DRIVING FORCE
THE OFFICIAL MAGA ZINE OF NEW YORK IADA
S T A T E
A F F I L I A T E
S E P T E M B E R / O C T O B E R 2 016
DEALER BEST PRACTICES
WHAT LENDERS WANT TO KNOW ABOUT YOUR DEALERSHIP Vendor Management P A G E 12
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SEPTEMBER/OCTOBER 2016 / THE NEW YORK DRIVING FORCE 1
INSIDE
2016 MEMBER DISCOUNT BOOK
WHAT’S NEW
2016 National Leadership Conference NIADA’s National Leadership Conference will be held September 26-29 at the Dupont Circle Hotel in Washington, D.C. Once again, the Leadership Conference will be combined with a Legislative & Regulatory Summit and Lobbying Day on Capitol Hill. This important event will help frame the NIADA Legislative & Regulatory agenda for 2016 2017 and beyond as NIADA’s legislative committee and association leadership meet face-to-face with legislators and continue their important work. For more information, visit www.niada.com.
$5,000 IN E AUCTION DISCOUNTS 2016 ME MB R D IS C OU N T B OOK $5,000 IN AUCTION DISCOUNTS ONE MONTH BOO K 2 0 1 6 M$50 E MBUY BEFEE R DI S PER COUNT $50 BUY FEE ONE PER MONTH
$5,000 IN AUCTION DISCOUNTS Long IsLand
new Jersey
Long IsLand
new Jersey
syracuse
syracuse
(TWO) $100 OFF BUY / (TWO) $100 OFF SELL FEE – TOTAL $400EACH FROM EACH AUCTION (TWO) $100FEE OFF BUY FEE / (TWO) $100 OFF SELL FEE – TOTAL $400 FROM AUCTION = TOTAL $1,600 = TO $50 BUY FEE ONE PER MONTH
06 SUCCESSFUL FAILING 08 NIADA CONVENTION
Long IsLand
10 T RADITION AND TRENDS NEED TO WORK TOGETHER 12 WHAT LENDERS WANT TO KNOW ABOUT YOUR DEALERSHIP
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
BLOOMBERG AUTO AUCTION – (TWO) $50 OFF BUY FEE (TWO) $50 OFF SELL FEE BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION BLOOMBERG AUTO AUCTION – (TWO) $50 OFF BUY FEE (TWO) $50 OFF SELL FEE
BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION
14 WHAT TO POST ON FACEBOOK 16 FINDING A CRM/ILM SOLUTION THAT FITS YOUR NEEDS 18 WASHINGTON UPDATE
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
22 S ECRET TO A SUCCESSFUL BHPH BUSINESS
BUFFALO AUTO AUCTION – $100 OFF BUY FEE / $100 OFF SELL FEE BUFFALO AUTO AUCTION – $100 OFF BUY FEE / $100 OFF SELL FEE GARDEN SP T
GARDEN SP T Auto Auction
Auto Auction
YO UR PR OF SP IT OT
YO UR PR O SPFIT OT
MANHEIM ALBANY – $100 OFF BUY/$50 $100 SELL GARDEN SPOT AUTO AUCTION – (FIVE) OFF BUY FEE
GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE
ADVERTISER’S INDEX
ADESA........................................................... IFC Alliance Inspection Mgt. ................................... 17 Autotrader ........................................................ 7 Auto Use .......................................................... 15 AutoZone........................................................ 19 Black Book ........................................................ 3 Manheim.................................................... 10, 11 Manheim New York.........................................IBC Manheim Pennsylvania .................................... 13 NextGear Capital .......................................... 9, 12 Spireon ............................................................16 STARS GPS......................................................... 5 VAuto..................................................Back Cover Wolters Kluwer .................................................14
OFFICE
ALBANY – $100 OFFPOST BUY/ SALE $100 INSPECTION SELL MANHEIM MANHEIM NEW JERSEY – 1 FREE 7-DAY
MANHEIM ALBANY – $100 OFF BUY/ $100 SELL MANHEIMNEWBURGH, NEW JERSEYNEW – 1 FREE INSPECTION MANHEIM YORK 7-DAY – $100POST OFF SALE BUY/ $50 SELL
MANHEIM NEWBURGH, NEW YORK – $100 OFF BUY/ $50 SELL MANHEIMNEW NEW YORK SKYLINE – (TWO) OFF BUY / (TWO) $50 OFF SELL MANHEIM JERSEY – 1 FREE$50 7-DAY POST SALE INSPECTION
MANHEIM MANHEIM NEW YORKPENNSYLVANIA SKYLINE – (TWO) $50 OFF BUY / (TWO) – $100 BUY/ $100 SELL $50 OFF SELL
For information on how to become a member of NYIADA, please contact Paula Frendel at 855.694.2324 or nyiada.pfrendel@gmail.com
MANHEIM NEWBURGH, NEW YORK – $100 OFF BUY/ $50 SELL MANHEIM PENNSYLVANIA $100 BUY/ $100$50 SELL MANHEIM PHILADELPHIA – (TWO) $50 –OFF BUY / (TWO) OFF SELL
NIADA HEADQUARTERS National Independent Automobile Dealers Association www.niada.com www.niada.tv 2521 Brown Blvd. Arlington, TX 76006-5203 phone (817) 640-3838
MANHEIM NEW YORK SKYLINE – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL 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)
For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. The New York Driving Force is published bi-monthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone 817-640-3838. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of New York Driving Force or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2016 by NIADA Services, Inc. All rights reserved. State Magazine MGR./Sales Troy Graff • troy@niada.com Editors Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com Magazine Layout & Graphic Artist Chantae Arrington • chantae@niada.com Senior Art Director/Production Manager Christy Haynes • christy@niada.com Printing Nieman Printing
ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35) MANHEIM PENNSYLVANIA – $100 BUY/ $100 SELL ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT
ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT STATE LINE AUTO AUCTION – 12 MONTHLY COUPONS FOR REGISTRATION
MANHEIM PHILADELPHIA – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL
$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! ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY
FE
SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT 4 THE NEW YORK DRIVING FORCE / SEPTEMBER/OCTOBERROCHESTER 2016 www.newyorkiada.org
FAILURE-ACHIEVEMENT CYCLE
MANAGEMENT MATTERS / BY STEVE HALL
SUCCESSFUL FAILING
>>
>> Why Embracing Failure Leads
to Greater Achievement
OUR CULTURE IS BUILT ON SUCCESS. Ironically, we can only achieve the highest levels of success by failing along the way. Failure is the basis of knowledge. Imagine you’re back in elementary school. Your teacher has just placed two apples on each end of her desk and asked, “If I added these two apples to the other two apples … ” – she physically moves them together – “… how many apples would you have?” She waits, then says, “Okay, class, now count them. One. Two. Three. Four.” This is how most of us learned in school: repetition and visual learning. Kids will chant along, correcting their answer when they realize it’s wrong. Failure in these very early stages is important – it teaches persistence and focuses on the importance of learning over knowing. And, in time, we all eventually did learn that two plus two equals four! SUCCESS-ONLY CYCLE
