April 2010

The New & Improved AutoSuccessOnline.com, Check It Out!

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marketing solution

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sales & training solution

leadership solution

feature solutionApril 2010

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pollak

An Interview with ToddCrossley

SteveShaw 24 THE ANSWER IS PRODUCTION

TOP DEALERS WORK TOGETHERON NEW AD NETWORK

SusanGivens 30

FIX WHAT YOUR PEOPLE CAN’TSteveBrazill 19

ToddSmith 29 KEY QUESTIONS AND ANSWERS FOR SELECTING YOUR LIVE CHAT SOLUTION

JockSchowalter 17 ARE YOU OFFERING A COMPETITIVE CONVENIENCE ADVANTAGE?

ToddStrause 18 HOW CLEAN IS YOUR PREVIOUSCUSTOMER DATABASE?

IS LEASING THE KEY TO INCREASE SALES BY30 PERCENT?

KirkManzo 26

MarkTewart 34 ARE YOU A HUSTLER?

‘RIGHT TARGET’ AND ‘NARROW DOWN’ ARE OVER-USED PHRASES IN E-MAIL AND DIRECT MAIL...HOW YOU CAN REALLY MOVE THE NEEDLE WITH YOUR DIRECT MARKETING

SowmyaIyer 10

FOCUS ON THE RIGHT THINGSBillPhillips 22

DEALERSHIP OWNERS - HOW TO BUILD EXCELLENCE IN YOUR DEALERSHIP

JoeAbraham 16

StephenR.Covey 08 RESOLUTIONS, PART 3

TURNING T.R.A.S.H. INTO TREASUREMarshBuice 33

JohnFreund 20 PLANNING FOR RETIREMENT IN STAGES

TomMohr 28 WINNING ONLINE

BudAbraham 32 IF YOU DO WHAT YOU’VE ALWAYS DONE, YOU’LL GET WHAT YOU’VE ALWAYS GOT

ARE YOU HITTING THE MARK?DalePollak 36

How Gary Crossley Ford Made 2009 the Best Year in the Dealership’s History

www.autosuccessonline.com

08

StephenR.Coveyle

adership

solu

tion

part 3RESOLUTIONSThe principles of temperance,

consistency and self-discipline are foundational to a person’s whole life – not just in the area of their profession. The costs of not maintaining self-discipline and

self-denial can be severe in all areas of life; likewise, the rewards of self-control can be amazing. As an example, let’s look at a battle all of us wage every day.

Many of us succumb to the longing for extra

sleep, rest and leisure. How many times do you set the alarm or your mind to get up early, knowing all of the things you have to do in the morning, anxious to get the day organized right, to have a calm and orderly breakfast, to have an unhurried and peaceful preparation before leaving for work? But when the alarm goes off, your good resolves dissolve. It’s a battle of mind versus mattress! Often the mattress wins. You fi nd yourself getting up late, then beginning a frantic rush to get dressed, organized, fed and be off. In the rush, you grow impatient and insensitive to others. Nerves get frayed, tempers short. And all because of sleeping in.

A chain of unhappy events and sorry consequences follows not keeping the fi rst resolution of the day to get up at a certain time. That day may begin and end in defeat. The extra sleep is hardly ever worth it. In fact, considering the above, such sleep is terribly tiring and exhausting.

What a difference if you organize and arrange your affairs the night before to get to bed at a reasonable time. I fi nd that the last hour before retiring is the best time to plan and prepare for the next day. Then when the alarm goes off, you get up and prepare properly for the day. Such an early-morning private victory gives you a sense of conquering, overcoming and mastering, and this sense propels you to conquer more public challenges during the day. Success begets success. Starting a day with an early victory over self leads to more victories.

Stephen R. Covey, Ph.D., is co-founder of FranklinCovey, and is the author of The 7 Habits of Highly Effective People. He can be contacted at 866.892.6363, or by e-mail at scovey@autosuccessonline.com.

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10

SowmyaIyer

‘RIGHT TARGET’ AND ‘NARROW DOWN’ ARE OVER-USED PHRASES IN E-MAIL AND DIRECT MAIL...HOW YOU CAN REALLY MOVE THE NEEDLE WITH YOUR DIRECT MARKETING

marketing

solu

tion

The past two years have forced

everyone to refocus their marketing efforts. Advertising had to become more effi cient, effective and produce a good measurable ROI or, more than likely, it was eliminated or drastically cut. Now the buzz is all about targeting the right customers and narrowing down your list. There are a couple of reasons for this. First, anytime you can narrow your scope and eliminate people who are not interested in your offer it’s a good thing and you will be more profi table. Second, the marketplace has changed and marketers who can’t adapt to changing customer behaviors will be left behind.

