Tennessee
Dealer Connect
J U N E / J U LY
Inside:
Overcome Used Car Stereotypes Acquire More Customers Newest Rules of Online Marketing Predictive Analytics
T E N N E S S E E I N D E P E N D E N T A U T O M O B I L E D E A L E R S A S S O C I AT I O N
REGULATORY COMPLIANCE STARTS WITH
DATA ACCURACY
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AUC T ION NE W S
Inside J U N E / J U L Y
ADESA Announces COO
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COINCIDES WITH NEW STRUCTURE
OVERCOME USED CAR STEREOTYPES
Move Forward with Basic Solutions | PAGE 06
ACQUIRE MORE CUSTOMERS
DealerSocket Data Reveals Untapped Strategies | PAGE 12
NEWEST RULES OF ONLINE MARKETING
Helping You Accomplish Sales Goals | PAGE 14
PREDICTIVE ANALYTICS
How it Can Make or Break a Dealership CRM System | PAGE 18
WAYS TO BE MORE EFFECTIVE Systemize and Organize | PAGE 20
REGULATORY COMPLIANCE STARTS WITH DATA ACCURACY Don’t Omit This Critical Detail | PAGE 22
What’s New
BHPH DEALER MAGAZINE
NIADA now has a magazine devoted to Buy Here-Pay Here! The BHPH DEALER Magazine is published bi-monthly on the even months of the year and is included as a supplement to NIADA’s Used Car Dealer magazine. Visit www.niada.com/bhph_dealer_magazine.php to check out the inaugural issue.
Advertiser’s Index
Ace Motor Acceptance................................................7 ADESA................................................................................. IBC Autotrader ...........................................................................9 AutoZone............................................................................16 Black Book............................................................................3 CarMax Auctions .........................................................17 DAA Dealers Auto Auction Group, LLC ...........5 Greensboro Auto Auction ..................................IFC High Tech Locksmiths .............................................18 Manheim .................................................................. 14, 15 Manheim Pennsylvania..........................................13 NextGear Capital..........................................................12 PassTime ...........................................................................10 Peritus Portfolio Services .....................................19 Protective ..........................................................................11 VAuto................................................................ Back Cover
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. The Tennessee Dealer Connect is published bi-monthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone 817-640-3838. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of TNIADA or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2016 by NIADA Services, Inc. All rights reserved.
STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITORS Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT & GRAPHIC ARTIST Chantae Arrington • chantae@niada.com ART DIRECTOR Christy Haynes • christy@niada.com PRINTING Nieman Printing
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ADESA has named Paul Lips as its chief operating officer for the U.S. He is being promoted from his current role as executive vice president of operations and finance. This move coincides with a new structure for ADESA’s auction groups. In the new post, Lips will head up the entire U.S. auction operations group for ADESA, which will now consist of four regional groups instead of two. Previously, it was just East and West. Now, ADESA has added Midwest and Mideast groups. ADESA said in its news release the aim of the new structure is “to implement best practices
our operations since joining the company nearly two decades ago. His unique blend BY AUTO REMARKETING STAFF of financial and operational expertise will be essential to and standardize processes to provide more dedicated service driving this exciting change.” With the realignment comes and support to customers two additional promotions: nationwide.” • Jay Hinchman, who had President and chief been general manager of ADESA executive officer Stéphane Las Vegas, is now vice president St-Hilaire said, “At ADESA, we are continually developing of U.S. auction operations in the new Midwest region. new strategies to ensure • Geoff Parker, formerly our customers have the best the GM of ADESA Cincinnatiauction experience possible. Dayton is regional vice The launch of four regions in president of U.S. auction place of two will enable us to further satisfy our customers’ operations in the new Mideast needs and better leverage our region. Pat Stevens will continue as resources and multiple assets executive vice president of U.S. at KAR Auction Services. auction operations in the West, “Paul is a proven and Mike Caggiano will remain innovator and leader who has in that same role in the East. consistently strengthened
INDUS T R Y NE W S
Cox Names Tech Execs
Group. He began his career in the automotive industry in the late 1980s. O’Neil began serving Dealertrack in 2001 as a member of the board of MARK O’NEIL NOW COO directors, and in 2005 became chief executive officer. He Cox Automotive Inc. has holds a bachelor of science appointed Mark O’Neil to the in industrial engineering newly created position of chief from Worcester Polytechnic operating officer. O’Neil will be Institute and an MBA from responsible for the company’s Harvard Business School. day-to-day operations of Cox Keith Jezek will succeed Automotive’s software, media, O’Neil as president of the Cox inventory and financial services Automotive Software Group. groups, reporting to Sandy Jezek, currently serving as Schwartz, president of Cox president of software solutions Automotive. O’Neil was previously president for Cox Automotive, has been responsible for the strategic of Dealertrack, which was direction and overall success acquired by Cox Automotive last of the company’s software fall, and subsequently president division, which includes of the Cox Automotive Software
Board Members
vAuto, HomeNet Automotive, Haystak, VinSolutions and XTime. Rick Gibbs was named Cox Automotive chief product officer, a new position, with the responsibility for creating product strategy and the technology development road map that will enable Cox Automotive to go to market as a unified product company. Both Jezek and Gibbs will report to O’Neil.
