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ONLINE MARKETING |
By Kenny Atcheson
5 WAYS TO PROTECT YOUR DEALERSHIP
Avoid Online Smears
First, read the following real comments by customers. Anything sound familiar? Could these comments lead to solutions? Does having these comments provide an advantage or save you from problems? Deborah: “The sales experience was good. The customer service after the sale has earned a 0. The car had three recalls and a leaking oil tube to the turbo and three mismatched tires. We took care of all these ourselves. But the warranty and service department in Rowling has turned me off to your company. I have been making my payments eight days early. Suzy is an embarrassment to your company. She is not only rude, she sets service appointments and then isn’t even at her job at the appointment time. She doesn’t even tell you up front about the $85 diagnosis fee. She leaves checks on her desk that a customer can easily reach through the window and take. I will get the AC system that is ‘covered’ by your 12/12 warranty fixed somewhere else. I won’t be buying from you in the future and forget about my payments being early. Suzy has single-handedly cost you a good customer.” Milton: “I have noticed that when you bring your vehicle in, whether for routine maintenance or a maintenance issue, you are not given a receipt or printout of repairs/ maintenance done. I asked the first time but was told by Suzy a new system was being installed. I was given one a week later. But the last two times one was not provided. A receipt in any setting is PROOF of purchase. Refusal or reluctance to provide a receipt of work/service performed is suspect to say the least. No paper trail, no record. Who’s to say that work was actually completed? Initial customer service was, of course, awesome. However, even more important to me is how I am treated after the sale. Disappointed is an understatement. Even though we have referred two people, we don’t feel comfortable recommending anyone else.” Maria: “I thought they worked with any credit but apparently they don’t.” Gregory: “I have been trying to contact Darren after applying but he doesn’t call back. I already bought one car through you and still can’t get a call. Guess I will have to go somewhere else.” Fortunately, all of these customer comments were internal.
Online smears have become a common practice for customers of independent dealers. Most dealers nowadays realize the importance of online reviews. However, they sometimes focus too much on getting positive reviews and do not give enough effort to avoiding negative reviews. Here are five ways to protect your dealership. Solicit Feedback Regularly A recent study revealed that only one out of 26 unhappy customers will complain to management. That means you could have 25 unhappy customers running around venting to everyone else. They are complaining at work, to their friends and family, and online. Some may complain to a local attorney general or the FCC, FTC, or another acronym that makes your wallet quiver. Wouldn’t you rather have customers complain to you? Welcome customer feedback at every step and after the sale. You may be able to keep a small issue small instead of it blowing up all the way to the attorney general. What if a customer truly could not understand why you turned them down for financing? That customer may look for other reasons why you didn’t sell to them. They may think you are discriminating against them. Sometimes the customer just doesn’t get it, but they could if you received their complaint and someone in management contacted them to explain. The customer may still not be thrilled with you but perhaps they won’t take it to the next level. Keep Issues Internal All of the customer feedback in this article went through the ThanksForFeedback.com system. As of this writing, none of these customers wrote a negative review publicly on Google. A previous unofficial case study found 97 percent of customers who complain through the system did not write a negative review publicly on Google. If you give your customers a chance to vent, they are less likely to do so publicly. Many customers just want to be heard, not to purposely destroy your business. If you don’t give them an easy method for offering feedback, they will find a way to do so elsewhere – and it will be for all the world to see.
Don’t Forget After the Sale As you know, there are more complaints after the sale than at the point of sale. If you are a Buy Here-Pay Here dealer, you may have the “audacity” to contact the customer to ask for payment. Sometimes they don’t like that. All used car dealers can experience customers who are ticked off because their check engine light came on. Nobody likes to have to bring in a vehicle for repairs. If a customer brings their vehicle in for repairs they should have an easy method for providing feedback while they are waiting and stewing. Not all feedback systems provide this capability, but when they do there are several ways to provide opportunities for customers to tell you what they think after the sale, including: • Signs on the exit door with a number to text feedback. • Sign-in flyer stand at the counter and/or on tables in the waiting area. • On the receipt (although some customers will complain before they get the receipt). • A feedback text number in a regular email newsletter or printed direct mail newsletter. Non-Customers If someone visits your website or the dealership, chances are good they are considering buying. If they don’t purchase, there is a reason. If a customer visits your website, fills out an application, takes a phone call from a salesperson, makes an appointment, shows up for an appointment, and then doesn’t buy, do you think they are more or less likely to complain than a customer who purchased a vehicle? Give non-customers a way to provide feedback. You may keep it internal. You may find out something going on at the dealership that surprises you. Employees Although the names and places were changed in the customer feedback in this article, Suzy was an employee who was mentioned several times. This may alert management that customers have a problem with Suzy. Having an easy system for customers to comment at all times will keep employees on their toes. In addition to earning a great online reputation, an effective customer feedback system offers a number of benefits that are just as valuable. Kenny Atcheson is the founder and president of Dealer Profit Pros and author of Marketing Battleground: How to Deploy Under-the-Radar Strategies to Explode Your Profits. Kenny teaches workshops and speaks at conventions and 20 Groups. His company offers several marketing and advertising programs, customer service and sales training. His website can be found at www.DealerProfitPros.com
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MARKET WATCH | By The Car Connection
AGING CARS
Index
05... The Difference Between Success and Failure 06............................ NIADA Compliance Program 08...................It’s Time to Take Time for Training 10................................NIADA Government Report 12........................Put That Lobby Monitor to Work 14............................ Customer-Friendly Websites
Advertisers Index
Manheim ............................................................. 11 NextGear Capital............................................. 8-9 vAuto................................................. Back Cover
What’s New
S AV E T H E D AT E F O R 2 0 2 0 WA A C : M AY 1
Save the Date for the 2020 World Auto Auctioneers Championship! It will be held at Manheim Dallas Auto Auction on Friday, May 1. The event will be streamed live on NIADA.tv. To learn more, visit autochampionship.com.