The problem is that narrowing down your list with basic segmentation usually does not go far enough — especially today.

Marketing communication is moving away from mass media toward an approach driven by fi rms with integrated customer data, a technology infrastructure and real customer analysis skills. Firms with this infrastructure and skill set will improve your net results. But to really move the needle, fi rms must have deep customer insight and skills that translate those insights into sales, profi t and differentiation and provide you with a competitive advantage.

Firms have different competency levels. Most start out with the ability to measure results and provide simple segmentation. Segmentation is probably the most common method used today at a dealership level. There are a lot of ways people describe segmentation to sound more valuable than it is. In reality, it is nothing more than being able to identify customers or prospects who share one or more characteristics that cause them to demand similar products and/or services. For example, rather than e-mail or mail your entire previous customer list, you could segment it to target new, used, active, inactive or lease customers. This will produce a better result, but you will not maximize your sales or profi t potential. We need to think beyond the basic identifying characteristics and the obvious relationships.

If you really want to impact your showroom traffi c, sales and bottom line, you need to work with fi rms that truly have analytic skills. For example, let’s say you are looking to resell “inactive” customers — people who you’ve lost for whatever reason and have defected to your competition. Mailing to the entire inactive customer segment is expensive. There’s a reason these people are inactive, and because of that reason the majority will ignore your offer. Direct mail is too expensive for you to justify that expense and more than likely you will not have a high percentage of e-mail addresses for inactive customers. A fi rm with a strong analytic team will start by identifying your inactive customers. Analytical algorithms are then created by analyzing data — combining information on past circumstances and present events — to predict or project which people of those inactive customers have the highest propensity to respond to your offer and, more importantly, re-buy or service with you.

Identifying which inactive customers will reactivate — rather than targeting the entire segment — will save you an incredible amount of money up front and produce a much better ROI. A great analytic team can become an indispensable asset to you, which you will rely on for strategic decisions. For example, let’s go back to your inactive customers. After the inactive analytic algorithms are created and a target list is found you could look for more ways to leverage that information with more analytics. The fi rm could identify behaviors of these inactive customers when they were active by analyzing past usage, spending, other behavior patterns and how those behaviors started to change before they left you. This is what recognizing “changing customer behavior” means. Now analytic algorithms can be created to identify customers who are “at risk” or have likelihood to leave you in the near future. Can you see the opportunities with this?

To do this level of analytic work is not cheap. In fact, it is expensive. The question becomes: What is more important to you, price per e-mail and/or direct mail piece, or price per lead and/or sale?

Before answering that question, you should consider one more thing. When you attempt to narrow down a list with segmentation compared to using analytic algorithms, you almost always send out more e-mails or direct mail. This creates a long-term problem. Between you and your manufacturer, your customers receive an enormous amount of communication. Let’s face it — many of them could receive confl icting messages. In any given month they could receive one message about a sale or service program from you and a completely different message from your manufacturer. When you over-communicate, your customer becomes callous to all your messages regardless of the offer. Instead of increasing their satisfaction level, you begin to annoy.

Over the last two years you have been forced to fi nd more effi cient ways to communicate with customers. Are you guilty of over e-mailing your previous customers? Just because e-mail is less expensive does not change the importance of every message being driven by detailed customer knowledge, appropriate to the context of the interaction and aligned with communications in other channels.

Your previous customer database offers a wealth of customer data. But without the analytical discipline to turn that data into insight, your database is as likely to amplify mistakes as it is to improve results. Poorly designed or untested models can add thousands to your fulfi llment costs. For this reason you need customer analytics to identify where your opportunities are and then measure your results. More advanced fi rms employ teams of statisticians with the sole purpose of building sophisticated mathematical models to describe and predict your customer’s behavior.

Real data success comes when you’re able to increase the behaviors you want. I invite you to e-mail me with any questions or comments.

Sowmya Iyer is the marketing analyst for J&L Marketing, Inc. She can becontacted by e-mail atsiyer@autosuccessonline.com.

http://www.v-active.com

In a turbulent economy, where many dealers struggled to survive, Gary Crossley Ford in Kansas City, Missouri found a way to thrive. Despite the challenging environment, they implemented a strategy that dramatically increased their revenue and reduced their operating costs, and just had the best month in the dealership’s history. By the end of 2009, the dealership became the No. 1 dealership in Kansas City and set a record for profi tability during the worst of economic times.

