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DEALER
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Building a Successful (Sales) Culture DALLAS, TEXAS Permit No. 2079
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By GWC Warranty
INDUSTRY NEWS
VEHICLE COX AUTOMOTIVE PHOTOS TAPS DATA EXEC THAT SELL Mark Luber Joins Team
Set Your Inventory Apart
Every picture you take of your inventory and post online can be the one click that sells a car or sends your customers on to a competitor’s website. When it’s time to get your camera ready for that new score from auction, be strategic to make sure your customers see everything that’s good about your inventory. Focus on the Details Things like tire treads, shots of clean engine compartments, high-quality stitching on upholstery and other small items can show your attention to detail that will attract customers and save them on repairs after the sale. These items may seem small, but can give the customer the impression they’re buying a meticulously maintained vehicle.
Mark Luber is joining Cox Automotive in the newlycreated role of chief data officer, reporting to chief product officer Marianne Johnson. In this role, Luber will lead
the Cox Automotive Data Solutions team, overseeing the company’s data strategy. In addition, he will lead the operations of Cox Automotive’s data business, own the data roadmap, and
oversee data governance for the company. Associate vice president of enterprise data product management Woodson Savage and a team of more than 150 will report to Luber.
Highlight Your Reconditioning You spend valuable time and money on getting your cars ready for primetime. Show this to your customers. You can even go as far as to show off an invoice or list of work done on the car to get it ready. It shows your customers how this car can stand out from similar models on sale elsewhere. Try Video A tool like Covideo gives you the ability to bring a standard vehicle walk-around to life. It gives you the ability to give your customers a firsthand look at the car. You can take them behind the wheel, in the seats and up close with every bell and whistle to show it off like a photo never could. WWW.TNIADA.COM JUNE/JULY 2019 TENNESSEE DEALER CONNECTION 3
PRODUCTS & SERVICES
ARE YOU MAKING IT EZ ON YOUR BUSINESS?
Tennessee’s EZ-TAG System Index
05..................Be the Coach Your People Deserve 06.............. Building a Successful (Sales) Culture 07............................................ Advantages of CPO 08........................................... 5 Social Media Tips 13................................NIADA Government Report 14........How to Build a Better Dealership Website
Advertisers Index
AutoZone ............................................................ 7 Manheim............................................................. 11 NextGear Capital............................................. 8-9 vAuto................................................. Back Cover
What’s New
N AT I O N A L Q U A L I T Y DEALER WEBCAST JUNE 20
Quality Dealers from across the nation will gather in Las Vegas to compete for the coveted title of National Quality Dealer during NIADA’s Convention & Expo. Even if you’re unable to attend in person, don’t miss this exciting event! Watch the live webcast on NIADA.tv on Thursday, June 20, 7 PM PDT (9 PM CDT).
Office
For information on how to become a member please contact TNIADA: P.O. BOX 366 Bell Buckle, TN 37020 1-866-5TNIADA (586-4232) executivedirector@tniada.com
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 Connection is published bimonthly 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 76006-5203. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of TNIADA 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 Christy Haynes • christy@niada.com PRINTING Nieman Printing
The state of Tennessee has partnered with Business Information Systems to develop and launch the EZ-TAG system. The system is an automated and easy to use program. This gives the dealership a streamlined process to print temp tags and temporary registrations in the store and electronically keep the tag log. Seventy percent of Tennessee dealers are on the EZ-TAG system. The state would like that number to be closer to 100 percent. HERE ARE A FEW OF THE BENEFITS. • Free Program • No Upfront Costs for Tags • Easy Reporting Features • Worry-Free Audit Logs • Free Reprints • Protects Law Enforcement by Preventing Unauthorized Use of Temporary Tags • Weather Resistant, State-Approved Paper • Secure Logins • User-Friendly Automated System Change is never easy but in this case we can make the transition smooth for your dealership. Did you know the Tennessee Independent Automobile Dealers Association is your official source for EZ-TAG supplies? Contact TNIADA for your EZ-TAG paper and supplies at 866-586-4232 or executivedirector@tniada.com. AUCTION NEWS
ADESA LAUNCHES SIMULCAST PLATFORM
Cloud-Based Solution ADESA recently announced the launch of ADESA Simulcast, powered by Auction Frontier’s Velocicast, a cloud-based auction simulcast solution. ADESA, working with Auction Frontier, is
ADESA Sacramento and ADESA East Tennessee have transitioned. All other ADESA U.S. and Canada auction locations will be fully transitioned by the end of June.