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
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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
Average Age of a Car on US Roads Hits Record High The average age of a car Americans aren’t saying goodbye to their in the U.S. hit a new record, vehicles like they used to. The average age of a car in the U.S. hit a according to the results of a new record, according to the results of a study recently released from study recently released from IHS Markit. The average age of a vehicle is 11.8 years old as of IHS Markit. The average age 2018. of a vehicle is 11.8 years old A few factors have likely contributed to the as of 2018. climbing age of vehicles. To start, longer-term loans are available with many consumers financing cars for six or seven years. Thus, they’re hanging onto cars and maintaining them longer. Secondly, IHS Markit said vehicles are simply built far better than they were in the past. Both factors have helped the fleet of cars on American roads stick around longer. The auto industry also experienced a boom throughout this decade. Many buyers likely won’t be swapping into a new vehicle until sometime next decade. Even then, the study said the average age should climb past MARKET WATCH | By Used Car News
CARS.COM NAMES TOP MIDSIZE SUV 2019 Hyundai Santa Fe Ultimate 2.0T AWD The 2019 Hyundai Santa Fe Ultimate 2.0T AWD won top honors in Cars.com’s 2019 Mid-Size SUV Challenge, beating out five contenders. The 2019 Hyundai Santa Fe received the highest score based on 17 separate categories including front- and backseat comfort and amenities, ride quality, handling, braking and value. Other features were considered as well, such as touchscreens, media and connectivity, which address audio and smartphone mirroring like Apple CarPlay and Android Auto.
The judges’ ranking of the midsize SUVs: 1. 2 019 Hyundai Santa Fe Ultimate 2.OT AWD 2. 2019 Honda Passport Elite AWD 3. 2019 Ford Edge Titanium AWD 4. 2019 Nissan Murano Platinum AWD 5. 2019 Chevrolet Blazer Premier AWD 6. 2019 Jeep Grand Cherokee Limited 4X4 “The Santa Fe is a home run for value, with the most generous buffet of luxury features and advanced tech in the mid-size group for the lowest price by a lot – barely more than some top-trim compact SUVs,” said Cars.com’s Washington, D.C., bureau chief Fred Meier, who was one of the challenge’s judges.
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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12-years-old next decade. Breaking down the information by region, western states have the oldest vehicles at 12.4 years old. The northeast’s fleet of vehicles is younger at 10.9 years old, which busts the myth that New Englanders keep their cars forever. Although there isn’t conclusive evidence, weather conditions could play a part in helping cars stay on the road longer in the west than in the wintry northeast. State-by-state, Montana is home to the oldest vehicles on the road with an average age of 16.6 years. The state with the youngest vehicles is Vermont at 9.9 years.
TENNESSEE DEALER CONNECTION OCTOBER/NOVEMBER 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
SALES MATTERS |
By John Chapin
THE DIFFERENCE BETWEEN SUCCESS AND FAILURE
Important Factors
Several important factors separate those who succeed in selling from those who fail. Although some of the following items are arguably more important than others, they are all critical to a salesperson’s success. When I talk about top salespeople, I’m referring to people who are not only great at the profession of selling, but also great human beings. T W E LV E S U C C E S S FA C TO R S
Great Attitude Top salespeople have a positive, “can do,” winning attitude. Specifically, they have enthusiasm, drive, competitiveness, and confidence. Top salespeople are highly motivated to succeed. They see selling as a competition, and they love competition. Top salespeople do whatever it takes to win – ethically – and they do not quit. They are extremely persistent. They are always moving ahead, changing, growing, and pushing through the bad times until they make it. They never give up on themselves and their dream of success. Top salespeople have a win-win attitude. They are genuine and truly like and care about other people. Action Oriented Top salespeople are people of purposeful, focused, well-thought-out, massive action. They are clear about what they are doing and why they are doing it. They don’t procrastinate. They are protective of their time and use it wisely. Top salespeople have a plan and they work their plan every day. They know what actions lead to success and that’s where they spend their time. Preparation Top salespeople are prepared for anything and they over-prepare for everything. They never wing it. They have prepared scripts, presentations, answers to objections, and proposals. They practice, drill, and rehearse. They never rest on their laurels and are always looking for ways to improve. They are ready for anything and expect the best, yet have a plan if anything else shows up. Businesslike and Business-Savvy Consumers are smarter and competition has increased. Top salespeople partner with customers and build a compelling business case based upon what’s best for the customer. They know their customers’ business and problems intimately. They ask intelligent questions that set them apart from other salespeople and, more important, let the customer know they thoroughly understand the business. Top salespeople know and embrace technology, but not to the point where they distance customers and/or remove the human element.