The Success-Only Cycle vs. the FailureAchievement Cycle Sadly, over time, we abandon the elementary school approach and focus more on knowing than learning. Failure changes from a useful tool to punishment. By the time we enter the workplace, most of us have fully accepted that failure represents the result of an action, and we view it as nearly insurmountable. Honestly, how useful is that philosophy? This Success-Only philosophy allows for only one option: You succeed, or you fail. This approach rewards knowing and only works if you already know how to do something. If you don’t know how to do the task already, well, you’re in trouble. The Failure-Achievement Cycle, however, focuses on failing fast – and then learning from your mistakes. No one is expected to perform flawlessly. Instead, failure is viewed as a feedback mechanism that allows you to improve your plan and try again to yield better results. Failure isn’t considered the opposite of success. Instead, this approach views failure as a critical component of it. Successful Failing Failing when trying something new or working towards solving a problem is admirable. This type of failure should be rewarded, provided two key components were included in the effort: • First, did you plan the activity, initiative or process to the best of your ability for the information you had been provided at the time? Failure due to “just winging it” is not productive failure. Plan for success, work
INDUSTRY NEWS / BY SUBPRIME AUTO FINANCE NEWS STAFF
Failure is viewed
as a feedback mechanism that allows you to improve your plan and try again to yield better results. your plan and adjust as needed. • Secondly, did you learn from your failure? Successful failure requires you to analyze what happened and create a game plan for other possible solutions moving forward. Failure Can’t Be a Show Stopper Mistakes aren’t the end of the line. They merely delay achievement. When you fail successfully, you must make sure the delay is as short as possible. As a progressive manager, who is always trying to grow your department, you should actively demonstrate to your employees that failure is welcomed. Give this a try. Hold a “learning from our failures meeting.” During the session, share some of the errors you’ve made in your career and how it helped you solve a problem. Encourage your staff to do the same, requiring them to explain what they learned from the experience and how it helped them become better in their positions going forward. Not only will your less experienced employees gain valuable knowledge from the more experienced ones, but it will reinforce to your staff that successful failure is an important part of your process. Done in the right way, it creates a great learning experience. Keep everyone focused on how the person improved from the experience and how to avoid the same mistake themselves. (It can also be a fun team experience, especially when you discover how entertaining others’ past mistakes can be! Be sure to share some funny examples of your own!) Failure is painful and, of course, we’d all rather avoid it. But when we apply successful failing, we learn how to bounce back quickly from failure and achieve even more in the long run. Steve Hall is a full-time instructor for the NCM Institute and is responsible for the development of its Fixed Operations training curriculum. For more than 25 years, Steve’s experiences have encompassed almost every aspect of the retail automotive service, parts and body shop business. This article originally appeared on NCM’s Up to Speed blog (http://blog.ncminstitute.com) and is reprinted with permission.
6 THE NEW YORK DRIVING FORCE / SEPTEMBER/OCTOBER 2016
EFG AMONG BENCHMARKPORTAL’S TOP 100 CALL CENTERS >> Only F&I Product Provider Named
EFG COMPANIES was recently the only F&I product provider to be named to the BenchmarkPortal Top 100 call centers for 2016. EFG also ranked in the Top 25 quartile for call centers with five to 50 staff members. The BenchmarkPortal Top 100 competition compares the performance of contact centers throughout North America by evaluating their key metrics against industry peers. Based entirely on statistical comparison to the world’s largest and most respected database of call center metrics, the BenchmarkPortal Top 100 competition is designed to objectively identify centers who are achieving superior results both in financial and qualitative terms. EFG’s average claims call speed to answer is less than 30 seconds, while 67 percent of its total claims are one-call claims. The company also said 96 percent of all claims are paid within one hour of receipt of invoice. “Our clients rely on our expertise and quality customer service when it comes to administering customer claims,” EFG president and chief executive officer John Pappanastos said. “We operate knowing that our claims administration reflects back on our clients’ business and brand. “By demonstrating our high level of expertise with this certification, we are giving our clients the highest confidence that all claims will be handled expertly, efficiently and respectfully, promoting a positive overall customer experience and driving greater customer loyalty for their business,” Pappanastos said. “The EFG Companies contact center is among the best in its industry,” BenchmarkPortal CEO Bruce Belfore said. “This award was granted on the basis of objective, metrics-driven performance. EFG Companies stood tall against its competitors according to the world’s largest database of call center metrics. This is not easy to do, and we congratulate them on their accomplishment.” www.newyorkiada.org
ASSOCIATION NEWS ///
ASSOCIATION NEWS /
>>
NIADA CONVENTION RECAP