BOARD MEMBERS PRESIDENT Tracy McMurtry
TREASURER Don Isakson
SECRETARY Sonja Hopkins
Robert Villucci
Franklin Motor Company 615-865-7350
Ally Dealer Products & Services 615-364-6259
PRESIDENT ELECT David Stancil 931-707-8899
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transitioning from its current ADESA’s LiveBlock platform to ADESA Simulcast. The new platform is launching on ADESA.com, ADESA.ca and ADESA’s mobile app. At the physical auctions,
TENNESSEE DEALER CONNECTION JUNE/JULY 2019 WWW.TNIADA.COM
Parker Auto Sales 865-310-3505 ISI Dealer Services Phone: 512-318-8642
Wendy Chester
AutoZone Phone: (901)338-5189
Stephanie Isakson Green Light Auto 865-776-2341
Newton G. Welch III Newton Motor Company 615-426-5855
Kevin Thompson Stars GPS 865-607-8371
MANAGEMENT MATTERS | By Dave Anderson
BE THE COACH YOUR PEOPLE DESERVE
Are You a Critic or a Coach? Ken Blanchard called feedback the “breakfast of champions,” and rightfully so. We all need feedback to grow and develop to our fullest potential. When done properly, coaching those on your team and giving them quality feedback is one of the highest return uses of your time. However, when it comes to giving feedback, many leaders today are more of a critic than a coach. They point out what’s wrong without offering the individual any coaching that would allow them to adjust and bring better performance day in and day out. Criticism without coaching doesn’t elevate people – it frustrates people. What follows are some key principles of coaching, and some steps to make sure you’re the coach your people deserve, and not just a critic of them. But first, let’s discuss what it means to be a critic and what it means to be a coach so you can better assess your style of giving feedback. A critic is defined as “one who expresses displeasure or an unfavorable opinion about someone or something.” Simply put, criticism without coaching is merely expressing displeasure and leaving it at that – not exactly the balanced feedback “breakfast” necessary to grow, develop, and invest in the people on our team. A coach, on the other hand, is “someone who gives private teaching, a trainer or coach.” Make no mistake, a coach will also express displeasure concerning poor behaviors or performance, but the difference is he or she will also provide instruction on how to improve. With a better understanding of what it means to be a critic and a coach, let’s look further at the differences between them. To improve performance, a coach will provide feedback concerning poor performance and immediately follow it up by redefining a performance expectation. The coach will do this both conversationally and sincerely, without getting personal, profane, loud, or reminding the offender of their past flaws and faults as the critic does. To improve performance a good coach will show the person what good performance looks like. By redefining the performance expectation with the individual, you’re setting the standard. By modeling and demonstrating the good performance you’re looking for, you’re setting the example. To further reinforce his or her point, the coach will explain why it’s important
to perform the task or duty in the manner prescribed. A great demonstration of what you’re looking for, by itself, is not enough to help coach the individual to greater levels of performance. This is why the best leaders in any field explain the “why” behind it. They understand people are more likely to apply the “how,” and live with the “what,” if they first understand the “why.” To test the individual’s comprehension of the feedback and the example demonstrated, a coach will ask the person to perform the task again to demonstrate their understanding of the proper technique. The only way you can know for sure that people get it is to test them, and let them show you they’ve got it. If the person requires further training to be able to perform the task or create the desired outcome, the coach will provide the resources necessary to support the person. Strong cultures understand talent doesn’t arrive fully developed, and a ferocious dedication must be made to training, coaching, and mentoring employees. Identifying and resourcing a team member’s growth by providing tools, experience, mentors, training or additional practice are key ways the coach supports and helps build the skillset necessary for the person to perform well. Once the performance improves, a coach will reinforce the change or improved behavior. This is because behaviors that are reinforced and rewarded are more likely to be repeated. But remember, the longer you wait to reinforce the behavior, the less impact it has. Reinforce often and quickly when you’re trying to influence behavioral and performance changes. If necessary, the coach will establish consequences for the performer if the poor behavior or performance continues. If you want to change a behavior, you must change the consequence for that behavior. As the saying goes, “If nothing changes, nothing changes.” Even when establishing consequences, a good coach will affirm belief in the performer and his or her ability. This is because the coach understands the consequence being established is something they’re doing for the person, not to the person. The sole objective of a consequence is to improve performance.
In summary, a critic is good at finding and pointing out faults or flaws. While a coach does likewise, his or her primary objective is to create the structure and tools necessary to eliminate the flaws. The coach is not just a “finder” but a “fixer.” With these points in mind, are you more of a critic or a coach? If you were to randomly survey team members on your coaching and feedback abilities, would they agree? If not, or if you’re unsure, the good news is you can fix that by bringing more focus to applying the principles shared here and adding value to your people, so they in turn can add more value to the organization. If you have good people who are being hamstrung by criticism without coaching, don’t expect them to endure or stay in your ranks for long. They won’t put up with the abuse, nor should they. Step up and be the coach they deserve – don’t wait until it’s too late to do so. 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.
WWW.TNIADA.COM JUNE/JULY 2019 TENNESSEE DEALER CONNECTION 5
SALES MATTERS |
By John Chapin
BUILDING A SUCCESSFUL (SALES) CULTURE
Four Features of a Great Work Culture You just hired the perfect person: great work ethic, positive and upbeat. They show up early, leave late, take 10 minutes of a 15-minute break, and do more than expected and more than you ask for. Now let’s take that person and put them into an environment where people are negative, aren’t held accountable, take three days off for a hang-nail, show up at 8:05 then spend 45 minutes “getting ready” for their day, start preparing to leave at 3:30 and leave at 5:00 like there’s a fire drill. What happens to that perfect hire? One of two things: they either become just like everyone else after about a month, or they leave. Whatever your culture is, it has a substantial impact on performance. There is significant peer pressure to conform to the culture, be it good or bad. This peer pressure is one of the four main motivators for people who belong to any group. Positive peer pressure is what took my grades from C’s in public high school to A’s and B’s in private high school. It’s also what ensured I made over 200 phone calls per day in my first job as a stockbroker. If you’re a great team or organization with a great culture, fantastic. Unfortunately, most organizations have negative cultures, or at least elements of them.
