AutoSuccess Oct08

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October 2008

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AutoSuccess Magazine is published monthly at 3834 Taylorsville Rd., Building A, Ste. 1B Louisville, KY 40220; 502.588.3155, fax 502.588.3170. Direct all subscription and customer service inquiries to 877.818.6620 or [email protected]. Subscription rate is $69 per year. AutoSuccess welcomes unsolicited editorials and graphics (not responsible for their return). All submitted editorials and graphics are subject to editing for grammar, content and page length. AutoSuccess provides its contributing writers latitude in expressing advice and solutions; views expressed are not necessarily those of AutoSuccess and by no means reflect any guarantees. AutoSuccess accepts no liability in respect of the content of any third party material appearing in this magazine or in respect of the content of any other magazine to which this magazine may be linked from time to time. Always confer with legal counsel before implementing changes in procedures.© All contents copyrighted by AutoSuccess Magazine, a Division of Systems Marketing, Inc. All rights reserved. Reproduction in whole or part is prohibited without express written consent from AutoSuccess. AutoSuccess may occasionally make readers’ names available to other companies whose products and/or services may be of interest; readers may request that names be removed by calling 877.818.6620. Printed in the USA. Postmaster: Send address changes to AutoSuccess Magazine, 3834 Taylorsville Rd., Building A, Ste. 1B Louisville, KY 40220.

Isaiah 9:2The people walking in darkness have seen a great light; on those living in the land of the shadow of death a light has dawned.

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LOW PROFILE SELLING

SteveBrazill

TomHopkins

LauraNoonan

An Interview WithPaulCummings

MattBaker

DON’T LET PHONE-UPS SLIP THROUGH THE CRACKSRecapture Missed Opportunities in Real-Time and Turn Them Into Sales

StephenR.Covey

THE ONE THAT GOT AWAY

MarcSmith

JasonBlair

TURBULENT TIMES

THE CULTURE OF TEAMPart 2 - What Every Used Car Manager

Should Know About the Service Department

SusanBurke

JimAdams

DalePollak

SeanV.BradleyINTERNET SALES 20 GROUP X

WHAT HAPPENS IF I DON’T COMPLY?

PAUL CUMMINGS: MAKING A DIFFERENCEHOW HE TURNED A DREAM AND A $75 BROCHURE INTO A GLOBAL

EDUCATIONAL POWERHOUSE

8TH HABIT LEADERSHIPUnleashing Potential

UNINVITED PARTNERS

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www.autosuccessonline.com

TomHopkinsSTS

LOW PROFILESELLINGToo many people in the automotive

business do poorly because they think selling requires them to be pushy and aggressive. They think they have to talk and talk and talk, wearing clients down until they buy.

Great selling involves being low key. It involves developing the ability to lead people with questions, rather than push them with facts. When you’re talking, you’re only spouting off what you already know. Truly successful people in this business understand that what really matters is getting the clients talking about what they need, then fi nding a truly good solution to their needs among your product offerings.

Don’t just tell potential clients about the various vehicles you have available. Ask them what their goals are. What are their thoughts about what a new vehicle will do for them that their current vehicle does not? Not all clients will be easy to work with. You’re bound to meet clients who may have had a bad past experience with another dealership or sales representative. Their defenses will be high and they’ll be ready to bolt out the door to shop around if you come across like the stereotypical car salesperson.

If helping people own the right vehicle for their needs at an investment they can handle is your professional career choice, you need to see yourself as an expert advisor. You want to counsel clients into the right vehicle for their needs, not just sell them a car or truck.

Being an educator is an important aspect of the business of selling. Think back to your favorite teacher. Most likely that teacher asked a lot of questions to draw out

what you knew about a subject. In fact, at the beginning of every school year, most good teachers will ask a lot of questions to determine what level of understanding their students already have about the subject at hand. You need to do the same with any new client.

If you don’t already have a needs analysis list of questions prepared and ready to use with potential clients, invest some time in drafting one up. Be careful to make the questions conversational. No one wants to be cross-examined or feel they’re being “grilled” for information. However, most people do like talking about themselves and sharing details of their situations when they feel you truly care by how you phrase them and that you’re listening to their answers.

None of this requires aggressiveness of any sort. It doesn’t involve talking fast, either. Many consumers have the perception of people who sell as being fast talkers. If they hear that coming from you, they’ll quickly raise defense barriers. Little alarms will go off in their heads, telling them that they don’t want to be sold anything. They will try to get away from you as fast as possible and seek out someone who can provide professional service to them, rather than being controlling.

The fun part of learning how to professionally meet, qualify and present products to people is that you are in control, but not in a way that generates fear or alarm. You control your meetings with clients by being professional, sincerely interested in their needs, putting them at ease and asking a lot of questions. When you get them talking about themselves or their needs, they’ll relax. When they relax, they’ll tell you more about why they came into your dealership in the fi rst place and

why they want what they want. And, that’s what you really need to know if you are going to serve their needs.

In some cases, customers will contact you seeking Vehicle A because they think that’s what will take care of their needs — perhaps after reading about it in the newspaper or doing some online research or just talking with friends or relatives. However, you’re the professional. If all you do is talk with them about Vehicle A and try to sell that vehicle, you could be doing them a disservice. By remaining low key and asking questions about their needs, you could very well determine that Vehicle B would be so much better for them and make them happier, knowing that you really listened to them.

By making your clients and their needs the stars in your communications with them, they’ll sense the level of importance you put on serving them well. When people feel they are being taken care of well, they’ll come back to you with repeat business and refer their friends and relatives to you. That’s when you’ve truly made it in this business — when clients think “automobiles,” they think of your name.

Those business people who take center stage for themselves and their products by being pushy, showy or talkative may appear to outshine the low-key people in business. But, those who keep their profi les low and their service levels high are those who will be sought out again and again.

World-renowned master sales trainer Tom Hopkins is the chairman of Tom Hopkins International. He can be contacted at 866.347.6148, or by e-mail [email protected].

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STSMattBaker

THE ONE THATGOT AWAYNo matter what area of the automotive

industry you’re coming from, we’ve all been plagued by “the one that got away.”

So what’s a dealer to do? Start by rethinking your daily communication process. Consider implementing morning meetings focused on “saving” yesterday’s dying deals. “Save a deal” meetings are just that — meetings focused on yesterday’s downs to determine the core issue and create a course of action to redirect the path.

The process is simple. Each morning, a motivated manager or key decision maker from each department sets aside time to discuss the downfalls from the day before. The goal here is to re-approach the issue with a fresh pair of eyes. By addressing the missed opportunity after a good night’s sleep, or simply by sharing the problem with others in the dealership, you may be amazed at what you can dig up. From tips on new bank programs or a niche that was overlooked, all can be key pieces of information to consider when developing a plan to redirect that lost sale.

However, before “save a deal” meetings can be truly effective, one must consider whom you have facilitating them. Attitude is an illustration of success. The better the attitude of the manager, the better performance rate of the staff and the more profi table the store. Ideally, you are looking for managers or key decision makers within your dealership who displays unprecedented persistence. They must be fueled by the energy and diligence to call the banks and push the deal, or encourage the sales team to follow up with the customer in question.

Effective facilitation of these meetings will keep the staff

motivated and on-target. By laying out the issue and questioning the process up front, each employee is confronted with the importance of timely and true follow-up.

While motivated facilitators are an important aspect, don’t overlook meeting structure as an indicator of effectiveness. A good fi rst step in any “save a deal” meeting is to address the vehicle in question. Through further inspection, you may realize that the particular vehicle should either be written down or let go due to the inventory age or current market value.