Kris “Tanto” Paronto, one of the heroes of the infamous Sept. 11, 2012 terrorist attack on the U.S. diplomatic mission in Benghazi, Libya, told the harrowing story of those 13 hours in a gripping keynote address >> that left the overflow crowd standing and cheering. Paronto discussed courage and handling adversity and crisis situations, as well as the decision of himself and his CIA Annex security FROM THE VENUE TO THE CONTENT , the 2016 NIADA Convention and team to speak out about what happened that night in the face of Expo was all about reinvention. conflicting reports from government and media that told a different While the theme of “Success By Reinvention” was created with the story. idea of helping dealers thrive in the rapidly changing used car business, Attendees also had a chance to celebrate, dance and loosen up at it fit the industry’s biggest event just as perfectly. the Cigars and Martinis and Margaritas welcome reception in a lush, NIADA celebrated its 70th annual Convention in a new venue – the tropical setting at poolside, and at a disco-themed closing party recently renovated Mirage, which provided a larger yet more intimate following the crowning of Florida’s Scott Lanier as the 2016 National setting – as well as a sold-out 60,000-square foot Expo Hall with more Quality Dealer. than 170 exhibitors and the most extensive dealer education agenda in In addition to the NQD ceremony – webcast live as always on history, featuring more sessions on more topics than ever before. NIADA.TV – the previous night’s National Leadership Awards Banquet It also included more attendees than ever before. The 2016 introduced new NIADA president Billy Threadgill as well as honoring Convention obliterated the event’s attendance record, sailing past the NIADA scholarship recipients and the winners of awards for the top previous mark, set in 2006 at the Las Vegas Hilton, by a staggering 24 performers within the association and the used vehicle industry. percent. The number of dealers and first-time attendees both rose by “I can honestly say my experience was far above and beyond my 30 percent or more. expectations,” said Daniel Johnson of LiteHouse Auto in Lakewood, “I got what I came for,” said Sean Schuetz of Klass Motors in Santa N.Y., a first-time attendee. “We will not miss a Convention from here Ana, Calif. “I wanted to learn new ways to take my business to the next on out.” level, and I’ll be spending the next several months implementing what The 2017 NIADA Convention and Expo will be back at The Mirage and I learned at my dealership. It was the most informative convention I is scheduled for June 12-15, 2017. Save the date and don’t miss your have attended.” chance to be part of the used vehicle industry’s biggest event of the While the education is always the focus, there was, of course, a lot year! more happening.
Reinvention Creates Success for 70th Annual NIADA Convention and Expo
8 THE NEW YORK DRIVING FORCE / SEPTEMBER/OCTOBER 2016
www.newyorkiada.org
MANAGEMENT GAMEPLAN / BY SCOTT BERGERON
TRADITIONS AND TRENDS NEED TO WORK TOGETHER
>>
>> Finding a Successful Blend
THERE’S A REASON traditions exist. They grow out of established, credible and time-tested circumstances. Trends, on the other hand, can be today’s hot attraction, which may or may not stand the test of time. How can a dealership capture the best of today’s trends and blend them successfully into a tradition-based program that drives more
sales on a consistent basis? CRM and Personal RelationshipBuilding There’s no question technology-driven Customer Relationship Management programs are firmly established as a trend. In all likelihood, CRM will become a tradition over time. But for now it’s still a relatively new and shiny toy many dealerships have embraced as a bedrock organizational and sales tool. CRM enables data mining about customers as well as regular communication with them. In essence, it can serve as the engine that drives relationship-building because it brings evidence-based intel to the table. Depending on the CRM used (and how consistently and completely it is adhered
to), salespeople can gain valuable information about buying history and preferences, and communication preferences. It’s gotten to the point where CRM can tell a dealership how often to communicate with a customer via email, and what not to do (e.g., overwhelm with too many emails that end up alienating the customer). But without tires the vehicle won’t move very far. All the technology-driven protocols in the world can only go so far toward the time-honored tradition of relationshipbuilding. This is the ability through interpersonal contact to establish and maintain trust, comfort and likeability with prospective and present customers. In the rush toward technology trends (e.g., Internet car-shopping and pricing tools), there’s a tendency to embrace the former and forget the latter. The truth is successful salespeople need both – the “scientific” piece that CRM systems can bring to the table and the “artistic” ability to develop rapport oneon-one. When the two work in harmony, dealerships get the best of both worlds. Buyers are “primed” by the CRM outreach that shows the dealership understands them and gives them useful information. In-person relationship-building then seals the deal. Here’s what can happen if the two aren’t working side by side: a prospective buyer walks into a dealership and is basically ignored by salespeople nearby because they’ve been schooled not to be too pushy or aggressive. (In some cases, it’s just plain laziness.) Armed with the amount of information available online, salespeople today too often assume a prospect will seek them out if interested. In the interim, they give them space. In reality, this is the worst way to proceed. It’s happened to me. I wound up feeling ignored rather than valued. Instead, a salesperson could have introduced himself/ herself and offered to help – without coming across as pushy. This would have set the tone for a pleasant and productive discussion and potential sale. Internet Shopping vs. Instinct Another “trend” (yes, many will say it’s
10 THE NEW YORK DRIVING FORCE / SEPTEMBER/OCTOBER 2016
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The trend is no-haggle pricing.
The tradition is to play the negotiating game. Both are valid. It depends on buyer preferences.
they’ve achieved a lower price through negotiation, they won’t buy at all – or at least they will be reluctant. Here’s another perfect example of how trend and tradition can complement each other perfectly. The trend is nohaggle pricing. The tradition is to play the negotiating game. Both are valid. It depends on buyer preferences. So find out what those preferences are, then go one direction or another – or both. Read the prospective buyer carefully, then adjust as gut feelings dictate. If someone comes in and is adamant from the get-go about a firm price, so be it. If it’s unclear what their preferences might be, ask. (Then, have an option to fit their preferences. If they want to negotiate, be prepared to shift gears from one-price shopping.)