Executive Director Darryl Noble P.O. Box 2219 Lebanon, TN 37088 615-506-4968 Cell 1-866-5TNIADA (586-4232) 615-443-7486 Fax dnoble@tniada.com
President Alan McFadden Al’s Auto Mart 202 Hwy 52 W Portland, TN 37148 615-325-2727 Office 615-403-1190 Cell 615-325-1190 Fax Carnut3333@yahoo.com
Sr. Vice President Mark Noble AmeriCar, Inc. 200 W. Main Street Lebanon, TN 37087 615-977-3313 Cell 615-547-6075 Office 615-443-7486 Fax mnoble@tdstn.com
Auction Member Representative Stephanie Baker DAA Murfreesboro 1815 Old Ft. Parkway Murfreesboro, TN 37129 615-217-2848 Office 615-217-6994 Fax sbaker@dealersauto.com
Chairman of the Board J.T. Livezey Mid-State Auto, Inc. 1023 Bridge Ave. Murfreesboro, TN 37129 615-962-9147 Office 615-962-9175 Fax 901-484-4840 Cell jtlivezey@yahoo.com
President-Elect Marcus Davis Marcka Auto Auction 150 Cox Avenue Crossville, TN 38555 931-456-7555 Office 931-456-7566 Fax marcka@citilink.net
Secretary/Creative Marketing Phyllis Sartin Creative Marketing P.O. Box 680574 Franklin, TN 37068 615-838-3110 Cell Creativemktg1@yahoo.com
Member David Stancil D&B Auto Sales 1384 Poplar Drive Crossville, TN 38558 931-707-8899 Office 931-707-9341 Fax
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M A N AG E MEN T G A MEP L A N
Overcome Used Car Stereotypes MOVE FORWARD WITH BASIC SOLUTIONS BY SCOTT BERGERON
I still remember the first time a person asked me what I did for a living. When I said I was a car salesman, you would have thought a siren had gone off. People gathered and started telling their worst experiences, as if I was responsible. I once heard that if a customer is happy with you, that person will tell three people, but if unhappy, 11 will hear about it. Apparently, I was one of those 11, as I had to hear all the horror stories from everyone nearby. Unfortunately, the horror stories so prevalent in the 80s continue today, and with social media and sites like Yelp, customers can tell thousands, not just a handful. Our reputation as an industry is still tarnished, and while many of us are working to change that, it’ll take more than just doing our part. As owners and managers, we have to stop tolerating the one bad apple that can spoil the bunch, at least the apples we manage and hire. Used Car Dealer Stereotypes Didn’t Happen in a Vacuum Pushy, know-it-all, condescending used car salespeople – the stuff of stereotypes – often tie back to routines learned 20-50 years ago. Their tactics still work at many dealerships, especially longstanding operations with longtime sales reps that sell to older buyers. Many dealerships have survived on repeat business from customers accustomed to hard-sell, in-your-face sales techniques. While a few gruff words may be exchanged, there’s familiarity and trust that supersede the unpleasantness. With today’s younger and more educated buyer, who will spend countless hours researching every possible choice through social media, all that is changing. Today, most car shoppers, not just the young ones, are researching, pricing and evaluating the quality and reputation of used cars and used car establishments. As a result, fewer prospective used car buyers will tolerate the old ways. They fall into three
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categories: the silent ones who never come back, the angry ones who tell everyone and never come back, and the ones who will complain to you and let you correct the problem. Most fall into the first two categories, which means revenues and reputation take a hit more often than not. Spotting Shortcomings Old car shark practices are increasingly rerouting would-be buyers toward more progressive competitors. Telltale old car shark signs include: • Know-it-all, condescending attitude. This is the “father knows best” approach where a sales rep tells a prospect what they want and need and talk down to them at every turn, instead of asking what they want. Even when a prospect has done extensive research, old car sharks often tell them they don’t know what they’re talking about. • Adversarial approach. These guys view themselves as advocates of the dealership, not the customer. Accordingly, they will argue anything they feel isn’t in the dealer’s best interest. Their negotiation tactics are often win/lose and not win/win. • Limited product knowledge. Given many buyers already have researched in-depth the make/model(s) they’re considering, sales reps need to become product specialists, at
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least to a point. Often, sharks will attempt to skate on this – preferring instead to spend time strong-arming, manipulating and playing ridiculous shell games with pricing. Aggravating the personnel problem can be dealership deficiencies. A dealership where cars are parked haphazardly, aren’t displayed in any kind of order, lack cleanliness, and generally look sloppy are all neon signs to would-be customers that the dealership doesn’t have much respect for itself, or likely its customers. Customers now expect a pleasant buying experience where they can feel acknowledged, in comfortable and clean surroundings. Solutions Start with Basics Rules of successful sales have changed. Used car dealer steps to counteract old-style people and presentations include: • Making the sales force advocate for customers, not the dealership. To do this, one key requirement is to follow the “two ears, one mouth” protocol – a clear directive to listen more than talk. When I first sold, my managers would listen to me close deals. I got roundly criticized for advocating my dealership first, the customer second. Customers need to feel you’re working in their best interest. One of the best examples of customer advocacy is Costco. They continue growing rapidly
in part because members know the retailer has their back, and will collaborate with them to solve problems instead of challenging them. • Being truthful and transparent. When my son was used car shopping recently, the salesperson went out of his way to disclose a repainted spot I wouldn’t have noticed. Going that extra mile to tell the truth generated considerable goodwill, helped lead to a sale, and has resulted in referrals. In the same vein, sometimes salespeople have to share truths buyers don’t want to hear, but it’s important to explain candidly what the real deal is. For example, a bluebook value of $10,000 on a car being sold for $12,000 may be due to regional preferences that make the car more popular and valuable. While the customer may not want to pay the premium, at least he or she should understand why. Then, there’s always the repair history. Let’s face it, if you don’t disclose it, chances are the customer already has a Carfax, and hiding an issue can lead to a customer walking away and telling you they will “be back.” • Knowing their cars. With most customers shopping online and setting appointments, wouldn’t it make sense to do some research about the make and model you’re about to present before they arrive? Googling “walk around Audi A4,” as an example, will give you instant credibility when you know how to pop the hood and the fuel cap. • Taking and showing pride in their operation. Talk to virtually any auto dealer consultant, and the first thing they’ll talk about is first impressions. Credibility soars when a prospect walks into a showroom/facility that has its act together, from its welcoming and clean facilities to a workforce that displays confidence and competence. New stereotypes painting the used car industry in a positive light are just around the corner for those willing to move forward in today’s car buying environment. Former dealer executive Scott Bergeron is the founder and principal of Daily Gameplan (www. dailygameplan.com), a national sales team productivity solutions provider. Bergeron is a major advocate of common-sense approaches to dealership front end challenges. Bergeron can be reached at 303.918.3169 or scott@ dailygameplan.com.