Ability to Stand Out from the Crowd Top salespeople differentiate themselves. They don’t sound or act like other salespeople. They are original. A top salesperson doesn’t come across as someone trying to sell. He or she comes across as an interested and informed party there to help. Top salespeople have an aura of respect. The way they walk and talk demonstrates they are professionals and, in turn, are treated professionally. Top salespeople are real, human, and down to earth, and people like them for this reason. Their caring, sincerity, and helpful dispositions stand out. They are memorable. Likeability, Trustworthiness, and the Ability to Build Relationships Selling is about doing everything necessary to build solid, loyal, long-term relationships. Top salespeople develop and nurture customer relationships and consider most of their customers to be friends. They have the ability to put people at ease and win others to their side, to establish a connection and build rapport quickly and effectively. They build trust and credibility. They are genuine, open, and honest. They convey a sincere interest in other people, what makes them tick, and what interests them. They truly like to serve people. Effective Communication Top salespeople are great communicators, knowing what to say and when to say it. They actively listen and are able to hear people well and read between the lines. They ask good questions, listen well to the answers, and take notes. Top salespeople don’t confuse people by giving them more information than they need. Yet they give them enough information to make a well-thought-out buying decision. Top salespeople have frank, direct conversations with people. Empathy Top salespeople have empathy for their customers and prospects. They are able to put themselves in other people’s shoes. Top salespeople enjoy helping people and they believe, with every fiber of their being, that buying their product or service will help people. Professionalism, Integrity, and Work Ethic Top salespeople are complete professionals with complete integrity. They have a great work ethic. They are always on their best behavior, aware they never know who is watching them. Top salespeople are honest. If they don’t know an answer, they admit it, find the answer, and follow up promptly. They are straightforward.
Top salespeople work both hard and smart. They don’t rest on their laurels when things are going well. They go the extra mile and always deliver more than they promise. They return phone calls and reply to correspondence promptly. Top salespeople take 100 percent responsibility for everything they do, both professionally and personally. Team Player and Leader Top salespeople look for ways to contribute to the team. They share information and success stories that may help other salespeople in their company. They pull for their peers and colleagues. They use a big sale by another person in the office to motivate them. They are focused on becoming better as individuals and believe that by doing so, they help the people around them improve and make their company stronger. Top salespeople work well with other departments and develop strong professional relationships with co-workers. They get along with everyone. Top salespeople are leaders. They expect to be at the top and they are comfortable there. They do not look down on or see others as inferior. Continuing Education and Training Top salespeople are always getting better at selling. They read sales books, listen to sales information at home and in their car, watch videos, and talk to other successful salespeople. They constantly look for ways to improve. They know selling and they know their business, yet they also know there is always more to learn. They study their competition inside and out. Top salespeople stay upto-date on all new developments in their industry and everything that could affect business. They are constantly looking through trade publications and magazines. Company Product and Support Top salespeople cannot remain at the top without reliable products and support. They pick companies and products in which they can believe 100 percent, and they continue to look for reasons their product is better than any other. While 12 factors may seem like a lot, the keys are having a great attitude, a sincere interest in helping people, and a burning desire to succeed. 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.
WWW.TNIADA.COM OCTOBER/NOVEMBER 2019 TENNESSEE DEALER CONNECTION 5
ASSOCIATION NEWS |
By Shaun Petersen and Adam Crowell
INTRODUCING THE NIADA COMPLIANCE MANAGEMENT SYSTEM POWERED BY COMPLYNET
Helping You Maintain a Culture of Compliance For years, government regulators have demanded that dealers maintain a strong compliance management system to comply with the numerous and ever-changing laws and regulations that apply to dealerships. Those regulators have not been shy about taking enforcement action against dealers who don’t comply. Agencies such as the Consumer Financial Protection Bureau have said businesses under their authority must establish a “culture of compliance” that includes frequent self-policing and effectively remediating issues promptly. They have dropped heavy hammers on businesses when those criteria have not been met.
A major benefit of the NIADA CMS is it removes the hassle from documenting a culture of compliance through its well organized and thought-out systems, which automatically alert employees about the need to take training, complete tasks and resolve issues. 6
In addition, the Occupational Safety and Health Administration has criminally prosecuted business owners and managers in the automotive industry when the failure to adhere to the appropriate standards have resulted in injuries. Other agencies, including the Federal Trade Commission, have recently taken enforcement action against automotive businesses for “lax” practices that result in the risk of economic injuries to others. To assist dealerships in establishing, maintaining and documenting a culture of compliance, NIADA has partnered with ComplyNet, an auto industry leader in environmental health and safety, sales and finance, and information security compliance management solutions, to offer an all-in-one workforce compliance management system (CMS) for tracking all compliance efforts – on-site and online. The NIADA CMS has the capability of tracking: • Online compliance training. • Review and acknowledgement of policies, procedures and guides by employees. • On-site inspection and audit results. • Resolution of discovered compliance issues. • Handling consumer complaints. Subscribing dealership managers and supervisors have the ability to easily determine how well their teams are meeting their compliance objectives directly from the NIADA CMS, through intuitive data visualization tools that dynamically and interactively enable managers and supervisors to better manage those compliance efforts. To minimize the most common risks to a dealership, the NIADA CMS primarily focuses on sales and F&I compliance, environmental health and safety compliance and information security awareness compliance. Employees are educated on applicable subject matter based on their job roles through policies and guides that must be reviewed and acknowledged by the employee, as well as through online training that tests employees and recurs periodically to breed familiarity with the subject matter. Topics covered include: • Adverse action. • IRS 8300 tracking and reporting. • OFAC. • Risk-based pricing.