Then, of course, there’s the hybrid – a buyer who wants the firm price and wants to negotiate from there. Decide if/how to address this scenario. In short, prepare your salesforce to deal with all types of buyers. Because just as the U.S. is a melting pot of different ethnicities, so is the car buying population a melting pot of preferences. Those preferences can best be addressed by honoring both trends and traditions. Former dealer executive Scott Bergeron is the founder and principal at Daily Gameplan (www.dailygameplan.com), a sales team performance company. Daily Gameplan’s Red Books and cloud-based CRM have been used in thousands of dealerships throughout the United States. Bergeron can be reached at 303.918.3169 or scott@dailygameplan.com.
here to stay) is Internet-based car shopping and pricing. There’s no doubt the abundance of Internet information has led to much more savvy and educated buyers. This is great because it opens the door for a salesperson to build rapport based on instincts instead of just answering pedestrian questions about a potential car or sale. However, exercising those traditional instincts seems to be a lost art in too many dealerships. Salespeople often are cast as order-takers, there to follow through on customer requests. As with the CRM example above, this is leaving a big (some would say the biggest) piece of salesmanship on the salesroom floor. Instincts can be wonderful because they work at a level technology doesn’t. Properly tuned in, a salesperson can intuit buying clues just by observing a prospective buyer’s body language, movements, gestures and actions. For example, a prospect is viewing pricing information on a particular vehicle, then throws up his hands. That well could indicate frustration, or is it exhilaration? The alert salesperson will make sure to find out, and take the conversation in the direction it needs to go from there. While instincts themselves can’t be trained, awareness of when and how to use them can. This needs to become, once again, a key part of salesforce training – at the time of hiring, and periodically thereafter. Even if the new hire is a seasoned pro, the “hows” of exercising instinct may need to change depending on previous experience and current dealer aims. Iron-Clad Internet Pricing vs. Art of the Deal Following through on the trend of all things Internet, one-price-no-dickering shopping has become the rule, not the exception. Why? Yes, I know a gazillion surveys have said buyers don’t want to haggle or be hassled in the price-shopping arena, and that a oneprice policy makes them feel much more at ease and trusting. Well, that’s great for those people. But what about those who like to haggle? There are still many buyers out there who live for the art of the deal. If they can’t feel like
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SEPTEMBER/OCTOBER 2016 / THE NEW YORK DRIVING FORCE 11
DEALER BEST PRACTICES / BY CHET HEUGHAN
VENDOR MANAGEMENT
>>
>> What Lenders Want to Know
About Your Dealership
VENDOR MANAGEMENT has become somewhat of a buzzword in the consumer lending industry, especially around auto lending. It has always been a financial institution’s responsibility and obligation to know who they are doing business with and how loan applications are reaching their institutions. The Consumer Financial Protection Bureau, however, has further emphasized financial institutions are responsible for the end product. This is to say that any negative actions taken by the dealer will become a problem for the lender. Within franchised dealerships the vendor management requirement is aided by a strong presence from the manufacturer. For example, a franchise dealer has certain covenants that require financial reporting, including minimum capital thresholds, required training and certifications. Franchised dealers also benefit from the monitoring of customer satisfaction surveys, detailed inventory tracking and industry benchmarks provided by other franchise dealerships selling the same brands. Independent auto dealers represent a unique challenge for many lenders. Independent auto dealers often vary in size, financial strength, operational models, inventory and experience. Unlike most franchise dealerships, independent auto dealers do not have the support of a franchise offering multiple checks and balances. It is easy to understand why lenders then tend to gravitate toward independent dealers that look and act more like a franchise dealership. As indirect auto lending has become more competitive and lenders struggle to increase yield, many have had to broaden their credit spectrum and move closer toward subprime lending or expand their dealer network outside their traditional relationships. To do this lenders have had to modify their dealer underwriting and dealer management models to fit smaller dealerships with more diverse revenue and sales models. In years past independent auto dealers had to meet the same minimum criteria for doing business with the lender as a franchise dealership, but times are changing. Many lenders have multiple programs and mitigate the risk of smaller dealerships with low working capital and minimal experience by using a third-party risk mitigation platform. With many of these platforms, small or new independent dealerships can gain access to the same national programs as large franchised stores. Lenders are able to serve independent dealers because thirdparty risk mitigation platforms are helping bring efficiency and transparency to the transaction. 12 THE NEW YORK DRIVING FORCE / SEPTEMBER/OCTOBER 2016
For example, independent dealers may be subject to more frequent underwriting, additional verification steps and less direct access to loan underwriters. While there is more work on the dealer’s side, these steps also benefit the stores’ owners by helping identify fraud attempted by customers or rogue employees. The days of simply signing a lender’s dealer agreement and providing a few supporting documents to gain access to their retail financing program are drawing to a close. Lenders are being required to truly know and manage their dealer relationships. This means updating key pieces of data and underwriting each dealership on an annual basis. As an independent auto dealer it’s important to understand what lenders are looking for and be prepared to provide the documentation needed annually to avoid disruptions in your lenders’ retail financing programs. Lenders will be evaluating the dealer principals, the dealership itself and inventory. They will be looking at credit reports that indicate bankruptcies, tax liens, past-due accounts, and potential fraud or identity theft. In addition, lenders will check criminal history reports and verify addresses, property ownership, bank statements, business financial statements and tax returns. Lenders will also be looking at more subjective data such as references from your auctions, floor plan lenders, warranty providers and personal references. You should be prepared to provide proof of insurance, copies of bonds and licenses, and expect a yearly site visit and basic inspection of your facility. Lenders really want your business, but they must first know who you really are. Creating your own internal process for managing due diligence requests from lenders and thirdparty risk mitigation service providers will make this process easier and more efficient for you. Understanding what lenders are looking for and providing it in a timely manner goes a long way toward building a strong profitable relationship along with the ability to compete with your neighboring franchise stores. Chet Heughan is director of AppOne® Risk Mitigation Services and Indirect Lending for Wolters Kluwer. For more information, please visit www. wolterskluwerfs.com.
