REPRESENTING ALL AUTO, TRUCK, TRAILER, RV AND POWER SPORT DEALERS OF OREGON
Dealer News THE
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Inside:
OREGON
IADA
• The Lost Art of the Switch • Washington Update • Retaining Women In Sales • How to Increase Your Social Presence
COMPETING WITH FRANCHISE DEALERS AND COMING OUT
ON TOP
HOW CONVERTING SALES TO SERVICE CAN HELP YOU SELL CARS BY DEALERSOCKET Page
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Tech Enabled Dealerships Need Tech-Savvy Employees
BY KEVIN BAUMGART
REMAIN COMPETITIVE IN TODAY’S INDUSTRY
What do Millennials and technology mean for the future of your auto dealership? The truth of the matter is you’re going to need both if you want to remain competitive in today’s industry. The Impact of Technology on Auto Dealerships One of the biggest changes forcing dealerships to shift the way they sell cars is customer behavior. According to an article from Fortune magazine, customers now make fewer than two visits (1.9 to be exact) to a dealership before making a purchase. Online shopping is the main culprit. Because of the free flow of information on the web, car buyers are more inclined to research their auto purchases at home or on the go using their computers and mobile devices. They’re no longer so dependent on salespeople for information about specific cars. As a result, some auto dealerships are equipping their sales team with greater technology, like tablets, to
facilitate customer interactions and close deals in the showroom. Unfortunately, you can’t just arm your sales team with tablets and expect them to be effective at selling in a new way. This is a significant shift, and your employee base has to be comfortable with approaching the customer and engaging them with a piece of technology. Most dealers are targeting Millennials to work on the sales floor for this reason alone. There are many benefits to having technology on the floor accompanied by tech-savvy employees: • It gives the sales team instant access to information when customers have questions to which they may not know the immediate answer. • It initiates the sale on the floor instead of having to wait until customers are in the back office. • It helps build early credibility and trust if your customer sees the employee as a reliable source. • It will improve the level of professionalism and drive positive
impressions of the store. Providing a mix of access to this type of technology and tech-savvy employees is one way auto dealerships can remain competitive. Millennials are a Perfect Fit for Technology Enabled Dealerships While the common stereotype you see of Millennials is a group of people who constantly have their smartphones at the ready or are scrolling through their preferred social media feeds, this generation is exceptionally adept at technology. They were born into an era of innovation that made digital technology one of the primary ways people experience the world. As a result, the generation has been groomed to reach for technology – mobile devices in particular – when searching for the answers to questions. According to the Society of Human Resource Management, Millennials are highly collaborative and make research-driven decisions. What’s more, according to a recent study from PricewaterhouseCoopers, 78 percent of Millennials believe access to technology makes them more effective in their roles at work. Thus, the technology your
auto dealership implements is a major contributing factor when Millennials are considering employers. In fact, six in 10 Millennials say the quality of technology a business has was important during recruitment. However, it’s increasingly likely Millennials will utilize their personal technology if the tools they have in the workplace limit them. Meanwhile, employers are also creating or updating their IT policies to adapt to Millennials’ technology needs – for instance, providing smartphones as an employee benefit. Technology and Millennials go hand in hand, especially at your dealership. Whether it’s informed consumers arriving at your dealership with buying research saved on their smart devices or tech-savvy employees who understand your customers, technology surrounds this generation and is paramount to delivering a positive buying experience. Kevin Baumgart is VP of Business Development at Hireology. His focus is to help retail automotive clients to improve the people side of the dealership. Kevin 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 (http:// blog.ncminstitute.com) and is reprinted with permission.
P RODUC T S & SER V ICES
S A F E T Y WAT CH
Wayne Reaves Updates DMS with Equifax Reporting Feature STREAMLINES REPORTING PROCESS
DMS provider Wayne Reaves Software rolled out an enhancement to its current platform provides the capability for Buy Here-Pay Here dealers to furnish credit data to Equifax. The technology enhancement allows for a streamlined reporting process, using a program provided by Equifax together with the National Independent Automotive Dealership Association and the National Alliance of Buy Here-Pay Here Dealers. “Reporting credit data can
Bridgestone Recalls Tires for Treads
BHPH REPORT STAFF BY BHPH REPORT STAFF
benefit both dealers and their customers,” Wayne Reaves president Jason Reaves said. “On one hand, you have dealers who will be armed with a more comprehensive view of a customer’s loan payment history, improving their ability to assess risk. And on the other, dealers who report credit data can provide a compelling value proposition for their customers, as timely payments could help them build their credit.” Reaves added the latest version of the tool will help to support compliance efforts with consistent and seamless reporting of trade line data. The company mentioned the enhancement will also offer access
to Automated Data View, an Equifax solution that allows dealers to quickly view the accuracy of reported payment and collection information, in support of the consumer dispute process. “Traditionally, many independent and Buy Here-Pay Here dealers have faced obstacles in reporting their customers’ auto loans and payments,” said Equifax vice president of enterprise alliances Ryan Guthrie. “Previously, dealers had to hold a minimum number of accounts, which can be difficult for smaller operations to meet. “To help overcome these barriers, we started a program last year to enable NIADA and NABD dealer members to report their loan payment data to Equifax, regardless of how many accounts they hold, and Wayne Reaves has now successfully automated the process,” Guthrie added. OIADA DEALER NEWS
TREAD MAY SEPARATE
Bridgestone/ Firestone North America Tire (Bridgestone) is recalling 32 Firestone FR710 tires, size 205/65R16, and Champion Fuel Fighter tires, sizes 205/65R15 and 205/70R15, manufactured March 27 to April 9. These replacement passenger car tires may have been manufactured with inconsistent rubber coverage over the steel plies. As a result, the tread may separate. A tread separation increases the risk of a crash. Bridgestone will notify the owners who purchased the tires, and dealers will replace the tires, free of charge. The manufacturer has not yet provided a notification schedule. |
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Inside J U L Y
AUC T ION NE W S
GM Financial Names Top Auctions
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MANHEIM PORTLAND WINS REGIONAL AWARD
THE LOST ART OF THE SWITCH Bring the Pendulum Back | PAGE 06
COMPETING WITH FRANCHISE DEALERS AND COMING OUT ON TOP
How Converting Sales to Service Can Help You Sell Cars | PAGE 07
WASHINGTON UPDATE
NIADA Government Report | PAGE 08
NOW IT IS A MUST
How Can We Do A Better Job Retaining Women In Sales? | PAGE 10
HOW TO INCREASE YOUR SOCIAL PRESENCE Quick Tips for Any Social Platform | PAGE 12
Associate Members
LIFTING THE HOOD ON CFPB’S PROPOSED CONSUMER ARBITRATION RULES How it Might Affect You | PAGE 14
What’s New
NEW PASSTIME SERIES ON NIADA.TV
Get more from your GPS! There is a new video series on niada.tv that identifies how PassTime GPS tracking solutions facilitate higher rates of return on financing based upon improved customer payment performance. It also discusses PassTime’s wireless GPs telematics products. Check out this new series and much more at niada.tv!