F EATUR ES O F GR E AT C ULT UR E S Great Leadership Culture is top down. It begins at the top and flows down through the entire organization. Whatever the leadership team eats, breathes, walks and talks related to culture will become the culture. As a leader, you don’t get what you want, you get what you tolerate and allow. And what you tolerate and allow you tacitly condone and get more of. If you allow people to miss their numbers year after year, when it’s evident they aren’t making the calls and doing the necessary work, you’ll get more of that. If you allow negativity in the workplace and don’t hold people accountable, you’ll get more negativity and more people not doing their job. On the flip side, if you lead by example, walk your talk, believe in people more than they believe in themselves, empower them, listen to them, give them all necessary tools and resources, and hold them to a higher standard, you’ll get more of that. Rules and Decrees The culture in an organization is how people treat other people, how they treat work, and how they treat the work environment. Great cultures have rules and decrees regarding these three items – written rules and decrees.
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Here are a few examples: • E veryone is expected to show up on time, work until the end of the day, finish what they start, be honest, have integrity, and put in a full day’s work for a full day’s pay. • E veryone will be held to the highest professional and ethical standards. There is no place in the workplace for negativity or unprofessionalism. You will be respectful to all employees and clients. Gossip, talking, and otherwise communicating behind someone’s back won’t be tolerated. • W e are a great organization with a great product. We take better care of our clients than the competition because we care more. Your rules and decrees, totaling about eight to 15 in number, should be framed and prominently posted in several highly-visible areas in the workplace on a document titled: Rules and Decrees of the Workplace. Prospective employees should also receive a copy of these during the interview process and you should have a conversation with them about how they feel about these. By the way, full acceptance of the rules and decrees is a non-negotiable prerequisite to being hired. Everyone is on Board with “All In” Commitment When Malcolm Butler was limited to a few special teams plays in Super Bowl 52, many people said that move cost the Patriots the Super Bowl. Maybe. My contention is that had they let him play and won Super Bowl 52, the Patriots would not have been back to play in Super Bowl 53. No one who breaks the rules gets a pass. If this is allowed even once, people inside the organization start to question the integrity of the culture, and the culture starts to crumble. When you’re more interested in winning, or making a sale, than living by your values, it’s the beginning of the end. Again, no one gets a pass on the rules, not even your top sales rep.
TENNESSEE DEALER CONNECTION JUNE/JULY 2019 WWW.TNIADA.COM
Cover Story
This doesn’t mean people don’t get a mulligan. You can allow a mistake or two, but address it immediately, and keep the leash short. Don’t allow chronic offenders who are making blatant and/or repetitive mistakes. While an occasional mistake may be inevitable, carelessness, ignorance, and apathy aren’t. Culture is a Living, Breathing Organism A great culture can’t simply be written out, placed on the wall, and left to die. It needs to be kept alive and well by visiting it often, talking about it, and reviewing it. Repetition is important, because like any new habit it will take time to imbed the culture into the consciousness and sub-consciousness of everyone in the organization. Once it’s locked in and habitually followed, discussing the culture keeps it on everyone’s radar and ensures it is remembered and adhered to. Also, it may be necessary to tweak some rules or decrees from time to time. Though many rules and decrees aren’t likely to change, there may be times when changes in people, technology, and other unforeseen future events make an edit necessary. Finally, you build a great sales culture by building a great overall company culture. As part of the organization, the sales department is included in all rules and decrees. Everyone, from leadership to the mailroom, must be on the same page when it comes to culture. So, while the sales department may have some additional rules and decrees related to activity, quotas, and other items, building an all-in, solid organizational culture is what will ensure the success of the sales culture. 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.
MARKET WATCH |
By Danny Delich
ADVANTAGES OF CPO
A Customer Favorite
The advantages of selling Certified PreOwned (CPO) vehicles are varied and many, but reduced to the common denominator: a properly utilized CPO program will help you sell more cars. Why? For the customer, a CPO program puts your dealership a cut above the rest because it promises a quality used vehicle without the risks normally associated with the used vehicle marketplace. For example, what if a customer purchases a used car that ends up needing expensive repairs? They can pay the expense themselves or sell the car. If they sell, they either lie about the condition or take a loss when disclosing the vehicle’s issues. A CPO vehicle eliminates this dilemma, thus eliminating the customer’s fear of getting stuck with a lemon. In all likelihood, a CPO car will be a highquality used vehicle that gives the customer a problem-free ownership experience. For one thing, the certification process puts each vehicle through dealership reconditioning dictated by an extensive inspection checklist of more than 100 items, ranging from mechanical parts to the condition of the vehicle’s interior.
