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R E P R E S E N T I N G A L L A U T O, T R U C K , TRAILER, RV AND POWER SPORT DE ALERS OF OREGON

THE OFFICIAL MAGA ZINE OF OREGON IADA O C T O B E R 2 0 17

DOES YOUR SALES PROCESS

MEASURE UP? Time to Fine Tune PAGE 6

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V I S I T U S AT W W W.O I A D A .C O M

06...............................Does Your Sales Process Measure Up? 08.......................................................................Clients for Life 09.............................................................Advertising Smarter 12...........................................Misunderstandings about Price 13............Tips to Secure Vehicle Service Contract Financing

WHAT’S NEW

NATIONAL POLICY CONFERENCE SESSIONS CATCH THEM ON NIADA.TV

Get caught up on the latest national regulations on the NIADA.tv Compliance/Legal channel! There was an impressive lineup of federal compliance and regulatory educational sessions during the recent National Policy Conference in Washington, D.C., including updates from the FTC, CFPB, and Small Business Administration. These sessions will be available for viewing on NIADA.tv October 16.

ADVERTISERS INDEX

ADESA.....................................................................................7 AmTrust....................................................................................5 DAA Northwest/Seattle......................................................IFC Lobel Financial.........................................................................4 Manheim................................................................................11 Manheim Portland..................................................Back Cover NextGear Capital...................................................................12 VAuto...................................................................................IBC

OFFICE

Oregon Independent Auto Dealers Association 9150 SW Pioneer Ct Ste. H Wilsonville, OR 97070 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 OIADA Dealer News is published monthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 6006-5203. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of OIADA Dealer News or NIADA. Likewise, the appearance of advertisers, or their identification as members of NIADA , does not constitute an endorsement of the products or services featured. Copyright © 2017 by NIADA Services, Inc. Inc.

STATE MAGAZINE MGR./SALES

Troy Graff • troy@niada.com EDITORS

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

Christopher Hanley • chris@niada.com PRINTING

Nieman Printing

ASSOCIATE MEMBERS ADVERTISING /MARKETING

Autotrader.com 866-836-1455 Used Cars.Com by Dealix 650-599-5616 Cars.com James Lynch 312-601-5052 Carsforsale.com Grant Lockner 605-306-3492 Interactive financial Marketing Group Travis Weisieder 804-248-0892 ATTORNEY

Byrd Cabrera LLP Robert (Scott) Byrd 310-365-1954 AUTO PARTS

AutoZone, Inc. Daniel Narvaez 971-218-2300 AutoZone Inc Ray Curry 503-964-9420 BOND & INSURANCE

Hecht & Hecht Insurance Agency Larry Hecht 503-542-1130 Shepard & Shepard Business Solutions Todd Shepard 1-855-396-0488 #8 Kelly Martin Insurance Agency Kelly Martin 503-625-2615

DEALER AUCTION

Manheim Seattle Auto Auction Ray Priest 206-762-1600 Manheim Portland Auto Auction Alex Fraser 503-286-3000 ADESA Seattle Auto Auction Mark Dumbler 253-735-1600 DAA Seattle Dave Blake 253-737-2200 United Vehicle Auctions Lori Jacoby 503-380-1927 ADESA Northwest Auto Auction Mark Melton 541-689-3901 ADESA Portland Auto Auction Jerry Hinton 503-492-9200 Crosspoint NW Dealer Auction Brian Hardy 503-594-2800 DAA Northwest (Dealers Auto Auction) Mitzi VanVoorhis 509-244-4500 CarMax Sean McDonald 804-747-0422 DEALER SOFTWARE

Frazer Computing Inc Jake Morley 888-963-5369 Motor Vehicle Software John Brueggeman 546-270-6699 FINANCING