Susan Givens, the publisher of AutoSuccess, interviewed Todd Crossley to fi nd out exactly what they did to get the best results in the dealership’s history in the worst economic environment since they opened their doors 30 years ago.

AutoSuccess: Everyone wants to know how you grew so much when the industry was shrinking. Can you tell us what were the key factors in your growth?Todd Crossley: After we were moved into our new location, we knew we had to increase revenue to cover the additional costs of the new store and we needed to reduce our operating costs. We created a strategy to attract more traffi c for less cost than the traditional advertising we had done in the past. Second, we converted more of our traffi c into profi table sales. Third, we increased our sales and service loyalty and increased our average revenue per transaction. We accomplished this by making sure we had the right people, processes and tools to deliver a world-class experience for our customers.

AS: What was one thing that had the biggest impact?TC: We shifted our advertising to markets where customers were shopping – the Internet. We also bought technology that helps us target in-market customers and automates many of our processes which allows us to do more with less people.

AS: What type of technology did you buy? How much did you spend?TC: At fi rst, we spent too much money on technology — we spent a total of $20,000 a month with 15 different vendors to execute

our strategy; it was too much money and too many different tools that didn’t integrate. We did a vendor audit and decided to replace 12 of

our vendors with one company (VinSolutions) that had an “all-in-one” system that integrates with our DMS and gave us everything we needed for about $5,000.

AS: How did you replace 12 vendors

and save $15,000?TC: We made a list of everything we needed and sent an RFP (request for proposal) out to multiple companies, and we picked a vendor with a system

that integrated everything we needed into one platform for a lot less money than what we were paying. Our new system includes our Web site, inventory management, Internet lead management, CRM, BDC, campaign management, reporting and service, and a desking system that integrates used vehicle market pricing.

AS: You said that you were able to attract more customers while spending less money. Isn’t that a contradiction?TC: Not at all. Previously our ad budget was too big and the returns on our traditional advertising were too small. We cut the budget and spent a higher percentage on targeted direct mail and Internet advertising because it generated more traffi c. We more than doubled our traffi c and our cost per sale was cut by approximately a third.

AS: What type of targeted marketing and Internet advertising do you do?TC: Our CRM system notifi es me 15 days before the month starts with recommended campaigns that target consumers who have the highest probability of buying or servicing their vehicle with our dealership that month. The system automatically sends e-mail and mail, and it schedules calls for our staff to make to the target customers. The system integrates with Team Velocity’s mail house (theVdrive.com), and they fulfi ll our direct mail because the production value is a lot better and the cost is similar to what we were printing on our letterhead. The best part about these targeted campaigns is that we are speaking to people who are in the market now, rather than wasting money on advertising to people who are not ready to buy or service from us.

AS: You mentioned that you shifted your budget to domore online marketing. Please explain.TC: We do online display ads and we send targeted e-mail campaigns to in-market consumers. Our new Web site appears on top of the search engines for the most popular search phrases in our market, and it received the top SEO Award from Brian Pasche, the Search Engine Guru. We also use Video Search Engine Optimization to get more placements on top of Google page one because Google gives video search results 55x more priority than text results. We use Car-Mercial.com to produce and optimize hundreds of videos that promote our dealership on the most popular search engines customers use to fi nd a vehicle in our market.

AS: How do you handle all of these activities whilerunning the business?TC: Most of what I mentioned is automated; the vehicle info, incentives and specials are automatically updated on our Web site in real time. For example, our system automatically reduces prices for vehicles older than 30 days to be more competitive than our competitors’ market prices and updates manufacturer incentives on our Web site and third-party sites as they change. If a car is reduced in price or a new incentive comes out, the system automatically sends an e-mail to all customers who were

12

interested in those vehicles during the previous 45 days. The system also automates customer communications throughout the sales process to confi rm appointments, follow up when they don’t show up or buy or to re-activate dead leads that in the past were not followed up. The automation does the work of a 20-person BDC, but I don’t have the payroll cost. The system also manages our inventory, and includes a camera that scans the vehicle’s bar code and generates window stickers, detailed vehicle brochures, videos and an “Auto-Biography” for every pre-owned vehicle in stock. The “Auto-Biography” is a book with a used car brochure, Carfax, all maintenance records and a list of other vehicles in the market that are selling for more than our asking price. The system then sends all the vehicle info, pictures and video to our Web site and third-party sites with the Kelly Blue Book retail price next to our sale price so consumers can see that our price is less compared to a credible third-party like KBB. If the customer does not fi nd a vehicle on our site, they can use our car fi nder and we automatically e-mail them when the vehicle they want comes into stock.