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SOCIAL MEDIA / BY KATHI KRUSE, FOUNDER CEO KRUSE CONTROL INC.
5 WAYS TO FIGURE OUT WHAT TO POST ON FACEBOOK >> Engage Your Customers and
Reach Your Goals
ONE OF THE most common challenges for independent dealers is social media. It’s actually a challenge for most companies simply because it’s a medium not well understood. Not to oversimplify it, but Facebook and other social channels are just another medium to connect with customers. If you think about the “traditional” media such as TV, radio, print, billboards, email and phone, they are all places where customers spend time, and it’s your job (through marketing and advertising) to attract them to your store. Once a dealer has decided to venture out into Facebookland, the first question that comes up is “What do I post on Facebook to attract more customers?” The answer is a simple one but not so easy to find. Engagement is king on Facebook. It drives everything. There are two types of Facebook engagement: organic and paid. Organic
simply means you did not pay to promote your post. Organic is the best kind of engagement and it’s the hardest to achieve. Solid, original, high-quality content achieves organic reach and engagement. People like, comment and share, which builds more authority with Facebook’s algorithms. It’s key to pay close attention to what’s working and what’s not. You must learn through data how best to promote (pay for) your content to improve on what’s happening organically. But what do you do when you hit a brick wall for ideas? These five ways will help you figure out what to post on Facebook to engage customers and reach your goals. 1. It all begins with your why. If you’ve done the work to determine your true why – why you’re participating in this race, and why your customers choose you over your competitor – the search for what to post on Facebook gets so much easier. Simon Sinek said, “People don’t buy what you do, they buy why you do it. The goal is not to do business with people who need what you have. The goal is to do business with people who believe what you believe.” Without inspiration, motivation and passion to craft meaningful content, your Facebook page falls flat. Pro tip: If you’re new to determining your why, take a look at your online reviews. Look and listen for commonalities from what your customers are saying – that will help you know why your customers choose you.
14 THE NEW YORK DRIVING FORCE / SEPTEMBER/OCTOBER 2016
2. Determine what your target customers want to know. Building relationships with buyers is how business gets done (with or without Facebook, right?). Knowing your customers’ interests and challenges helps you create content for your page that matters to them. Whether you realize it or not, there’s a story happening in the mind of your customer. They are the hero of their story, and when you actively participate in that narrative in a meaningful way (which Facebook is ideal for), you position your business within your customer’s story... and have a great shot at the sale! Pro tip: Begin to notice ideal customer experiences within your store and find a way to
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>>
Review your list
and discover you've just experienced what it's like to know what to post on Facebook.
document them. 3. Identify and develop your resources. Part of your plan for what to post on Facebook is sitting down and assessing just what it is you have available. Failing to identify and develop your resources makes it even harder to know what to post on Facebook. Answer these questions: • Who will produce our content? • Who’s in charge of our content? • Who will maintain our content? (Content is a business asset!) • Examine and describe what forms of content are most comfortable right now (written, images, audio, video). • What types of content do you want to
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focus on in the next 12 months? • What do you need to do to get there? 4. Encourage employee participation. Most dealers agree they need to A) produce more content and B) connect on a deeper, personalized level with today’s hyperconnected buyers. Shifting your internal processes to engage employees (especially salespeople) in content creation helps with both of these challenges. When you showcase employees as thought leaders in the automotive industry, the company receives more recognition online. Employees reap the benefit of their voices being broadcast, paving the way for more referrals, leads and sales. The company looks smarter because its employees look smarter. 5. Don’t make it too complicated. If you’ve been managing a Facebook page for a business, chances are one or more of these statements apply to you: •Y ou’re a current or potential customer of that store. •Y ou possess similar attributes to the customers you’re trying to attract. •Y ou have empathy for customers’ struggles and feel a connection. This means you are uniquely positioned to understand your customer (because they’re just like you). You have an idea of what would be valuable to post on Facebook and you need to give it wings. Try this: identify four to five Facebook pages you like and what it is about them you admire. Write down your answers.
Review your list and discover you’ve just experienced what it’s like to know what to post on Facebook. Those pages you identified are successful for the reasons that attracted you. They are the same or similar to the reasons customers like your page. Brainstorm with others within and without your organization to come up with a game plan to create content that elicits the same interest, excitement and belonging you feel when you visit those pages on your list. Pro tip: We all get busy and it’s nice to have one place to refer to our game plan. A content calendar helps you think through what to post on Facebook, gives you the room you need to plan your strategy and allows you to schedule posts into the future to save time. Fact: figuring out what to post on Facebook is a creative process. Not everyone is cut out for it, but those who are usually realize it’s fun once you get things in place. Don’t be afraid to test different types of content with your fans. This will build your self-confidence and motivate you to keep going. The answer to “what to post on Facebook” is simple, but not easy. Do the work, test your ideas and make good use of a content calendar. You’ll soon stop struggling, find the answers and become a Facebook superstar. 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 ZACH KLEMPF
EVERY INDEPENDENT CAR DEALERSHIP NEEDS THE RIGHT CRM/ILM
Mobile sales tools
That Fits Your Needs
IT’S 2016 and never has the used car industry faced so much disruption! Over $450 million in venture capital has been invested into new automotive start-ups like Beepi and Carvana. Moreover, GM recently announced they will sell 30,000+ vehicles direct through their pre-owned Lease/Fleet GM Factory Collection, and Millennials are quickly adopting utility models for transportation, weakening America’s long love affair with car ownership. With the average car buying consumer doing most of their research online, today’s dealership has to be able to pivot quickly and digitally evolve their business model to remain competitive. The digital dealership model is here to stay, and it goes beyond dealerships simply doing a decent business through their website and automotive classified websites. Face it – the car buying public has already changed, forcing dealerships to become more
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allow your sales team to run deals from their phones no matter where they are.