Credit Acceptance John Bragg 360-980-2214

Lobel Financial David Lobel 714-816-1301 Oregon Auto Finance Gary Veum 541-868-0472 The Equitable Finance Co. Brandon Fox 503-808-7939 Pac West Credit LLC John Kiefer 541-868-2595 United Finance Todd May 503-238-6488 Oregon Community Credit Union Rich Black 541-681-6311 Nationwide Insurance Mark Tischer 503-339-4165 Credit Concepts Inc Jason Moon 541-342-8545 Veros Credit John Pierce 714-415-6125 x21131 Reliable Credit Associations David Marx 503-462-3022 Ted Investment LLC Tom Garza 503-213-1109 FLOORPLAN

Lobel Financial David Lobel 714-816-1301 NextGear Capital Robert Torbet 503-358-3911

OIADA BOARD OF DIRECTORS

INSIDE

Floorplan Xpress Josh Chandler 503-621-9260 Auto Cap Services (ACS) Michael Smith 800-800-6494 ONLINE REVIEW MANAGEMENT

Podium Kaylie Smart 801-376-0677

PUBLIC AUCTION

Woodburn Auto Auction Steve Morin 503-981-8185 Petersen Auction Group of Oregon Curt & Susan Davis 541-689-6824 SECURITY

Pro-Vigil Kris Brackin 210-858-1105 SERVICE CONTRACTS

AUL Corporation Jacqueline Swank 800-826-3207 Elite Warranty, Inc Al Ham 503-530-0912 Automotive Business Developers Shannon Meany 541-944-9186 Benchmark Dealer Services Jacob Bangert 360-834-3333 Protective Asset Dylan Doran 818-836-1455

PRESIDENT Siamak Lotfi

EXECUTIVE VICE PRESIDENT Jim Weaver

1ST VICE PRESIDENT Gary Brooks

SECRETARY/ TREASURER Salvador Alvarez Herrera Zamora Auto Sales

CHAIRMAN OF THE BOARD Gary Sargent

OIADA / October 2017

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MANAGEMENT GAMEPLAN

BY SCOTT BERGERON

DOES YOUR SALES PROCESS MEASURE UP? Time to Fine Tune

Are you fed up with your sales team? Your processes? If you’ve watched your salespeople get too comfortable and satisfied with their own performance, maybe it’s time to shake things up. And I’m not talking about sweeping house and starting over. One of the best salespeople I ever met was Jeff Barber. He’s now retired and living an awesome life, fishing and hunting in the Colorado Rockies. Jeff would always give me advice when I was working my way up, first as a green-pea, then in management. Jeff is a former drag racer. He said, “Selling cars is a lot like drag racing – everyone’s got an engine, and if they’re all built the same way, the one who does the best job of fine tuning his car will win. If you lose a race, you don’t tear apart the engine – you fine tune the obvious problems. “Besides, spark plugs are a lot cheaper than an engine rebuild. We all have the same opportunities in sales, but it’s the guys who work smarter and fine tune themselves and their daily routines who will win.” There’s huge danger in thinking you’ve got everything dialed in – especially when it comes to fundamental items in your dealership. For example, have you reviewed your contract and financing forms to make sure they’re easy to read, navigate and understand? Coasting along without conducting basic inspections of basic processes will lead to problems. Without this step, you’re likely letting profits walk out the front door – in many cases without even knowing it. Then, there’s the other side of the equation – where your processes are so bad everybody knows about it. United Airlines is an example. Their “established” policies led to a firestorm of public criticism and severely damaged their reputation when they dragged a bleeding passenger off a plane. Lack of knowing or lack of inspections will harm your dealership. In the long run, it could damage its reputation, which could take years to bring back to glory days. Here’s an example. One of the nation’s largest dealers recently sold me and my wife a car, but not without many hours of illegible paperwork, and frustrating old school 4-square processes that didn’t even pertain to my situation. If a customer brings in a 60 percent down payment of a free and clear trade, and the salesperson says, “They can’t calculate the payments unless you put cash down,” it can