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M A N AG E MEN T M AT T ERS
P RODUC T S & SER V ICES
Lessons Learned From Irate Customers
Let’s begin with the approach – how you manage the window between the “ring” and the “answer” defines the experience as educational, confrontational or successful. In the seconds before answering the call or beginning TAKE THE HIGH GROUND the contact, keep in mind that BY JOE CURCILLO the best way to initiate control is to take the high ground. Not Boss Deborah is just the high road of virtue and sitting in her office doing the right thing, but the when she hears her high ground as a vantage point secretary, Mary, attempting to observe the situation as a to get a word in as she deals whole. with a rather stubborn and Prepare to remove yourself authoritative customer. from the fray and look at the The call is transferred big picture. The best means into Deborah’s office. Mary of accomplishing this is to announces, “Mr. Money is on remember these rules: the phone. He is angry and Do not speak until you have demands your help.” truly listened: The opposite of As Deborah reaches for speaking is not listening – it her phone, how she handles is waiting to speak. Listening the next few seconds will determine whether Mr. Money is a separate task and, in fact, will raise or lower the bottom is an art. The easiest of all customers line on the next monthly to deal with in the world of report. In the time it takes to reach irate customers is the one for the phone and say “Hello,” that just wants to be heard. Everyone has dealt with you must have the focus and someone who expressed every knowledge necessary to take control and lead the caller back detail of his complaint to every person in the organization. into your corner.
Preparedness comes from having the structure in mind that will allow your persuasive and reassuring abilities to control the situation. Maybe it was your staff, your management team or a salesman, but the buck stops with you. As you listen to the complaint, pay attention to how the caller became disgruntled and match his words to the organizational structure and discipline you have in place. Many times the caller reached your desk because someone in the chain of command failed to listen and address his concerns.
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The repeated telling of the story is your first indication that all he needs is understanding and reassurance. He wants someone to listen. Make that person you. Do not defend until you have heard the attack: Step back and allow the speaker to talk. As you listen, do not formulate your response – follow the speaker with an eye toward understanding the nature of the allegations. The ability to effectively challenge someone’s argument hinges on your understanding of their argument, not on the merits of your own. J U N E / J U LY 2 0 1 6
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Taking control of a situation requires paying attention to what is being said so you can take all you’ve heard and use it as you map out your proposed solution. Adopting the other person’s arguments makes it much more difficult to logically rebuff your offer of resolution. Identify the true nature of the complaint and the complainant: There are many reasons a person complains. Dissatisfaction with a product or service is obvious, but some complaints are born and nurtured in environments outside of your control. Taking control of those complaints requires listening and exploring with questions the circumstances leading the customer to your door. Some people are simply disappointed with your entire industry. It is necessary to set yourself apart from the herd and let the speaker know you care. Some complaints come from a lack of clear expectations. Explore their concerns and guide them back to a more realistic path. The most difficult complainant is the person who, due to his own shortcomings, is unable to understand the reason for the problem is his inability to follow instructions or guidance. It is essential to speak to those people as you would to a friend. Make sure your vocabulary and speech is simple enough that they can follow your directions to the letter – but do not allow yourself to come across as condescending. That can be avoided by remaining social and human as you address your customer. Focus on areas in which you and your company can improve: Learn. Even the most irrational or selfabsorbed customers can teach you valuable lessons to improve service. By looking for areas of improvement in every conversation, you will not only actively listen, you’ll enjoy the opportunity to grow and become better. Joe Curcillo, “The Mindshark,” is a speaker, entertainer, lawyer and communications expert, and an adjunct professor at Widener University School of Law. For more information, visit www.themindshark.com.
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Ally Expands eContracting SOON AVAILABLE IN ALL 50 STATES
Currently, dealers in 42 states can complete an eContract with Ally as the finance source through Dealertrack. The company is completing the set by adding Arizona, Hawaii, Michigan, Mississippi, Montana, New Jersey, New Mexico and Wisconsin. Through this expansion, Dealertrack aims to spur the adoption rate of digital technologies among automotive finance sources and dealers. “eContracting is gaining momentum and popularity – and will be a vital part of the car buying process in the years to come because of its convenience and efficiency,” said Ally president of automotive finance Tim Russi. “The broad availability of eContracting on the Dealertrack F&I platform gives more dealers the opportunity to evolve their contracting process and receive faster funding with Ally, thus giving car buyers a better customer experience.”
P RODUC T S & SER V ICES
Dealer.com Partners with Contact at Once!
PARTNERSHIP OFFERS CHAT AND TEXT SOLUTIONS
Dealer.com, a Cox Automotive brand, recently announced the company has partnered with Contact at Once! to offer the provider’s chat and text solutions, including a number of Contact At Once! packages that are integrated with Dealer. com websites. “Contact at Once! has a history of delivering leading chat and text products and services,” said Dealer.com senior vice president Wayne Pastore. “The Contact at Once! tools allow us to give dealers a powerful, convenient and mobile solution to better connect one-on-one and service car buyers wherever they are, whenever they need help.” In 2013, the companies worked together to incorporate chat in Dealer.com’s Control Center, making it simple for customers to use instant messaging to connect with car shoppers and view the impact of chat performance. Dealer.com clients will now be able to select from options that include fully managed and co-managed chat and text. For more information about Dealer.com please visit www.coxautoinc.com. To learn more about Contact At Once! visit www. contactatonce.com.
ONL INE M A RK E T ING
Dealers Upset About Google Adwords PPC Change CHANGE PUSHING ORGANIC RANKINGS DOWN BY KENNY ATCHESON
Recently Google decreased the amount of Google Pay-Per-Click ads showing after a given search such as “used car dealer.” The ads down the right-hand side of the search results have vanished. There used to be three at the top and seven down the right side. Now there are four at the top and that’s it! What does this mean for you? If you are not utilizing Google Adwords PPC ads and you are reliant on search engine rankings, be prepared for your website visitor traffic to drop. Now that there are four ads instead of three at the top, that pushes organic rankings further down. If you are ranking outside of the top three you may drop below the fold (death to traffic).
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This change lessens the impact of search engine optimization because some websites are pushed below the fold. Surprise! Google wants more people to click on their ads so they can make more money. If your ads were appearing outside of the top four previously, then your ads may not appear at all. You could go from thousands of visitors to zero overnight! Let’s not be too hard on Google. Facebook made sweeping changes awhile back forcing you to pay money if you want anyone to see your posts. Back to Google… If your ads generally appeared in the top three you still may have to make some adjustments. Your competition will probably think the only thing that gets them into the top four is by placing higher bids. This drives the price up on you but you can be smart about it, and it may not cost you any more than it does now.