Next consider customer credit rating. This is often the “make-it or break-it” point, especially given the current market condition. Ensure that you are fully utilizing all factory incentives and programs, as well as your relationship with lenders to help swing the deal in a positive direction.

Additionally, take into account the customer’s trade-in value. Make sure that everyone who knows the market for the vehicle has had a chance to take a look. Put feelers out with wholesalers and other dealers. Remember — one man’s trash may be another man’s treasure.

Finally, think about whether or not all decision makers were present. While many might have been wrapped up in the emotion of the sale at the get-go, it doesn’t guarantee a signed deal at the end. Lack of a key decision maker throughout the sales process can be damaging, unless the issue is promptly addressed and a plan of action is set to save the deal.

Once you’ve covered the essential points, what’s the next step? The answer is effective communication through true and timely follow-up. Whether it’s contacting

wholesalers to address a trade-in, or calling on banks to solve the customer’s credit concerns, effective communication (both internally and externally) is essential when attempting to positively infl uence a deal. While not every deal will work out the way you would like, consider using those fully lost sales as topics for upcoming sales meetings. Situations like these provide perfect case-in-point examples which can provide your sales teams with tips on handling similar situations in the future.

In today’s economy, the gas that the customer consumes just pulling into your dealership should be reason enough to follow-up with every one who visits your store. Yet the reality is that true and timely follow-up is often a skipped step in the overall process.

By relying on 100 percent TO (turn over) with no exceptions, dealers can often fool themselves into believing that no plausible deal ever got away. Wake up and smell the coffee; it’s time to re-evaluate how your teams are handling those deals that didn’t seem so possible the day before.

Whatever the case may have been, reviewing yesterday’s business today with fresh perspective offers an opportunity to readdress concerns in a new light. Get yesterday’s issues out in the open by implementing motivational morning meetings that focus on fi nding unique ways to secure that deal that almost got away. Who knows — you might be surprised by what you discover while saving the business you thought you had lost.

Matt Baker is the vice president of sales of G&A Marketing. He can be contacted at 866.618.8248, or by e-mail [email protected].

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An interview withPaulCummings

DTX is a registered trademark of Detroit Trading Company.

An Interview WithPAUL CUMMINGS:MAKING A DIFFERENCEHOW HE TURNED A DREAM AND A $75 BROCHURE INTO A GLOBAL EDUCATIONAL POWERHOUSE

In a recent interview with AutoSuccess Magazine, Paul Cummings set the record straight about his company, his philosophy and his unconventional approach to education.

Paul was asked a series of questions about his 25 years as a teacher. In his usual candid style, Paul gave us a peek into the vision and mindset that has made a difference to more than one million students since he opened his company. Intense, direct, passionate and charismatic to those who know him, Paul addresses important issues to our industry.

AutoSuccess: Paul, how does one stay fresh and relevant in the education business?

Paul Cummings: I believe our willingness to adapt and evolve in these changing times is one of our greatest strengths. In fact, in my 25 years in this industry, I would say we are in the most exciting age as it relates to the subject of change, and we have to adapt to that with new and fresh perspectives.

Clients today are looking for “Fast ToolsTM” they can deploy quickly and with confi dence. Their real world environment is too fl uid and fast paced to implement tools that cause a slow down in operations. We’ve worked to stay on the leading edge of responding to this need by designing tools that can be implemented and executed quickly. The great news is that our clients are responding favorably, and the results have been staggering; in the last 18 months, we have added more than 1,000 new clients to our customer base.

AS: Can you tell us how you approach your training relationships?

PC: Our approach is a 360° full-circle

approach. Anything less can possibly leave gaps in your education program, which may cause system breakdowns and potential failure. These mistakes can easily be avoided by doing a dealership-wide needs analysis. (see fi gure 1)

AS: Is needs analysis an example of one of the “Fast Tools” for dealerships that you mentioned earlier?

PC: Yes, it is one of the “Fast Tools,” and a very important one. Let me explain. When a dealership seeks assistance from a training company, they need to realize there is no “one size fi ts all” process out there that truly works. Tons of those programs are sold, but ultimately the failure leaves a bitter taste in the dealer’s mouth. No one likes to waste their money, especially when it could have been avoided. This is where spending the time up-front on a thorough needs analysis comes in.

AS: How does a tool like needs analysis solve that problem for a dealer? Is it a real solution that will help them avoid the system failure and potential waste of time and money?

PC: Our approach is proven. We have a Web-based needs analysis product and survey company, called QuestionForward360, which provides dealers with a comprehensive gap analysis of their entire business operation. Dealers will enjoy this process because it is fast, affordable and accurate. This approach allows targeted education to be designed to meet their real needs and close real gaps — gaps that, frankly, are costing dealers to lose valuable assets such as people, customers and money. (see fi gure 2)

No two companies are alike, no two companies have the same issues or people.

Without a comprehensive needs analysis, all you are doing is guessing what you need and hoping the training company offers the right solution. Knowing is better than guessing — always.

AS: Describe how your needs analysis program works, and why it works for dealers.

PC: First, everything is Web-based, and for that reason, simple and quick to complete. The analysis is customized, and provides the dealer with a link and a password for every employee. People are busy, so the survey can’t take a long time to complete, and each person contributes to their ideas and opinions with anonymity, allowing each employee to speak freely and with confi dence. Everyone’s opinion carries the same weight, and people love knowing their opinions matter.

AS: What happens after the employees fi nish the survey?

PC: The beauty of technology is the data is collected and assimilated in real time. As soon as the last survey is completed, the needs analysis report is created. This is where the real work comes in. Our content managers and teachers analyze the input then design a customized education program that meets the targeted needs of the client. That is exactly how we began with the Taylor Group and one of the reasons that they are sitting as the No. 1 Kia store in the nation (see sidebar on pg. 14).

AS: Is having a needs analysis performed an expensive process?

PC: The truth is, it is one of the best investments a dealer will ever make. Not knowing the source of your gaps is costly. This uncovers all your hidden activity-based cost that you can’t locate on a statement. The ROI is amazing.

AS: Taylor mentioned they had achieved the coveted spot of the No. 1 Kia Store in the nation since their association with your fi rm (see sidebar). What would you attribute their success to?

PC: That’s simple. Great people. Great products. Great practices. Great philosophy. And, of course, amazing leadership.

AS: In your full 360º circle approach to training and education, where does leadership come in, if at all?

PC: Immediately after the need analysis, we focus our energy on teaching, coaching and preparing the departmental manager — the leaders — to implement the customized program. We do this at our Level 10 Campus.

AS: Is this program a class focused specifi cally on leadership practices and management principles?

PC: Yes and no. The class is called “Sustaining Excellence” and the name says a lot. The program is designed to teach any individual the principles and strategies they need to become a better leader in every area of their life. It is a mind-bending, life-changing experience. The program is fi lled with the most challenging content and situational exercises you will ever encounter. It is extreme education that produces a lifetime of results. (see fi gure 3)

AS: Is it true that some dealers have sent all their employees through the program after they attended themselves?

PC: Yes. In fact, we have on more than one occasion had dealers send their teenage and college-age kids and grandkids through the program. This program will equip any individual for greatness and help them acquire the tools they need to become the best leader they can be.

AS: How often do you teach the class, and who should attend?

PC: We teach the class eight times per year, and we also schedule private events for larger groups and OEMS. As far as who should attend, I always ask dealers the same question to determine that answer. If you had to start over tomorrow with only yourself and fi ve other people, who would they be and why? Whatever the answer, that is the group I want in attendance. This model has produced quantifi able and qualitative results for over a decade.