TENNESSEE DEALER CONNECTION OCTOBER/NOVEMBER 2019 WWW.TNIADA.COM
• Red Flags Rule. • Safeguards Rule. • Disposal Rule. • Unfair and deceptive acts and practices (UDAP). • Used Car Rule. • Repossessions. • Hazard communication. • General safety. • Lift safety. • Bloodborne pathogens. • DOT hazmat for hazwaste and disposal. • General cyber awareness. • Email phishing. • Payment card industry standards. A major benefit of the NIADA CMS is it removes the hassle from documenting a culture of compliance through its well organized and thought-out systems, which automatically alert employees about the need to take training, complete tasks and resolve issues. There are other benefits, too. Insurance carriers would rather do business with a dealership that is serious about mitigating its risks and can document all of the various ways the dealership is a better risk than the next one. Sometimes those insurance carriers will compete for that business by offering better premiums. That pleasant consequence is sometimes unintended, but it should be an intended strategy in operating your dealership since less expense equals greater profit. The information captured in the CMS can be leveraged by a knowledgeable insurance agent to tell that great story. NIADA and ComplyNet have collaborated to offer affordable monthly subscription plans to the CMS that will accommodate small and large dealerships alike. For more information about the NIADA CMS and plans, visit www.niada.com and click on the “Compliance” tab. Additional on-site inspection, audit and training services can be provided to NIADA members by ComplyNet. For information about those additional services, visit www. complynet.com or call 1-800-653-1869. Shaun Peterson is NIADA’s senior vice president of legal and government affairs. Adam Crowell is president and general counsel of ComplyNet, which has combined on-site auditing services with intuitive software to assist dealerships in achieving regulatory compliance goals, mitigating risks and retaining talent since it was founded in 1994. He can be reached at adam.crowell@complynet.com.
WWW.TNIADA.COM OCTOBER/NOVEMBER 2019 TENNESSEE DEALER CONNECTION 7
ACCELERATE | By GWC Warranty
IT’S TIME TO MAKE TIME FOR TRAINING
Get Started on a More Successful Dealership With everything you handle on a given day, it’s easy to dismiss training for you and your staff. You understand the value, but always find a reason to put it off. But that can end today. Sure, your main goal is to sell cars. That goes without question. Without finding ways to keep things fresh and continuing to evolve, however, you risk falling behind the competition. You probably already understand this and therefore see the value in dealership training, but it’s easy to watch the busy days, weeks and months fly by without pursuing the training your dealership needs. That said, there’s no better time than the present to overcome these common reasons for putting training on the back burner and get started on a path to a more successful dealership today. Not Enough Time This is the easiest excuse when it comes to avoiding a training program. It’s also the
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easiest to overcome. There are countless options for online training you can complete on your own time. Convenience is just the first step though. Setting deadlines is on you. Give you and your team goals to complete certain coursework and you can begin holding each other accountable to chip away at the training iceberg. Not Enough Money Training can be expensive. But it doesn’t have to be. Looking in unexpected places for ondemand training (like your vehicle service contract provider) might be your ticket to affordable – or even free – training resources. A quality VSC provider will value your loyalty and be able to provide training for your entire dealership that will help you be more successful and efficient in every aspect of your business. Not Enough People So you have a small team, maybe even a
TENNESSEE DEALER CONNECTION OCTOBER/NOVEMBER 2019 WWW.TNIADA.COM
team of one, and you think training would be a waste of your time, right? Wrong. Small teams need training that can maximize success and efficiency more than any others. If you’re running a small shop, you need to maximize all your resources. Learning best practices, pro tips and processes that diversify your skills could actually be the best use of your time. Not Enough Opportunity You might be more of a numbers person and you’ve historically had trouble quantifying the opportunity training holds. When overcoming this objection, think about if you had two more upsells in the F&I office each month. Or if you sold five more cars. Or if you learned about a new product that could double F&I revenue. Unless you train on the processes and methods you can employ to achieve these goals, you’ll have no path to get there. There is always opportunity and room for improvement in your dealership, and training is the road to get there.
INDUSTRY NEWS | By Used Car News
AUCTION NEWS | By Used Car News
HYUNDAI GIVES GRANT MANHEIM FOR CANCER FIGHT ENHANCES SIMULCAST
$100,000 Hyundai Impact Award Grant Hyundai Hope On Wheels, a non-profit organization supported by Hyundai and its U.S. dealers, announced a $100,000 Hyundai Impact Award Grant to the University of Illinois at Chicago to continue its longstanding fight against pediatric cancer. The institution is one of 77 recipients receiving a combined $16 million in new grants this year to develop innovative approaches to finding a cure for the disease. The Hyundai Impact Award was to
New Features Rolling Out
be presented to Dr. Mary Lou Schmidt, chief of the hematology/oncology section in the Department of Pediatrics at UIC’s College of Medicine. HHOW remains one of the largest funders of pediatric cancer research in the nation.