>> Finding a CRM/ILM Solution
tech-savvy and socially connected to their customer base to remain relevant. Have you taken the right steps to keep your dealership at the heart of where the action is? Key to staying relevant is ensuring the car buying customer experience is second to none with the right Customer Relationship Management/Internet Lead Management solution that keeps your dealership top of mind with your clients. CRM software is fast becoming as important to the dealership as Dealership Management Software has always been. Independent dealers need to be nimble and quick. They need a CRM/ILM solution that fits their needs without slowing them down and tying them to the showroom floor. Here are some tips to help make sure your dealership has the right CRM/ILM. Internet Lead Management Your dealership is being bombarded with
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20 or more leads per day from the likes of Autotrader, CarGurus and Cars.com. How do you manage them effectively and ensure they are being worked promptly? If you’re relying on old school pen and paper, then your store is in trouble. Customers expect prompt follow ups to Internet leads. By reaching out to you online, they expect to interact with your dealership online throughout the entire sales process. Make sure your dealership has an integrated CRM/ILM solution that allows the sales manager to distribute and track leads while enabling the sales team to follow up immediately from their smartphones via text, video, social media or email. Develop Sales Team Work Plans How do your sales reps know when they need to follow up with a customer? How do you quickly onboard new hires? Make everyone more productive with a CRM solution that focuses on the 10 things you
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really need to allow you to schedule reminders for follow up emails, texts, or calls. Avoid bells and whistles that aren’t used daily and add cost to the solution. Stay connected to previous “sold” customers with annual birthday greetings, trade in incentives, and tailored drip marketing communications to keep a digital heartbeat with them alive. Mobile and Social CRM Dealers who use a mobile CRM typically increase Fresh-Ups by 20-25 percent. Mobile sales tools allow your sales team to run deals from their phones no matter where they are. They are never out of touch with prospects, which keeps them productive and always on. Make sure your CRM has key mobile features that accelerate the momentum of the deal with seamless data entry like an in-app Driver’s License Scanner to add contacts or a VIN scanner to appraise tradein vehicles. The mobile CRM must also offer offline capabilities for when you have no cellular or Wi-Fi reception as well as social media integration for services like Facebook and Pinterest. Record and Manage All Opportunities How many “lost” customers do you have who made the trek to the lot but were never seen again because your sales rep didn’t follow up? Think about how many thousands of dollars are left on the table each month simply because a sales rep didn’t capture Fresh-Ups contact information correctly.
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What will it take to move one more opportunity to a closed deal by the end of the month? Take control of your opportunities and manage your sales cycle with a sleek, streamlined manager dashboard in your CRM that strips out the noise and focuses you on the immediate actions needed to close deals. Some of you already understand these things and have moved forward with purchasing a CRM platform for your dealership. Others are dragging their feet because they are not yet convinced of the return on investment, or are put off by the cost and complexity of the franchise centric CRM solutions on the market today. On the ROI front, a 2014 Salesforce.com Customer Relationship Survey conducted by Confirmit Inc. showed a CRM system can drive a 32 percent increase in sales, a 40 percent increase in productivity, and a 32 percent improvement in win rate. On the cost and complexity front, independent dealers need a simple, mobile, intuitive CRM that allows them to connect with their prospects any way the customer wants to engage, manage opportunities on the fly without requiring an advanced computer science degree to figure out, and enjoy the benefits of a CRM solution without bankrupting the store in the process. Beware of the heavy, “every feature imaginable” CRM/ILM systems built especially for the large franchise dealerships now being price reduced and sold to independents as an afterthought.
These are complex systems with tons of features that easily overwhelm the smaller stores, and take a big chunk out of your wallet every month. Believe it or not many of these franchise dealer CRM/ILM systems cost upwards of $1,000 per month, leaving a huge hole in the dealership’s pocket! If your sales people cannot easily ramp on these expensive systems without extensive training or they refuse to use it at all because they have to change their entire sales rhythm to use the tool, then that will be your money quickly going down the drain. Independent dealerships need a quick, painless and lightweight CRM/ILM solution that delivers the essential features on a mobile platform at a price point that makes sense that their sales team will actually use. Savvy GMs and sales managers already realize this and purchase software specifically designed for the independent dealership space. Remember, if your dealership is going to stay competitive in today’s “all things connected” used car market, you need tools that complement your store’s selling motion and are easy for your sales team to embrace. As the dealership’s model continues its digital shift, the CRM/ILM system will become even more critical in reaching and retaining the car buying consumer. Zach Klempf is CEO of Selly Automotive, a CRM/ILM dealership software company focused on the used car market. For more information, visit www.sellyautomotive.com.
SEPTEMBER/OCTOBER 2016 / THE NEW YORK DRIVING FORCE 17
S T A T E
18 THE NEW YORK DRIVING FORCE / SEPTEMBER/OCTOBER 2016
A F F I L I A T E
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ONLINE MARKETING / BY KATHY R. TAFOLLA, LOBEL FINANCIAL
DOES YOUR CONTENT MARKETING STRATEGY INCLUDE VIDEO?
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>> Video Outperforms in Driving Conversions
VIDEO CONTENT is exploding across the Internet, in social media feeds and in social hubs. Given the growing quantity of visual content in newsfeeds on social media, you can capitalize on video marketing. Even more, you can shoot, edit and produce these videos inexpensively. How is this possible? 1. Write a script. 2. Record a voice over. 3. Use Adobe to create the graphics. 4. Get a video recorder for live video. 5. Use Adobe After Effects for video editing. 6. Add music using sound effects. 7. Publish.
