DEALER
NEWS
THE OFFICIAL MAGAZINE OF OREGON IADA DECEMBER 2019
REPRESENTING ALL AUTO, TRUCK, TRAILER, RV AND
POWER SPORT DEALERS OF OREGON
HIRE DON’T DRIVE YOURSELF CRAZY
page 06
CORRECTLY
!
DALLAS, TEXAS Permit No. 2079
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WWW.OIADA.COM DECEMBER 2019 OIADA 1
ASSOCIATE MEMBERS ADVERTISING/ MARKETING
Index
05...............................NIADA Government Report 06.................................TCPA and Text Messaging 07....................It’s Time to Take Time for Training 10............Foundation for Top Sales Achievement 12.................................OIADA Annual Conference 13..................... Enhancing Customer Experience
Advertiser’s Index
DAA Northwest/Seattle...................................IFC Lobel Financial.................................................... 3 Manheim ............................................................. 11 NextGear .............................................Capital 8-9 vAuto................................................................ IBC
DEALER AUCTION
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 BOND & INSURANCE
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 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 Cathy Edoleman 804-747-0422
Frazer Computing Inc Jake Morley 888-963-5369 Motor Vehicle Software John Brueggeman 546-270-6699
DEALER SOFTWARE
Reliable Credit Associations David Marx 503-462-3022 Ted Investment LLC Tom Garza 503-213-1109
FINANCING
FLOORPLAN
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 NW 678-735-0341 Credit Concepts Inc Jason Moon 541-342-8545 Veros Credit John Pierce 714-415-6125 x21131
Lobel Financial David Lobel 714-816-1301 NextGear Capital Robert Torbet 503-358-3911 Floorplan Xpress Josh Chandler 503-621-9260 Auto Cap Services (ACS) Michael Smith 800-800-6494 PUBLIC AUCTION
Woodburn Auto Auction Steve Morin 503-981-8185 Petersen Auction Group of Oregon Curt & Susan Davis 541-689-6824 Insurance Auto Auctions, Inc. Austin Andrews 4415 NE 158th Ave Portland, OR 97230 503-253-1500
J Stout Auctions Jacob Stout 9635 N Columbia Blvd Portland, OR 97203 503-969-3461 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 Benchmark Dealer Services Jacob Bangert 360-834-3333 Protective Asset Dylan Doran 818-836-1455
F U E L S AV I N G S : Ta k e A d v a n t a g e o f Membership Benefits
Hecht & Hecht Insurance Agency Larry Hecht 503-542-1130 Shepard & Shepard Business Solutions Todd Shepard 1-855-396-0488 #8
Office
OIADA BOARD OF DIRECTORS
What’s New
Though colder winter temperatures can decrease your fuel economy, NIADA can still help you save money. Members across the country keep the number on the pump low with special fuel discounts that can save big. Access your fuel savings here: niada.savings4members.com/ programs/mySavings.spr.
Oregon Independent Auto Dealers Association 9150 SW Pioneer Ct Ste. H Wilsonville, OR 97070 800-447-0302
President Siamak Lotfi
1st Vice President Gary Brooks
Executive Vice President Jim Weaver
Secretary/ Treasurer Salvador Alvarez Herrera Zamora Auto Sales
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 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 © 2019 by NIADA Services, Inc.
STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITORS Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT Jeffrey McQuirk • jeffrey@niada.com PRINTING Nieman Printing
4 OIADA DECEMBER 2019 WWW.OIADA.COM
Chairman of the Board Gary Sargent
Join OIADA and Receive Thousands of Dollars in Discounts • $1,150 Auction Discounts • $100-150 in Forms Discounts • Free Continued Education Credits • Discounts on all Classroom Ed • Up to $16,000 with NIADA Discounts Call OIADA at 503-362-6839 or go to OIADA.com and click on Membership Application.
LEADERSHIP |
By Dave Anderson
GET ACCREDITED!