So you and your customer already know the vehicle is sound, inside and out. This is a fact upon which you can build solid negotiations. Added benefits include a limited warranty (which further reassures your customer they won’t be hung out to dry in case of mechanical problems), roadside assistance and provisions for a loaner vehicle if their vehicle is held for covered repairs. These benefits raise the perceived (and actual) value of the program in the eyes of the customer and give peace of mind that makes it worthwhile for the customer to pay a little more – and they realize that. These features add value and should also be discussed during negotiations. Even though the cost of a CPO vehicle is a bit higher, your customer saves money in other ways, such as depreciation. According to Carfax, a typical new vehicle loses 20 percent of its value in the first year of ownership. That means a $30,000 new car will be worth only $24,000 just one year
later. Naturally, any vehicle will continue to depreciate as it ages, but it can be at a much slower rate. Certification allows the customer to buy an “almost new” model for less, which will better hold its value until they’re ready to pass it on to the next owner. And they can enjoy this advantage without worry because although the vehicle is older, it is of certified quality. And who wouldn’t return to a dealership that was able put them into the car of their dreams without the usual worries of a used car purchase? With the knowledge that they’re covered by a limited warranty? Secure they’ll never be stranded at the side of the road? And with the reassurance they’ll have a ride to work even if the car is in the shop for a covered repair? I know I’d be a customer for life, and I’d send my family. Danny Delich is senior vice president at Peak Performance Team.
WWW.TNIADA.COM JUNE/JULY 2019 TENNESSEE DEALER CONNECTION 7
SOCIAL MEDIA | By Kathi Kruse
5 SOCIAL MEDIA TIPS FOR CAR SALESPEOPLE
Put Your Professional Brand into Action Building a recognizable professional brand opens up professional opportunities. Social media can be very helpful for car salespeople to build authority, engage current and wouldbe customers, and set appointments. Every time you are online, in a meeting, at a conference, networking reception, or even a backyard BBQ, be mindful of the following: 1) What others are experiencing about you. 2) What you want others to experience about you. In each of your engagements, your customers, peers and even friends and family are evaluating you. When you’re solid in your professional brand, there is no difference between #1 and #2. As a car salesperson, being new to this idea of a professional brand can be challenging. However, when you begin to see yourself living through the “lens of a brand,” your perspective will change and you’ll become more mindful about how you approach the professional brand you are trying to define and aiming to live.
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Customers have changed how they shop: • 95 percent of car buying begins online (Google). • 96 percent of consumers are influenced by online reviews (eMarketer). • 80 percent of car buyers are more likely to turn to social media than a salesperson (Crowdtap). • There is expectation of price without having to talk to anyone (DrivingSales). • The average consumer visits 1.6 dealerships in person (Autotrader). Putting your own professional brand into action allows you to greet the customer where they are and help facilitate a purchase (or a purchase through their friends and family). We call this “social selling.” These five “social selling” steps will help you put your professional brand into action. Look Your Best Your image is just as important in the digital world as it is in the real world. Online, your profile image is the first thing prospective clients will see. Make a
TENNESSEE DEALER CONNECTION JUNE/JULY 2019 WWW.TNIADA.COM
good impression with a professional image that isn’t too stuffy but still makes you look trustworthy and friendly. The copy in your bio on any social network has to accomplish everything a greeting, handshake or elevator pitch would do in person. Write every word with your prospect in mind and write in the first person, not the third. And be sure to very clearly share your contact info. Share multiple avenues if there is room. On a site like LinkedIn, where you have more real estate to expand upon in your summary section, tell a story about who you are, why you do what you do and how you can help. Remember, LinkedIn is different from a resume. Use your headline not just for your title but also for a short phrase or keyword explaining how you help your clients. Build Your Credibility Your store has a solid reputation, but do you? Social networks can help you build your personal brand. With every Facebook post,
Instagram post, LinkedIn comment or Tweet, you can grow your reputation and establish a solid foundation. It’s a great record of your authentic self and a great place to demonstrate your understanding of your industry and potential clients. High credibility can be achieved by sharing relevant articles about the auto industry and your dealership as well as adding thoughtful insights to conversations and solving problems your prospects may have. It’s all in the name of establishing trust. When you share interesting thoughts, others will re-share them, tag you or start a conversation with you. Track Your Social Selling Efforts The best way to get better at social selling is by learning from your existing efforts. Collect insights from your current efforts and see what’s effective as well as what isn’t. Based on this data, ask yourself what you should be doing differently and what you can do better. This can help you gain clearer direction of how you should adapt your efforts to deliver even better results. Track these metrics and set personal goals to improve: • Inbound connections and network growth. • Content engagement rate (how many people are engaging with your content each week?). • Follower quality (followers who find and engage with your content).