OIADA / October 2017

be a little frustrating to say the least. And no, this wasn’t a green pea. It was an eight-year veteran, and yes the desk required a cash dollar down before they would work up figures, apparently to adhere to established policies. After this silly process, the paperwork was hard to read and looked like it had been copied repeatedly since 1993. Finance processes and slowdowns also can lead to hours of unproductive time for staff, not to mention the reputation it’s putting into your customer’s head. If it can happen in a big box store, it can happen anywhere. Here’s where and how to fine tune your sales engine without large amounts of cash or time investment. Who are you selling to? Whether business is good, decent, or falling off a cliff, look at where sales are or are not coming from. If your dealership has a loyal base of aging customers, you’d better start planning for the next generation of buyers – who have demands, expectations and values different from your older customer base. Ask around, talk to Millennials and find out what they want, what would bring them in the dealership, and what turnoffs exist. Many younger generation buyers don’t believe in the dealership model at all, so you’d better have your Internet department bulletproof, and start thinking outside the box. The dealership model is changing in many ways, and if we rely on “doing things as we’ve always done” you can find yourself kicked to the curb. In fact, there’s nothing wrong with a salesperson asking an UP, “What do you hate most about buying a car?” At least it isn’t the same old, “Can I help you?” It gives customers a chance to vent, and gives the salesperson an opportunity to show off why your store is different, and they’ve just found someone who listens. Salespeople and Performance First, look at your sales board and who’s selling the most cars and why. Then do the same with the bottom of the board. If you have good information, either from a CRM or a paper-based system, you can tell why the top guys are leading and the bottom guys are trailing. It usually stems from a “sales process glitch.” Your top guy who talks to 50 people is usually demo-ing at least 35 of them. What are your bottom guys demoing? How many are they writing up? Raw data on the basics can convey a lot you may have skipped over. Getting a handle on the basics gives you a place to start but it’s a long way from the finish line. For example, good sales performers always can be made better with improved prospecting, tracking and accountability techniques. Poor sales performers likewise can improve with these same steps. There’s always room for improvement. Factor in

THERE’S ALMOST NOTHING WORSE THAN HAVING A HAPPY CUSTOMER GO BAD BECAUSE OF BAD PAPERWORK OR A SLOW PROCESS DURING DELIVERY. the ideas, insights and idiosyncrasies of the up-and-coming customer base and address how to best handle different buying groups – the older, more established and loyal crowd and the younger generation. Finance and Delivery Processes and Procedures There’s almost nothing worse than having a happy customer go bad because of bad paperwork or a slow process during delivery. This is what happened to me at the big box store with my wife. Frankly, I was amazed. Given this dealership’s size, the last thing I expected was hardcopy paperwork where type was illegible and agreements were poorly written. Obviously, I wasn’t alone in this situation. Most people usually don’t wait for the question about what they hate about a dealership experience. Most will tell us without asking – they hate that the process takes so long, even when they do most of the homework ahead of time online. It leaves me asking the following question: How many people will not return, or show consistent loyalty, to a dealership because their last impression was unfavorable? Today’s sale is a chance to do one of two things: Solidify a long term customer, or make them wonder why your dealership isn’t keeping up with the times. 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 Book,” cloud-based CRM, and direct consulting have been used in thousands of dealerships throughout the United States. Bergeron can be reached at 303.918.3169 or scott@dailygameplan.com.

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SALES MATTERS

BY JOHN CHAPIN

CLIENTS FOR LIFE From First Sale to Long-Term Relationship

I’ve had a lot of people ask me about client retention. It’s something I’ve been very successful at over the years. Here are the steps I recommend to navigate from the initial sale all the way through the entire long-term relationship. Step 1: Verbally thank the client for his business when you close the sale. Step 2: Review expectations and what will happen next. Whatever your particular steps are, go over these steps with the client and let him know how and when he will be kept up to date. Step 3: Ask the client if he has any final questions, thank him once again for his business, and reiterate when he will next hear from you or someone from your company. Step 4: Send a handwritten thank you note the day you get the order. Sign the thank you note in blue ink and include your business card. Note: Depending upon the size and significance of an order, it may be appropriate to thank a client with more than a thank you note. You may also do this for more than just the initial order. Here are some various ways to do that: • Small gifts: golf balls, nice pens, cups, etc. • Gift certificates. • A gift to one of his favorite charities. • An investment in client’s business or something else they are involved in. • Vacations or trips to trade shows and other industry events. Step 5: Introduce other team members they might be working with. Step 6: Follow up and deliver what you say you’ll deliver. At a minimum you must deliver what you say you will, when you say you will. Ideally you’ll deliver more than you say you will. Always try to give something extra. Step 7: Call or stop by in person before, during, and after initial delivery of the product or service. It’s particularly important in the beginning of the relationship to communicate often. This may feel like micromanaging and it is. You have to ensure everyone does what they’re supposed to do