AS: Why are you and others so passionate about this class?

PC: Because it is our belief that you should always put your money on your coaches fi rst. These individuals have the most dynamic impact on your team daily. Dealers make a mistake when they train players fi rst. This “Sustaining Excellence” content will raise the capacity of leadership by 20 to 30 percent and that will allow the team underneath to fl ourish. Taylor is sending all their managers to “Sustaining Excellence.” This is a content- and process-rich class. Everything you learn is supported with a toolkit for implementation. The class is intense, powerful and based on teamwork. We teach people how to perform more effi ciently. (see fi gure 4)

AS: OK, so now the tough question that I am certain all dealers ask you: How do you sustain the program back in the dealership?

PC: This is something I am so excited about because traditionally this is where training programs fall apart. We have solved this dilemma by using our customized online learning system that continues to deliver our unique training approach — Paul TV Live.

AS: How does an online learning system benefi t the dealer when compared to more traditional approaches?

PC: First, it is an example of a “Fast Tool” that can be accessed 24/7/365 from any computer where Internet service is available. We’ve found that it’s a great learning application that can be used to answer questions as they come up, and to keep a high-level of motivation. The segments are short snapshots — three to four minutes in length, with testing built right in — to ensure comprehension. It defi nitely works. (see fi gure 5)

AS: What type of content should be featured on such a system?

PC: An outstanding online learning system will have something for a dealer’s every need. Paul TV Live delivers this. There is a complete library for all dealership

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AutoSuccess spoke with one of Paul’s clients, the Taylor Organization in Toledo, Ohio, to get their view on the value of training. Taylor has three name plates — Cadillac, Kia and they recently launched a new point with Hyundai. General Manager Stephen Taylor II and New Car Manager and Trainer Ed McNeal shared some comments with us.

Taylor: “Taylor Kia had the opportunity to join forces with Paul Cummings and his team at the beginning of 2008. In our short relationship, Paul and his team have helped thrust our dealership into the coveted spot as the No. 1 Kia dealership in the country! With an inexhaustible source of cutting-edge information, Paul and his team focus on strengthening individuals while advancing strategies that enhance the overall team performance.

McNeal: “If we were to say that Paul Cummings is an extremely gifted communicator and teacher and that he possesses a rare ability to connect to his audience in a way like none other, we would be selling his unique gifts short. He is deeply passionate about impacting lives and does so every time he speaks. To have Paul and his staff on your team is to equip your team with all the tools to win at the highest level. Paul Cummings and his team have made a tremendous diff erence in the lives of our team members and in our bottom line. What more could you ask?”

personnel specifi c to their roles, with leadership and management training featured from “basic” to “advanced” content. Customized content such as telephone skills training is available, along with F&I best practices, prospecting and follow-up strategies, recruiting processes, coaching strategies, assessments of course an exhaustive curriculum for sales and service and so much more. In fact, we even host 52 “Morning Meetings” for the sales department that can be viewed weekly as a set-up for internal dealership sales department meetings.

AS: What about accountability and measurement within the online education system?

PC: Our advanced online learning system has enhanced reporting features where, at the push of a button, managers can view individual, department or dealership progress within the platform. It makes a manager’s job easier.

AS: What other features do dealers look for in an online learning system?

PC: They love the fact that within our system every education segment that is viewed is followed by a test to insure people are learning. All the course materials, workbooks and toolkits are included as PDF fi les that can be downloaded at no extra charge. Our system even allows for internal communication and promotes social networking between team members. The most important feature, though, is that the value and the results should far outweigh the associated cost - with Paul TV Live it does.

AS: Paul, your mission statement is “Changing Lives Through Dynamic Instruction.” What does that mean to you?

PC: I have always considered teaching a privilege. When I started this company, I promised myself I would never bore a student with a dull teaching style. I wanted to be a real difference maker and I believe that goal has been accomplished. Comments like the one from Taylor are humbling and remindful of why I do what I do the way I do it.

AS: Paul, thanks for the time and the information. By the way, did you really start the company with a $75 brochure?

PC: Absolutely I did, and the truth be told I also started the company with a brochure that had a few misspelled words in it. I was in such a hurry to get started I didn’t proof the document. The good news is we turned that into a lesson and kept our eyes on the big prize. All we ever wanted to do was to make a difference. We have been uncompromising in our approach. We have remained unyielding in our commitment to our core values. I have stayed a relentless student and a passionate teacher. We have built a company that cares past the customers check. Our future is bright because our customer’s futures are even brighter. Thanks for your interest and questions.

Paul Cummings is president and CEO of Paul Cummings Enterprises. He can be contacted at 866.618.8365, or by e-mail at [email protected].

We also spoke to the Tim Shults, owner and president of the Shults Auto Group, Shults Auto Group represents 19 new vehicle franchises with stores located in New York state and Pennsylvania.

Tim Shults: “The Shults Auto Group is more motivated and energized than we were just six months ago when we asked Paul Cummings and his ‘Level 10’ team to become our training partner. Paul’s organization has inspired our nine-store operation on personal, professional and business fundamentals resulting in measurable successes at every level. His genuine interest and enthusiasm touches lives and business practices throughout the operation, not just the senior management. Our dealership teams are focusing on shared goals and improved practices that continue to increase our effi ciency in all aspects of customer service…and, yes, bottom line results.”

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StephenR.Covey

8TH HABIT LEADERSHIPUnleashing Potential

leadership

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LS

The business culture in which we live and

work has “softwared” us for mediocrity.

To be mediocre is to fall far short of our potential. The startlingly gifted “hardware” we each have — a body, mind, heart and spirit unique in the universe — is rarely called upon to do much more than fulfi ll a job description — the “software” handed to us by the organization. The vast untapped capabilities within us too often atrophy and waste away.

Superb leaders know this, and that’s why they seek to unleash the potential of every team member. The “command-and-control” Industrial Age software deceives many organizations into believing that wealth lies in capital and equipment, not in people. Great leaders realize that they have the power to rewrite that software.

In 1979, the U.S. Olympic Committee hired a college coach named Herb Brooks to lead the U.S. hockey team to Lake Placid for the 1980 Winter Olympics. For 20 years, the Soviet Union had dominated Olympic hockey with a high-powered, highly cohesive team that simply bulldozed any competition. The Soviets were the best hockey team in the world, but Herb Brooks was determined to beat them.

The team he assembled had little promise of doing it. They were young college boys who had never played together. College rivalries simmered among them. Few of them had professional ambitions — they just liked playing hockey. And Brooks had only seven months to mold them into a world-class team.

No one expected Herb Brooks to compete with the powerful hockey teams of the

Eastern Bloc, least of all his players. Most of them were happy just to be going to the Olympics. But Brooks intended to win. To do that, he resolved to unleash the great potential of each team member.

How was it done? First, he chose his team carefully, looking not for superstars but for people who could work well together. He set a very clear goal — beating the world’s best. He emphasized physical conditioning: “We may not be the best team at the Olympics,

but we’ll be the best conditioned.” He emphasized mental conditioning, requiring quick and accurate playmaking from the team.

But most of all, he connected to the spirit and the heart of each player. “Ten, 20, 30 years from now, you don’t want to have left anything on the table,” he told them. He asked for everything they could give.

Brooks taught each member of his team how to pay the price of excellence. Over the course of several grueling months, these college boys from all over America caught his vision. Instead of a disparate group of players from different universities with different life goals, they became a lean, powerful team defi ned by one wildly important goal.