How to Build Killer Instinct and Mental Toughness ACCREDITED is an acronym presenting 10 key traits that help build killer instinct and mental toughness. These traits are both different and essential. Opening Thoughts on Killer Instinct and Mental Toughness Killer instinct is defined as an aggressive, tenacious urge to dominate in order to reach a goal or overcome a struggle. In essence, killer instinct is “drive” on steroids. Whereas drive indicates an “urge,” killer instinct raises the stakes and puts you on the attack with an aggressive, unrelenting approach to your most important goals. Mental toughness is defined as a measure of confidence and resilience predictive of success in education, athletics, or the workplace. Mental toughness gives you the persistence, and mental and physical energy, to fight for your goals until you get them. Think of it this way: Where killer instinct gets you started, mental toughness helps you finish. It’s common to see people with killer instinct who lack mental toughness. They get excited about a new challenge or goal – in business, a workout program, a diet, etc. – but when the struggles start or disappointments arise, they don’t have the mental toughness to power through to success. On the other hand, some people lack strong killer instinct and essentially require a near-kick-in-the-rear to get them out of the gates, but once they get onto something they stick with it until completion because they’ve built the confidence and resilience to fight to the finish. Intentionally working on the following ACCREDITED traits will consistently and incrementally build killer instinct and mental toughness to entirely new levels. But it’s the “intentional” part that stops most people short of their potential. Intentional means “on purpose.” In today’s age of instant gratification, fewer and fewer are willing to follow purposeful processes long enough to make a significant impact on their growth. Recall the definition of killer instinct – “an aggressive urge to dominate in order to reach a goal or overcome a struggle.” For the right perspective in understanding the importance of intentionality, let me define the context I’ve found is the most effective interpretation of that definition: your primary goal is to dominate your former self, not someone else. This is what you can control, and this is what’s most relevant. What are the odds of consistently dominating others if you haven’t yet mastered yourself? The crux of developing killer instinct and mental toughness is to be better today in
MENTAL TOUGHNESS IS DEFINED AS A MEASURE OF CONFIDENCE AND RESILIENCE PREDICTIVE OF SUCCESS IN EDUCATION, ATHLETICS, OR THE WORKPLACE. MENTAL TOUGHNESS GIVES YOU THE PERSISTENCE, AND MENTAL AND PHYSICAL ENERGY, TO FIGHT FOR YOUR GOALS UNTIL YOU GET THEM. these 10 areas than you were yesterday, and to repeat again tomorrow, the next day, and until the day your time on this earth expires. The ACCREDITED Traits • Attitude. Without the right outlook on life in general – or concerning struggles, successes, and defeats – killer instinct remains dormant and mental toughness is underdeveloped. • Competitiveness. Competitiveness is a desire to dominate in the quest to obtain a goal others are also vying for. The key to competitiveness is to first and foremost seek to dominate your former self. It can’t be considered as progress or growth if you “beat” others but are stagnant or in decline. • Character. Character is about the development of a moral and ethical code that protects your talent and builds your success on a sustainable foundation. Strong and weak character alike are developed over time, one decision at a time. • Rigor. This trait embodies having a well-structured, highly effective daily routine that prioritizes what matters most, and minimizes time with – or ignores altogether – the people, activities, and thoughts that make it more difficult to reach your goals. • Effort. Effort is about bringing game changing work ethic to whatever you do – doing more than is required, and more than what makes you comfortable; doing all you possibly can regardless of whether you feel like it. • Discipline. Discipline is only possible when you limit your options, when you narrow your focus to the essential activities you must execute with excellence daily to reach your goals. To develop discipline there are certain conversations, excuses, habits, activities, and more that you no longer give yourself the option to engage in.