Advertiser’s Index
ADESA Northwest/Portland ................................BC DAA Northwest/Seattle..........................................IFC Manheim.com....................................................... 10, 11 NextGear Capital ............................................................7 Spireon................................................................................... 5 VAuto................................................................................... IBC
Office
Oregon Independent Auto Dealers Association 1475 Capitol St. NE • Salem, OR 97301 800-447-0302
NIADA Headquarters
National Independent Automobile Dealers Association www.niada.com www.niada.tv 2521 Brown Blvd. Arlington, TX 76006-5203 phone (817) 640-3838 For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. OIADA Dealer News is published 12 times per year 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 6006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of OIADA Insider 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.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 ART DIRECTOR Christy Haynes • christy@niada.com PRINTING Nieman Printing
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General Motors Financial Company Inc. named Grand Rapids Auto Auction as 2015 Open Sale Auction of the Year and ABC St. Louis as the 2015 Closed Sale Auction of the Year. This marks the first year GM Financial has recognized two winners - one for open and one for closed sale performance. Recipients were chosen after reviewing each of the company’s 46 auction partners’ performance in customer service, marketing promotions, presale activities and overall auction success. A quarterly and year-end overall winner is awarded to one auction in each of GM Financial
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ACCOUNTING SERVICES Delap, CPA Adam Puckett Lake Oswego, OR 97035 503-697-4118 ADVERTISING Affiliated Media LLC Aaron Jarvis 503-683-2574 Carsforsale.com Aaron Oestretch 605-306-3302 AutoTrader.com Ed Merrick 503-747-9162 Cars.com James Lynch 312-601-5052 UsedCars.com by Dealix Tamara Garris 847-397-1700 AUTO SERVICES & ACCESSORIES Auto Marketing Specialist Gary Palaniuk 503-519-7725 Auto Detailer Show Room New Mike Barthe P O Box 822073 Vancouver, WA 98682 360-882-8162 Northwest Auto Accessories Craig Lessard 503-288-5700
SHOWROOM/ BUSINESS JANITORIAL Show Room New Mike Barthe 360-882-8162 Commercial Cleaning JaniKing Morgan Thomas 541-868-8080 PRIVATE AUCTIONS Brasher’s Northwest Auto Auction Mark Melton 541-689-3901 Brasher’s Portland Auto Auction Jerry Hinton 503-492-9200 Crosspoint NW Dealer Auction Brian Hardy 503-594-2800 Manheim Portland Auto Auction Ray Priest 503-286-3000 OUT-OF-STATE AUCTIONS ADESA Seattle Auto Auction Jason Arcaro 253-735-1600 x 213 DAA Northwest Mitzi Vanvoorhis 509-244-4500 DAA Seattle Dave Blake Auburn, WA 98002 253-737-2200 Manheim Seattle Auto Auction Ray Priest 206-762-1600
Board of Directors
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Remarketing’s five regions. This year’s Regional Auction of Excellence winners are: Midwest Region: Grand Rapids Auto Auction, Jenison, Mich. Northeast Region: Manheim Pennsylvania, Manheim, Penn. Southeast Region: Manheim Georgia, Atlanta Southwest Region: ADESA Austin, Austin, Texas West Coast Region: Manheim Portland, Portland, Ore.
PUBLIC AUCTIONS & AUCTIONEERS Commercial Industrial Auctioneers Ray Beal 503-760-0499 Insurance Auto Auctions, Inc. Ryan Hall 503-253-1500 Petersen Auction Group of Oregon Curt Davis 541-689-6824 Rick Leathers Auctioneers Rick Leathers 503-668-5326 Woodburn Auto Auction Steve Morin 503-981-8185 DEALER SOFTWARE Frazer Computing Michael Frazer 888-963-5369 FINANCING Credit Acceptance John Bragg 360-980-2214 Credit Concepts Jason Moon 541-342-8545 JP Morgan Chase Auto Finance Jeff DeGarmo 503-201-4370 Lobel Financial Tom McConkey 503-653-8000 Nationwide Insurance Mark Tischer 503-339-4165
Oregon Auto Finance Gary Veum 541-868-0472 Oregon Community Credit Union Rich Black 541-681-6311 PacWest LLC John Keifer 341-868-2595 Reliable Credit Association David Marx 503-462-3022 Smartway Auto Advisors Sheldon Harris 503-795-7700 The Equitable Finance Co. Brandon Fox 503-808-7939 United Finance Todd May 503-238-6488 FLOORPLAN FINANCING Lobel Financial Tom McConkey 503-653-8000 Floorplan Xpress Josh Chandler 503-621-9260 NextGear Robert Torbet 503-358-3911 INSURANCE & BONDING Hecht & Hecht Insurance Agency Evelyn Hecht 503-542-1131
KMI Agency, Inc. Kelly Martin 503-625-2615 Shepard & Shepard Business Solutions Todd Shepard 509-396-0488 The Summit Group of Oregon John Petrie 503-581-2825 LEASING Oregon Roads, Inc. Joseph McKinney 541-683-2277 SERVICE CONTRACTS A.U.L./D.P.C. Jim Bangert 360-834-3333 Automotive Business Developers Shannon Meany 541-944-9186 Auto Services Company Susan Williams 800-442-7116 DPC, Inc. Jacob Bangert 360-834-3333 Protective Life Insurance Dylan Doran 818-836-1455 TRAINING OIADA/NIADA Certified Pauline Sill 503-362-6839
PRESIDENT Tommy Wilson, Jr.