On February 22, 1980, hockey team USA faced the “Mighty Red Machine” from the Soviet Union. Although unmatched in skill and experience, the Soviets were beaten that night 4-3 by sheer heart and determination. USA went on to win the Olympic gold medal in what has been called a “miracle on ice.”

The miracle that Herb Brooks produced that night unleashed nothing less than the full potential of his team members. He conjured up the best they could give in all four key dimensions of their being — physically, mentally, emotionally and, perhaps most important of all, spiritually.

Do the leaders of your dealership call up that kind of energy? Are they coasting with no particular end in mind, taking little interest in the workers? Or are they scurrying from one crisis to another, staying busy but unfocused? Or are they leading lean, vigorous teams totally focused on the mission-critical goals? Are they tapping the full powers of mind, body, heart and spirit of every team member?

Originally ran in CLO Magazine.

Stephen R. Covey, Ph.D., is co-founder of FranklinCovey, and is the author of the best-selling The 7 Habits of Highly Effective People. He can be contacted at 866.892.6363, or by e-mail [email protected].

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17

the #1 sales-improvement magazine for the automotive professional

Car dealers deserve praise for their

charity and philanthropy. Dealers have always been quick to share the fruits of their labor with those who are needy. Unfortunately, many are sharing their resources with people who are simply greedy. Every few months I encounter another story in the industry press about a dealership forced to close due to employee fraud or embezzlement — and the stories that appear in the news are only the tip of the iceberg.

It’s easy to rationalize why employee fraud and embezzlement are more likely to hit the other person’s dealership than yours. You have some things going for you. Right?

We Screen and Investigate People Before We Hire ThemFact: Employee fraud and embezzlement are crimes of opportunity, and the overwhelming majority are committed by fi rst-time offenders who saw an opportunity and acted upon it.

My Store (Department) is Small Enough That I Know My People. We’re Like a FamilyFact: Multiple studies show that smaller organizations are more vulnerable to employee fraud and embezzlement than larger organizations. Re-read the preceding paragraph. If you still believe that having a small, tightly knit organization is an effective defense, watch for those news reports about dealerships that have been forced to close. Keep track of how many are family dealerships, often multi-generational. Count how many times the story involves a long-term employee who was trusted like family — or was family.

We Have Internal ControlsFact: Internal controls that are not diligently enforced provide a false sense of security. How many of your controls are “fl exible” the moment they become inconvenient? And never underestimate the level of creativity that is possible when someone is determined to circumvent your controls, no matter how tight you might think they are. In cases where employee frauds are discovered, we generally learn

they were in place for months (or years) before discovery.

It’s helpful to look at the ways employee fraud tends to be discovered, in descending order of importance.

• Tip from whistleblower (company insider)

• Accidental discovery• Internal audit• Tip from someone outside company

(customer, vendor or anonymous)• External audit

So what can you do?

Whistleblowers provide the No. 1 method of discovery and that makes your employees an important element in the defense against fraud. You can make it easier for them to help by subscribing to a service that provides a 24/7 toll-free hotline and anonymity. Companies that subscribe to such services report that most calls come in the evening, when the employee is at home.

Old-fashioned luck is the second most successful “method” of discovering employee fraud. Sometimes we simply stumble across something that doesn’t look right and start investigating. This works best when you are alert to what is going on in your business and take the time to dig into things that don’t look right. If you can promote an attitude of healthy attentiveness among your people without building a culture of suspicion, you will have even more eyes and ears working on the dealership’s behalf.

Work with your CPA. Internal controls and audits cannot build a force fi eld around your assets, but they are useful tools. Consistent execution is critical. Controls won’t work if your people are allowed to circumvent them. Do you have locks on your doors? Do you expect your people to lock every door every night, or do you allow fl exibility?

Steve Brazill is the chair of automotive marketing at Northwood University, Texas Campus. He can be contacted at 866.861.1515, or by e-mail [email protected].

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18


DalePollak

TURBULENT TIMES

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The last few months in the automobile

business have been turbulent. We’ve seen radical shifts in consumer preferences due to a variety of economic conditions, most notably oil price fl uctuations. There’s been massive restructuring in the manufacturing sector in favor of fuel-effi cient vehicles. Unprecedented investments are being made in new alternative fuel technologies. Automobile dealers have been stunned and confused about what to stock and how to value their inventories. These conditions have brought forth a variety of opinions and theories about how to conduct business operations.

For some time now I’ve advocated that past history is no longer a reliable method for determining proper inventory mix or valuations. In fact, I don’t think that there could ever be market conditions that more clearly validate this stance. Simply stated, if you’re still making inventory decisions based on your past performance, you are, without a doubt, going to be caught off-guard and ill-equipped to address what will certainly continue to be a rapidly changing market environment. I am aghast by solution providers who continue to toot their horn for the need to stock based on core (code word for “past”) sales history. These solutions only serve to reinforce the outdated notion that past performance somehow guarantees future success.

I’m also distressed by those who are attempting to predict the future of the automobile market. These are the individuals who say that they are “stocking up” on certain models because they perceive that the market will “come back.” Another expression of this equally ill-fated notion is “I can’t replace them for what I paid.”

In the 1988 vice presidential debate, Lloyd Bentsen said to Dan Quayle, “Senator, I served with Jack Kennedy, I knew Jack Kennedy. Jack Kennedy was a friend of mine. Senator, you’re no Jack Kennedy.” To those who attempt to predict the market by the means of overstocking or refusing to sell stocked units in spite of their age in the hopes of making greater future returns,

I say in the spirit of Lloyd Bentsen, “I have friends who are hedge fund traders, and we are not hedge fund traders.” If any of us really believe we can predict the future markets, we need to get over it. Hedge fund traders work with a wealth of information and mathematical models that not only predict outcomes with proven certainty, but limit the amount of risk and exposure. Moreover, by law, hedge funds are for “qualifi ed investors,” which means those individuals who are prepared to lose their money and can afford to do so. I fi rmly believe that we in the automobile business are neither sophisticated futures traders, nor are we dealing with investors who are prepared to lose it all.

Anyone who is going to stock up on certain models in anticipation of a future market or retain existing units for the same reason should be prepared to also accurately predict future oil prices, interest rates, fl eet and lease returns and a myriad of other variables, any one of which may affect the shape of their future market predictions. Honestly, let’s be sensible and realize that while our guesses about future markets may turn out to be correct, we really shouldn’t be in the business of trading futures. We have a signifi cant enough challenge in dealing with the present — we should not get hung up with managing from the past or too far in the future.

The only sensible alternative as managers of multi-million dollar inventories is to stay focused on the immediate market and as be nimble and responsive to the inevitable changes as possible. This approach requires real-time market data about current wholesale and retail values, as well as market day’s supplies of vehicles in their varied confi gurations. Specifi cally, dealers should focus on three real-time metrics that, if managed properly, will ensure success. The fi rst of these is called “cost to market” (CTM). CTM measures the cost of inventory as a percentage of its retail market value. A dealer’s CTM percentage should be approximately 80 percent for new inventory up to about 30 days old. This benchmark assures dealers an adequate return on their investment.

The second key real-time metric is “price to market” (PTM). Dealers should keep their vehicle prices at around 100 percent for the fi rst 30 days. In other words, their vehicles should be priced, on average, right smack in the middle of the competitive pack of identically equipped vehicles in their market. In the critical age category of 31 – 60 days, dealerships should price their inventory at approximately fi ve percent below the market average, at 95 percent of the identically equipped vehicles in the market. This allows dealers to retail out of a maximum number of inventory units before they either have to accept an aged condition or a wholesale loss.