• Intelligence. This key trait involves an ability to acquire and apply skills and knowledge. Most people do far better with the acquiring aspect than the application, but killer instinct is leveraged and mental toughness is built or weakened depending upon your success in consistently executing what you learn, and doing what you know you’re supposed to do. • Tenacity. This trait is a persistence fueled by ferociousness. Not only do you persist, you do so without losing enthusiasm or passion but with renewed determination when things don’t go your way. • Energy. Energy involves the mental and physical stamina to sustain the key activities necessary to reach your goals. Many people start well (killer instinct) but fizzle out and never finish because they lack energy (a key aspect of mental toughness). • Drive. Drive is an innate, biologically determined urge to attain a goal or satisfy a need. Drive is where killer instinct starts. While drive involves an urge – a strong feeling – killer instinct demonstrates an aggressive and tenacious urge. You not only want something, but you want it bad enough to stop waiting for it or procrastinating, and take whatever action is necessary to bring it about. If you want to raise your leadership level by more intentionally working on these traits, take the ACCREDITED Course found in the Insider’s Club at learntolead.com. It’s a 70day course where you’ll intentionally work on one trait per week for 10 weeks. Along with an overview of the course, you’ll find 70 supporting video clips as well as a printable ACCREDITED Progress Diary to grade and track your daily progress. Enjoy the journey and get ACCREDITED! Dave Anderson, “Mr. Accountability,” is a leading international speaker on personal and corporate performance improvement. He is also the author of 14 books and host of the podcast,The Game Changer Life.
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MANAGEMENT MATTERS |
By John Chapin
HIRE CORRECTLY
Don’t Drive Yourself Crazy Holding Producers Accountable
!
It happened again last week: I was brought into an organization that did a poor job of hiring and had a bunch of salespeople who weren’t doing what they were supposed to be doing because they had a poor attitude, poor work ethic, or both. Some difficult conversations ensued and I was asked what could be done to make sure the salespeople were doing what they were supposed to be doing. Here is my answer. The most effective way to ensure people do their job is to hire correctly to begin with. If you hire the right people, you don’t have to hold their feet to the fire to get them to do what they’re supposed to be doing. If you hire people with the right attitude and work ethic, they will do the work. And while you do have to guide them and “trust but verify,” for the most part you can rely on them to do the job you hired them to do. If you hire people with either the wrong attitude or no work ethic, they’ll do as little as possible to fake people out that they’re working to stay on the payroll as long as possible. You’ll go crazy trying to hold them accountable but at the end of the day you’ll be worn out, they still won’t be doing the job, and you’ll have to let them go after spending a bunch of time, effort, and energy, not to mention money. So, step one is hire correctly. If you want me to send you my Rules for Hiring, just email me and I’ll be happy to do so. Next, reward your workers and punish your non-workers. Give people doing the right things plenty of praise. Also, reward them with gifts, bonuses, and other items that will motivate them. Use the stick with the people who don’t do what they’re supposed to be doing. On a related note, if you’re an
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organization that requires salespeople to do call reports to ensure they are making enough calls, stop doing this with your good people. If someone is doing lots of good, clean business, and it’s obvious they’re doing what they’re supposed to be doing, don’t punish them by adding this task. It takes valuable selling time away from them. On the other hand, if you have people who aren’t making the sales and you know aren’t making the calls, then force them to document who they’re calling. Have them include the company name, name of the person, and contact information, phone number and, if possible, email. Then check up on them. You do this two ways: by calling the contacts and by going on the road with these salespeople. One of my favorite techniques is to call them during the day, ask where they are and where they are headed to and say, “Great, I’ll meet you at your next stop.” When it becomes clear they aren’t making the calls, which you already know, it’s time to either let them go immediately or give them one final ultimatum. By the way, the latter usually doesn’t work for long, if at all. That said, you will probably know within a week or two whether you made a good hire. I discover this very quickly when I start working with a new organization. One of the first things I do is to ask each of the salespeople to give me the number of new business calls they’re willing to commit to on a weekly basis. I do this before I meet with them in person. The salespeople with the right attitude and work ethic are usually realistic or high on their number. Also, they are usually already making that number of calls, or, if they aren’t, they immediately start making that number of calls. In other words, they
don’t wait for me to tell them during our first in-person meeting. The bad hires either say they are too busy to make new business calls, give me a low number, or give me a number they think I want to hear, even though they have no intention of making the calls. In addition, they always wait until the in-person meeting to start making calls as opposed to proactively making the calls as soon as they commit. The bottom line is if you hire correctly, your people will require very little accountability and hand-holding, but if you hire incorrectly, you’ll have to do massive amounts of accountability and even then, you still won’t end up with the results you want. Important note: I find executives with a background in sales usually do a poor job of hiring salespeople. Most of them see the best in people and are designed to connect with and get along with people. This can be a detriment when hiring. You only see what people are really like when you move them out of the relatively comfortable interview seat and put them through a rigorous, well-thought-out hiring process. Most salespeople are great interviewers, especially the ones that go on lots of interviews because they jump from job to job. If you don’t ask difficult questions, put any heat on them, or have any real hurdles in your hiring process, anyone is going to look good. You’ve got to test people and see how they respond and react. John Chapin is a sales and motivational speaker and trainer. He has over 31 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.