1ST VICE PRESIDENT Jim Weaver
TREASURER Salvador Alvarez Herrera Zamora Auto Sales
EXECUTIVE VICE PRESIDENT Siamak Lotfi
SECRETARY Gary Brooks
CHAIRMAN OF THE BOARD Gary Sargent
L EG A L NE W S
S A F E T Y WAT CH
Dealer Alert: New Rental Recall Rules in Effect
Some New Cars Still Include Faulty Airbags
LOANER VEHICLES MAY BE AFFECTED Rental car companies with an average of 35 or more vehicles in a rental fleet are now prohibited from renting those vehicles if they are subject to an open recall. That requirement, which applies to vehicles with a gross vehicle weight rating of 10,000 pounds or less, was part of the Fixing America’s Surface Transportation Act (FAST Act), which was signed by the President in December. The National Highway Traffic Safety Administration now has authority to investigate and enforce the new provisions on rental companies. While the new rule clearly applies to rental vehicles, the law does not state whether “loaner” vehicles are subject to the limitations. Dealers are encouraged to consult their attorneys for specific legal advice on the issue. NIADA successfully lobbied Congress to keep harmful provisions out of the FAST Act, including an amendment that would have prohibited dealers from selling or leasing used motor vehicles with an open recall. Nevertheless, NIADA encourages all dealers to use the VIN lookup tool found at NHTSA’s safercar.gov website regularly to check their inventory for open recalls and to have those vehicles fixed, if possible, before selling, leasing, renting or loaning them. When a repair is not possible, dealers are strongly encouraged to disclose the existence of all open recalls to their customers prior to sale.
FOUR AUTOMAKERS SELLING CARS WITH DEFECTIVE AIRBAGS
Four automakers – Fiat Chrysler, Mitsubishi, Toyota and Volkswagen – are still selling new vehicles that include the defective Takata airbags responsible for the largest recall in automotive history, a U.S. Senate report said. The vehicles are being sold even though their manufacturers know they will have to be recalled by 2018. During an investigation by Senate Commerce Committee, the companies confirmed they are selling cars equipped with Takata airbags that feature ammonium-nitrate inflators without chemical drying agent, citing engineering and supply challenges to explain why they are still relying on the faulty airbags. The vehicles are legal to sell but must be recalled by 2018. So far, almost 70 million cars in the U.S. and 100 million worldwide have been recalled. The inflators can rupture, causing them to explode and send metal shrapnel into the passenger compartments, and have been linked to 13 deaths and more than 100 injuries. The new vehicles with the Takata airbags include the 2016-2017 Mitsubishi i-MiEV, 2016 Volkswagen CC, 2016 Audi TT and 2017 Audi R8. Toyota and Fiat Chrysler declined to name the new models that use the inflators, but Toyota said it expects to produce about 175,000 of the cars for the U.S. through July 2017.
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The Lost Art of the Switch BRING THE PENDULUM BACK BY SCOTT BERGERON
Back when car deals were far easier, and customers didn’t spend six months selfdiagnosing their needs, the ability to switch a prospect out of one car into another was commonplace and done with virtually every deal. Today, switching prospects from one vehicle to another can almost be considered a lost art. Re-focusing on it, though, can bring your dealership more deals. Historically, switching vehicles was a natural part of the sales process. Today, customers are more rigid in their quest, and to them, it’s often more about finding the “exact perfect vehicle.” Prospects walk in armed with loads of online research information about vehicle history, equipment, trade-in and retail values. But often they haven’t accurately assessed the value of their trade-in or calculated their monthly payments. That’s when forward momentum stops going forward, and the deal starts going sideways. The Swinging Pendulum – from Too Pushy to Too Cushy Traditional used car salespeople often were branded as being too pushy, too money motivated, and far too aggressive in their efforts to make a sale. Today’s pendulum, in many cases, has swung too far the other way. Reacting to a prospect who seems to know it all, many sales reps have basically adopted an order-taker mentality instead of being a value builder and solution provider. Part of this is a natural aversion to the used car stereotype. Part of it is salespeople or the sales process being allowed to become too soft. Here’s a typical scenario: A prospect walks in with an inflated idea of trade-in value, and little or no idea what their actual monthly payment will be. The prospect has researched tradein value based on retail versus wholesale, and perfect condition compared to actual condition. Other than perhaps a ballpark guess, the monthly payment is an unknown. In some cases, the salesperson may overhear comments about payments or
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terms, but may choose to still let it go to the finance office – where it can, and in many cases does, blow up. Where’s the sweet spot? Bring the pendulum back toward the center. Just because a prospect has done research and is somewhat knowledgeable doesn’t mean he or she doesn’t need or want an “expert” to help guide the process. A major key to successfully finding that middle ground is knowing and asking the right questions, and if need be, switching the prospect to another vehicle that makes more sense.