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There are two ways to crack the top four ads or maintain your top status: 1. Pay more money per click (bidding). 2. Improve your CTR (click through rate). The second is trickier but here is the short answer: •Better targeting. •Better copywriting on your ads. •Ads specific to the specific target.
Hot Tip: Although I’ve been getting paid to write copy for a long time, I still splittest the ads to make sure our clients get the most out of every dollar spent on Google Adwords PPC. I will continue to do so. Whoever is managing your ads should be splittesting too. Kenny Atcheson is the founder of Dealer Profit Pros and author of Marketing Battleground: How to Deploy Under-theRadar Strategies to Explode Your Profits. His website is www.DealerProfitPros.com.
S A L ES M AT T ERS
Acquire More Customers
Implementing phone sales training and call management technology can help narrow the competitive gap. 2. The problem: Traditional marketing no longer works. Radio spots, TV ads, DEALERSOCKET DATA REVEALS billboards and tent sales are UNTAPPED STRATEGIES mainstays of most dealerships’ BY DEALERSOCKET marketing plans. But the DealerSocket has unveiled a ROI just isn’t there anymore. five-step customer acquisition Conventional media now bring plan for independent car in an average total profit of dealers, backed by the $1,702 per vehicle, while digital company’s most recent marketing rakes in $2,514 per internal data and a survey of sale. In today’s increasingly dealerships nationwide. The digital world, dealers must plan highlights low-hanging- relinquish preconceived ideas fruit strategies dealers can and embrace the media that implement right away to work. attract and convert more leads. The solution: Digital media “It’s tempting for result in more sales and cost independent dealers working less. in the trenches every day In many cases, a lower to get ‘tunnel vision’ about price translates to lower their marketing efforts. If the performance. But it’s just numbers aren’t where they the opposite with digital need to be, the automatic marketing, which includes response is to just try harder,” websites, social networks, said Matt Redden, chief email, smartphones, tablets marketing & sales officer at and kiosks. According to DealerSocket. “Instincts and DealerSocket data, it costs $150 subjective observations are of digital marketing to sell one helpful, but dealers must also car. Compare that to $1,581 of prioritize reliable, black-and- traditional media. If you stick white data. It can reframe with conventional methods, challenges and uncover you’ll pay 10 times more than solutions they may have never necessary. noticed otherwise.” 3. The problem: ThirdDealerSocket recommends party lead generation can be implementing the following expensive. strategies for the quickest Some dealers believe they results in lead acquisition and must directly pay for more conversion: leads. They don’t think they 1. The problem: Phone can produce new prospects leads are underperforming. organically through resources With lower close rates, already in place. While longer sales cycles and lower third-party lead generators profit margins, phone-sourced can certainly work, the leads provide tremendous question boils down to cost opportunities for growth. effectiveness. Independent dealers take 37 The solution: Optimize percent longer to close phone your website for maximum leads. In addition, phone leads visibility and efficiency. result in a mere 14 percent of About 35 percent of independents’ sales. Perhaps independent dealers’ leads most challenging of all, phone arrive through their website, leads bring in about $307 less making it the No. 1 lead profit per sale than other lead generator. It’s also one of the sources. easiest to optimize for even The solution: Focus on more impressive results. phone training and call Invest in organic search management efficiencies. engine optimization and Independent dealers make marketing so customers can an average of 2.86 outbound find you. Also keep in mind calls to each phone prospect, inventory pages are the most while focusing more time on visited section of any dealer floor leads (4.13 calls) and website. They should be well Internet leads (3.82 calls). As organized and fully searchable, a result, phone leads have while offering multiple calls to only a 5 percent close rate. action.
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4. The problem: Digital efforts do not account for user demographics. Many businesses build websites for themselves rather than their end user. Do you know who is visiting your site, what they prefer in a user experience, and how your content displays on each person’s device? The solution: Pay special attention to mobile and tablet users. Independent dealer websites receive about half of their traffic from mobile devices, and another 10 percent from tablet users. So dealers must prioritize responsive web design that optimizes the user experience, regardless of how the user accesses the Internet. Also, get to know your online shopper base, which typically consists of 65 percent males and 35 percent females. While age ranges are distributed fairly evenly, the majority of online shoppers are between the ages of 25 and 44. 5. The problem: Many leads aren’t yet ready to buy. Try as you might to bring in new customers, you may find the majority of your leads are earlier in the purchase process – making it seem even your strongest closing efforts fall on deaf ears. The solution: Leverage a data mining solution to boost trade-ins and intercept customers when they’re most likely to purchase. Data mining tools have long been a staple of the franchise auto industry. The results are clear – 75 percent of deals generated from a data mining solution result in a trade-in. On the contrary, only one out of every 10 independent dealers take advantage of data mining, and the small number of trade-ins follow suit (about 19 percent of deals). Today’s market includes affordable solutions geared specifically toward independents. By leveraging data mining to identify and target customers for vehicle buy-back programs, dealers accomplish two desirable goals: 1) Aid inventory acquisition efforts by purchasing quality vehicles from past customers and 2) Increase sales as customers replace their old vehicle.