ACCELERATE |
By GWC Warranty
INVENTORY SELECTION
Trust the Data
When it comes to acquiring the right inventory for your lot, it’s easy to go with your gut and buy a car based on your experience and savvy. But what if your general industry acumen could be augmented by data and information that will help you find cars that can fly off the lot just as quickly as you get them there? To find out if you are seeking out the right inventory for your lot, you have to be able to look in the mirror and answer a few questions honestly. If you can do that, your acquisition strategy can go from trusting your instincts to trusting the numbers.
What has sold in the past? If you can go back into your books and find makes and models that have sold particularly quickly, you might just find a few surprises. Your customers might tell you they want more trucks and SUVs, but the data show that economy cars or luxury sedans move more often. You want to buy what your customers tell you they want, but your bottom line could benefit by buying vehicles you know will move quickly. Have you ever bought a car for you? Here’s where you really need to be honest with yourself. We’re not talking about getting
a car at auction for you to own yourself. Rather, we’re talking about a vehicle you bought because it appealed to your tastes. This is an instance where your gut tells you that you’re buying a great car – and you very well may be – but are you buying a car that will sell quickly? It’s imperative you resist the urge to bid on a car just because it’s a car you’d like to see front and center on your lot. Are you looking in the right places? We’re all creatures of habit. We know the auctions we like – we’ve had success at them in the past and we don’t see a reason to change. However, today’s automotive industry is ripe with vehicles you can find at the right price. Have you checked online auctions? What about competitors that have trouble selling a vehicle that’s in your sweet spot? How about giving a shot to that auction a couple hours away you’ve heard so much about? Trying a new source for your inventory could be just what you need to find more of the right cars at just the right prices. Once you’re able to take a hard look in the mirror before heading out to the auction and answer these three questions, you’ll be well on the road to moving metal at a faster pace than you’ve ever seen before.
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ASSOCIATION NEWS
2020 FOR OIADA
Making Great Changes and Exciting Moves
Oregon dealers, you are going to see some outstanding changes for OIADA in 2020. First, we will be taking our Dealer News in house. We will be able to provide you state and local updates quicker, offer our local vendors a more affordable opportunity to advertise to our state dealers, and offer easier ways to get your CE credits. We will be sending out e-news bulletins regularly, just so we can keep our OIADA member dealers informed. We are redesigning our webpage, which will be more accessible and easier to navigate. It will be easier to register and pay online for classes, renewals and to purchase forms. Speaking of forms, we will be adding a
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greater number of items our dealers need to be successful, so keep an eye open for that. What we are really excited about is the new auction discount app for your phones – no more lost punch cards, no more cards going through the wash or just forgetting to use it. We will be able to get you updates on special sales as well as changes to an auction due to weather or holidays. Plus, we will be working on providing features for easier online purchases. In even better news, we are expanding the number of auctions and discounts. We will be growing to $1,500 to $2,000 in discounts, and maybe more. If you have any questions, please contact
your OIADA office at 503-362-6839 or info@ oiada.com. Your OIADA staff and board members wish you happy holidays and a greater year to come. Also, we just completed our 63rd Annual Convention and it was a huge success. The entire day of education was said to far exceed expectations. During the general membership meeting, it was resolved OIADA will be conducting more quarterly classes to keep our dealers informed. Watch Dealer News and check with our website at www.OIADA.com for more updates. Some classes may be limited for space so make sure you get on board.