OIADA / October 2017

and everything goes smoothly on this initial sale. It’s best to follow a checklist. Step 8: Survey the client on how you did. Do this step in person or on the phone. What did you do well and what could have been done better? Next, shift your focus to building a lifelong relationship. Step 9: Reach out 18 to 26 times per year. Reach out in a variety of ways: phone calls, emails, regular mail, in-person visits, FedEx, etc. Three contacts: Send out a holiday, birthday, and anniversary card. In addition to sending out holiday cards, you can send gift baskets, bottles of wine, champagne, and other items to your best clients. Also, Thanksgiving and New Year’s Cards stand out because few people send them. Here are some other ways to reach out to clients 18-26 times: • Send cards for promotions, new babies, and other celebratory events. • Send get well cards. • Visit clients in the hospital. • Send items pertaining to their interests and hobbies such as books and T-shirts. • Act on personal information about your clients’ family members and send out notes to acknowledge graduations and similar events. • Get your clients on the mailing list for company publications. • Develop your own newsletter or monthly article and send it out to your clients. • Attend events sponsored by clients. • Do business with your client and send them business if possible. • Send copies of industry articles that may affect their business or simply be of interest. • Send a good business book or resource. Note: You are an expert. You are expected to be learning, reading, and passing applicable and valuable information on to your clients and prospects. • Send information out on new products. • Send promotional items. • Donate money to their favorite charities or events they sponsor. • Drop by with baseball tickets. • Take clients to lunch, dinner, other sporting events, shows, or out to play golf or some other activity. • Connect them with other companies, other people they’d like to meet, and other professionals such as lawyers, CPAs, insurance agents, realtors, and vendors. • Send them potential new employees. • Connect on social media. (Use discretion and your best judgment here.) Step 10: Practice these overall

client rules: • Always make the client your number one priority. • Keep communicating. Focus on good, solid communication. • Personalize the relationship and always seek to build and strengthen it. • Let clients know you appreciate their business and you don’t take them for granted. • Focus completely on the client and how you can help. Always do what’s best for them. • Stay on your toes and do what you say you’ll do. • Go above and beyond. Deliver more than you say you will. Note: You don’t need to follow this plan with all your accounts, only with the clients you want to keep. Most likely these are your largest clients. If you follow the 80/20 Rule, you will be doing this with your top 20 percent of accounts that give you 80 percent of your business. If you care about your clients, treat them right, build strong relationships, and keep them happy. You will rarely have to worry about having enough business. Not only will they stay with you, they will also refer business associates, friends, and family. In addition, if you’re working with happy, lifelong clients all day, your work and life will be much more enjoyable. JOHN CHAPIN is a sales and motivational speaker and trainer. He has over 27 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. For more information, visit www.completeselling.com or email johnchapin@completeselling.com.

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MARKETING MATTERS

BY KATIE BARTH

ADVERTISING SMARTER Focusing Ad Spend Where It Counts

2016 was a record year for the automotive industry. After a year of great sales, many dealers are left with a big question: what’s next? We all know the importance of digital advertising, but many spent 2016 just checking the boxes of search, display, and social advertising. The true test comes from a potential customer’s simple search. Is your dealership showing up when they’re looking for you? Advertising successfully online starts with strategy. Far too often we hear things like, “My budget is too small,” “We don’t see much ROI with our ads,” or “We’re competing against a huge dealership down the street – our budget doesn’t allow us to keep up.” Sure, budgets are important, but how you spend them makes all the difference. Advertise the Cars that Need it Sounds simple, right? When it comes to execution, many find it difficult. Think about the vehicles on your lot right now. How many have been there 60 days or more? Which ones are you advertising? Why