AS: You mentioned that you increased your closing ratio and gross profi t. How did you increase both of them atthe same time?TC: We improved the customer experience and follow up, which increased our closing ratio. When an Internet lead comes in, we automatically send a custom e-mail that gives the customer a custom brochure with pictures, video and fi ve less-expensive alternative vehicles. The e-mail directs them to complete our online credit application with a video tutorial and our online appraisal tool so they go deeper into the buying process with our dealership. When the customer schedules an appointment, we send a confi rmation within fi ve minutes with point-to-point directions and a second confi rmation is sent at 7 a.m. on the day of the appointment via e-mail and text. When the customer arrives at the dealership, the sales consultant can use their phone to view the client’s info and to gather information about their desired and current vehicle. All of the most important fact-fi nding questions are in the mobile CRM tool, and everything that is gathered is saved in the customer’s record. The sales rep can also print custom vehicle brochures and comparisons that highlight the advantages of our vehicle versus the competition’s. This helps increase our closing ratio for fi rst-time visitors and our new follow-up system helps bring back customers who don’t buy.

AS: How do you follow up with the customers who do not buy?TC: The fi rst step is getting 100 percent of our prospect’s contact information. Our CRM system captures the customer information if they call or e-mail the dealership, and it attaches the recording of the call to their record. We can also see the customer’s lifetime value to the dealership based on their historic spend so we can give our best customers special treatment. For customers who walk in, the sales rep puts the customer’s phone number

in our CRM and it automatically fi lls in all the other contact information, even e-mail. Our sales reps scan the customer’s license before the demo ride and it attaches a copy of their driver’s license and picture to their record. The system

then pulls additional information from the customer’s social networks like Facebook, Linked in, MySpace and other sites that have public information available. The system tells them what calls they need to make and provides the phone guides for each type of contact. Since the tool is connected to our phone system, it records all the inbound and outbound calls, tracks their daily follow-up tasks and notifi es management if their appointment, follow-up and/or closing ratio is below our store’s benchmarks.

AS: You mentioned that your average gross profi t has increased. Please tell us how your gross has increased along with your volume.TC: Our sales and desking process has greatly improved our gross. We use our new desking system to give consumers multiple fi nance/lease scenarios that fi t their payment requirements and that are the most profi table for our dealership. We then print out a professional work sheet that includes all their options and highlights the unique advantages of buying a Ford from our dealership. Our salespeople can also use the tutorials in the system to overcome objections and to educate our customers. For example, the tutorials include multimedia presentations on fi nance versus lease, the appraisal process, certifi ed pre-owned process, and Extended Service agreements, among others. These professionally produced tutorials help build value in our dealership and to increase our gross per vehicle. Our desking tool also has an appraisal tool that gives us all the market pricing information so we can value trade-ins based on what cars are wholesaling and retailing for in our market. In addition to telling us the auction and book values, it tells us how much we made on similar trades in the past and how many prospects inquired in the last 30 days about that vehicle.

AS: Is this Reynolds desking program? TC: No, our desking is part of a VinSolutions system, but it is integrated with Reynolds so our managers don’t have double input — they just press a button and the deal goes into Reynolds.

AS: You also mentioned that the dealership improved its loyalty. Can you tell us more about that?TC: We dramatically increased our retention by sending targeted e-mail and direct mail campaigns to customers who are in equity and need service work done. We give them a custom offer

14

to upgrade their vehicle at the same or lower payment that they are currently making, and give them service offers that relate to their current mileage, including the option to buy an extended warranty if our records show they don’t have one. Our system notifi es the original salesperson when their customer that is in-equity comes in to service their vehicle. The service advisor is also notifi ed so they can put a hang tag in the customer’s vehicle to inform them of our “Vehicle Buy Back Program.” If the customer is inactive or lost, we send more aggressive incentives to bring them back.

After we sell a car, our system also creates a personal automotive Web site for each customer with their vehicle info, owner information, pictures and video, and it updates them with service reminders, recalls and other information related to their vehicle. When a customer spends money in any department, we send them an automated survey, and if they rate us four out of fi ve stars or higher we automatically post their review on our Web site and their personal Web site. We then send them an e-mail to invite them to share their opinions on the most popular review sites on Google, Yahoo, DealerRater.com, etc. If the customer gives us lower than four stars, we direct their survey to a manager for follow up as a part of our concern-resolution process.

We also target customers who bought from another dealership but live in our market. When we lose a sale to another dealership, our salespeople have to tell our system that they “bought elsewhere” and our CRM tool automatically sends an e-mail from me, congratulating the customer on their purchase from the other dealership and inviting them to use our service department to maintain their vehicle. Then system also automatically sends out communications to our customers via e-mail, text, voicemail and mail throughout the ownership cycle to retain them for service and re-sell them when they are in equity or at the end of their lease.