SO CI A L MEDI A
Newest Rules of Online Marketing
HELPING YOU ACCOMPLISH SALES GOALS BY KATHI KRUSE
It’s hard to believe, but we are almost through the first half of the year. How far along are you in achieving your dealership’s goals for 2016? The digital marketing landscape continues to evolve. SEO, social media, content marketing and online reviews are no longer standalone strategies. All
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these intertwine and support each other, and it’s extremely important to clarify exactly how you’ll leverage these online marketing pillars to grow your business. Where does your store fit in the digital marketing landscape? I continue to be concerned about dealerships’ reluctance or slow adaptation to Google’s requirements and customers’ needs, especially when it comes to digital presence. There’s a lot of conversation (both online and off) postulating how some dealerships or business models won’t survive in the next 5-10 years. I’ve been helping dealers navigate social media, content marketing, SEO and online reviews for years and sometimes it
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seems like the needle has barely moved. Everything else is moving at such a fast pace and, judging by what I hear from a lot of dealers, sitting on the sidelines seems to be the common go-to strategy. A manager in one of my conference sessions said, “Car sales are at an alltime high. What do I need with online marketing?” Warren Buffett said, “In the business world, the rear view mirror is always cleaner than the windshield.” Just a few short years ago, every dealership was struggling to figure out what to do in the Great Recession. Using the above mindset – “Car sales are at all-time highs” – as an example, all-time highs mean the end of growth is near. Also, subprime delinquencies are at 20-year highs (and there’s a bubble happening similar to the mortgage meltdown). Add these indicators to all of the outside pressures on the dealership business model (Uber/Lyft, ride-sharing, self-driving cars, etc.) and you’ll see it would be prudent to forecast for the coming downturn – no matter what it looks like. From my years as a dealership manager, 60 percent of which was as a CFO, I can’t ignore trends. Online is how we all communicate today and becoming savvy in this arena will ensure your store has every chance to reach today’s buyers. THE 7 NEWEST RULES OF ONLINE MARKETING Getting and keeping customers is proving to be more and more difficult. Many dealership marketers seem to be ignoring a basic fact: people like to buy from businesses they know, like and trust. That isn’t just some cliché. Selling to people who actually want to hear from you is more effective than interrupting strangers who don’t. These newest rules of online marketing will help you understand what it takes to win customers and make informed decisions about how to drive more leads and sales to your store. Assume nothing. • Consumers. They’re getting a 5-star experience with online sellers like Amazon. How are you delivering the same experience, or better? • Competitors. What are your competitors doing better than you? Nothing short of fearless assessment and measured improvement will do. • Google. What exactly are you serving up to search engines? Search strategies today compared to even just a year ago are drastically different. Google is wickedly adept at recognizing quality content to serve its users. Do you know the ranking factors Google employs? Invest. Resolve to build stronger relationships with current and new customers. The
amount of time and effort spent is directly proportionate to the results achieved. We live in a world where no one wants to see ads from brands they don’t know. Why? Zero trust. Ad blocking is up 48 percent in the U.S. and growing. However, your ads are welcome in cases where you’ve invested in customer relationships and built a strong following. Profit isn’t a purpose, it’s a result. Empathize. A brand that can put themselves in their customers’ shoes, and deliver the information needed to make the right choice, secures a customer for life. Teach. With so much content on the web and very little trust, it’s overwhelming for consumers to research even the most common products. That’s why we’ve all turned to our social networks and online ratings sites for answers. The days are gone when you could walk into a store and get a trustworthy recommendation. A business today must leverage its assets to be a teacher not a seller. Social selling (using social media to build a network by providing value to give and receive referrals) is a fantastic solution to grow your business. Incorporate social selling within your sales process: • Differentiate yourself from the “sales sharks.” • Don’t be all about making the deal. • Pass on valuable information. • Use social media to teach, not sell. • Be a publisher (all good sales people are content marketers too!). • Develop your network through giving and getting referrals. • Leverage paid social to drive leads. • Don’t be afraid to ask for the sale. Curate. Everyone loves valuable information. People who consistently deliver solid, original, high quality content are considered thought leaders. Spend 30 minutes per day consuming content that’s helpful to your business growth and helpful to your customers. Schedule posts (via Hootsuite, Post Planner, Buffer or others) on social media sites to broaden your thought leadership. Advocate. Create a community online that mirrors your offline community. I’m always delighted to find a brand on social media that listens to their customers. Brand loyalty is born when someone at the store is there monitoring, responding and advocating for customers should they have an issue or want to give feedback. Listening > Advocacy > Loyalty. Care. A step further from advocacy is to
authentically care. Every time I fly JetBlue, they see my check-in at the airport and tweet me a nice message. They make me feel special and I feel like they care. When they announced they would abandon their “first bag free” policy, it wasn’t the best news, but their previous efforts to make me feel special softened the blow. Evidence that you care can only come from authentic action. Being able to document that well in the form of blog posts and social media content is a musthave strategy in 2016. Your goals for the second half of 2016: It all boils down to this: Attracting,
CREATE A COMMUNITY ONLINE THAT MIRRORS YOUR OFFLINE COMMUNITY. engaging and selling to today’s hyperconnected buyers requires focused attention and a solid plan to drive leads and sales. These seven new rules will guide you to accomplishing your sales goals and finishing the year strong. Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc. Kruse Control coaches, trains & delivers webinars focused on integrating social media and online reputation management into dealership operations.
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SO CI A L MEDI A
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 Cost-Per-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
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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
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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.
Hyundai Recalls Sonatas for Steering Issues
MAY LOSE POWER STEERING ASSIST
Hyundai Motor Company is recalling 173,000 model year 2011 Sonata vehicles manufactured Dec. 11, 2009, to Oct. 31, 2010. In the affected vehicles, the Electronic Power Steering circuit board may be damaged and result in a loss of power steering assist. With a loss of power steering assist, extra steering effort will be required, especially at lower speeds, increasing the risk of a crash. Hyundai will notify owners, and dealers will replace the EPS control unit, free of charge. The recall is expected to begin May 30. Hyundai’s number for this recall is 143.
M A RK E T WAT CH
What Will $5,000 Buy?