ACCELERATE | By GWC Warranty
SELLING TO THE INFORMED CUSTOMER
Strategic Approach
Today, more than ever before, customers are walking through your doors with a plan and a price in mind. It’s a dangerous situation that can cut into your margins if you aren’t prepared to teach them something they don’t already know. So how do you combat this type of consumer approach when you’re priced competitively and you can’t sacrifice any more off your margins? Certify Your Lot Certified Pre-Owned programs aren’t just for franchise dealers, but you can thank them for the cachet behind the name. Explaining to your customers your price includes shortterm coverage from expensive repairs shows them you’re providing an assurance of a quality vehicle – something they can’t deny demands a higher-than-normal premium. Explain Reconditioning Continuing to build on the fact higher quality vehicles demand a higher price, you
can go into detail with your customers about the work you’ve done to get that vehicle ready for them. Showing you’ve inspected the vehicle for common problems with brakes or replaced tires and fixed cosmetic problems explains value no third-party website can account for. Back-End Products If a customer is surprised by a monthly payment that includes vehicle service contract coverage, you can explain how the tools they used to come up with a monthly payment don’t include the price of a service contract. If a customer sitting across from you is sensitive enough about a monthly budget to do all these calculations ahead of time, they’ll also be sensitive to what a major repair could do to that same monthly budget. Educating customers on the cost of common repairs and how damaging that can be to a tight budget will help demonstrate just how valuable that relatively minor added monthly cost for a VSC can be.
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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.
Sen. Chuck Schumer.
LEGISLATIVE “Cash for EVs”: Senate Minority Leader Chuck Schumer (D-N.Y.), has proposed a $454 billion plan that would include $392 billion in subsidies for drivers who swap their cars for “cleaner” vehicles. The plan, which would cost $454 billion over 10 years, would be similar to the controversial “cash for clunkers” program of 2009, offering rebates of $3,000 or more to consumers who trade in gas-powered cars eight or more years old for electric, plug-in hybrid or fuel-cell vehicles. The gas vehicles would then be scrapped. Schumer’s proposal also includes $45 billion in grants to upgrade the nation’s charging infrastructure and $17 billion in incentives to automakers to build or retool factories to produce zero-emission vehicles. Schumer said he plans to introduce legislation to enact his proposal if the Democrats win control of the Senate in the 2020 election. While a bill has not been written yet, NIADA is reviewing the proposal with key members of Congress. Mind Your Own Business Act: Sen. Ron Wyden (D-Ore.) has introduced legislation he said would create the strongest protections ever for consumers’ private data and would hold corporate executives accountable for abusing that information. Wyden said the Mind Your Own Business Act is aimed at preventing Facebook and other businesses from abusing sensitive information. It would give the Federal Trade Commission the authority to set strict new privacy and cybersecurity standards and impose severe penalties on companies – and their executives – that violate them. The bill would authorize the FTC to fine businesses up to 4 percent of their annual revenue for a first offense. Senior executives who knowingly lie to the FTC would face 10-20-year criminal penalties and their companies would be hit with tax penalties. It would also require companies to assess the algorithms that process consumer data to examine their impact on accuracy, fairness, bias, discrimination, privacy and security, and would give consumers the right to review the personal information a company has about them, find out with whom it has been shared
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or sold, and challenge any inaccuracies. The legislation would beef up enforcement by hiring additional FTC staff and empowering state attorneys general to enforce regulations created by the bill. In addition, each state would be able to designate one “protection and advocacy” organization that could file civil suits against companies that violate privacy regulations. NIADA is reviewing the bill and preparing an appropriate response. REGULATORY Department of Labor: More than five years after President Obama launched a push to update the regulations defining which whitecollar workers are exempt from overtime pay, DOL has announced its final rule. The new rule revises the earnings thresholds for executive, administrative and professional employees to be exempt from the