• Prospect referrals. • Lead activity. Pro tip: LinkedIn has a “Social Selling Index” (SSI). LinkedIn should be one of your preferred channels to prospect. Check out your own SSI at business.linkedin.com/salessolutions/social-selling/the-social-sellingindex-ssi. Monitor Relevant Conversations to Find Prospects The most effective tactic to understand what your prospects want and need is to listen to them. You can then customize your messaging and/or offering based on this knowledge. All you need to do is pay attention to what your prospective and current customers are saying. Monitor relevant conversations about your vehicles to see what issues existing customers are experiencing. Maybe they’re venting their frustrations about your service on social media. Or they could be raving about you but mentioning some areas that need improvement. You can make use of all of this information to provide solutions to your existing customers and address their issues. So you’ll be nurturing your relationship with them to enhance their loyalty. Pro tip: Participate and engage in Facebook and LinkedIn Groups. You can share your valuable expertise and content, ask relevant questions or engage with group members to build a relationship.
Find Your Prospects Social networks are a great place to learn more about your potential clients. Pay attention: where do your potential clients turn to seek more information about problems they may have? Do they belong to a LinkedIn group? A public or private Facebook group? A weekly Twitter chat? Plant yourself there, listen to their conversations and get involved. While LinkedIn is the place to turn for business connections, Twitter has a much better search function and has a lower barrier to entry. You can follow anyone you want, from a CEO to a celebrity, and they don’t have to accept your request as they do on LinkedIn or Facebook. They might even follow you back. Once you’ve found some prospects, they may be able to lead you to others. For example, check out whom they are following and start following those people as well. On LinkedIn, some of the best conversations happen in industry-specific groups. Check the profiles of your prospects and see which groups they are a part of, and then join them. Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc., which coaches, trains and delivers webinars focused on integrating social media and online reputation management into dealership operations. She can be reached at kathi@ krusecontrolinc.com.
WWW.TNIADA.COM JUNE/JULY 2019 TENNESSEE DEALER CONNECTION 9
PRODUCTS & SERVICES
PASSTIME INTEGRATES WITH SOLUTIONS BY TEXT
Making it Easier to Stay in Touch Automotive GPS solutions provider PassTime recently announced it has completed an integration with Solutions by Text, a division of Marketing Response Solutions, focused on streamlining client communication and leveraging the power of SMS to create advanced business solutions in the mobile space. Through the software integration, mutual customers of PassTime and SBT will have the ability to automatically send consumers text message communications and reminders relating to their vehicle payment and PassTime device. The addition of text message communication to the payment reminders of the PassTime device makes it even easier for dealers and finance companies to stay in touch with their customers. “The integration with SBT is something a lot
LEGAL MATTERS |
of customers in the industry are already talking about,” said PassTime president and COO Chris Macheca. “We are most excited about providing our customers even more tools to help their business – and that is exactly what the integration with Solutions by Text gives them.” Automotive dealers and finance company customers use PassTime’s GPS solutions to connect vehicles and protect their assets. For the auto finance industry, PassTime GPS solutions help facilitate communication between consumers and creditors, helping keep consumers on track with their payments with payment reminders. PassTime, which has been in business for over 25 years, prides itself on providing high-quality and reliable products to the vehicle financing industry along with unmatched 24/7 live customer care.
Solutions by Text leverages the power of SMS for business solutions and has a full suite of services to complement nearly any business model, from payment reminders to completing a transaction. From answering billing questions, offering loyalty discounts, or promoting products and services, with SBT, customer communication happens in real time. “At the end of the day, it’s all about creating meaningful relationships. Our partnership with PassTime GPS allows us to provide useful tools to better the user experience,” said Solutions by Text CEO Danny Cantrell. “PassTime GPS is a top tier organization and we are proud to be a part of the team.” For more information, contact PassTime at 877-727-7846 or info@passtimegps.com.
By Jeff Ingram
BE CAREFUL WITH CREDIT REPORTS
Follow the Proper Procedures Obtaining and using a customer credit report is one of the most common actions taken by car dealers. Each credit report should be treated with care because each one represents potential liability to you. There are numerous restrictions on the use of those credit reports. Generally, what you obtain is a “consumer report.” Use of such a report is governed by a federal statute. A “consumer report” includes more than just what you may normally think of as a credit report. A consumer report is a written, oral or other communication of information by a consumer reporting agency bearing on a customer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living which is used or expected to be used or collected to serve as a factor in establishing the consumer’s eligibility for credit or insurance, employment purposes or any other purpose authorized by statute. Credit reporting agencies are limited in furnishing a consumer report. Such a report can be furnished only if the consumer report is to be used: 1) in connection with a credit transaction involving the consumer; 2) for employment purposes; 3) for insurance underwriting purposes; 4) for a legitimate business need in connection with a business transaction initiated by the consumer or to review the consumer’s account.
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How do credit reporting agencies ensure their reports are used only for these purposes? By obtaining warranties from you confirming the report is being obtained for one of these permitted reasons. If you take an adverse action based in whole or in part upon the information in a consumer report, you must provide: 1) notice of that action to the consumer; 2) the name, address and telephone number of the agency that furnished the report; 3) a statement that the agency did not make the decision to take the action and cannot provide the reasons why the action was taken; and 4) notice that the consumer can obtain a free copy of the report from the agency and dispute anything therein that is inaccurate or incomplete. An adverse action is not just a refusal to provide financing. An adverse action can include offering a financing rate in excess of the amount requested by the customer. If you deny credit for personal, family or household purposes or increase the credit charge based on information gathered from someone other than a consumer reporting agency, you must, if requested by the consumer in writing, disclose the nature of the information to the consumer. Be sure you have reasonable procedures in place to assure compliance with these sections. Such procedures could be an important defense in a claim brought by a consumer.