managers need to make sure their team is controlling the deal, not being led down the wrong path by a prospect who seems to know “exactly what they want,” but in the real world isn’t even close to reality for payment and terms. During the initial introduction phase, salespeople should always work towards keeping the prospect as flexible and open to suggestions as possible. As smart as today’s prospects are, it’s always a good idea to remember most only walk into a dealership or purchase a car every four to five years. Salespeople and
clothes I chose to shop in. I did finally get help, and yes, I bought the car. But the first impression is still something people put a lot of stock in. 3. Understanding the marketplace. When I visit a town, I make it a point to find prevalent radio stations to get an idea of what, how, and who they’re advertising to. It gives me a quick snapshot of potential audiences for cars – whether it’s young “Kardashian types” or highly educated, more affluent prospects. If I were working at a used car dealership in that town, I
Switching it Up Salespeople need to be well aware of their “switch car inventory” ahead of time. Rules of the road include: 1. Training the sales force on switching. During your sales meeting, sales manager(s) should go through their inventory with their sales team and train what’s new on the lot, the hot cars from auction, the perfect switch vehicles – such as cars sold at auction for well below Bluebook and that allow the dealership to essentially get the deal done when trade values are upside down. This gives the sales rep, and the dealership, much better odds at making a deal happen. 2. Training/retraining the sales team on taking charge and being tuned in. Can you tell how to spot a green-pea on the lot? They’re the ones being led by their prospects instead of the other way around. Sales
managers work deals bell to bell nearly every day. So you and your team’s opinion should be taken as expert advice, especially in terms of deal structure. You know what’s going to work and what’s not. The key is having enough rapport and trust built to be able to efficiently lead the deal. This level of competence must extend to making sure walk-ins, rarer these days, are helped as soon as possible. I walked into a dealership a few years ago wearing my worst blue jeans, and a tank top covered in dried paint. I had finished my Saturday work around the house and was ready to go buy my dream car. I was looking for a certified pre-owned Porsche 911. I was on the lot for at least 20 minutes. There were several salespeople available, but no one acknowledged me. Being from the car business, I really wanted to see if prejudging still existed just from the
would attempt to determine right away what station(s) a prospect tunes in to – which may provide some valuable intel about how to switch and sell a car. Sales managers need to train their people to do similar investigation, so they can learn to spot hot button motivators, as well as building value in benefits. Just segmenting by generation (e.g., millennials) won’t do it. No matter what traits predominate, at the end of the day it still comes back to buying from people they like and can identify with. A salesperson who can listen, build rapport and truly be an expert can switch when need be, or build the value up on the first choice so it makes sense to spend a little more.
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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.
S A L ES M AT T ERS
Competing with Franchise Dealers and Coming Out on Top HOW CONVERTING SALES TO SERVICE CAN HELP YOU SELL CARS BY DEALERSOCKET
DealerSocket’s DAR for Fall 2015 cites two primary problems independent car dealers face. One is used car sales and the other is repair services. Why are these issues for independent dealers? This finding is based on an independent dealer’s ability to convert used car sales to repair services, which correlates with customer satisfaction and retention. How do you convert sales to service? You must change customer perception. Almost all business is judged by the strength of the customer service department. You need to change consumer buying habits. DealerSocket reports for independent dealers only 30 percent of sold customers brought their vehicle back to the dealership for service within the first year. The average percentage of repeat customers is only 20 percent. They examined a Chrysler Jeep dealer and discovered the average sold customer who brought their vehicle back to the franchise dealer for service during the first year of ownership was 80 percent while the customer retention rate was 44 percent. How do they do it? According to DealerSocket, they have established a two-step process unique to their group and region. They introduce all new customers who purchase a vehicle to the service department at the time of delivery by scheduling their first oil change. Once the customer is in the service department, they created a program they call Platinum Plus. Every time a customer spends money in the Service Drive, 15 percent of dollars spent goes towards the purchase of their next vehicle. This has proven to increase retention in service. Converting customers who bought vehicles from the sales department into service
customers is the formula for increasing customer holdings. The cycle of customer sales purchase to customer repair service, coupled with a 2-5 year trade-in is the pattern every dealership seeks to obtain. How does an independent dealer compete with the larger franchise? DealerSocket surveyed consumers and found 75 percent say where they purchase their vehicle is influenced by negative online reviews. Your online presence matters and there are ways to make it work for you. DealerSocket proposes several solutions: • Data mining or data discovery is the process of analyzing data from different perspectives and summarizing it into useful information. This information can be used to increase revenue, cut costs, or both. This software is an analytical tool often used by retail, financial, communication and marketing organizations. It enables companies to determine relationships among internal factors like price, product positioning, or staff skills to external factors like economic indicators, competition, and customer demographics. This allows you to properly position your business and possibly increase customer sales and retention. Customer relations management software keeps a customer database with phone numbers and email addresses, so you can schedule follow ups, appointments, and email blasts that allow you to continually reach sold and prospective customers. • Schedule your customer’s first oil change before they walk out the door and send a reminder before the appointment date. This is OIADA DEALER NEWS
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an excellent way to build a sales/service cycle. • Examine sales trends, including the retail sales outlook, trends by vehicle type, web based and device driven sales, and the online shopper and how they’re utilizing your website. Traditional marketing processes are irrelevant in light of today’s online marketplace. The DealerSocket DAR for Fall 2015 summarizes their report the following way: Increase customer retention by: • Integrating sales and service processes. • Building trust and communicating the value of the service department within the first year of selling a vehicle. • Utilizing data mining software. Grow revenue by: • Implementing appointment confirmation processes. • Focusing on used car opportunities. • Decreasing spending on traditional advertising. • Creating a digital shopping experience that drives consumer engagement.