Fair Labor Standards Act’s minimum wage and overtime pay requirements. Beginning Jan. 1, the exemption threshold will increase to $35,568 per year ($684 per week) from the previous level of $23,660 ($455 per week). Up to 10 percent of that amount can be satisfied by nondiscretionary bonuses or commissions. The new thresholds account for growth in employee earnings since the thresholds were last updated in 2004. Obama’s DOL proposed more than doubling the salary threshold and adding a mechanism to automatically update it annually, tying the threshold to a fixed percentile – likely 40 percent – of salaried wages. NIADA filed comments opposing that drastic increase, noting no data had been provided to support the increase or to suggest salaries had risen at a rate remotely comparable to the proposed threshold increase over that same time. Following litigation and the election of President Trump, the proposed rule was reworked and finalized. The new rule will make 1.3 million American workers newly eligible for overtime pay. Consumer Financial Protection Bureau: The CFPB announced the creation of a task force charged with finding ways to harmonize
and modernize federal consumer financial laws. The bureau said the task force will examine the current legal and regulatory environment facing consumers and financial services providers and make recommendations to CFPB director Kathy Kraninger about how to improve and strengthen consumer financial laws and regulations. The group’s assignment is to produce new research and legal analysis of those laws with a focus on updating consumer credit laws and the regulations that implement them, identifying areas that require additional research, finding ways to improve consumers’ understanding of markets and products, and pointing out potential conflicts or inconsistencies in existing regulations and guidance. Kraninger said the evaluation is necessary “to identify where there might be gaps or where regulation should be simplified or modernized.” NIADA will engage the task force and discuss any recommendations it makes. For more information, including an application to serve on the task force, visit www.consumerfinance.gov/about-us/ taskforce-federal-consumer-financial-law. Credit reporting workshop: The CFPB and FTC will hold a free public workshop Dec. 10 at the Constitution Center in Washington D.C., to discuss credit reports and employment and tenant background screening reports. The workshop’s goal is to bring together stakeholders – including industry representatives, consumer advocates and regulators – for a dialogue on the many issues impacting the accuracy of consumer reports. Topics will include non-traditional data in credit reports and credit scoring models, new technologies and data management practices, how consumers discover and dispute inaccuracies, identity theft and more. Comments on the issue may be submitted electronically until Jan. 10 at www.regulations. gov/docket?D=FTC-2019-0073. NIADA plans to file comments. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
ACCELERATE |
By GWC Warranty
FOCUS ON QUALITY OVER QUANTITY
Upsell and Improve Back-End Profits
Sometimes you aren’t able to sell more, so focus on selling something better. Let’s look at ways you can begin upselling more often and improving back-end profits even when your service contract penetration is right where you want it. Start the Conversation Early Advertising basic level coverage, like with a Certified Program, helps plant the seed early on and get customers on board with the principles behind service contract protection. Once customers are bought in on the ground floor, you have the foundation needed to get them to a higher level of coverage. PRODUCTS & SERVICES |
Stick With What Works Over and over, you hear mention of the menu approach and the 300 percent rule. Both are proven tactics that can be repeated in the F&I office for consistent success. Presenting good, better, best options and working your way down from the top coverage you offer is the best way to help customers see the value in richer coverage. And it’s important you do this every time without exception. Practice Makes Perfect Not just with the menu technique but also with overcoming objections, the more you practice, the more successful you’ll be. You
can schedule workshops with your team or work on your skills with on-demand online resources like virtual training to ensure you and your team stay sharp in these critical areas. Keep the End Result in Mind Better coverage means increased profits and happier customers. Don’t discount the longterm profit opportunities and repeat business that can come as a side effect to selling better coverage. When your customers are well protected and can avoid out-of-pocket repair bills, they’ll undoubtedly sing your praises to family, friends and on review sites across the web.