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It has long been thought that you do not have to supply the adverse action notice if the credit decision is made by someone else. For example, if you submit a credit application to a potential financing source and that source refuses to extend credit, that source must supply the adverse action notice. If their notice if sufficient, you probably do not have to furnish one. There has, however, been litigation as to whether or not dealerships must also send an adverse action notice even if the financing source sends one. To be safe, you should send your own notice to everyone who has an adverse action taken against them. Many dealership computer systems automate this process, making it easy to send out those notices. Once you obtain a credit report, you must take steps to protect that information. Do not allow employees or other persons to view the report unless there is a legitimate business reason for them to view the report. Do not simply throw the report away. When you dispose of a report, you should do so in a secure manner such as by shredding the report. Store reports in a secure manner to prevent unauthorized access. Obtaining credit reports is a necessary part of your business. Do not let it cost you money for failing to follow the proper procedures.
ACCELERATE |
By GWC Warranty
3 HURDLES TO VSC SALES
How to Clear Them
The numbers are in. Consumers have spoken. There are three main reasons customers don’t protect themselves with service contract coverage. The good news is dealers can easily clear these hurdles with the right program in place. A study recently released by Pegasystems surveyed more than 1,000 consumers to understand whether or not they saw value in service contract coverage and what stops customers from purchasing a VSC with their vehicles. Overall, the study found 63 percent of customers do not have a service contract despite seeing the value in one. Why is this? Let’s dive into what stops customers from buying a VSC and how you can overcome those obstacles. Cost Thirty-five percent of customers say they can’t afford a service contract. But when you compare the small increase in monthly payment to what a major repair could do to
a tight monthly budget, it’s easy to see which scenario is easier to withstand. With so many used car buyers on tight monthly budgets, a service contract’s monthly investment can easily pay off in the long run. Not Thinking They Need One Thirty-two percent customers think they’ll never encounter the need for a service contract, but trends say otherwise. A simple question of how long the customer plans on owning the vehicle he or she is purchasing is just what you need to clear this hurdle. With the average length of ownership on the rise, chances are your customers will be in their vehicles for a long time. Used cars are inherently more likely to break down, especially as they approach and surpass 100,000 miles, making it more likely than
ever a customer will need a VSC at some point during his or her ownership. Lack of Availability at the Time of Purchase To solve for the 29 percent of customers who aren’t offered a VSC at the time of purchase, all you have to do is turn to the 300 percent rule. The first step is having a service contract provider that offers the product versatility – from both a vehicle and term perspective – that fits your inventory. Once that’s in place, it’s vital you present 100 percent of your products to 100 percent of your customers 100 percent of the time. You’ll never bat 1.000, but you’ll get better at your presentation as you continue to get real-world practice and you’ll inevitably see the results in your F&I profits.
COMPLIANCE MATTERS | By Digital Authority Partners
BUILDING AN ADA COMPLIANT WEBSITE
A Quick Guide
Lawsuits targeting business websites with ADA violations are on the rise. In fact, the number of ADA lawsuits filed in federal court for alleged website violations reached a record of over 10,000 in 2018, a 34 percent increase from 2017. You risk steep fines if your car dealership’s website is not ADA compliant. Your first violation could cost anywhere from $55,000 to $75,000, not to mention the potential revenue loss from failing to cater to the nearly 50 million adults in the United States living with some form of disability. It pays to comply with ADA regulations, but more importantly, it’s the right thing to do. What does it mean to have an ADA compliant website? Title III of the Americans with Disabilities Act stipulates businesses must provide a website experience that works for all citizens – including those with disabilities. This means having a site that accommodates users with visual impairments, as well as those with hearing, motor, and cognitive impairments. Here are four critical steps to ensure your website is ADA compliant.