Manheim is introducing several new features to its Simulcast technology, which debuted in 2002. As use of this digital auction platform, which debuted in 2002, continues to grow, Manheim is boosting its investment and improving its dealer experience. New features include: • One platform that makes it easier for dealers to view the bidding/buying experience. • Odometers and auction lights, indicating any special conditions of the sale, are now visible for vehicles on the run list. • Visible proxy bid amounts to remind dealers they have already placed a bid. • Photo tabs that provide more visuals, larger images and multiple views, allowing dealers to see the vehicles from different angles without being onsite, and more. These enhancements will be rolled out to clients later this year and into early 2020.
WWW.TNIADA.COM OCTOBER/NOVEMBER 2019 TENNESSEE DEALER CONNECTION 9
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.
GRASS ROOTS
Members of the Illinois IADA met with State Sen. Laura Murphy to discuss the controversial new law regarding sales tax on trade-ins.
L E G I S L AT I V E
NIADA’s National Policy Conference, held late last month in Washington D.C., offers independent dealers a chance to make their voice heard in the nation’s capital, allowing them to tell their story in face-to-face meetings with members of Congress. But it’s also a chance to advocate for or against bills that are currently being considered by the House or Senate and to discuss NIADA’s position on issues that affect the used vehicle industry and small business. This year there were three major issues on our agenda. First, we voiced our support for a pair of bills in both chambers of Congress – H.R.3182 and S.1564 – that would delay implementation of the current expected credit loss (CECL) accounting standard mandated by the Financial Accounting Standards Board and require a financial impact study of CECL’s effect on the U.S. economy, the availability of credit and small financial institutions such as credit unions, as well as nonfinancial institutions, insurers and government-sponsored enterprises. NIADA is concerned that the additional
reserves required by the CECL standard would reduce the amount of credit available for dealerships through lines of credit and would leave dealerships that provide financing less money to extend credit to their customers. Next up was the familiar subject of recalls, as Sen. Richard Blumenthal (D-Conn.) is once again pushing his proposal to ban the sale of used vehicles with an open recall. NIADA opposes such overbroad recall legislation, which harms consumers by devaluing their vehicles and does not increase recall repair rates. And finally, we reiterated NIADA’s opposition to tariffs on imported cars and auto parts, citing their potentially harmful effects such as increased vehicle prices and reduced credit availability.
R E G U L ATO RY
The American Association of Motor Vehicle Administrators is working on a document, expected to be released this fall, that will provide state DMVs with a list of recommended best practices, including potential laws and regulations, for governing Internet sales from legitimate licensed dealers as well as what AAMVA refers to as “unlicensed dealer activity” – better known to dealers as curbstoning. The document will also address issues to look for in private party Internet sales and guidance for regulating online advertising. NIADA was part of the Internet sales working group that provided comments and ideas for the document. When it is completed we will review it and may have further comments. AAMVA is also in the process of producing a white paper on wholesale dealer transactions that will identify and discuss the way various states handle issues such as wholesale dealer licenses, issues to consider when writing regulations and limiting temporary tags, and will offer recommended solutions regarding shared office spaces and requiring wholesale dealers to have a physical location, and potential sanctions against violators. That paper is also expected to be released in the fall.
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TENNESSEE DEALER CONNECTION OCTOBER/NOVEMBER 2019 WWW.TNIADA.COM
Illinois: Illinois IADA, in conjunction with the state’s new car dealers association, is fighting an impending change in the way sales tax on trade-ins is calculated that will significantly increase the amount of tax paid on many auto sales. The change, part of a wide-ranging tax bill that was passed by the legislature and signed by the governor in June, will cap the sales tax credit for trade-ins at $10,000 beginning Jan. 1. Currently, sales tax is calculated using the difference between the purchase price of the vehicle and the value of the trade-in. So, for example, if a customer buys a $30,000 vehicle and has a trade-in worth $20,000, sales tax is paid on the $10,000 difference. Under the new law, the trade-in value for tax purposes is limited to $10,000, meaning sales tax would be paid based on the $20,000 difference. That would raise the sales tax for that vehicle by at least $625 and, depending on local sales taxes, it could rise as much as $1,000. That increase, in addition to hikes in the state’s gas tax – which was doubled – and license and title fees, would dramatically raise the cost of car ownership in Illinois and it would have a huge negative impact on dealerships and other auto-related business, including finance companies. In all, state lawmakers passed 21 new or increased taxes and fees totaling almost $5 billion this year in an effort to fund a $45 billion infrastructure bill and record $40 billion state budget. IIADA leaders have been meeting with state legislators to discuss preparing a bill to repeal the trade-in cap before it takes effect. That could be accomplished during the fall veto session – a session called to review and reconsider legislation after the legislature’s regular session. A veto session has been scheduled for Oct. 28-30 and Nov. 12-14. In addition, the association is working to raise awareness of the issue in the media and among the public, and has issued a call to action among its members to contact their state legislators to support a repeal. The trade-in tax issue will be among the featured topics of an IIADA Town Hall meeting to be held Oct. 8, during the NABD BHPH Subprime Conference at the Marriott Marquis in Chicago. All Illinois dealers are invited to participate. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
ACCELERATE | By GWC Warranty
PUT THAT LOBBY MONITOR TO WORK
Make Your Job a Little Easier
Something as simple as a monitor in your showroom can go a long way toward helping how your business performs in the F&I office. Having videos on a loop that help customers get on board with the idea of a service contract is a great way to make your F&I job a little bit easier. The great thing about video is it helps customers get to the decision about a VSC on their own rather than being sold the service contract. In these instances, customers feel like the VSC purchase was their idea and therefore feel more comfortable with the value of a VSC purchase. Cost of Repairs A video that describes the cost of common repairs gives customers an idea of what they might be on the hook for if something small or major were to happen to their vehicle. The reality of buying a used car is they are more likely to break down over time. As long as customers know what these repairs can cost, they can justify the cost of a VSC once they get to that point in the process.