The third key real-time metric is the market day’s supply of their vehicles. Dealers should make every effort possible to maintain inventory with as low of a day’s supply as possible. Just ask yourself whether or not you would purposely stock new vehicles if they had a high market day’s supply. The answer is obviously “no.” Yet, this is exactly what most dealers are doing with their used vehicles. Maintaining an inventory with low day’s supply generally means stocking vehicles whose supply in the market (given identical equipment confi gurations) is less than 50 days.

The three real-time metrics of CTM, PTM and market day’s supply are available with new technology. The technology is so effi cient that it will even notify you proactively through e-mail when or if thresholds are crossed unit by unit. This is what I call real-time market management and it is the only proper way to navigate in times of turbulent markets and uncertain conditions. Again, in the spirit of Lloyd Bentsen, “I know real-time market management. Real-time market management is a friend of mine. Working from your past or trying to predict the future is not real-time market management.”

Dale Pollak is an author and the chairman and founder of vAuto. He can be contacted at 866.867.9620, or by e-mail at [email protected].

22


Recently, I was conducting a

private workshop in a dealership outside of Houston. As I looked into the audience, I could tell by their body language that no one had much of an interest in being there, and much less of an interest in listening to what I had to say. It was as if some sort of disease had come over them — what I call LOE (Lack of Enthusiasm).

“How is business?” I asked, with a smile on my face. Normally, I would never start a meeting with this opening, but this time I felt I needed to. There was only silence. After a few minutes, someone spoke up. “Not good,” he said. “What do you mean?” I replied. “It’s slow,” another responded. “No traffi c.” “Why do you think that is?” I said.“The economy. Advertising. No more leasing. Financing. People just aren’t buying cars….” And on and on they went. It has been said that 10 percent of life is what happens to you and 90 percent is how you respond to it. So, what are you going to do about it?

In all of my travels across the country — and not limited to the car business — the story is always the same. The most successful people stay focused on what they can do and not on the things they can’t, and they tend to remain successful regardless of the market because of it. Why is it we focus on what we can’t do because of the circumstances, and not on what we can do? The state of your business is like a good car deal in the mind of the consumer — it is a state of mind.

The last thing you want to do is tell or even let the customer sense that business is bad. Enthusiasm is transferable. If I had come

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WHO SAYS BUSINESS IS BAD?

into the meeting that morning without a smile on my face and had announced to everyone in the room that I wasn’t feeling my best but tried to get through the meeting anyway, how would it have made the audience feel? Not very good about our time together, would it? People like to feel good about what they are doing and where they are doing it.

By telling the customer that business is bad, you also immediately set the tone for a big discount in the negotiations process, if you are even lucky enough to get that far. You should always be in a position of strength, and telling the customer that business is down reverses the roles. Not only will the customer not look forward to the car-buying experience, but they’ll also sense that you are hungry and would probably do anything for a sale. Good luck on holding a little gross profi t. People are not likely to buy from you if they feel sorry for you.

Simply put, people like to do business with people who are successful. When you walk into a virtually empty restaurant, bar or any other retail establishment, what is your fi rst thought? It’s probably “either this place is dead or it must not be any good.” Now, have you ever noticed when you pass by an Apple computer store how it is buzzing with business? It makes you want to go in, whether you need to or not.

Understandably, not all businesses are that fortunate, but the strategy still works. I shared a story in my meeting at the Texas dealership about how I stopped in a restaurant one night to pick up dinner, as I often do. As I sat waiting at the bar, I commented on how slow business was. Now, the bartender could have responded with, “Yeah, I know, it’s terrible. Business is really down.” Instead, he said, “It’s really

been busy. I’m just glad it slowed down a little and I can get a little break before the next crowd comes in.” How he responded changed my perception of the place from bad to good.

So how can you counter the fact that your showroom is not full all the time? How can you make that one customer feel better and want to do business at your dealership and do it today? You can start by telling everyone in your organization, including all departments, how important it is to tell prospective buyers that business is great. Explain how it affects a customer’s attitude.

Managers, your front line needs to portray a healthy retail environment to everyone that comes into your dealership. Every customer should sense that your dealership is doing better than ever before. If you or one of your staff tells a customer that business is down, you can rest assured that they will tell everyone else in your marketplace about it, including your competition.

I told the crowd at the Texas meeting that the next time business is slow and the customer ask how business is, they should try responding this way: “Business is great. We were so slammed over the weekend that it is nice I’m getting the opportunity to provide you with the time you deserve.”

No one is going to know that business is down unless you tell them. So who says business is bad?

Marc Smith is the senior vice president for The Cardone Group. He can be contacted at 866.665.4479, or by e-mail at [email protected].

24


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As you make your way through this

fl uctuating economy, now is an important time to focus on what’s happening with your advertising. Now more than ever you cannot afford to miss any potential buyers out there, and they are out still there. You just have to work a bit harder and smarter to reach them.

Use this checklist to evaluate if you’re operating as smart as you can.

Promote Your DealershipStudies show that maintaining an advertising budget during tough economic times is benefi cial. And some of the studies clearly mention how brands continue to benefi t competitively for two or three years after economic low-points. This is because while some dealerships pull back, others can capitalize on their absence by maintaining a market presence and capturing the consumer’s attention (replacing the presence and image of those dealers who have cut off communication). So, it’s important to continue promoting your business by maintaining offl ine efforts with traditional media — local radio, spot television, and targeted direct mail — and search engine marketing with banner ads or paid search programs. Either way, you’re staying present in the market through offl ine and online marketing and advertising. So, check that off the list. Check.

Measure Advertising ActivitiesIf you’re tracking leads, whether they’re incoming calls or Web contact forms, then you are already building your database of prospects who come into your dealership as a result of your advertising efforts. So, check “tracking” off your list. Check, check.

Pursue Missed OpportunitiesHere is where the checking of the list may

begin to stall. Unlike Web contact forms, where folks may not expect an immediate response or may be shopping off-hours, phone-ups require real-time interaction, which is great. Phone-ups indicate that the lead is hot and gives you a jump on fostering a relationship with that caller. However, if you miss a call, and the caller doesn’t leave a “paper trail,” like a voicemail or a message with your gatekeeper, then you’ve missed a sales opportunity. Multiply that by the number of calls that your team may be missing on a weekly or monthly basis and you’ve just had a direct negative impact to your bottom line.

It’s inevitable; every dealership misses calls from time to time, for a myriad of reasons:

• You’re fl ooded with showroom traffi c and can’t get to the phone, and the caller doesn’t leave a message with your answering service or your gatekeeper (this is the best-case scenario)

• Your sales team is all on the phone at the same time (again, a great situation to be in)

• You’re placing callers on hold in order to transfer them to the right person, resulting in busy lines (also a good thing to experience)

But, these lost opportunities are costly, and diffi cult to recapture unless you have a proactive, immediate notifi cation system in place. The good news is that some phone service providers offer instant notifi cation of missed incoming calls. You can set up the call monitoring system to send instant e-mail or SMS message alerts to multiple contacts.

Instant notifi cation of missed calls takes the lead generation cycle full circle, to recapturing lost leads — those who

contact your dealership via phone, but are confronted with a busy signal, a phone that rings with no answer in your sales department, or an impatient caller that hangs up before you’ve gotten a chance to pick it up.

There are many benefi ts to using a service that provides instant notifi cations of missing calls. The rewards reach far into your sales and service departments, your lead generation performance and your dealership’s bottom line.