MANHEIM DISSECTS WHAT $5,000 BUYS AT AUCTION THESE DAYS BY NICK ZULOVICH, AUTO REMARKETING SENIOR EDITOR A segment of Manheim’s 2016 Used Car Market Report asked a question most Buy Here-Pay Here operators consider when they scour the lanes or online platforms to find inventory that will not only turn but will last for the duration of the installment contract. To answer the question of what $5,000 will buy, Cox Automotive chief economist Tom Webb acknowledged in the report that rising wholesale prices often trigger headaches for BHPH dealers since they need to find vehicles their customers can afford, but can run the term of the note with minimal repairs. To give a sense of just how much wholesale prices have gone up over time in the lower price tiers, Manheim looked at the average mileage on auction vehicles that sold between $4,000 and $6,000 during the past 16
years. Back in 2000, if operators spent an average of $5,000 for a vehicle at auction they acquired a vehicle with 84,541 miles. “Average mileage slipped over the following three years as wholesale supplies grew and the overall pricing environment weakened,” Webb explained. But between 2003 and 2014, Webb pointed out the average mileage for the typical $5,000 wholesale vehicle purchase rose every year, except for the recession of 2008 and 2009. A year ago, Webb mentioned BHPH dealers got a slight reprieve as the average mileage on a $5,000 auction purchase dipped but remained above 120,000 miles. During a conversation with BHPH Report, Webb elaborated about the kinds of vehicles that fit that price parameter nowadays. “It’s certainly a mixed bag,” Webb said. “Certainly a vehicle with six digits on the odometer is really not an issue in terms of running the terms of the note if you have some feeling about its condition level. Some makes and models have better reliability over time than others. “The Buy Here-Pay Here
dealers, as you know, are extremely knowledgeable of those units,” he added. “Typically they’ll have some makes and models which are on their black list which they will not buy at all for those reasons. But with any model, the condition can vary quite substantially depending on how it was used or abused.” BHPH operators and other independent dealerships should benefit from the overall lift in wholesale volume, according to Manheim’s report. As wholesale supplies grew a year ago, Webb explained independent dealers were better able to secure inventory that met the needs of their individual customer bases. “As a result, unit sales grew considerably faster than in the prior two years, and at a pace that was higher than that of franchised dealers,” Webb wrote in the report. “Earlier in this cycle, many independents suffered as a result of a lower flow of wholesale units from franchised dealers, fewer desirable trade-ins, and reduced auction supplies. “With all of those sources
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returning to normal volumes, independent dealers should have another good year in 2016, especially if all-important credit conditions remain favorable.”
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Predictive Analytics HOW IT CAN MAKE OR BREAK A DEALERSHIP CRM SYSTEM BY LANG SMITH
For an automotive sales organization, it isn’t the size of your data that matters but what you do with it. No longer a discretionary luxury, predictive analytics are now the name of the game for dealerships that seek to utilize customer metrics in a meaningful way to establish a tremendous competitive advantage, gain notable market share and significantly boost bottom lines. Just what exactly is predictive analysis? Simply put, it’s the ability to more precisely predict a customer’s future spending based on their past behaviors. Of course, there’s no way to actually predict the future but predictive analysis can give companies invaluable insight that can make or break a CRM system. If your dealership isn’t using predictive analytics, your current CRM system is likely falling short
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in several areas. Forecasting Likely Customer Behaviors There’s an old saying in sales: “buyers are liars.” Unfortunately, salespeople are forced to enter notes based on what the customer tells them. Besides these basic notes, which are often unreliable, it’s almost impossible for a CRM system to determine a consumer’s actual behavior. However, predictive analytics software comes with a certain level of assumptions. In this case, the assumption is the future will continue to be like the past. Often, however, behaviors change. That’s why it’s critical to have a system that can not only change with your customers but also learn and adapt to their new actions to make predictive calculations based on the past, present and future behaviors. Enhancing Customer Relationships It’s very difficult to build a true customer relationship if you have no way of accessing and analyzing their prior behavior with your company. Unfortunately, a CRM system cannot automatically track customer actions. It relies
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heavily on manual human interaction and cultivation relying heavily on the accuracy of a salesperson’s notes, which are often less than desirable. The most common use of predictive analytics is to increase and improve customer relationships. The better you know your customer, the more sales you can ultimately make. Using sophisticated algorithms to reveal how your customer behaves also allows you to better communicate with your customer. For instance, isn’t it nice to hear your name when you walk in to your local coffee shop? Isn’t it nice they already know what you’re drinking without you saying anything? On a larger scale, this is how predictive analytics enhance a company’s sales efforts. Many direct marketers have it figured it out – mailing you offers you are likely to actually want as opposed to the ones you consider junk. This is all done with predictive analytics. Another great thing about predictive analytics data is that it doesn’t have to be “big” at all. In fact, sometimes the data can be just a
small concentrated section of just a few hundred actions. Maximizing Marketing Budget ROI If you’re like most companies and have an actual marketing budget, however big or small, it’s best to first make sure the audience you’re targeting actually wants what you’re selling. On its best day, a CRM system can only give you an educated guess. If you want to maximize your marketing dollars, solely using a CRM platform to determine the best suited marketing audience is not the best direction. With predictive analytics, you can maximize your return on investment no matter the budget. For example, if you seek to spend $10,000 on a campaign for delivery to 10,000 customers or prospects, predictive analytics will curate that audience to deliver your message to 10,000 consumers who specifically want what you’re offering at the time. Conversely, CRM solutions alone have very limited filters that prevent a business owner from drill-down targeting the correct audience and, as a result, are undermining their ROI with
opportunity loss. Allowing Data-Driven Decisions The core success benchmark of any company is its numbers. A CRM system cannot show you exact sales numbers broken down by each individual customer over time with any ease. A significant amount of training is usually involved in trying to properly access and formulate these tasks. This often requires a lot of time, which means less time spent making actual sales. Fortunately, good predictive analytics software will allow you to specifically identify where all your money is being made and where the areas of your business are lacking. It should also be able to provide you with a specific customer spending list based on what you’re asking for. Adept systems can actually categorize all your customer’s spending and break it down for you in an easy to read format that allows you to properly make future predictions. Formulating Offer Intelligence Unlike a predictive analytics platform, CRM systems cannot recommend specific offers
unique to customer spending habits. This is a huge downside. It is very difficult to maintain and engage repeat customers without knowing what they want. CRM solutions are mainly a lead management system but, let’s be honest, who wants leads when you can have buyers? Predictive analytics not only analyzes customer actions and habits but also “learns” as it goes. For instance, when an online offer is sent out to customers, or even different offers sent to varying customer segments, a predictive analytics platform can tell you who opened a particular offer, who clicked through on that offer, who redeemed that offer and, when they did, how much that customer spent. The data can also be finely filtered down further to key metrics like which date and day of the week a customer redeemed a particular offer. With the rich data predictive analytics provides, customers can be sent highly meaningful offers tailored specifically to their needs and, as a result, companies can more readily build stronger customer relationships
PREDICTIVE ANALYTICS NOT ONLY ANALYZES CUSTOMER ACTIONS AND HABITS BUT ALSO “LEARNS” AS IT GOES. that bolster the bottom line. Lack of quality data is usually the greatest barrier a salesdriven organization can face when deciding to implement predictive analytics. Getting the most out of a predictive analytics platform requires there is actually available data on customer spending habits, the attributes of the products or services they’re buying (other than the “people who buy this also buy this” type of model), date ranges of their spending, and how much they spend on average. Some demographic information wouldn’t hurt either. If it’s really good, the
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predictive analytics platform will automatically track all your customer actions from start to finish. And, although it can be very difficult to find in current predictive analytics software, a really good system will also automatically capture this data for you to create unique profiles of your individual customers. With this weapon in your proverbial sales arsenal, prepare to grow your sales revenue and overall company profitability in kind. Lang Smith is the founder of Cloud Signalytics, a first-of-its-kind predictive intelligence software platform helping major franchise auto dealerships create highly precise, individualized customer profiles to maximize sales. He may be reached online at www.cloudsignalytics.com.