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did you pick that vehicle over the one you’ve had for two weeks with little engagement? What about the hottest car of the season that’s getting all of the page views? All inventory is not created equally. Focus your spend on the cars that need the boost. Do you have 10 silver sedans on your lot? Spotlight those over the hot rod you’ve had for three days. The hot rod will inevitably sell itself. Focus on the vehicles that need the boost and you’ll see big results. Strategy in Media Buying The average car shopper spends 75 percent of their product search time on the Internet. Google, Bing, Facebook, Instagram, YouTube, Waze, and the list goes on and on! Successful spending – and advertising – lies in the ability to determine which platform is the most relevant for your target audience and the vehicle you’re advertising. Is your zip code a heavy-traffic area? Hit the customers looking for a route around the traffic with Waze. Wanting to boost your fixed operations sales? Serve an ad for a discounted oil change to the DIYers searching for oil change how-to’s on YouTube. Focus on the Customer Now that you’ve determined what and where to advertise, it’s time to focus on the customer. It wouldn’t make sense to serve

an ad for a sports car to a mom of three watching YouTube videos for installing car seats, but often the focus is more on getting the ad out there than strategy in who the ad is being shown to. Connect the dots between your stocking and advertising, and make sure you’re hitting the right audience with the right message. Instead of worrying about how many zeroes are in your budget, focus your efforts on your strategy. Everyone is checking the boxes of digital advertising, but very few are focused on the details. If your focus is where it should be – the right inventory, the right place, and the right customer – even the smallest dealerships can compete with the large stores for the sale. Set your dealership up for success with strategy! KATIE BARTH is the senior marketing manager at PureCars.

October 2017 / OIADA

WASHINGTON UPDATE

BY SHAUN PETERSEN

NIADA GOVERNMENT UPDATE Latest Government Issues and Activity

NIADA is your voice in Washington D.C., advocating for independent dealers, the used vehicle industry and small business. Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities. PAC The featured speaker at NIADA-PAC’s upcoming event will be the Speaker. Paul Ryan (R-Wis.), Speaker of the U.S. House of Representatives, will be the highlight of a business roundtable discussion hosted by the NIADA’s political action committee on Oct. 17. Ryan will discuss issues related to business and the used vehicle industry with industry leaders in an informal setting.

on the Senate Committee on Commerce, Science and Transportation – recently sent a letter of inquiry to several Buy Here-Pay Here dealers and subprime finance companies across the country. While Sen. Nelson acknowledged what we in the industry have been pointing out for years – the use of the devices allows creditors to extend more credit on better terms for better vehicles to customers who otherwise might not qualify for those terms – his letter expressed concerns of consumer advocates about data privacy and safety. Nelson cited unsubstantiated claims from consumers who said their vehicles were shut off while they were driving. He also attempted to link the use of the devices and an alleged rise in subprime auto loan delinquencies to the 2008 mortgage crisis. In response, I traveled to Washington D.C. with NIADA ucti legislative committee and BHPH commission member Mike Brill to meet with the senator’s staff. We spent an hour educating the staff about the use of the devices in BHPH

Rep. Steve Stivers (fourth from left) was joined at his fundraiser by (left to right) Shaun Petersen, Steve Jordan, Columbus Fair Auto Auction owner Alexis Jacobs, David Andrews and Andrew Gabler. For more information about the event and how to attend, contact me at 1-800682-3837 or shaun@niada.com. On Aug. 23, NIADA CEO Steve Jordan and I, along with NIADA president David Andrews and president-elect Andrew Gabler, attended a fundraising event for Rep. Steve Stivers (R-Ohio) at Columbus Fair Auto Auction in Columbus, Ohio, and presented Rep. Stivers with a contribution of $4,995 from the NIADA-PAC fund. Stivers serves on the House Financial Services Committee and is a member of the Congressional Automotive Caucus. He has been a proponent of policies to strengthen small business and was a featured speaker at NIADA’s 2014 National Leadership Conference and Legislative Summit. LEGISLATIVE Payment assurance devices have attracted attention on Capitol Hill. Sen. Bill Nelson (D-Fla.) – the ranking Democrat

