the illegal funds used to purchase them. Rodriguez further promised purchasers to keep a lien on certain vehicles despite receiving payment in full, so in the event those vehicles were seized by law enforcement authorities, Rodriguez could reclaim possession and return the seized cars to the purchasers or their family members. FEDERAL TRADE COMMISSION Following a public comment period, the FTC approved final consent orders with CarMax, Asbury Automotive Group and West-Herr Automotive Group, resolving claims they failed to disclose open recalls despite advertising rigorous inspection programs. The orders require the dealerships to refrain from stating their used vehicles are safe, have been repaired for safety issues or have been subject to a rigorous inspection unless they are free of open recalls or the dealerships clearly and conspicuously disclose that their vehicles might be subject to unrepaired recalls for safety issues and explain how consumers can determine a vehicle’s recall status.
STATE ACTIVITY
New Jersey: After his conditional veto forced changes to the bill, Gov. Chris Christie signed final legislation that will require dealers using GPS or starter-interrupt devices to disclose the existence of the device and whether it has the ability to disable the vehicle’s starter remotely. Dealers using starter-interrupt technology will not be permitted to disable a vehicle’s starter until a consumer is in default for at least five days on a contract requiring weekly installment payments and at least 10 days on a contract requiring other installment payments. Dealers will be required to warn the consumer at least 72 hours before disabling the starter. The bill originally made it to Christie’s desk with several restrictive provisions, including a mandatory interest rate reduction for use of starter-interrupt devices. The state legislature removed those provisions following the conditional veto.
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Nevada: The Nevada Senate has a bill pending that would prohibit the use of starter interrupt or GPS devices in that state. I traveled to Nevada to testify against the bill, along with several dealer members and other interested parties. We are in discussions with the bill’s sponsor and interested parties about workable legislation.
LEGISLATIVE REPORT By Sante Esposito
CFPB CONGRESSIONAL HEARINGS The House Financial Services Committee’s Subcommittee on Oversight and Investigations held a hearing March 21 titled, “The Bureau of Consumer Financial Protection’s Unconstitutional Design.” The hearing examined whether the structure of the CFPB violates the Constitution and discussed possible changes to resolve any constitutional issues. As established by the Dodd-Frank Act, the bureau is headed by a single director who serves a five-year term and can only be removed by the President for “inefficiency, neglect of duty or malfeasance in office.” The director sets the CFPB’s budget, which is funded outside of the congressional appropriations process through transfers from the Federal Reserve system’s operating expenses. One of the witnesses, former U.S. solicitor general Ted Olson, who represents PHH Corp. in a case against the CFPB, said, “Congress went way too far with this agency. The breadth of authority here and the lack of oversight to Congress and the President I’ve never seen in any other agency.” On April 5, CFPB director Richard Cordray appeared before the full committee for his semiannual report. In his opening statement committee chairman Rep. Jeb Hensarling (R-Texas) said Cordray should be fired “for conducting unlawful activities, abusing his authority and denying market participants due process,” and said the CFPB should be overhauled. “Mr. Cordray and his CFPB don’t just act as a cop on the beat,” Hensarling said. “They act as legislator, prosecutor, judge and jury all rolled into one. The CFPB represents the summit of unelected, unaccountable and unconstitutional agency government. It represents a dagger aimed at the heart of our foundational principles, namely co-equal branches of government, checks and balances, due process and justice for all. “The tyranny must end and the people’s constitutional rights returned to them.” Cordray defended the bureau, citing enforcement actions Wells Fargo and its efforts to “clean up the problems” associated with credit reporting. “Nobody should want to return to a system that failed us and produced a financial crisis that damaged so many lives,” he said.
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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 in-depth 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
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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 ultra-competitive 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 May 31 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.
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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
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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
THE NEW YORK DRIVING FORCE / May/June 2017
your Facebook marketing. KPI’s give you a solid foundation from which to measure results. 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
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(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
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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. Thirty-three 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.
May/June 2017 / THE NEW YORK DRIVING FORCE
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THE NEW YORK DRIVING FORCE / May/June 2017
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MANAGEMENT GAMEPLAN BY SCOTT BERGERON
WHEN EXCEPTIONS OVERTAKE THE RULES OF YOUR SHOWROOM How to Get Back on Track
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? 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 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 big-box 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 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
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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 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
THE NEW YORK DRIVING FORCE / May/June 2017
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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