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Ways to Be More Effective
SYSTEMIZE AND ORGANIZE BY KENNY ATCHESON
I attend many of the same conventions you do, sometimes as a speaker and others as an attendee. There are a lot of good ideas to be gleaned, and attending these events is great. However, everyone needs more frequent exposure to relevant ideas and information. A few weeks ago one of our clients’ Google page and reviews completely disappeared from the Internet. This client regularly uses our Feedback and Review system. As of this writing, they have more than 155 Google reviews. They also enjoy great rankings in the search engines. So disappearing from the Internet was a big deal.
After some sleuthing, we found the Google system had a glitch and the same thing happened to businesses across the country. There was an easy fix available, and we repaired it quickly. We also sent out an emergency update email newsletter. Consider what would happen if all of your Google pages and reviews disappeared. This could cost you tens of thousands of dollars if you didn’t know what to do, or if you were unaware of the problem, or if it took two extra days to get it fixed. This situation makes it even more important to get relevant information quickly. You may be subscribed to several email newsletters, a few print newsletters and industry trade publications. You have regular communications with your team and customers. But you’re busy and so much information in your inbox makes it difficult to get relevant news.
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The way to cut through it is to systemize and organize. Set a specific time daily to open emails and relevant communications, rather than randomly. Hat Head It is hard to be effective when wearing too many hats. Many studies reveal that when a person goes back and forth from one task to a completely different task throughout the day they’re not nearly as productive. Batchtasking can help, but it’s more important to have people do what they are good at. For example, you may have team members doing things they are capable of getting done but not within their strengths. The task gets done but may take twice as long because it doesn’t fit their skillset or personality as well as someone else’s. Inadequate results are a side effect of giving people a task that does not match their skillset. This is especially important when such things are directly related to advertising and marketing, and sales are at stake. Another example is when a team member at your dealership runs a complicated system such as Google pay-per-click ads or Google AdWords. The team member may be able to set it up so the ads show on Google, which enables Google to charge you for the ads, but that doesn’t mean it’s as effective as it could be. In fact, you could be wasting thousands of dollars a month running ads to the wrong targets completely outside of your area or who won’t be buying for months down the road. Many times I’ve been hired to analyze a Google AdWords account. I made improvements that not only increased the effectiveness of their ads and increased sales but actually saved the dealer money. The employee was likely doing the absolute best job they knew to do, but hadn’t been trained how to use the tool. The answer is to hire others from outside to handle some of those tasks that don’t match your team’s skillset. Or hire someone to come in and train your existing team on a particular process or system. Tools Using tools will lead to being more effective and getting better results. By now, you should be using a Customer Relationship Management tool. If you are
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not using one, take a look at your leads over the last several months and see how many have not been followed up in over one month. Look and see how many no one can tell you anything about – whether that person has purchased yet, or plans on purchasing, or if they just didn’t qualify. You may have salespeople who realize the importance of keeping track of customers and potential customers by monitoring them on a Word document, spreadsheet or some type of email contact database of their own design. That isn’t good enough. Their own system doesn’t allow you to check on it – and everybody is doing their own thing. That is never as productive as everyone using the same system and process that has been proven, tested and tweaked for maximum results. Organizing Your Decisions Many Buy Here-Pay Here dealers use AutoZoom, a scoring tool to help make underwriting decisions. Some dealers believe making that decision themselves is the way to go. They have been in business so long they think they don’t need such a tool. However, what happens when the main decision maker is off that day, or out to lunch, or on vacation? Someone else will make the decision and may not do it exactly the same. A tool such as AutoZoom standardizes the process. It also organizes questions to make it an easy and productive process. The dealer still makes the final decision, but this tool organizes and systemizes the decisionmaking process, which is more productive. Organizing Your Customer Feedback Collecting testimonials and getting customer feedback should be a systematic process. Don’t expect your customers to share their experience with everyone, unless it’s a negative one. Even in those cases they aren’t necessarily going to tell you they are unhappy – but they will certainly share with the whole world on Google and/or Facebook. If you tell all your salespeople to merely ask customers to write a review, or give the customer a slip of paper and ask them to fill it out regarding their experience, that’s not enough. Too much human
error is possible, or laziness, or forgetfulness. We set our clients up on a Feedback System and provide them with signs to post in the dealership. Salespeople can forget. A customer who doesn’t buy has a reason and they may go to your privately designated webpage to fill out a feedback form so you know why they didn’t buy. Customers who may stop by after they’ve purchased have yet another place to give feedback. In most cases customers are happy at the point of sale. However, sometimes they are unhappy months later because the vehicle had challenges or their payment was late and somehow it’s the dealer’s fault. Organizing Your Paperwork, Data and Your Life Overall organization of your paperwork and data at work will lead to more productivity because you will find things when you need them. Personal development guru Brian Tracy spoke about a study revealing salespeople spend two hours per day just “looking for stuff.” Imagine the increased productivity if everything was organized and every one of your salespeople had an extra two hours in their day. Would they be more productive? Would that lead to more sales? Business owners, managers and salespeople are often busy. Busyness leads to being disorganized because a phone call comes in or another deal comes in and paperwork and data are pushed to the side. As things pile up, disorganization blooms and it becomes harder to focus. Business owners who are organized at work may be disorganized at home. This can take up time and lead to stress, which leads to lack of sleep, which decreases productivity. Being organized at home may lead to more success at work. Knowing these principles and struggles, we reached out to an organizing company called Major Mom. The owner, Angela CodyRouget, appeared on the television show Shark Tank. Our interview with Angela is available for our email newsletter subscribers. She shared great ideas that will help people who struggle with organization at home and in their businesses. Kenny Atcheson is the founder of Dealer Profit Pros and author of Marketing Battleground: How to Deploy Under-the-Radar Strategies to Explode Your Profits. For more information visit www. DealerProfitPros.com.