OIADA / October 2017

dealerships and their related finance companies. We explained the devices are a tool for dealers and finance companies to communicate with customers to assist in account servicing, rather than immediately repossessing a vehicle. We assured them it is not possible for payment assurance devices to shut off vehicles while they are in operation because the devices are not connected to the engine. NIADA will continue to monitor the situation. REGULATORY Near the end of the Obama administration, the Department of Labor issued a rule that would have significantly changed the salary threshold for white-collar employees to be exempt from overtime compensation, raising it from $23,660 annually ($455 per week) to $47,476 ($913 per week). But in November, just before the Dec.

1 date when it was supposed to take effect, a federal judge in Texas issued a temporary injunction against the effective date of the rule. After hearing arguments in the case, Judge Amos Mazzant permanently struck down the rule on Aug. 31, saying the government had overstepped its authority. And last month, the Department of Justice asked the court to dismiss its pending appeal of the judge’s temporary restraining order. Just before the judge’s ruling, the Department of Labor published a new request for information asking for feedback on questions defining the duties and appropriate salary level one must have before being exempted from overtime, including whether nondiscretionary bonuses and incentive payments should be considered a portion of the salary. One of the issues from the struckdown rule being examined by the request is whether that salary level should be automatically updated. NIADA is reviewing the request and will submit appropriate comments. GRASS ROOTS New York Attorney General Eric Schneiderman, who has targeted dozens of car dealers with allegations of regulatory violations over the past year, has put another dealership in his crosshairs. In August, Schneiderman announced a $298,000 settlement with Nissan of New Rochelle for deceptively charging 298 consumers for what he called an “unwanted and bogus anti-theft product that cost up to thousands of dollars per consumer.” The cost of the product – a windowetch program that included a “Total Loss Protection” benefit – was tacked on after customers had agreed to a price for the vehicle and often without their knowledge or consent, Schneiderman said. In addition to refunding the cost of the product, which ranged from $215 to more than $5,000 per vehicle, the dealership agreed to pay the state $22,084 in penalties, fees and costs. It also agreed to fully disclose that any and all after-sale services or products are optional and that the price is negotiable, to clearly explain after-sale services or products being offered to customers, and to only add an after-sale service or product to the final bill with the knowledge and full consent of the consumer. SHAUN PETERSEN is NIADA’s senior vice president of legal and government affairs.

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MANAGEMENT MATTERS

BY DALE POLLAK

4 MISUNDERSTANDINGS ABOUT PRICE Could Impede Your Sales Velocity and Profitability Old beliefs and habits definitely die hard. Take the way many dealers still think about their vehicle prices, for example. Dealers control vehicle prices. I’m not talking about the obvious point that dealers do, in fact, largely set the asking prices for their vehicles. My point relates to the ever-more powerful influence the market has on a dealer’s latitude to price vehicles the way they really want to. Some dealers have let this one go entirely. They’ll price their vehicles based on what the market data tells them – no more, no less. They recognize they can’t control or make the market for a vehicle. They understand the market dictates if the car’s a winner or loser, or lies somewhere in between, and they should price accordingly. A higher price is a better price. Some dealers still believe higher prices lead to higher front-end gross profits. This belief used to be true, before the Internet and pricing transparency gave the market more influence on vehicle prices. Back then, dealers could set their retail asking price as high as they wanted, and negotiate to keep every last bit of gross profit from a customer. Unfortunately, it doesn’t work that way as much or as well today. Vehicle buyers hunt hard for a fair price, and don’t respond well to dealers with vehicles priced 10 to 20 percent higher – or more – than the same or similar cars in their markets for no apparent reason. Price and age aren’t related. This thinking isn’t as prevalent as it used to be in used vehicles. Generally, dealers recognize the longer a used vehicle sits in inventory, the less money it makes, due to depreciation, competing units and opportunity costs. As a result, many dealers make the effort to adjust prices as vehicles age to facilitate a timely retail exit. But these same dealers often do not apply the time-is-money principle in new vehicles. The prices these dealers place on new vehicles on Day 1