Missed call monitors, a real-time tool, empowers you to follow up with prospects within minutes and improve your customer service standing by calling back the people who have tried to reach you, but could not get through.

Take these missed calls and turn them into sales opportunities. With the auto market changing, chances are some of your sales people can assume a proactive approach to selling. So, take advantage of their enthusiasm and need to sell and create a new marketing program. Call it something like “Dialing for Dollars” or “Calls for Cash.” Focus your sales team’s efforts on recapturing those missed opportunities by calling them back within minutes. You’ll impress the caller, you’ll earn their respect and trust, and your sales team will be that much closer to making a sale.

If you don’t currently have a missed call monitoring system in place, then you should do so as soon as you fi nish reading this article. Then you can complete the third check on the list. Check, check, check!

Laura Noonan is the vice president of marketing and corporate communications of 800response. She can be contacted at 866.388.1397, or by e-mail [email protected].

DON’T LET PHONE-UPS SLIP THROUGH THE CRACKSRecapture Missed Opportunities in Real-Time and Turn Them Into Sales

Some of your most overlooked sources

for service business are your own customers — your pre-owned customers, that is. We’re all experts in these vehicles when they are “stock units” — just look at the internal repair orders generated. Wouldn’t we all be proud to have the hours per R.O. we generate on these cars as customer pay?

When a customer buys a new car, we proudly shower them with love, attention, gifts and surveys. But, how about our pre-owned customers? We mail them a payment book, and an “oh, by the way, please don’t come back” attitude. The plan it seems at many dealerships is to spend “x” amount of money on used car reconditioning, and then cross our fi ngers that these customers never come back.

And they don’t. Statistics point out that 28 percent of new vehicle customers come back for retail service work. This is pretty poor when you consider that our target should be 100 percent. And what about the pre-owned customer? We wish we did just as poorly here; we’d all have to build bigger shops. Just four percent of pre-owned customers return for retail service work. Suppose we could increase that number substantially? We can, with a little planning.

• We Need the Right Attitude — We can service anything except true specialty vehicles and rare exotic problems.

• We Need Information — There are several low-priced subscription sources that provide technical information, specifi cations, technical service bulletins, recall campaigns, labor time guides, part numbers with aftermarket number cross-referencing and maintenance schedules.

• We Need a Universal Scanning Device — Such devices are sold by SnapOn, which offers both new and refurbished devices that range from about $5,000 to about $12,000.

Next, let’s talk about changing our “culture” as it relates to pre-owned customers. Take the 2 x 4 “attitude adjustment” with your service advisors. These are our customers, and we will willingly service their vehicles. We will not direct them to competing dealerships. And if we need to get their vehicle to another dealership because the needs exceed our capabilities (or are

covered by their warranties), we are the drop-off and pick-up point for our customer. If we direct our customer to another site, poof, they’re gone forever.

Salespeople are no better than service advisors, as initially it should be their responsibility to “introduce” the pre-owned customers to the service department. Since most can’t do it with new vehicle customers, what chance do the pre-owned customers have? “Gosh, if we let the pre-owned customers know we have a full-service service department, they’ll want all of that stuff fi xed on their car that they didn’t notice when they took delivery.” Pre-owned vehicles should be inspected by the service department prior to the sale. If the service department isn’t doing a good inspection, deal with that as well.

So how do these lucrative customers fi nd out about our service department? Create and mail a letter to these customers from the service manager about one month after taking delivery thanking them for their purchase and welcoming them to the family. The letter should accompany a coupon booklet specifi cally for pre-owned customers only. The letter should contain phrases such as: “We earned your business to sell you a car or truck, now we’d like to earn your service business,” and “We’ve earned these awards....”

Mail the letter and the coupon booklet in plain “booklet” style white envelopes, hand-addressed and stamped, not metered and labeled. This will raise the rate of customers opening your mail to about 45 percent, which is the objective here — retention. To take it to the next level, try calling your new customers. Also, consider a free fi rst oil and fi lter change and tire rotation.

Because you never get another chance to make a fi rst impression, make sure when your pre-owned customers come in for service, they receive the same treatment as new vehicle customers. By implementing this process you will turn your most overlooked source of business into a lucrative business for years to come.

Brooke Samples is the COO of Dealer Service Corporation, a division of NCM Associates. She can be contacted at 866.618.8377, or by e-mail at [email protected].

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26


JimAdams

THE CULTURE OF TEAMPart 2 - What Every Used Car Manager Should KnowAbout the Service Department

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To truly develop 100 percent ownership

in the idea that we, as leaders, are equally responsible for the total effort of the team, it is important that each manager knows how each other’s department operates. This understanding is most important between the service department and used car department. Many times there is a daily struggle between the shop and used car department based on:

• the cost of the repair• the time it took to make the repair• the work recommended to produce a

unit for inventory

When both the used car manager and the service manager understand one another’s challenges, they can begin the process of empathizing with one another and start moving together toward a common goal. Here are three things that a used car manager must know about the service department.

1. It is a Profi t CenterJust like used cars, everyone shows up to turn a profi t. We should seldom ask the shop to look at something for free. Think of it this way: Technician time is an inventory. Each day there are about nine hours in a tech’s day. To the shop, that is a potential of $720 to $850 in service sales dollars depending on effi ciency — we’ll talk about that later — based on a door rate of $80. When a technician gets pulled off a paying job to look at something for the used car manager, it costs the tech money, it costs the service advisor money, it costs the parts department money and it costs the dealership money. A used car manager must minimize the times that he or she asks the service department to interrupt the fl ow of the shop. In my opinion, the only time it should be done is when it has a direct impact to award-winning customer service.

2. It Runs on a Daily ScheduleOr a least it should. I mentioned that

technician time is an inventory. In the shop we track time in three ways:

• Available time — This is the actual time that is available on a daily basis. For example: 10 tech x 9 hours = 90 hours of available time every single day.

• Actual time — This is the actual time that a tech is clocked onto a job or repair order. For example: If Tech A is in the dealership for nine hours, but is only clocked onto a job for six hours, his or her actual time is six hours.

• Flag time — This is the time that the repair or job actually pays. We use factory or common labor guides to tell us how long a particular job should take — a technician gets paid by the labor guide. It is his or her job to perform the work at near or better than the time allotted for the work based on this guide. This is how we arrive at technician effi ciency. For example: If Tech A completes a job that should take an hour based on the labor guide in an hour he or she is 100 percent effi cient; if is takes 90 minutes, they are 66 percent effi cient; if they can complete it in 45 minutes, they would be 133 percent effi cient.

The reason it is important for the used car manager to understand this is because each day in the shop, there is a balancing act taking place to make sure that the proper work is going to the right technician. Our advisors and dispatcher are trying to schedule the shop in a way to maximize our lift space and labor mix to produce profi t on a daily basis. They also want to make sure they use as much technician time as possible. Remember, when the day is over, your technician time for that day is gone forever. Things come in order. Used car managers need to understand that the quicker the service department has a heads-up on incoming program cars, the quicker they can get it scheduled through the shop.

3. It Is Designed to Cover as Much Overhead Expense as PossibleThere is an equation called “fi xed absorption” that basically says that the ideal dealership’s service and parts department should cover 75 percent of the entire dealership expenses, less variable selling expenses. Our CFO, who once told me that I was not a general manager but a frustrated accountant, challenges the exactness of this equation. I will concede the point, but the “theory” stands that the more the fi xed-operations department covers expenses, the fewer units the dealership has to sell in order to turn a profi t. Imagine coming to work knowing that the fi rst new car sold every month went to the bottom line. More net profi t means happy dealers…or at least that is my 20 years of experience.