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WA SHING T ON UP DAT E
NIADA Government Report
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 Department of Labor The department released a final rule changing the threshold for which executive, administrative and professional white collar employees are exempt from overtime compensation. The final rule, which becomes effective Dec. 1, 2016, includes a number of changes. • Increases the minimum salary level required for the exemptions from $455 a week ($23,660 per year) to $913 per week ($47,476 per year). •Up to 10 percent of the salary level for those white collar exemptions can be met with nondiscretionary bonuses, incentive payments and/or commissions if the employer pays them at least quarterly. • Increases the minimum compensation level required to meet the separate “highly compensated employee” exemption from $100,000 to $134,004 per year. Of that amount, at least $913 per week must be paid on a salary basis. • The salary/compensation levels will automatically increase every three years. For the executive, administrative and professional exemptions, the salary will be adjusted to the 40th percentile of full-time non-hourly workers in the region of the country with the lowest average wages. For the highly compensated employee exemption, the salary will be adjusted to the 90th percentile of full-time non-hourly workers nationally. • Increases the minimum salary that must be paid to employees in computer-related occupations to $913 per week, but leaves the existing alternative hourly rate of $27.63 intact. U.S. Supreme Court Spokeo v. Robins: In a 6-2 decision, the Supreme Court held that a plaintiff cannot sue for technical violations of a statute
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– the Fair Credit Reporting Act in this case – without showing concrete harm. The plaintiff, Thomas Robins, accused Spokeo, a people search engine, of violating the FCRA by publishing false information regarding his wealth, marital status, education and employment status. Robins sought to recover statutory damages on behalf of himself and a class of similarly situated individuals for the alleged FCRA violations. The district court originally dismissed the case on the grounds that Robins lacked standing to bring the lawsuit because he had not sustained an injury-infact. The Ninth Circuit reversed, holding that a violation of his statutory rights constitutes an injury-in-fact. The Supreme Court ruled the injury-in-fact requirement is met only if a plaintiff establishes that he or she suffered “an invasion of a legally protected interest” that is both “particularized” and “concrete.” The Ninth Circuit’s analysis only covered the “particularized” criterion but did not consider whether the injury was concrete. The Supreme Court said for an injury to concrete, it must be “actual or imminent, not conjectural or hypothetical.” Intangible injuries can be concrete and the legislative intent of a statute plays an important role in determining whether intangible harm is sufficiently concrete to qualify as an injury-in-fact. A statutory private right of action does not automatically satisfy the injury-in-fact requirement. The case could be helpful to dealers with the myriad of statutes that have statutory rights of action. Consumers will have to provide an injury-in-fact to proceed with a claim of a violation of the statute. Federal Communications Commission The FCC issued a notice of proposed rulemaking to implement amendments to the Telephone Consumer Protection Act. Among other things, the FCC is seeking comments regarding calls to collect a debt (the commission has proposed a limit on the exemption to calls made to obtain payment after a borrower is delinquent, or debt servicing calls made by or on behalf of a creditor), who can be called (a proposal would limit the exemption to calls |
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made to debtors and would not apply to calls made to family, friends, etc.), the maximum number of attempts, live calls vs. prerecorded messages, the duration of calls, calling hours and opt-outs. Congress is looking into potential changes to the TCPA to modernize the statute. The Senate Commerce Committee held a hearing on the matter. NIADA is working with other interested parties to provide appropriate comments and ensure the result is not overly burdensome to legitimate business. LEGISLATIVE REPORT Safety Recalls During the Senate’s consideration of the Fiscal Year 2017 Transportation Appropriations Bill, Sen. Richard Blumenthal (D-Conn.), with Sen. Ed Markey (D- Mass.) as cosponsor, filed an amendment that would prohibit a dealer from selling or leasing a used passenger vehicle until any defect of the motor vehicle or motor vehicle operation or noncompliance with a federal motor vehicle safety standard has been remedied. NIADA, in conjunction with NADA and NAAA, reached out to various members of the Senate Appropriations Committee, including committee chairman Thad Cochran (R-Miss.) and Sens. Richard Shelby (R-Ala.) and Shelley Moore Capito (R-W. Va.) in opposition to the amendment. That effort was successful and the amendment was not considered by the Senate. However, speculation is that Blumenthal will continue to pursue it on other legislation. H.R.4715, Recognizing the Protection of Motorsports Act of 2106 (RPM Act) The bill, which was introduced March 7, would clarify that modifying street cars into race cars used solely for competition is legal and cannot be regulated by the Environmental Protection Agency even if the vehicles no longer remain in their certified configuration for emissions purposes. The bill added 16 cosponsors since our previous report, raising the total to 73, encompassing both parties. The Senate companion bill, S.2659, which was introduced March 9, added two more
CONGRESS IS LOOKING INTO POTENTIAL CHANGES TO THE TCPA TO MODERNIZE THE STATUTE. THE SENATE COMMERCE COMMITTEE HELD A HEARING ON THE MATTER. NIADA IS WORKING WITH OTHER INTERESTED PARTIES TO PROVIDE APPROPRIATE COMMENTS AND ENSURING THE RESULT IS NOT OVERLY BURDENSOME TO LEGITIMATE BUSINESS. cosponsors and now has 11. H.R.1486, TABS Act of 2016 The bill, introduced March 19 by Rep. Andy Barr (R-Ken.), now has 50 cosponsors. It would amend the Consumer Financial Protection Act of 2010 to eliminate provisions that fund the Consumer Financial Protection Bureau using transfers from the earnings of the Federal Reserve System as under current law, which allows the CFPB to be funded outside of the annual appropriations process and effectively removes it from accountability to Congress. The bill would bring the CFPB into the regular process.
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M A N AG E MEN T M AT T ERS
Now it is a Must
HOW CAN WE DO A BETTER JOB RETAINING WOMEN IN SALES? BY JODY DEVERE
Dealerships currently report that women represent just 25 percent of face to-face positions. But that small number is powerful: Within four months of reaching that percentage, dealerships typically experience as much as 35 percent gain in overall vehicle sales, new and used, and a substantially increased used car turnover. Less numbers-driven, but just as important, those dealerships also see an
increase in desirable employee statements regarding company loyalty and goals toward longevity. How did they do it? Simple: They brought women into their sales, service and management positions and found ways of retaining them. It’s simple: Attracting women yields high results. Considering 85 percent of all automotive purchases are either directly made by women buyers or directly influenced by them, if we are not responding to this statistic, then our dealerships are missing the boat. Totally. ROI is a key driver in how we consider the physical programs and offerings we
EXPLORE NEW TECHNOLOGY. EMPLOY MARKETING SPECIALISTS COMFORTABLE WITH
WOMEN’S NEEDS.