OIADA / October 2017

often don’t change for months. Other dealers, however, have recognized that age- and marketrelated adjustments result in faster retail sales, which affords them the right to earn additional inventory from their factory partners. When you re-price, you lower your price. Dealers affirm the vast majority of re-pricing decisions result in a lower price. But the most market-astute dealers know this isn’t always true. That’s why they assess each vehicle’s online performance. They ask these and other questions: Is the vehicle’s online listing getting a sufficient number of Vehicle Details Page views? Is the online activity increasing or on the wane? Are there more or fewer competing cars in the current market? How do the prices and Market Days Supply metrics on these cars compare with mine? Most of the time, the answers lead to price reductions. But there are times where dealers are well-justified to raise a vehicle price, or hold off on a price reduction, because their vehicle stands taller in the market than others. I’m sharing these misunderstandings because I’ve seen, time and time again, how they impede a dealer’s ability to fully maximize vehicle sales velocity and profitability. In today’s market, margins are too thin, and time is too precious, to allow these common misunderstandings about vehicle prices to get in the way of tomorrow’s retail sales. DALE POLLAK is the founder of vAuto and an executive with Cox Automotive. This column ran on his blog on June 19. For this story and all his posts, visit www.dalepollak.com.

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ACCELERATE

BY GWC WARRANTY

TIPS TO SECURE VEHICLE SERVICE CONTRACT FINANCING How to Convince and Reassure Lenders

If you’ve heard it once, you’ve heard it a million times: “There’s no room on this deal for a vehicle service contract.” It’s a struggle so many dealers face when trying to secure the funding for not just the vehicle sale but also back end F&I products. But there’s no need to fret. Knowing some tricks of the trade can help you convince lenders of the value of a vehicle service contract while also reassuring them that including one on the deal won’t diminish their chances of receiving regular payments. Ask multiple times. Sometimes, all it takes to get a lender on board with funding a service contract is to ask again. If the initial reaction is a “no,” you can remind your lender why a service

contract is beneficial to them and ask again if it’s possible to find a touch more for the back end. Show a Certified checklist. A lender’s primary concern is ensuring they continue to get paid. Nothing can stop that more quickly than a broken down vehicle. Don’t be afraid to show a hesitant lender the checklist from your Certified program to help get them over the edge and on board with a service contract on the deal. It will demonstrate the effort you put into reconditioning and make the lender more comfortable with the quality of the vehicle. Provide protection from delinquencies. Like you and your lender know, a broken down vehicle usually leads to a broken down loan. And what better way to keep a vehicle on the road than a service contract that protects customers from budgetbusting repair bills. Remind your lenders of this fact when attempting to secure back end funding. Stress the importance of protecting subprime customers. One objection you might hear is a customer’s credit score is preventing you from securing additional funding. In this case, you can reference the tight monthly budgets of many subprime customers

as further evidence a service contract is needed. It’s assurance that an already tight budget won’t get tighter because of an unexpected repair, hence keeping the payments rolling into your lender. Build a great relationship. The more you and your lender work together and succeed on deals with a service contract, the more confident you will get with each other. And the more confident you are with each other, the better the prospects for a prosperous and profitable future together. Highlight for your lenders that making a deal work today could lead to many more deals down the road.