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Ensure your website can be easily navigated with a keyboard. Users with disabilities may have trouble gripping a mouse, but they can still operate the computer using another limb, their eyes, a headpointer or a mouth stick. Ensure users can perform all tasks on your website using a keyboard. This includes everything from page navigation to clicking on a link or button, selecting a radio button, or scrolling through the website’s menu. Use alternative text on graphics. Blind or visually impaired users need software applications called screen readers to make sense of your website. Screen readers rely on alternative text or metadata included in the website code to “translate” images to users. Alternative text should be 125 characters or less to be compatible with most screen readers. As an example, alt text for the image of a vehicle should include the vehicle type, color and other background details. Make your forms accessible. All website forms need to be easy to understand and fill out by those with disabilities. This can be achieved by adding
TENNESSEE DEALER CONNECTION JUNE/JULY 2019 WWW.TNIADA.COM
text labels to your forms such as “textbox,” “checkbox,” “radio button,” and “menu.” Provide clear instructions about what actions you expect users to take, such as “request a quote” or “apply for financing.” Don’t place time limits on your form. This allows users with disabilities to complete actions at their own pace. Additionally, all forms should have easy-to-see error messages with steps on how to fix them. Fix your language. You can program the language of your website’s content by using the HTML language attribute, allowing screen readers to read content out loud with the correct pronunciation. For example, without the language attribute, a screen reader pronouncing a German car brand would sound like a tourist who doesn’t speak the language, causing confusion for the listener. Use proper color contrast. You also need to ensure adequate color contrast. Reading brown on a black background is hard enough for a normal user, but almost impossible for those who are color blind. According to the Web Content Accessibility Guidelines standard for color contrast, a 4.5:1 ratio between text or images and background is required. All customers and website visitors deserve a great online experience. Designing an accessible website should be one of your top priorities in 2019. If you don’t have the expertise to fix ADA compliance issues inhouse, consider working with an agency. Digital Authority Partners can help you build a userfriendly, ADA compliant website. Contact us at hello@ digitalauthority.me or (312) 600-5433 to get your ADA audit today.
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.
LEGISLATIVE Congress overturned the Consumer Financial Protection Bureau’s controversial guidance regarding discrimination in auto finance last year, but that doesn’t mean the issue is dead. The House Financial Services Committee’s Subcommittee on Oversight and Investigations held a hearing May 1 to examine discrimination in the automobile loan and insurance industries. The hearing included debate about the CFPB’s now-nullified guidance document, which claimed dealer discretion on interest rates in indirect auto lending creates a “significant risk” of unintentional disparate impact discrimination. “Last Congress, Republicans impeded enforcement of fair lending laws, making discrimination potentially worse,” committee chairwoman Maxine Waters (D-Calif.) said, referring to the vote to repeal the guidance. “Buying a car is a significant purchase for many Americans and should be a fair and transparent transaction, free of discrimination. Unfortunately, this is not the case for persons of color.” Waters said a “test of auto lending discrimination” by the National Fair Housing Alliance found “nearly two-thirds of minority loan applicants received higher-cost financing options from automobile dealers than less qualified white applicants.” “These types of practices warrant Congressional scrutiny, analysis and ultimately legislation,” she said. While much of the questioning and arguments from committee members went predictably according to party affiliation, Rep. Joyce Beatty (D-Ohio) joined ranking member Patrick McHenry (R-N.C.) in casting doubt on the CFPB’s methodology used to identify the race and ethnicity of consumers in determining disparate impact discrimination. Congressional Democrats would like to address the discrimination issue legislatively now that they control the House, but their options are limited by the previous Congress’ override of the CFPB guidance – not to mention the Republicancontrolled Senate.
Rep. Cathy McMorris Rodgers
REGULATORY The Federal Trade Commission has completed its 3½-year review of the Holder in Due Course Rule and concluded no changes are necessary. The commission said it received 19 comments from the public about the rule – including a comment from NIADA – since the review began in November 2015. All of the comments supported retaining the rule as is. The Holder Rule, formally known as the Trade Regulation Rule Concerning Preservation of Consumers’ Claims and Defenses, was put in place to protect consumers when they purchase personal goods or services with money loaned by a merchant or a lender who works with a merchant. The rule requires those loans to include a provision that preserves consumers’ ability to raise the merchant’s misconduct as a reason for not repaying the loan, even if the loan is sold to a third party. It also prevents businesses from using financing mechanisms to collect debts from consumers when the debt arises from a sale in which the merchant defrauded customers, failed to deliver the goods or services, or engaged in other misconduct. The five FTC commissioners were unanimous in approving the rule with no changes, and affirmed the commission’s 2012 advisory opinion that the remedies provided by the rule are not limited to circumstances in which the seller’s conduct warrants rescission of the contract, or in which the goods or services sold to the consumer are worthless. PAC In conjunction with the National Auto Auction Association’s Day on the Hill last month, the NIADA Political Action Committee made campaign contributions to freshman Sen. Todd Young (R-Ind.) and Rep. Cathy McMorris Rodgers (R-Wash.). Young serves on three Senate committees important to independent dealers and the used vehicle industry: Finance, Small Business and Entrepreneurship, and Commerce, Science and Transportation – the committee with jurisdiction over the contentious issue of recalls. As the ranking Republican on the House Energy and Commerce Committee’s Subcommittee on Consumer Protection and Commerce, Rodgers also is deeply involved in the recall issue.