ELIMINATE PROCEDURES WE HAVE UTILIZED JUST BECAUSE WE HAVE ALWAYS DONE SO. put forth to the consumer in our efforts to entice them to visit our facilities. We do recognize Internet information access has affected profit margins, margins inflated by consumer ignorance as to how much flexibility in costs existed. The fact is we just cannot make the margins we used to, and have to find ways of addressing our concerns as survival efforts. Playing the numbers game of total sales for a month will eventually be passed with the money lost in potential profits. The bottom line is we must place our investment monies into areas of concentration that will bring us returns that will not only keep us in business but by their very nature help us grow in our financial viability, viability that is attractive to women who may be considering this industry as a workplace. Roadblocks to attracting women. Here are some reasons why we are not attracting women at this point: 1. Traditional resistance. Many organizations still are thematically maledominant and have programs in place that do not have interest to the new womendriven market. “What was good for my dad is good enough for me” is the motto above the entrance of many empty and abandoned dealerships. 2. Reluctance to trying new programs. Management and owners may not have the desire or courage to try new programs. Or they may be lazy. 3. Equitable pay and work programs. There need to be considerations for family needs and even part or adjusted time participations. Traditional long hour work periods do not work. 4. Knowledge and expertise. Existing dealership management may simply not have either or both of these to design and implement marketing to attract and hire women, or initialize training and financial or equitable incentive programs to make this happen. 5. Necessary minimal monetary investments. Many management
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must address the elimination of restrictive traditional procedures we may have in place. 5. Encourage our educational systems to step up to the plate, and support local and regional programs. We need realistic training at design, management, service, finance and especially sales. This must happen at all levels of the industry. Today’s women are time-constrained, pragmatic, comfort-conscious, and heavy into efficient and consistent communication with their employers. They are extremely effective at communicating within their own social groups and pay little attention to advertising. They are direct with their customers, and women are especially effective at establishing
a meaningful rapport that translates into return business transactions built upon trust. If we wish to survive, let alone prosper, we cannot wait any longer. Let’s do everything we can to attract these valuable women employees, and provide them with the incentives to keep them with us. The time is now, not tomorrow. Jody DeVere is an internationally recognized speaker, trainer, often quoted industry pundit and spokesperson for the automotive industry on the women’s market. As CEO of AskPatty.com, she provides automotive education to women consumers and an interactive online Certified Female Friendly certification training program for automotive retailers on how to attract, sell, retain and market to women. This article originally appeared on NCM’s Up to Speed blog (http://blog. ncminstitute.com) and is reprinted with permission.
personnel simply may not want to make these investments. 6. Difficult economy conditions. Many organizations lean on this often-perceived statement as an excuse. This is not an excuse. 7. Negative reputation: Previous poor treatment and lack of respect. The dealership’s experience has left a bad taste in many women’s mouths. Women are still greeted on the sales lot with detestable statements such as, “Is your husband with you today?” With such disrespect, it’s not surprising that women don’t consider dealership work as a viable option. 8. Failure to address the needs of female millennials. Times are different. Women in this largest group of consumers want to be in organizations that “feel good” to their basic drives, other than just to climb through positions or achieve high income solely. They want to have better communication with their administrators and most often prefer working “with” them, as opposed to “for” them. So, how do we fix this, and not only bring talented women into our organizations but keep them there as well? With sales consultant turnover figures ranging from 72 percent to 80 percent, the highest turnover rate is women at a shocking 90 percent. Turnover among millennials is presently at 54 percent. It is obvious we are doing a lot of things wrong. Here are some realistic solutions to retain women: 1. Get off our butts and try new methods. Explore new technology. Employ marketing specialists comfortable with women’s needs. Eliminate procedures we have utilized just because we have always done so. 2. Re-examine possible positions that can effectively interest and challenge women. Conduct non-traditional interviews that ask what these interests might be. 3. Re-evaluate compensation incentives and adjust them. Consider not just the primary needs of full and part-time women, but their family and personal needs as well. 4. Take a new look at our models. We OIADA DEALER NEWS
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SO CI A L MEDI A
OI A DA C ON T INUING EDUC AT ION P ROG R A M
How to Increase Your Social Presence QUICK TIPS FOR ANY SOCIAL PLATFORM BY CHELSEA MAGEE
Did you know social advertising outperforms all traditional media? It also exceeds nearly every digital ad format in both CostPer-Click (CPC) and Cost-Per-Thousand Impressions (CPM) of the ad… when targeted, optimized and tracked! You’re probably thinking, “Great! So how do I get started?” To get your actual customers or prospective customers to follow you, you need to give them a good reason. Below are some quick tips you can utilize on any social platform. Accept the importance of social media. You need to realize that social media is here, and it’s not going anywhere. If you resist the change, you are sure to fall behind. So what’s the good news? A little bit of effort goes a long way! Be visual! Pictures drive engagement, regardless of the platform! Content with relevant images gets 94 percent more views than content without related images. Utilize images that will immediately intrigue, delight and connect with your audience (And no, I don’t mean just pictures of your inventory!). You might want to think about it this way: Images are bold, beautiful and simple to scan. Visuals are especially important in our quick-paced society. People love to see themselves online, and pictures draw them in, so consider posting photos of happy customers (with their permission). Do you have an animal mascot at the dealership? Involve them! Pets and animals seem to get a lot of “likes.” Engagement is essential. Keep your customers engaged with games and giveaways. Think about your target audience. What do they want? What are their hobbies and lifestyles? In Lexington, I might offer tickets to a University of Kentucky basketball game. What would appeal to your clientele? You also need to think about how much effort from your consumer you are asking – match the giveaway with your ask. If you give too little, you won’t get a lot of motivation, and you won’t gain followers or increase engagement. You might get a ton of followers when you offer a grand giveaway, but you also run the risk of consumers not trusting you. Our industry already has an issue with distrust, so don’t prove consumers’ worst fears right! A quick note about giveaways in social media: Most channels have pretty strict rules about contests and giveaways, so be sure to check terms and conditions. These rules change frequently, so review them before any contest, just to be safe. Chelsea Magee has been involved in digital throughout her career. She is the Client Success Director at NCM and oversees their online training website, digital marketing and social media. This article originally appeared on NCM’s Up to Speed blog (http://blog.ncminstitute.com) and is reprinted with permission.