You can also use PowerPoint to video edit if money is a factor and Adobe is out of your budget. Video content marketing allows consumers to satisfy their information and entertainment needs all at once. It’s also a great way for small business owners to compete with larger businesses. Video is unrivaled when it comes to reaching your target audience. YouTube reports over a billion viewers, almost one-third of the people on the Internet every day. Video content is straightforward, quickly shared and easily accessible. It’s easy to create a business channel where all of your video content can be found through an organic search. Since buying a car is a visual experience and your dealership website is primarily based on images, it makes sense to include video content as a way to build relationships with customers. You’ll make personal
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connections through your website and build prosperous business connections in the process. Some examples for you to consider are: • Stories from customers. • A fictional series. • Personal stories. • Documentary style videos. • An interview. All of these ideas will help your customers connect to your dealership. This can be a fun and exciting way to not only brand your dealership but engage existing and new customers as well. In content video marketing storytelling is crucial. It’s effective because people love stories and they connect to authentic human experience. It creates an emotional investment. Content can be defined as experimental as much of it is based on trial and error. You post content and track it through Google Analytics to see how it’s ranking in the search engines. You want to know how many website visitors are clicking on it and how long they’re staying on the page. Most B2C business owners know content marketing is the most commercially important part of your digital marketing campaign. Why? The object of content marketing is to help and inform consumers. It is to show people your business knows the industry and their expertise is credible. Mastering a video content marketing campaign will help you build relationships with your customers before they step foot on the premises. Content tells people why your products are good and how it benefits them. For dealerships this might include financing options, reliability, and what sets you apart from the competition. Content allows the consumer to view your offerings, and if presented well, compels them to buy from you. Online marketing reports indicate content videos outperform other content types in driving conversions. Videos increase consumers’ understanding of products and services and website visitors are more inclined to purchase a product after watching a video. Moreover, you can expect to see a rise in interactive and personal video content to help turn viewers into leads.
SEPTEMBER/OCTOBER 2016 / THE NEW YORK DRIVING FORCE 19
MANAGEMENT MATTERS / BY KEVIN BAUMGART
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DOES YOUR DEALERSHIP VALUE ITS INTERVIEW PROCESS? >> Be Prepared for the Right Hire
BY THE TIME a candidate reaches the interview stage, it’s clear they have grabbed your attention as a potential hire for your dealership. The interview process is an irreplaceable component of your dealership’s overall hiring strategy. It’s also the point at which both the employer and job seeker determine if it’s worth their time to move forward with the process. What’s at Stake for Employers? Taking the time to speak with a candidate in person is critical to determine if someone is a good fit for the role. It’s also an integral part in persuading top talent to work for your dealership. Research from LinkedIn found that 87 percent of job seekers said a great interview experience would make them reconsider a job offer even if they have initial doubts. In a competitive job market, this can make the difference between hiring an all-star and a dud. Conversely, 83 percent of candidates say a negative encounter during an interview will
erode their interest in a position. Getting the interview process down to a science begins far in advance of the in-person visit. Employer Due Diligence You will want to use the early stages of the hiring process to get as much information about the applicant as possible to ensure you’re making the right decision by inviting them in for an interview. Hiring technology has come a long way in enabling auto dealers to evaluate job seekers before they ever step foot in the dealership. Employers should take advantage of tools that test hard skills, soft skills, culture fit and aptitude. Based on the results of these evaluations, you’re able to better gauge whether they meet – or even exceed – the requirements established in your job description. This adds insight that employers can use in conjunction with resumes and applications to make informed judgments about applicants and if they should bring them in for an interview. Once you’ve completed these critical steps, you need to make sure you are prepared to meet the candidate in-person. How to Prepare for the Interview No detail is too small as you prepare for the interview. Consider what type of impression you’ll leave after you’ve invited a candidate to talk about a specific position and you forget their name, the job they applied for or refer to past work experiences belonging to another applicant. This is the candidate’s first impression of what it would be like to work at your dealership. It’s important to get it right.
You should also have your interview questions prepared in advance and in front of you when you sit down for the interview. Be sure to have questions that will help you effectively identify whether the candidate can perform all necessary tasks defined in the job description. Addressing your priorities up front and asking questions about measurable criteria will help you determine their ability to do well in the role. At the end of an interview is a great time to allow candidates to ask questions, which helps set expectations for the candidate and the interviewer. If you are prepared for this exchange in advance, it is easier to sell top talent not just on the role, but also on your dealership as a place to work. As much as the employer is judging the candidate, the potential new hire is also forming opinions about working for the dealership, and a great impression will win over all-star candidates. An Extensive Process The interview is the singular component in hiring that carries the most weight for both the employer and candidate. It’s crucial you have a rock-solid process in place – built on strong intel about each applicant – that will make the encounter productive and illuminating for all parties involved. Kevin Baumgart is VP of Business Development at Hireology. He has spent his entire 15-year career in sales and sales management for entrepreneurial and start-up companies. This article originally appeared on NCM’s Up to Speed blog (blog.ncminstitute.com) and is reprinted with permission.
SAFETY WATCH / BY USED CAR NEWS
REFLECTIONS ON MY FIRST NIADA CONVENTION
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>> Pleasantly Surprised
I HAD THE PRIVILEGE of attending my first National Independent Automobile Dealers Association convention [in June] in Las Vegas. Quite honestly, I wasn’t sure what to expect, but I was pleased to discover many similarities with my experiences at 47 National Automobile Dealers Association conventions for franchise dealers. First, many of the dealers I met are as astute and keen about their business as many franchise dealers. They understand the wholesale and retail marketplaces are changing fast, and they are wisely seeking new ideas, tools and ways to make their businesses more profitable and successful. Second, like many franchise dealers, the independent dealers are deeply committed to
their businesses. It’s their money on the line every day. They are hands-on, pragmatic operators, some of whom are likely to pick up a wrench or a chamois cloth to get a car ready for retail. Third, I was struck by the family nature of the event itself. I met dealers, their wives and their children on the NIADA floor – a reminder that many, if not most, dealers of all types are by their nature a family affair. Finally, I was pleased to be a part of Cox Automotive’s impressive presence on the NIADA floor – a testimony to our commitment to serve independent dealers as we collectively transform the way the world buys and sells cars. My hat’s off to NIADA’s Steve Jordan, CEO, and Joe Lescota, director of dealer development, for hosting an enlightening, productive and well-run event. This year’s NIADA convention may have been my first, but it most definitely won’t be my last. Dale Pollak is the founder of vAuto and an executive with Cox Automotive. This column was published on his website, www.dalepollak. com, on June 18.