Sen. Todd Young
Rep. Maxine Waters
GRASS ROOTS Lawsuits are being filed against dealerships in more than 30 states alleging their websites do not comply with the Americans With Disabilities Act. The 1990 law requires businesses to make “reasonable accommodations” for access to people with disabilities in “any place of public accommodation.” The suits are claiming the Internet is a place of public accommodation, which requires dealerships and other businesses to make their websites accessible to those who cannot use them as currently configured. Those accommodations could include coding to convert words on the screen to audio for blind users, descriptions in videos for the deaf and keyboard commands for interactive functions for people who cannot use a mouse, all of which could be costprohibitive for small businesses such as dealerships. There is currently no federal standard for making websites ADA compliant. The Department of Justice issued advance notices of proposed rulemaking on the issue in 2010, but the Trump Administration withdrew them in 2017, saying DOJ will evaluate whether such regulations are necessary. California dealers have been hit hardest by the lawsuits because state law mandates a minimum of $4,000 in damages plus attorney’s fees for each violation in disability discrimination cases, regardless of the actual damages. Attorneys have made such suits a specialty, with plaintiffs sometimes visiting a number of dealerships and making the same claim in hopes of receiving multiple settlements. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
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ONLINE MARKETING |
By Adam Tobias
HOW TO BUILD A BETTER DEALERSHIP WEBSITE
3 Steps
In the increasingly competitive car dealership industry, brand loyalty is more important than ever. It’s also harder than ever to build. Cutting through the noise requires a clear message and focus on the customer experience. Standing out and building a loyal customer base may seem impossible. But small and mid-sized dealerships around the country are punching back and delivering amazing experiences that win lifetime customers. Brand loyalty is still possible for dealerships to attain. And when they do, the benefits are incalculable. A dealer’s website is their first impression with a potential customer. That’s where our brand loyalty journey begins. The Purpose of Every Dealership Website Dealership websites have one job: Get customers to visit the dealership. Car buyers today spend over 60 percent of their time conducting research online and visit only 1.2 dealerships on average. If your website doesn’t convince a buyer to visit your dealership, you have lost a deal, and potentially a lifetime customer. The problem is most dealers try to do too much with their website. Instead of focusing on their sole job – getting customers into the dealership – dealers load their sites with financial services, their life story, and vehicles that customers don’t want to see. EXAMPLE: A
EXAMPLE: B
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For this reason, most dealership websites are hard to navigate. The customer doesn’t know what to do, so they leave your site and go on to the next one. The best dealership websites – those that effectively drive customers to the dealership – show customers only the information they need to know. Everything else is a distraction. I M PROV IN G YO U R W E B S IT E I N 3 ST E P S Here are three elements that matter most for your website. By focusing on these three elements, you can cut out the junk that distracts customers and turns them away. Element 1: Value Proposition Oli Gardner is a master of building great websites. As co-founder of Unbounce, Oli spends his days thinking about and testing how websites can convert more users into customers. In a recent podcast, Oli discussed dealership websites and the importance of clearly communicating your value proposition to your customers: “If you can’t communicate [your value proposition] quickly, your competitor will,” said Oli. “If you can’t communicate quickly, your competitor will.” Oli said you have less than five seconds to make your value proposition clear to visitors. If you don’t, they will move on to the next site. When a customer first visits your website, they have one question on their mind: What can you do for me? The answer to that question is your value proposition. Dealerships should put their value proposition at the top of their homepage. Remove other messages that might distract from it, including financing deals, weekend sales, and messages from the dealer. Most dealers struggle to do this, but when they do, the difference is clear. The dealership website in “Example A” is easy to read and has a clear value proposition: “Family owned for 35 years. 5 minute approvals.”
TENNESSEE DEALER CONNECTION JUNE/JULY 2019 WWW.TNIADA.COM
Your value proposition is a signal to your target customer they are in the right place. Remove clutter from the homepage so your most important message stands out. Element 2: Testimonials/Social Proof Customers are always on the lookout for scams and bad companies. They want to see proof you’ve made customers happy in the past. Testimonials are the best way to put a wary customer’s mind at ease. Testimonials should be honest, authentic, believable and relatable. Here’s an example of an excellent testimonial for a dealership in Oregon: “Amber and the team were extremely helpful. No pressure and they were attentive to our needs. Great experience. We will definitely be back for our next purchase. Amber answered all our questions, even met us on her day off and followed up the next day via text to ensure we were happy. Financing was quick and painless. The whole process was under two hours.” Reviews that seem over-the-top, or even fake, can do more harm than good. Dealerships should encourage customers to leave honest reviews. Never create fake testimonials or encourage customers to write “favorable” reviews. People can sniff out inauthenticity a mile away. They will steer clear of your dealership and find another. Element 3: Call to Action Button Finally, your website needs a call to action: a clearly-defined next step for customers to take. Most websites look like “Example B.” This homepage has at least 10 different calls to action, with everything from “Shop inventory” to “Claim your Offer!” With so many elements vying for your customer’s attention, the action they’re most likely to take is leaving your site. When it comes to CTAs, clarity is king. Your homepage should have no more than three “actions” for customers to take. Ideally, your website offers a single CTA. Brand loyalty starts with the dealership website. If you promise an excellent carbuying experience, make sure your website provides an excellent experience, too. Dealership websites should be clear, trustworthy, and easy to navigate. Focus on the most important elements of your site and remove the clutter. Dealers who do this will be best positioned to build brand loyalty and earn lifetime customers. Adam Tobias is the co-founder and COO of Dealercue, which provides dealerships with real-time, intelligent, market-driven vehicle appraisal, pricing, inventory management, and sourcing solutions. He can be reached at adam@dealercue.com.