Once our used car manager understands that our shop is here to make a profi t — and that, regardless of their personal circumstance at the time, there is an actual schedule that must be followed in order to maintain profi tability. So used car managers, walk a mile in your service manager’s shoes before you throw a fi t. Inform them of program cars that will be coming in before they show up at 4:30 on a Friday night when you need them for the weekend. Understand that the more profi t they produce, the less dependent your dealership is on your department to turn a profi t. Everyone is happier, and everyone makes more money. Don’t worry — we will pick on service managers next month.

Be different, be a professional.

Jim Adams is the general manager at Fletcher Auto Group in Joplin, MO. He can be contacted at 800.905.0627, or by e-mail at [email protected].

28


Two statistics of the modern auto sales

market:• 83 percent of “in market” car shoppers

visit the Internet fi rst to research vehicles

• 88 percent of “in market” car shoppers visit a dealership’s Web site before entering the showroom

It is clear that Internet search engines have become the primary tool for fi ltering both vehicles and dealerships in a consumer’s search for their next car. And even more so, a dealership’s Web site has become a key extension of the dealer’s showroom. In the age of the Internet, online advertising clearly can broaden a dealer’s sphere of infl uence, and go far to attract and engage consumers the way traditional advertising vehicles — newspaper, radio and print — simply cannot.

What is YourDigital Advertising Strategy?With the growing demand for online advertising, top-performing dealers in the country are channeling their advertising budgets away from less-successful and less-measurable media channels such as newspaper, radio and television, and implementing digital marketing strategies that include high-impact animated graphic or video ads displayed on high-traffi c Web sites. Smart dealers are cashing in with online display advertising to drive signifi cantly more traffi c and profi ts to their dealership’s sales, fi nance, service and parts departments.

Research continues to prove that digital ads consistently generate the highest conversions into dealership showrooms, completed lead forms on dealer Web sites, and telephone calls into business development centers. And best yet:

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THE RIGHT DIGITALADVERTISING STRATEGY

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These leads belong only to the dealership doing the advertising, and are not shared like those purchased from third-party lead providers. In other words, display advertising generates good-quality leads from “in-market” consumers interested in what your dealership has to offer, not some generic inquiry made by a consumer who doesn’t really know what they are looking for, or who they want to buy from.

With the killer combination of the right message, the right placement and the right marketing strategy, automotive retailers make every online ad initiative payoff with increased sales and profi ts in all areas of the dealership.

A CompleteDigital Advertising Solution The right digital advertising solution is a soup-to-nuts implementation of everything needed to perform like a professional on the Internet in order to attract and engage more leads. This solution includes:

• Creation of targeted, high-end, media-enriched graphic or video banner ads and microsites that highlight key “in market” consumer-buying behaviors to capture targeted consumers

• Search engine marketing to deliver high-quality leads directly to dealership Web sites

• Pay-Per-Click advertising to reach a broader audience searching for vehicles using specifi c key words, providing the best results at the lowest cost

• Placement on geo-targeted and behavioral-targeted ad networks

• Month-end reporting to measure what is working, what is not and at what cost

Digital Advertising ConsultantsSome of this will be new to many dealerships grounded in the ways of traditional marketing. One way to

overcome this challenge is to employ personal digital advertising consultants who will plan, execute and measure the results on a monthly basis. Effective digital advertising consultants review dealership customer demographics and buying patterns, identify and evaluate tactics, pull together a digital advertising plan that makes sense and later provide ROI reports on the metrics on all of the campaigns run.

Premier Advertising NetworksThe power behind the optimal digital advertising solution also includes a premier advertising network, which encompasses hundreds of popular Web sites to accomplish the following:

• Provides maximum exposure for your dealership

• Generates high lead conversion rates• Provides geographic and demographic

optimization• Guarantees premium placement on

the sites your shoppers visit most frequently

Every dealership must spend money to sell cars, and that’s why successful dealers are realizing that online marketing provides the best return on investment and are shifting budgets from traditional media to online initiatives, including digital advertising. You do not have to increase your advertising budget to take advantage of digital advertising — you just have to allocate your current budget in the areas that will draw the most attention to your Web site and leads to your store — the Internet.

Susan Burke is a senior product manager for ADP Dealer Services. She can be contacted at 866.855.5923, or by e-mail at [email protected].

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JasonBlair

WHAT HAPPENS IF I DON’T COMPLY?

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STS

That’s a question that may go through

the mind of the dealer principle and/or the fi nance manager. With the state of business the past few months, compliance to a new federal regulation is the last thing dealers want to spend time or money on.

The FTC’s Red Flags Rule requires every U.S. auto dealer to develop, implement and maintain a written, comprehensive identity theft prevention program that specifi cally outlines the dealership’s plan to detect, prevent and mitigate identity theft. This Red Flag regulation applies to every auto dealer — regardless of size — and must be in place by November 1, 2008.

So, you decide not to comply and put off writing your identity theft prevention program, ignoring the fact that there are staggering statistics out there about the rising concern of identity theft. One out of every eight people will be touched by identity theft by 2009. If you think you won’t be affected, you are lying to yourself, as Steve Zabawa, owner of Rimrock Auto Group in Billings, Montana can attest. He paid $80,000 in ID theft claims. “Pay now or pay later,” Zabawa said. He is now equipped with a Red Flag solution. “If I would have had this program in place,” he said, “this costly identity theft would have been avoided.”

When looking for a Red Flag solution, dealers should look to address some of the tougher aspects of compliance, such as:

• Automating training of F&I and sales staff

• Improving the dealership knowledge base with informative data to assist the staff in detecting Red Flags in their organization

• Automating the process of developing your identity theft prevention program

Our greatest fear as consumers is for someone dishonest to get our personal information. It’s essential for dealers to have business systems, protocols and procedures in place.

The goal is to prevent identity theft from occurring, as well as protect the dealerships bottom-line. For example:

• As identity theft claims go up, property and causality insurance costs go up

• If several claims are logged, dealerships run the risk of tarnishing their reputation

with the community, and possibly losing their insurance

What this means is that you can’t afford not to comply with the Red Flags Rule. Putting off this important federally mandated regulation is like playing Russian rolette

with a six shooter loaded with fi ve bullets. The odds aren’t in your favor.

Jason Blair is the president and founder of Dealerspan LLC. He can be contacted at 866.618.8235, or by e-mail [email protected].

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STSSeanV.Bradley

INTERNET SALES20 GROUP XMost dealerships have a six-, eight- or

even 10-step “Road to the Sale” process in their dealership. That’s great, but let me share a secret with you: You don’t need that many steps to sell a car — or to sell anything, for that matter. You only need three things to happen:1. First, you need an opportunity to

do business. Meaning, you need an audience — someone who is in the market to buy what you are trying to sell. In a dealership, we call these people ups, leads or prospects; these are your potential customers.

2. You need to get that person to like, trust and believe you.

3. If you can accomplish the fi rst two steps then the third is inevitable. If they are truly in the market, they will buy from you or they will at least come in for an appointment. (This last part applies if you are working in the Internet Department or BDC).

The fourth habit in Stephen Covey’s 7 Habits of Highly Effective People is “Think Win-Win.” This is so important. Most salespeople in the dealership are never taught this strategy. Unfortunately, when it comes to handling customers, sales team members are often taught to “Crack’em like a baby seal” or insert whatever local term you use to slam the customer into a sale.