20 THE NEW YORK DRIVING FORCE / SEPTEMBER/OCTOBER 2016
>> Damaged Wires Could
Disable Passenger Air Bag
>>
INDUSTRY PERSPECTIVE / BY DALE POLLAK
CHEVY RECALLS IMPALAS FOR AIR BAG ISSUES
GENERAL MOTORS LLC IS RECALLING 289,254 model year 2009-10 Chevrolet Impala vehicles manufactured April 25, 2008, through Feb. 16, 2010. The front passenger seat frame may contact and damage the wires of the passenger presence sensor module. If the wires are damaged, the passenger presence sensory system may fail to recognize the passenger seat is occupied, disabling the air bag. Damage may also cause the air bag fuse to short resulting in a loss of all air bags and seat belt pretensions. Both conditions increase the risk of injury during a crash. GM will notify owners, and dealers will double wrap the wires with anti-abrasion tape and replace damaged wires as necessary, free of charge. GM’s recall campaign number is 36110. www.newyorkiada.org
BHPH PERSPECTIVE ///
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Success depends on your available capital and your day-to-day involvement, your commitment to collections, and so much more.
BHPH PERSPECTIVE / BY DUSTIN KERR
WHAT’S THE SECRET TO A SUCCESSFUL BHPH BUSINESS?
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>> Some Best Practices for Success
I HAVE THE PLEASURE of meeting Buy HerePay Here dealers all over the country when I travel. I see owners of both small and large operations. Sometimes, I meet a BHPH owner who is just starting out. Other times, I meet one who’s been going strong for many years. I’ve even encountered retail dealers who are seriously considering a jump into our industry. Even with all these differences, there’s one universal question that unites these people: What’s the best way to run a BHPH business? You may not like my answer. It’s a question I take very seriously, so I answer it honestly. And I’m not going to lie. So, generally speaking, they aren’t very satisfied with my answer! Why? Because I genuinely believe there are many successful ways to run this business. There’s no cookie-cutter solution. Success depends on your available capital and your day-to-day involvement, your commitment to collections, and so much more. How the business performs is heavily influenced by your temperament and your market – there are dozens of factors that can make or break BHPH dealerships. I see different business models every day that are highly successful. Pick your method – but follow best practices. Even though I heartily believe the right success model depends on your circumstances and attention to detail, each of the profitable BHPH businesses I’ve encountered operate with a few best practices I believe you should follow to maximize your business and mitigate your exposure to risk.
1. Understand this is a collections business, not just a sales business. I see more dealers struggle with this idea than any other because they just don’t understand this simple, but crucial, point. It’s especially hard sometimes for someone who has built a successful franchise or independent business where sales, gross and expense control were the keys to success. In the BHPH business, we cannot just sell our way out of bad collections! To make the most of the business, our collectors have to be the dealership’s most talented, best trained and best compensated employees. A well-run collections department can make up for a lot of mistakes in other areas. 2. Get serious about compliance. If you don’t have the wherewithal to devote time every day to compliance, I suggest not getting into this business. If you’re already in and still not serious about compliance, I suggest getting out while you still have a business and a choice! The CFPB and the Department of Justice will do everything they can to put you out of business if they even think you are not following their rules. Ignoring compliance puts everything you have in jeopardy. If you can’t (or won’t) manage that reality, you shouldn’t have a BHPH dealership. 3. Be an advocate for BHPH businesses. Reread No. 2. If you want life in the BHPH industry to be easier, you have to fight for it. One way is to join the state and national associations that are fighting for your business’s survival against the likes of the CFPB and DOJ. Not only should you be a member, but it is very important you contribute financially to these associations so they can fight for your rights. Connect with your city council members, senators and state/national representatives and other important political figures in your area. Make sure they understand just how much your business contributes to the local economy – and educate them about the industry, so they realize you aren’t the “bad guy” consumer advocacy groups like to make you out to be. Find out their stance on the
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CFPB and DOJ and vote accordingly. Remember the quote by Edmund Burke: “The only thing necessary for the triumph of evil is that good men do nothing.” Stand up for yourself and others. 4. Join a 20 Group. The best career move I ever made was joining a 20 Group. Nothing else I tried made me a better operator – or provided a better ROI – than the insights I gained from that group. The power of peer collaboration and accountability you receive in a 20 group setting is magnificent. Imagine sitting in a room with 20 other dealers talking about your business. You get to see the good, the bad and the ugly, and have literally hundreds of years of experience in the room with you! The one warning I will give you, though, is that you must have an open mind and be ready to go back to your dealership and make meaningful change because your fellow 20 group members will hold you accountable to making your business better. Even when you’d prefer they didn’t. BHPH success is possible – and important. I love this industry. Although we often get a bum rap, BHPH dealerships provide a valuable service to the vulnerable in our community. We help people learn to be financially responsible, and we give them the means to get up on their feet and improve their lives. It’s amazing. So, no, there’s no perfect business model for success in this industry, no matter how many times people may ask me to show them the way. But if you take our work seriously, commit to helping people while making a profit and follow the best practices I’ve outlined above, you’ll make it. And if you encounter bumps along the way, give me a call and I’ll help you out! Dustin Kerr has been in the automotive industry for 15 years with the last 10 spent exclusively in the Buy Here-Pay Here and Lease Here-Pay Here industry. Dustin serves as an NCM consultant and sales and collections trainer to the Buy Here-Pay Here industry. This article originally appeared on NCM’s Up to Speed blog (http://blog.ncminstitute.com) and is reprinted with permission.
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