Customer Reviews If you work with a quality VSC provider, they should have content on hand to show how they’ve taken care of customers in the past. You can sell customers on the peace of mind associated with a service contract, but seeing how it actually paid off shows just how valuable a VSC can be in a customer’s time of need. Coverage Videos Once customers have an idea of what some common repairs cost and how valuable a VSC can be during a difficult repair experience, you can begin to educate them on the coverage levels you offer. Using video to educate your customers on different coverage levels shows them what is covered under different plans. If they know components they want to protect, they’ll connect that knowledge with the coverage level videos to start making up their minds on what product to purchase. When it’s all said and done, these videos plant the seed about service contract early on, so when the time comes to present your coverage options, your job can be a little bit easier and the sale a little bit smoother.
SALES MATTERS | By Kenny Atcheson
OUR HOUSE NEARLY BURNED DOWN
At Least They Didn’t Try to Sell Me Something Air conditioning companies in Las Vegas are busy in the summer. They are flooded with calls. When the temperature cools, A/C companies need to stay busy, so they sell other services, such as air duct cleaning. Because of my terrible allergies, I was willing to have our air ducts cleaned even if it only helped a little. While the A/C guy was at our house he asked if I wanted to have our dryer duct blown out. I declined since we do a good job of removing the dryer lint before every cycle. I also stick a vacuum in the hole in the wall to suck lint out. The person who booked my appointment and the tech in my home mentioned dryer duct cleaning but didn’t do a good job of selling it. They only mentioned it. Fast forward a couple months. Our dryer was taking two cycles to dry one load of clothes, and they still came out damp. We had a dryer repair man take a look. About $250 later we replaced a part that had burned out because the dryer was working too hard. The repairman told us the dryer was working too hard because the duct in the wall had a major blockage. He explained the blockage did not allow moisture to escape, so although the dryer was hot, the air was humid, not allowing
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clothes to dry. I called a different company to come clean out the duct. It was full of lint nearly 10 feet up the wall from the dryer. No wonder my vacuum didn’t take care of it. The reason I called a different company was because the first company representative did nothing to explain how important it is to have dryer ducts blown out every few years – especially in a one-story house. Someone from the new company explained a one-story home has a dryer duct that goes straight up the wall all the way to the roof. Stuff gets caught in there no matter what a homeowner does to get rid of it. They also explained the number one cause of house fires in Las Vegas is clogged dryer ducts. That made for an easy sale. The point of my story is best understood from Zig Ziglar’s point of view: “Sales is not something you do to someone. Sales is something you do for someone.” People from the first company should have done a much better job of selling me the dryer duct cleaning. Why didn’t they tell me it’s the number one cause of house fires in Las Vegas? Did they lack training about getting past a customer’s initial objection? My wife and
TENNESSEE DEALER CONNECTION OCTOBER/NOVEMBER 2019 WWW.TNIADA.COM
dogs could have burned to death but at least they didn’t have to use any sales tactics on me (sarcasm). In training workshops at dealerships I explain to salespeople they should do their best to sell to customers. That customer could go elsewhere and someone could take advantage of them. Plus, “you don’t get paid.” During this training we discuss every reason the dealership they work at is the better option. We discuss how good salesmanship helps people. Sometimes salespeople steer a customer toward something they did not originally intend to buy. Outside of slimy sales tactics, that salesperson is helping the person. Customers don’t always know what they need. Henry Ford famously said that if he asked people what they wanted they would have said a “faster horse.” Sometimes trying a little harder to make the sale is good for the customer, too. Make sure your team understands this. Kenny Atcheson is the founder and president of Dealer Profit Pros and author of Marketing Battleground: How to Deploy Under-the-Radar Strategies to Explode Your Profits. Kenny teaches workshops and speaks at conventions and 20 Groups. His company offers several marketing and advertising programs, customer service and sales training. His website can be found at www.DealerProfitPros.com
COMPLIANCE MATTERS | By Zach Klempf
TCPA AND TEXT MESSAGING
Are Your Dealership’s Texts Up to Code? Could your auto dealership bounce back from a $2.5 million mistake? Sounds daunting, doesn’t it? Well, the executives at Lithia Motors faced that very real question just a few years ago. The source of their troubles was a text messaging law called TCPA. In 2011, Lithia Motors of Medford, Oregon, sent a short text message to 57,800 consumers. A week later, they sent a second message to 48,000 of those people. What followed was a class action lawsuit that forced Lithia to settle for $2.5 million. Luckily for Lithia, they are one of the country’s largest auto groups. But could your dealership take a blow like that? For most independent dealers, the answer is a resounding “no.” How can dealers avoid this fate? The answer is simple, although not always easy. Complying with TCPA text messaging rules can be challenging if you don’t have the right tools in place. TCPA Text Messaging Laws and Lawsuits TCPA, or the Telephone Consumer Protection Act, is a 1991 law that prohibits companies from sending any form of unsolicited communication to customers via telephone technology. TCPA applies to prerecorded messages, robocalls, faxes, and, yes, text messages. For a dealership to call or text a customer, they must have prior written consent. But that’s not all. Business communication must also comply with several other conditions as outlined by TCPA. Lithia Motors is not the only dealership that has paid for violating TCPA. In 2016, Interstate National Dealer Services agreed to a $4.2 million class action settlement after sending robocalls to customers with unsolicited offers. In 2017, another dealership faced legal action for texting customers about a vehicle recall. This message seems innocent enough, but because the recall wasn’t covered under the car’s warranty, the plaintiff claimed it was a scam to get her to buy more services. The lawsuit was unique because it expanded TCPA law to “service-related” communication instead of just marketing. The latter case illustrates just how fine a line dealers must walk with texting customers. If only one of your salespeople makes a mistake, the penalty could be steep. Fines for violating TCPA can cost up to $500 per text message. How to Keep Text Messages TCPACompliant One of the biggest risks for dealerships is salespeople messaging customers from their personal phones. Those messages are not TCPA-compliant, which means your dealership is at risk of facing legal action.