on Kelley Blue Book throughout the ownership experience for guidance on service and repair costs, all while experiencing the same trust and transparency they’ve come to expect from the brand.” According to the Cox Automotive Service Industry Study 2018, consumers have negative perceptions about getting their vehicle serviced at dealerships, citing unreasonable total cost, overcharging and labor or parts charges among top reasons for not using their dealership service department. In reality, that same study showed common maintenance and services and potentially steer those individuals to The service drive can be just as important provided by dealerships are on par from a dealerships, Kelley Blue Book’s all-new Auto to dealer profitability as vehicles rolling over pricing standpoint with independent offerings. Repair Guide includes: the curb. With that in mind, Kelley Blue Book Kelley Blue Book’s new Auto Repair Guide • I nformation on recalls, maintenance and launched a new tool to help keep those service also can make service appointment scheduling repair work. bays busy. easier. Owners can see the Fair Repair Range, • A Fair Repair Range estimator – similar to Kelley Blue Book’s new Auto Repair Guide select a service provider and book service the Kelley Blue Book Price Advisor tool – to experience addresses what the company says without leaving the site. Meanwhile, the guide consumers on service and repair are needs of both the consumer and automotive Featured Auto Repair Center can connect price ranges, based on average dealer industry for a principal source of “trustworthy” dealers with engaged car owners, increasing service pricing. recommendations related to servicing and consumer trust and confidence by validating • The ability to schedule service maintaining a vehicle. appointments with local dealerships directly their service pricing within the Kelley Blue Book The all-new experience on KBB.com can Fair Repair Range. on KBB.com through the Featured Auto guide consumers through three primary service “The complexities of how to maintain and Repair Center. categories: recalls, maintenance and repairs. repair a vehicle, as well as understanding the Kelley Blue Book can enable consumers and KBB.com can also allow consumers to schedule associated costs, are a major pain point for service online through the Featured Auto Repair dealers to remain on the same page for pricing and now in the service lanes with its integration most consumers,” said Tully Williams, fixed Center, a pilot with its sister company, Xtime. To point consumers in the right direction, the with Xtime, an integrated software platform for operations director of The Niello Company in Sacramento, Calif. retail automotive service departments. Auto Repair Guide on KBB.com helps vehicle “Not only has our dealership increased “Car shoppers have long trusted Kelley Blue owners answer their top service and repair questions such as “What do I need to get done?” Book to provide them with vehicle values, new- service cost transparency and communication car information and more,” Cox Automotive vice with our customers, but they also have an “When should I get it done?” “Where should I increased sense of trust from knowing they are president Jim Roche said. “With this new auto get it done?” and “How much should it cost?” being fairly charged for every service visit.” repair feature on KBB.com, now they can rely To help consumers answer those questions By Auto Remarketing Staff
NEW KBB TOOL FOR SERVICE SCHEDULING
Keep Those Service Bays Busy
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MANAGEMENT MATTERS | By Rex A. Collins CPA, CVA
MANAGEMENT SUCCESSION
Preparing for the Transition
It’s going to happen. At some point you will transition your dealership to another owner, whether it is one of your children, an employee or an outside buyer. Doing it right requires advanced planning and a multitude of considerations such as the financial security of the business, transfer of wealth, taxes, future business strategies, family values, and your long-term personal goals. Most of all, transitioning to a new set of leaders is critical to ensuring the ongoing success of the dealership. Managing leadership succession involves a number of difficult steps, including consensus building and assembling key parties into a succession planning team. Knowing when to start is one key to an orderly transition. The longer you wait to get your team together, the more difficult the initiative becomes and the more obstacles you will encounter in making the transition. At a minimum, an owner should start planning three to seven years in advance of selling or retiring. We recommend starting when the dealership demonstrates the ability to generate consistent profits and the current owner reaches age 50. Some of the usual starting considerations:
• Will your children be coming into the business? If so, how will each be involved? This will require educating children about the functions and conditions of the business and making sure everyone involved remains open to the evolution of, or changes in, the succession plan. • If no children are involved, how and when will a successor be determined? • Or should you simply sell the business and monetize your investment? Starting early is also important, as any succession plan should include a contingency plan addressing an untimely death, disability or other unexpected event. This also gives you time to build your succession team. Your team could include family members, employees, a banker, a member of your 20 group, and outside advisors. Regardless of the makeup of the team, it should exhibit four characteristics: trust, openness, realization and interdependence. A team with those qualities will be able to overcome what are bound to be multiple hurdles and challenges in negotiating the process toward a successful successor. A succession plan will address four phases of transition: • Initiation or point of entry: When succession planning begins.