DE A L ER B ES T P R AC T ICES
M A RK E T WAT CH
Regulatory Compliance Starts with Data Accuracy DON’T OMIT THIS CRITICAL DETAIL BY CHET HEUGHAN
How many times have you heard the phrase “The devil is in the details”? That statement has never been more applicable to automotive dealers than it is today. When considering financial risks to their businesses, most dealership owners and managers tend to spend more time focused on issues such as hidden damage on vehicles purchased at auction, aging inventory, contracts in transit and the possibility of another downturn in the economy while often omitting an issue of critical importance to their business. One of the largest risks to a dealer’s financial future is accuracy – or better stated, the lack of accuracy – in loan documentation. Inaccurate sales documentation in financed transactions can create a lingering risk to your business. Your risk starts from the time you submit a credit application to the lender. Something as simple as an incorrect bookout submitted along with the credit application to a lender can create an ongoing financial liability. For example, if you submit a credit application that incorrectly states a Nissan Altima has an SL trim package when really it was an S trim package, your dealership could be responsible for the difference between the stated value and the actual collateral value. Many lenders will audit the loan documentation when a loan results in a repossession and subsequent charge-off. If the lender finds the dealer overstated equipment, which inflated the stated value of the collateral, the dealer will likely be requested to compensate the lender for the difference. In the past this could cost dealers several hundred dollars to a few thousand dollars, in addition to creating tension
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between the dealer and its retail lender. Today, however, with advancements in technology the stakes are higher for dealers as lenders now see this behavior as a red flag. Lenders can easily audit a dealer’s entire portfolio by using technologies that use vehicles’ VIN numbers to access the actual manufacturer’s build sheet for a vehicle in question, leaving no doubt as to exactly which loans contained “power booking.” This could result in the lender terminating their relationship with the dealer and requesting a larger demand letter. Compliance and accuracy go hand in hand. Repeatedly making simple mistakes when completing forms, or using the wrong forms to document a transaction, can appear to be predatory or deceptive. Inadvertent noncompliance with state and federal guidelines when preparing loan documents can be another area where risk can accumulate over time. A typical retail installment contract can contain more than 150 fillable fields. Making sure the correct information goes into each field may seem like a no-brainer, but what if you’re selling four aftermarket products and your retail installment contract only provides three lines to disclose the information? Some dealers simply combine two of the products or include the product in the selling price. These aren’t good ideas! This approach may pass a lender’s due diligence process, so it must be compliant, but don’t rely on the lender to be your failsafe. Lenders are not perfect and they don’t catch everything. This issue could be caught months or years later during an audit of the lender’s indirect loan files or it could be questioned by your customers. What was a simple solution to a problem caused by not having enough lines on the contract could easily be viewed as nondisclosure or as deceptive and predatory practices, which can carry large financial penalties or be the basis of a consumer lawsuit. Choosing the right loan documents that are up to date with current legislation along with the enhanced market features needed to support the sale of the many insurance and
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Gen Z Prefers Face-to-Face Interactions AUTOTRADER AND KELLEY BLUE BOOK STUDY
ONE OF THE LARGEST RISKS TO A DEALER’S FINANCIAL FUTURE IS ACCURACY — OR BETTER STATED, THE LACK OF ACCURACY — IN LOAN DOCUMENTATION. aftermarket products available in the market today is a sure way to reduce noncompliance and ultimately financial risk. Using the same old loan documents you’ve always used or the free documents made available from your lender may not be the best practice. Choosing a loan documentation supplier that warrants their product, has a comprehensive program for monitoring pending and enacted regulations, and completes timely revisions of their products can go a long way to reducing your compliance risks. Of course, there are many more risks to your business – market conditions, competition and availability of inventory, just to name a few. Many of these risks are outside your control, but you can control a large portion of your risk by demanding data accuracy from your staff and the vendors who provide you with products and services. Chet Heughan is director of AppOne® Risk Mitigation Services and Indirect Lending for Wolters Kluwer. For more information, please visit www.wolterskluwerfs.com.
Generation Z – individuals up to 17 years of age – may have grown up with more access to technology than Millennials, but buying online isn’t in the cards for this emerging demographic, according to a joint study conducted by Autotrader and Kelley Blue Book. “Gen Z accounts for nearly a quarter (23 percent) of the population right now, and by 2020 this group will translate to $3.2 trillion in purchasing power, which is larger than the GDP of some small countries,” said Isabelle Helms, vice president of research and market intelligence for Cox Automotive. “While they will have access to some serious cash, they will be cautious about how they spend their money, a trait that makes Gen Z markedly different than their Millennial counterparts.” While Gen Z is full of technology natives, only 26 percent of them said they wanted to buy a car online in the future. Sixty-eight percent of them said face-to-face interactions during their vehicle transaction was important and 54 percent claimed they would need to test drive a vehicle before making a purchase. The study further found that while the environmental impact of a vehicle is important to Gen Z the majority of respondents said cost was the most important aspect of a vehicle purchase. When asked on their opinion, more respondents said it was the gas savings rather than impact on global warming that would sway them toward environmentally friendly vehicles. “What worked for marketing to Millennials will not work for Generation Z because some of the defining traits of Millennials do not hold true for the next generation of car shoppers,” Helms said. “The best news from this research is that auto sales are not going to take a hit because of this generation. In fact, it may prove to be quite the opposite. Their love for cars and driving is very much alive.”