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OIADA CONTINUING E D U C AT I O N P R O G R A M
Read & Respond and Certify Below
COMPL E T E T HIS T ES T A ND CER T IF Y BELOW T H AT YOU H AV E RE A D T HE A R T ICL ES F OR JULY 2016.
“THE LOST ART OF THE SWITCH” True/False: Just because a prospect has done research and is somewhat knowledgeable doesn’t mean he or she doesn’t need or want an “expert” to help guide the process. True/False: There is no correlation between local radio stations and a potential audience for cars. “COMPETING WITH FRANCHISE DEALERS AND COMING OUT ON TOP” According to DealerSocket reports for independent dealers, what percentage of sold customers brought their vehicle back to the dealership for service within the first year? a) 10 percent. b) 20 percent. c) 30 percent. d) 40 percent. True/False: Utilizing data mining software does nothing to increase customer retention. What are some ways you can grow revenue? a) Implementing appointment confirmation processes. b) Focusing on used car opportunities. c) Decreasing spending on traditional advertising. d) Creating a digital shopping experience that drives consumer engagement. e) All of the above. “LIFTING THE HOOD ON CFPB’S PROPOSED CONSUMER ARBITRATION RULES” True/False: Arbitration provisions commonly give either party the right to require the other to arbitrate a future dispute rather than resolve it with a civil lawsuit. True/False: Many consumer arbitration agreements provide the dealer will pay most or all of the arbitration filing fees, arbitrator’s fees and other arbitration costs. I certify to OIADA that I have personally read these articles in The Oregon Dealer News Magazine for July 2016. STOP!! Before you sign and send this form, make sure you have answered and completed all the quiz questions to receive Continued Education Credits. My Name _______________________________________________________________ _______________________________________________________________________ Dealership Name _________________________________________________________ Dealership # _____________________________________________________________ Dealer License Expiration Date: (Month)________________________________________ (Year)________________ Signed: ____________________________________________ Date ____________________________________________________________________
FAX TO: 503-364-7331 MAIL TO OIADA, 1475 Capitol St NE, Salem, Oregon 97301
A S SO CI AT ION NE W S
Oregon Independent OIADA ~ Oregon Independent Auto Dealers Association Auto Dealers Association
Your only nationally recognized association since 1948. OIADA, here to help, support, educate and promote quality dealers in Oregon.
Here are the great benefits of OIADA membership: • Oregon Dealer News is delivered to our dealers monthly, filled with quality up to date business articles. • Included in each Dealer News Magazine is 30 minutes towards continued education, free to OIADA members, which now means returning eight answer sheets a year. This is a savings of $75 annually. • OIADA Auction Punch Card: Our valued auction houses in Oregon, Washington and California are offering $50 savings on your buy and sell fees, a value of $1,100. • OIADA offers members discounts on all meetings, educational programs and conventions, with an annual savings of over $200. • OIADA members receive a discount on most forms, a savings of up to $100 or more annually. • Quarterly regional dinner meetings, an outreach to bring programs, education and conversation to all areas within Oregon. • Annual convention will host a variety of programs including eight or more hours of continued education. Quality Dealer of the Year Awards and Banquet. At a savings of $100 for OIADA members. • Opportunities for OIADA members to be awarded Oregon’s Quality Dealer of the Year and to compete for the National Quality Dealer of the Year at our national convention. • National education opportunities, becoming a Certified Master Dealer and more. • National access to Dealers 20 Groups . • OIADA has on contract a lobbyist to bring forth interests and to protect our dealers at the state level. • OIADA hosts a required certified 8-hour Pre-License Class. Upon completion dealers will receive the DMV required 8-hour certificate. • Title and registration classes, savings of $35 for OIADA members. • Help and support with your issues is just a phone call away. • Automatic membership with NIADA and the NIADA Used Car Dealer Magazine. • Access to NIADA’s annual convention. • Opportunities for scholarships, both state and national. • NIADA offers OIADA members a wide variety of discounts to members, from education to everyday business expenses.
Contact OIADA at 503-362-6839 to start your enrollment for all these great opportunities as a member of OIADA. Annual Savings $1100 Auction Punch Card $ 100 Forms $ 75 Education $ 100 OIADA Convention $ 50 Driven to Learn & Regional Meetings $ 1425 Bottom Line Savings
$325 Cost of Membership ~ OIADA helping you succeed.
OIADA Forms Store
YOU CAN EASILY ATTAIN FORMS NEEDED FOR EVERYDAY BUSINESS Don’t let yourself run out of the forms you need to do business every day. OIADA has four ways for you to get forms:
1.
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You can order forms any time of the day online at OIADA.com. All you need is an email address.
You can stop by one of three locations within the Oregon auction houses during auction day.
You can pick up forms at the OIADA office, located at 1475 Capitol Street NE in Salem.
You can call the OIADA Office MondayFriday. We will ship your order that day. In most cases, it will be delivered to you overnight by UPS.
Don’t be caught without a Secure Odometer Form or Secure Power of Attorney. These forms are DMV forms and each has a registered number assigned to the dealer who purchased them, so don’t lend yours out and do not borrow from your neighboring dealer. When you purchase these forms, it’s a good idea to pull them out of the packet and slip a reminder near the bottom to call OIADA and order more. You can even add the phone number (503-362-6839) on the note. Did you know that our members get a discount on most state forms? OIADA members save an average of $100 or more every year.