INDUSTRY WATCH

SUCCESSION PLANNING REMAINS A CHALLENGE FOR DEALERSHIPS National Survey Results

Results from the National Alliance of Auto Dealer Advisors’ first nationwide succession planning survey reveal succession planning remains a challenge for auto dealerships. Nearly one-third of the dealerships surveyed indicate they do not have a succession plan in place. More than 285 dealership owners nationwide were represented in this study, and nearly 80 percent of the respondents were owners. The number one inhibitor for succession planning was listed as timing and the current owner’s willingness to step back. Faced with unique challenges, dealers are pushing off succession planning by more than five years. While nearly 50 percent of the dealerships surveyed

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recognize succession planning is important, they also admit they haven’t dealt with it yet. For those that have a plan in place, 79 percent are looking at internal transition. “Different from other studies you may find in the market, this succession planning survey focused on the state of mind of the owners responding, rather than some of the hard metrics on the number of retiring dealership owners,” said NAADA president Steve Hewitt. The full findings will be released in the coming months as part of a succession planning series. The articles will offer solutions to the challenges disclosed in the survey. For more information, visit www. autodealeradvisors.com/2016-dealershipsuccession-survey-results/. NAADA is a nationwide network of accounting firms that specialize in working with auto dealers and their ownership teams. Collectively they represent more than 1,000 dealerships throughout the country from single point stores to multistate enterprises. To learn more about NAADA, please call 609-890-0800 or visit autodealeradvisors.com.

October 2017 / OIADA

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2017 OIADA ANNUAL CONVENTION MONARCH HOTEL

“Does Your Sales Process Measure Up?” True/False: Finance processes and slowdowns can lead to hours of unproductive time for staff, not to mention the reputation it’s putting into your customer’s head.

One Day Only, Packed with Education, Tradeshow and Quality Dealer/Benefit Banquet Saturday, October 21

True/False: Today’s sale is a chance to do one of two things: Solidify a long term customer, or make them wonder why your dealership isn’t keeping up with the times.

Check-in at 8:00 a.m., Hosted Cocktails at 4:30 p.m.

“Clients for Life” Which of the following is a client rule you should follow? a) Focus on good, solid communication. b) Let clients know you appreciate their business. c) Personalize the relationship. d) Stay on your toes and do what you say you’ll do. e) All of the above. “4 Misunderstandings about Price” True/False: Higher prices lead to higher front-end gross profits. Which of the following is an accurate understanding of price in today’s market? a) When you re-price, you lower your price. b) Price and age aren’t related. c) The longer a vehicle sits in inventory, the less money it makes. “Tips to Secure Vehicle Service Contract Financing” True/False: A service contract that protects customers from budgetbusting repair bills is a great way to keep a vehicle on the road. True/False: A lender’s primary concern is ensuring they continue to get paid.

• Dealers will receive up to 6 hours of education credits. • All meals included in registration: breakfast, banquet lunch, and hosted cocktail hour. • Hear from DMV Investigator Robb McCracken. • NIADA speaker Marshall Zoerner: Salesmanship 101, Hiring and Training. • Learn how to deal with the recalls, credit ratings, bad debt and much, much more. • Learn from our sponsors, vendors and speakers. • Trade show will host a variety of industry products and represent top vendors. • Annual OIADA Quality Dealer of the Year Awards Banquet Lunch. • All the above for “One Low Price.” • Contact OIADA about requirements and applying for Quality Dealer of the Year. Registration $95 for the first attendee, $75 for additional members. For non-member dealers $150 for first registrant. $85 for each additional. Dealership Name__________________________ Dealer #___________ 1st Registrant Name _______________________ Registration $_______ 2nd Registrant Name _______________________Registration $_______ Additional Names ____________________________________________

I certify to OIADA that I have personally read these articles in The Oregon Dealer News Magazine for October 2017. 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 ____________________________________________________________

Total amount due $ _________________

____________________________________________________________________

Form of payment CK______ Cash _______

Dealership Name ______________________________________________________

CC# _______________________________ Ex-Date _________ Code ______

Dealership # __________________________________________________________

Address ________________________________________________________

Dealer License Expiration Date: (Month)_____________________________________

Registration $_______

Email address ___________________________

Phone # __________________________

(Year)________________ Signed: _________________________________________ Date _________________________________________________________________

OIADA, 9150 SW Pioneer Ct Ste H, Wilsonville OR 503-362-6839

FAX TO: 503-364-7331 MAIL TO OIADA at 9150 SW Pioneer Ct Ste H, Wilsonville, OR 97070

OIADA / October 2017

dsparks@oiada.com Fax 503-364-7331