Maintaining TCPA-compliant text messages takes a lot of work. Luckily, there is a shortcut for dealers to maintain compliance without all the hassle. But before we get to the shortcut, here are the guidelines dealers should follow to adhere to TCPA. •A cquire written consent. First and foremost, GMs should ensure all communication with a customer has been agreed to beforehand. Consent must be in written form and consist of a double opt-in. In other words, when a customer agrees to share their phone number with you, dealerships need to send a follow-up message that asks them to confirm. That message could look something like this: “ABC Motors News and Deals Updates. Messages sent weekly. Reply HELP for help. Reply YES to confirm your sign up.” A customer must reply with a Y or YES to start receiving messages. This is to ensure customers are not signed up without their permission. •B e specific and share important information. Customer consent is not universal. Dealerships need what’s called “contextual consent,” which means customers agree to specific types of communication, like marketing or service-related messages only. Dealerships need to be specific when requesting permission. Instead of asking customers to simply “subscribe,” dealers should ask them to, “subscribe to weekly promotional deals and updates.” Dealers also need to make customers aware of any fees they might incur. With some cell phone data plans, customers must pay for each text message received, so dealers need to include “message and data rates may apply” in their opt-in messages. A dealership’s privacy policies should be easily accessible on their websites. Add a link to your company’s privacy policy in the footer of your website. Make sure an attorney reviews the policy. •S tick to your word. Even after obtaining consent from a customer, dealerships can still violate TCPA by not sticking to their word. Remember, customers must consent to specific types of communication. If they sign up to receive vehicle recall messages, you cannot send them marketing messages without consent for those, too. Consent is also broken by sending more messages than promised. If you say messages will be weekly, but you send them out daily, those extra messages are considered unsolicited and in violation of TCPA. The rule regarding contextual consent is simple: Do what you say you were going to do and nothing more.
•A llow customers to opt out at any time. Just as important as opting in is giving customers the opportunity to opt out at any time. Every message sent by your dealership should include, “Reply STOP to cancel” at the end. Dealers need to maintain a Do Not Call list of all customers who have opted out. It is critical this list is maintained and followed. Many TCPA class action lawsuits are filed because dealers ignored customers’ requests to be removed from call lists. •S tay up to date on changing regulations. Since becoming law in 1991, TCPA has evolved several times. The most recent example is the “services-related messaging” lawsuit mentioned above. With each new case, TCPA’s interpretation changes. It’s important to stay up to date with the latest reading of the law to avoid unknown pitfalls. Take the TCPA Shortcut: Use a CRM System If maintaining TCPA text messaging compliance sounds like a lot of work, you are right. From managing opt-ins to auditing messages to keeping up with new regulations, TCPA compliance is a full-time job in itself. Luckily for busy independent dealers, there’s to a shortcut to TCPA compliance that will save you significant time, money, and headache. The secret is using an automotive CRM with built-in, TCPA-compliant text messaging. CRM systems automate the process so you and your salespeople can focus on the customers. When you add a phone number to your CRM, the customer automatically receives an opt-in message. Each message after that includes optout instructions, and the CRM keeps your Do Not Call list up to date. Additionally, all text messages are stored inside the system, not in a salesperson’s private phone. If a salesperson ever leaves the dealership, they won’t take any sensitive customer information with them. CRMs also make sure your salespeople stay TCPA-compliant with phone calls. No matter the method of communication, using a CRM ensures your dealership stays on the right side of the law and away from lawsuits. Using a CRM to Stay TCPA-Compliant It’s smart to use text messaging to communicate with customers. However, dealerships absolutely need to protect themselves from expensive TCPA violations. The steps to staying TCPA-compliant are clear, but implementing them on a regular basis is difficult and time-consuming. The better way is to rely on a CRM system to take care of it for you. With the right tools, TCPA-compliant text messaging is easier than you think. Zach Klempf is founder & CEO of Selly Automotive. He can be reached at 415-562-7104 or zach@a1softwaregroup.com.