• Selection and assessment: Choosing the leaders for the next generation based on accomplishment and dedication, which could involve psychological and other testing. • Education and training: Ensuring the successor has the skills and knowledge to continue a profitable operation. • Passing the baton: Transferring authority and accountability to successors. Some common issues to address: • How to encourage your children to think positively about a succession plan. • How to determine when children are mature enough to be considered as successors. • Who should succeed as dealeroperator or CEO? • When should the current dealer retire? • What are your options in terms of a prospective leader? • Should you sell the business to an external buyer? • A personal development plan for the successor dealing with “operational” skills – technical, financial, and organizational issues – and “essential” skills – the ability to communicate with staff and customers. • A leadership development plan, including creating a vision for the future of the business, commanding respect and being professional. • The transition process, including the changing roles of the current and succeeding dealer, their evolving job descriptions and who’s making key decisions at what points. • A plan to communicate the succession to your constituents, including family, company and community • The organizational succession plan, including how top management will be affected, the career paths of key managers, and the future participation of family members in the business. A successful management transition is not only key to ongoing profitability but to the legacy of the retiring owner. As famed management consultant Peter Drucker said, “The final test of greatness in a CEO is in how he chooses a successor and whether he can step aside and let the successor run the company.” Rex Collins is a principal at HBK CPAs and Consultants. He directs HBK’s National Dealership Industry Group, which provides tax, accounting, transactional and operational consulting exclusively to dealers. Rex can be reached at rcollins@hbkcpa. com or 317-504-7900.
WWW.OIADA.COM DECEMBER 2019 OIADA 13
OIADA CONTINUING EDUCATION PROGRAM
READ & RESPOND CERTIFY BELOW Complete this test and certify below that you have read the articles for December 2019.
“GET ACCREDITED!”
Which of the following is an “ACCREDITED” trait?
“SELLING TO THE INFORMED CUSTOMER”
Complete this test and certify below that you have read the articles for December 2019.
(a) Certify your lot. (b) Explain reconditioning. (c) Back-end products. (d) All of the above.
I certify to OIADA that I have personally read these articles in The Oregon Dealer News Magazine for December 2019. STOP!! Before you sign and send this form, make sure you have answered and completed all the quiz questions to receive Continued Education Credits.
How can you approach selling to the informed customer?
(a) Character. (b) Rigor. (c) Intelligence. (d) All of the above.
True/False: Discipline is only possible when you limit your options, when you narrow your focus to the essential activities you must execute with excellence daily to reach your goals.
“INVENTORY SELECTION”
What question(s) should you consider when seeking inventory? (a) What has sold in the past? (b) Have you ever bought a car for you? (c) Are you looking in the right places? (d) All of the above.
True/False: If a customer sitting across from you is sensitive enough about a monthly budget to do all these calculations ahead of time, they’ll also be sensitive to what a major repair could do to that same monthly budget.
“HIRE CORRECTLY”
True/False: If you hire the right people, you
don’t have to hold their feet to the fire to get them to do what they’re supposed to be doing.
How can you upsell more often and improve back-end profits? (a) Start the conversation early. (b) Stick with what works. (c) Keep the end result in mind. (d) All of the above.
____________________________________________
Dealer License Expiration Date: (Month)
opportunities and repeat business that can come as a side effect to selling better coverage.
to bid on a car just because it’s a car you’d like to see front and center on your lot.
Dealership Name _____________________________
Dealership # _________________________________
“FOCUS ON QUALITY OVER QUANTITY”
True/False: Don’t discount the long-term profit
True/False: It’s imperative you resist the urge
My Name ___________________________________
____________________________________________ (Year)_______________________________________ Signed: _____________________________________ Date _______________________________________
FAX TO: 503-364-7331 MAIL TO: OIADA at 9150 SW Pioneer Ct Ste H, Wilsonville, OR 97070
True/False: If you’re an organization that requires salespeople to do call reports to ensure they are making enough calls, you should stop doing this with your good people.
ASSO
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NEWS AT I O N
HE OY T OF J N E S IP EFIT B E NM B E R S H ME
14 OIADA DECEMBER 2019 WWW.OIADA.COM
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