If you observe the most successful sales professionals in the industry, they are not the people that try to obliterate their prospects and never see them again. The most successful sales professionals have a powerful book of business, retain relationships with their customers and get lots of referrals. Please take note of these statistics:

• Average closing ratio for OEM Internet leads within 30 days = six percent

• Average closing ratio for third-party leads within 30 days = eight percent

• Average closing ratio for leads generated by your dealership’s Web site within 30 days = 16 percent

• Average closing ratio for showroom traffi c (a fresh “UP”) = 18-20 percent

• Average closing ratio for referral = 50 percent PLUS a $800 higher gross profi t

• Average closing ratio for prior customer = 65 percent PLUS a $800 higher gross profi t

The No. 1 reason why someone doesn’t buy a car is that they are landed on the wrong vehicle. That means the sales person did not qualify the prospect the right way and identify their wants, wishes and expectations. Any sales professional’s goal should be to exceed a prospect’s expectation, but the fact is you can’t do this unless you fi rst identify their wants, wishes and expectations. Only when that is done can you attempt to exceed those expectations.

Your goal as a professional salesperson is to identify those things that are important to the prospect. Price is part of the discussion and we will address it here, but customers have other priorities too. Here are some aspects of the transaction that customers fi nd important:

• Convenience — They might work several jobs and not have a lot of time. Or they have kids and it’s diffi cult to get to the dealership. Or they just don’t want to waste their time. You can offer to either bring the vehicle to the prospect with no obligation on their part, or you can offer FREE delivery to their home or offi ce. You could even mention that you have weekend hours and late hours to accommodate them.

• Availability — Sometimes sales people try to shove someone in a car that really doesn’t suit them. I do understand we all want to maximize gross profi t and sell a car but there are people that take it too far and lose sight of what is good for the customer. They try to crush someone into the wrong car and then run around the dealership high-fi ving everyone saying “I just made a $4,000 deal.” I am all for making a great gross profi t, but make sure that you have properly identifi ed the prospects wants and needs and have met them.

Remember, we are supposed to be the professionals here. Some people have absolutely no clue as to what they are buying, what they need to buy or what they can afford. They come in looking for advice, guidance and someone they can

trust to watch out for them. We should try to give it to them. Qualify them properly: Find out who is going to be the primary users of the vehicle and how it is going to be used. What kind of vehicle meets their needs: car, truck, SUV or minivan? What features are important to them? Do they have a color preference? Try to provide to the best of your ability exactly what the prospect is looking for. Remember that, after buying a house, this is the second largest purchase your prospects will probably ever make. For many, a vehicle might be the most expensive item your customer ever purchases. Spend time with them and make sure it is a great experience.

• Price — When they bring up price, you need to provide value. Explain your unique value package proposition (why you are different and better than everyone else). You need to differentiate your dealership from the competition and clearly show that you are the best dealership to buy from in the market.

• Being Comfortable with You and Your Dealership — Show your prospects that you are a dealership they can trust. Start collecting video testimonials of your happy customers and upload them to YouTube. You also need to start collecting letters, quotes, references from your happy customers and proactively offer your new prospects references, video testimonials, contact info (with permission) of your current and past clients just so they can get a real live pulse of the type of sales professional you are and the type of dealership you are.

The bottom line here is that you want to think “Win-Win.” You want to create an environment so that the prospect likes you, trusts you and believes you. If you can get that to happen you will sell more cars, more often and more profi tably.

Sean V. Bradley is the founder and CEO of Dealer Synergy, a nationally recognized training and consulting company in the automotive industry. He can be contacted at 866.648.7400, or by e-mail at [email protected].

DON’T JUST SURVIVE. THRIVE.

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32


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MSAmyPeck

Historically, the focus for dealers on

their Web sites has been sales, sales and more sales. Dealers have become more and more sophisticated in attracting more leads: from search engine-friendly sites to

pay-per-click services and paying for third-party leads. Today, there is an emerging trend that helps dealers expand their customer relationships and put the Web to work in the dealership’s fi xed operations department. The trend is online service

reservations, and it’s a new way for dealers to look at their Web site and a new way to expand customer relationships to a 24/7 venue. Dealers can now harness the power of the Internet and put it to work for them in fi xed operations and online appointment scheduling.

Consumers, it seems, operate 24/7/365. A dealership that offers convenient access to quick, easy ways to have a vehicle serviced is one way to drive consumer loyalty and repeat business for the service department and the dealership. Research has shown that for those new vehicle owners who return to the dealer for service and have a good experience, 55 percent of them typically will buy their next car from that same dealership.

So what do dealers need to do to turn their Web sites into service appointment and customer loyalty generators?

First, drive consumers to the dealership Web site:

• The steps dealers use today to generate their Web business — ensuring search engine-friendly sites, pay-per-click advertising, TV, radio, and newspaper advertising — are working.

• Dealers also can use their lead management tool to generate a service-specifi c e-mail advertising campaign to their current customer base. This is an inexpensive way to reach a large base of current or potential service customers by sending a discount coupon or other incentive and including a link directly into the dealership’s online service area.

The second step is to make sure the dealership’s Web site is a place where customers can actually schedule service, not just fi ll out a “contact me” form. Real online scheduling, complete with a confi rmation, is like keeping an advisor on duty 24/7/365.

• When scheduling an appointment directly from the dealer’s Web site, consumers should be able to select the service(s) that they are interested

REINVENTING THE DEALERSHIP WEB SITE:More Touch Points With Customers Creates Better Business for the Dealer

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in having done or enter free-form text describing an issue that doesn’t fi t into the selected maintenance services offered. Dealers may also want customers to have the option to choose services that were recommended previously but not performed.

• Consumers should be offered the ability to select a preferred date and time, based on service advisor availability. Dealers will also need to allow the consumer to enter additional information such as whether they would be willing to wait, would like a loaner, would like to take a shuttle, and so on.

• Consumers should receive a confi rmation e-mail after scheduling as well as a reminder e-mail prior to their appointment.

While the goal is to keep the techs busy and their bays full, dealers also want that goal to translate into profi t. So, it is crucial that the online service scheduling functionality also helps increase repair orders and repair order dollars. Dealers should keep these things in mind when turning their online dealership into a profi t generator:

• The dealership’s online scheduling tool should work as a customer initiated up-sell tool. Offer the consumer a list of maintenance services to choose from. This will directly add to customer pay hours sold.

• Allow customers access to view any outstanding recalls or campaigns. This will promote and drive warranty sales and keep dealership customers more current on satisfying recalls (also helps to increase CSI).

Online service scheduling will not — and should not — replace service advisors, but online scheduling can change how advisors manage their time. With appointments made online, advisors will spend less time on the phone. If the online appointment data integrates with the DMS, less time is spent re-entering information — and possibly making an error. All of this leaves more time for advisors to spend with each customer so that they can focus on more effi ciently solving customer problems and more effectively up-selling services.

While the Internet has been a successful channel for new and used vehicle sales

for some time, service scheduling on the Internet has been slower to develop. With more and more current and potential consumers touching the dealership through Web sites, in addition to the physical store, there is a ripe opportunity to open new avenues to reach consumers and, most importantly, to generate more business.

In today’s multi-tasking world, consumers continue to demand more convenience around online activities and transactions. New technologies and processes that reach

out to build stronger relationships will help a dealership stand out for consumers and pave the way to more business success. Dealers who create more touch points for consumers — at the consumer’s convenience — will not only survive; they will thrive.

Amy Peck is the product planning manager for Reynolds and Reynolds Web Solutions. She can be contacted at866.618.8405, or by e-mail [email protected].

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AutoSuccess Oct08

Business

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