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ONLINE MARKETING |
By Kathi Kruse
6 SIMPLE FIXES
Making Your Website More Customer Friendly One of the highest priorities for dealers in 2019 is to make their website more customer friendly. However, even though most dealers agree it’s a priority, the resulting website often doesn’t live up to what they envisioned. I recently spent a few days doing a website audit for a local dealer. I was investigating their competitors and found a lot of sites that desperately needed updating – many were not even mobile-friendly. Bad website design, outdated aesthetics, and poor usability are all credibility killers. The Internet does not hand out second chances. No matter what you want people to do once they click to your site – buy, sign up, inquire about service, etc. – it’s all about conversions. Your website’s main role is to compel visitors to take action. Your dealership website must include a strategy to convert visitors. There’s a simple dealership website secret many seem to miss: If you make your website more customer friendly, your conversions will improve. But where do you begin? It’s best to focus on the simple fixes first. 6 SIMPLE FIXES Here are areas that can be modified to improve user experience, engage visitors longer, and answer their questions – thereby setting your site up to convert more customers. Clearly State What You Do Studies show you have less than 10 seconds to convince visitors to stay on your site. If they don’t feel their needs are addressed, they will click away – often to a competitor. To gain several minutes of user attention, you must clearly communicate your Unique Value Proposition within 10 seconds. Also known as a unique selling proposition (USP), your UVP is a clear statement that describes the benefit of buying from you, how you solve your customer’s needs and what distinguishes you from the competition. Your unique value proposition should appear prominently “above the fold” in your hero image section at the top of your homepage. Easy to Find Contact Info Many websites still don’t give visitors an easy channel for getting in touch with the dealer. Some websites don’t even have an email address or contact form. Make your website more customer friendly with these simple fixes: • Make sure you have a “Contact Us” page. •P ut a link to your contact page in a conspicuous place in your header menu. •C reate “click-to-call” and “click-to-email” links so mobile users can easily reach you. Simplify Choices Hick’s Law is a popular theory. It states,
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“The time it takes for an individual to make a decision is proportionate to the possible choices he or she has.” In other words, by increasing the number of choices, the decision time is also increased. You might be tempted to copy Amazon in their presentation of seemingly unlimited choices, but do everything you can to fight that urge. The reality is too much choice is overwhelming and often leads to customer inaction. Wading through a lot of information involves the conscious brain, and results in decision avoidance. The brain dislikes figuring out how one choice is different from the others. Simplify choices so they are easily distinguishable from one another. When presenting choices, keep in mind the brain is lazy and unwilling to wrestle with things. Make it easier for customers to choose by limiting the number of options, showing what makes an option different from the others, and visually emphasizing the choice you want them to act on. Simplify Menu Navigation The navigation on your site serves two purposes: • I t helps the user find what they’re looking for. • I t helps your search engine rankings. Website visitors should come first, search engines second. Use descriptive navigation instead of generic text. Use words your visitors would use and words your visitors are searching for. It’s fewer clicks for the user and it helps search engines indicate your relevance. Keep menus short and concise so they serve the user’s needs. Avoid the temptation to over-complicate. Your customers are on your website to do something, so the navigation should help them do that thing as quickly and pain-free as possible. Pricing The debate on whether or not to include prices on the dealership website rages on. Why? Because every dealer is different and website owners look to Google to help them decide, which often only confuses the situation. The fact is to make a website more customer friendly, there are good reasons to list pricing, or at least a “starting at” price or range of prices: • Give visitors what they want. If someone loves what they see but they have to email you to get pricing, you may never hear from them. And, poor user experience may cause them to tell others. • Saves visitors time. People have an idea of what they can spend. Pricing saves time for those people who aren’t your target customer for budget reasons.
TENNESSEE DEALER CONNECTION OCTOBER/NOVEMBER 2019 WWW.TNIADA.COM
• Save yourself time. Pricing on your site allows potential clients to figure out what a vehicle or service will cost them without bombarding your inbox with inquiries. Clear Calls to Action Calls to action (CTA) should be strategically placed and designed to stand out. Buy now buttons, lead forms, contact pages, click-to-call buttons, newsletter sign ups and more are all crucial to your website performing the way it should. Use strong command verbs: • When a visitor is on a specific vehicle, “Schedule a Test Drive” is a good next step for them. • How about a simple vehicle inquiry? Start your CTA with words like “Find Out More” or “Got Questions?” • Are you looking for more newsletter subscribers? Start your CTA with words like “download” or “subscribe.” • Want someone to request more information? Try “fill out a form for…” or “find out how…” Guide your website visitors through the buying journey with strategically placed, clear calls to action. Focus your efforts on outstanding website user experience. Ninety-five percent of all vehicle purchases begin online. Take a few minutes and go through your website as your customer would. Make note of what works for you and what doesn’t. Take these simple fixes to make your website more customer friendly to your company website provider. Ask them to consider each one and how it may improve your conversions. The changes will help you avoid the negative results that happen on your store’s website and ultimately delight your customers. 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.