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C OMP L I A NCE OV ERDRI V E
M A RK E T WAT CH
Lifting the Hood on CFPB’s Proposed Consumer Arbitration Rules
We agree that neither we nor anyone else will use this agreement to stop you from being part of a class action case in court. You may file a class action in court or you may be a member of a class action even if you do not file it. Dealers will need to modify their consumer arbitration agreements to include the new provision and to make the text consistent with new limitations. Of course, the HOW IT MIGHT other option is for dealers to AFFECT YOU simply stop using consumer BY CHIP ZYVOLOSKI, SENIOR arbitration provisions. ATTORNEY, WOLTERS KLUWER 2. Arbitration class actions. By now, you’ve read about The proposed rule does not the Consumer Financial seem to prohibit consumer Protection Bureau’s proposed arbitration provisions new rule affecting consumer that prevent buyers from arbitration agreements. creating or joining a classThe headlines are all about wide arbitration proceeding. its proposal to prohibit Consumer arbitration consumer arbitration clauses agreements commonly from blocking consumers’ prohibit class action ability to join class action lawsuits. A lot has already been arbitration proceedings, so those provisions could written about that point. remain unchanged. But there are a few details 3. Paying for consumer that will help round out your understanding of the proposal. arbitration. In the past, the consumer So let’s look under the hood at arbitration process was the proposed rule and how it criticized for potentially might affect you if it becomes being more expensive for final. consumers than small claims 1. Ban on prohibiting courts or other civil lawsuit consumers from joining a alternatives. class action lawsuit. If it was more expensive, This is the main point you’ve the prospect of arbitration heard about. Arbitration might cause some consumers provisions are often part of not to pursue their claims. the retail sales contract or are The cost of arbitration has separately executed to cover a motor vehicle credit sale. They been raised in lawsuits to argue that an arbitration commonly give either party agreement should not be the right to require the other enforced. to arbitrate a future dispute Today, many consumer rather than resolve it with a arbitration agreements civil lawsuit. provide the dealer will pay That means, for example, most or all of the arbitration if a buyer files a civil lawsuit filing fees, arbitrator’s fees or joins a class action civil lawsuit, the dealer can require and other arbitration costs. In addition, arbitration the buyer to resolve the issue organizations like the through arbitration. American Arbitration If the CFPB’s proposed Association and JAMS have rule is finalized, consumer adopted consumer arbitration arbitration agreements could rules requiring the dealer to no longer allow a dealer/ pay most or all of the costs of creditor to require a buyer to arbitration. arbitrate instead of filing or The CFPB’s proposed rule joining a class action lawsuit. If the proposed rule becomes does not regulate who pays for consumer arbitration. final, consumer arbitration Since claims will probably agreements entered into after be subject to arbitration the effective date will require organization rules anyway, the following provision:
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it’s not likely dealers will change their contract terms on who pays for arbitration. Dealers will probably continue to bear much of the costs of consumer arbitrations. 4. Required reporting of arbitration results. If the proposed rule becomes final, in any arbitration action that results from a consumer pre-dispute arbitration agreement, the creditor must provide the CFPB with certain information about the claim and results of arbitration. The CFPB plans to use the information as part of its research on the topic. 5. Timeline from proposal to final rule. The CFPB is seeking public comments on its proposed rule. Comments must be submitted within 90 days of the date the proposed rule is published in the Federal Register. If the amount of early media attention is any indication, the CFPB will likely receive a number of comments. It will then take some time to analyze the comments and consider any edits to the proposed rule. The proposed rule specifically provides that if it is finalized, it will become effective 211 days after publication of the final rule in the Federal Register. Putting these steps together, if the CFPB publishes a final rule, it probably will become effective no sooner than May 2017. The CFPB’s proposed rule is receiving a lot of attention in the auto finance marketplace. Most of the attention is on the proposal that dealers can’t use an arbitration agreement to prohibit consumers from joining a class action lawsuit. Much will continue to be written about that specific item. But remember the other details will help determine whether the engine of consumer arbitration agreements will continue to run or end up on the scrap heap. Chip Zyvoloski is a senior attorney for indirect lending at Wolters Kluwer. For more information, please visit www. wolterskluwerfs.com/indirect.
Black Book Unveils Residual Forecast on Three-Year-Old Vehicles RISING SUPPLY’S CONTINUED IMPACT
Black Book, a division of Hearst Business Media that provides new and used vehicle valuation services and custom data licensing solutions, unveiled its May residual forecast illustrating the downward pressure on prices that increased supply will continue to have over the next few years. Black Book forecast data shows residuals on an average three-year-old vehicle will dip from the current threeyear retention of 52 percent in 2016 to 47.8 percent by 2019. Retention values on a three-year-old vehicle peaked in 2013 when vehicles were retaining approximately 54.5 percent of their original typically-equipped retail. Favorable credit availability, continued growth in demand, and consistently low gas prices have provided support in keeping retention rates high in the last five years. Increased used supply in the marketplace, driven by the significantly large volume of sales on new cars and trucks has played a driving role in slipping retention rates this year. Here are the historical three-year retention rates and the projected residual forecast on an average threeyear-old vehicle according to Black Book: • 2012: 53.8 percent. • 2013: 54.5 percent. • 2015: 54.1 percent. • 2016: 52.0 percent. • 2017: 50.1 percent (forecast). • 2018: 48.6 percent (forecast). • 2019: 47.8 percent (forecast). The historical data represents published Black Book Wholesale Average values as a percent of new typicallyequipped retail. The forecast represents published Black Book Residual Values averaged across all three-year-old models. “Despite the industry’s continued efforts to maintain a strong pace of sales on new cars and trucks, the increased level of supply in the used market has begun to weaken prices on both cars and trucks,” said senior vice president of automotive valuation and analytics Anil Goyal. “We saw the first sign of this in 2015, when cars saw above-average depreciation on the year, and this year we will see rising depreciation for truck segments as well.”