AS: Have you dropped all your traditional advertising?TC: No. Our advertising strategy has improved dramatically because we consolidated our marketing vendors and hired one company to develop and implement a more targeted marketing strategy that speaks to people who are in the market. In the past, we worked with an ad agency and eight other companies to execute every part of our strategy. The vendors didn’t work together, however, so the campaigns were not integrated. It was confusing for my customers because my TV and radio commercials had one message, direct mail had another, my Internet manager was sending e-mails with other offers, and none of it was on my Web site or point of purchase materials. We hired a marketing company called Tier10Marketing.com, that specializes in digital and traditional advertising, and now we have one strategy that is completely connected and consistent. To make sure our customers are treated right, we monitor we use a company called CallRevu.com to monitor all our calls 24/7 and they send real-time alerts to our managers when a customer is mishandled on the phone. Our managers save a lot of deals because they contact customers immediately before it is too late. We also review daily and weekly reports that tell us what marketing the customers responded to, the appointment rates, show rates and closing ratios by ad source. With this information we adjust our marketing to spend more where we get the results and less where we don’t.

AS: It sounds like you are doing a lot at a young age; how do you manage and monitor it all?TC: My brother Ryan and I have a great team, and we learned a lot from our father, who built the business from the ground up. He taught us the importance of having cost controls and effi cient time management. That is why we are always looking for ways to do things better and cheaper.

AS: So, what’s next?TC: We just had the best month in the dealership’s history, but we don’t want to take our success for granted. We will continue to work hard to constantly grow and improve how we serve our customers and our employees.

Todd Crossley is the general manager for Gary Crossley Ford. He can be contacted at 866.580.1013, or by e-mail attcrossley@autosuccessonline.com.

#%

#%12 turns

2008

Used Inventory Turn

ROI increased by 33%

pulling customers into my front door.

Almost everything my franchises bring to our new car side, vAuto brings to our used operations, including

— Dwayne Hawkins President Crown Automotive Group St. Petersburg, Florida

16 turns

2009

Beyond the leading-edge technology. Beyond the exclusive features. Beyond the data-driven insight. For a select set of dealers nationwide, vAuto has become much more. It has become all the power and the privilege of a franchise — refocused on used car operations.

License to proprietary software proven to drive profitability. Access to the Velocity Management™ playbook and coaches. Entrance to a community of like-minded, highly successful dealers. Contact with customers predisposed to buying from you. It’s “the franchise”— reinvented for today’s used car market. vAuto is The Franchise 2.0.

Get a live demo today. Visit www.vAuto.com/nextfranchise or call 888-536-4086.

www.autosuccessonline.com

16

JoeAbraham

DEALERSHIP OWNERS -HOW TO BUILD EXCELLENCEIN YOUR DEALERSHIP

leadership

solu

tion

I was on the phone with a frustrated

used car dealer the other day. Here was his frustration.

“My people just don’t show ownership,” he said. “I just need to fi gure out how to get them to have some sense of passion and excitement for what they do. I’ve got to get them out of ‘J.O.B.’ mentality into a mindset of excellence. Don’t they know that if they do, we’ll all make a ton of money — together?”

He was right.

Passionate and excited employees with an ownership mindset and a drive for excellence do generate better results. But the question of the day remains, “How do we accomplish that in our business?” More specifi cally, how do we accomplish that in the highly complex dealership environment?

The answer is a bit of a “good news/bad news” situation.

First, the good news.

Regardless of how dysfunctional, negative, beat down or chaotic your current corporate culture may be, you can turn it around (virtually on a dime).

Now, the bad news….

Most of the work takes place in the CEO’s offi ce. I know that doesn’t sound like what you may want to hear, but from having worked with thousands of business owners, I can assure you that is the case.

A culture of excellence, performance and productivity trickles down and out of the CEO’s offi ce. Take that statement to heart and understand why it actually could be a very good thing. After all, if I told you that it all begins with your GM, sales managers or marketing gal, you’d be in a bit of hot soup. Until you got their buy-in on a culture of excellence, you’d be up a creek with no paddle.

But what I am saying here is that most of the success in the process of transformation is within your control.

Building a culture of excellence begins with the owner. So the big question you have to ask yourself as the owner of the business is this:

“Does my business need more productive employees, a positive environment and fanatical customers?”

If “no,” skip to the next article in the magazine. If “yes,” then read on.…

A committed dealer can build a culture of excellence into their dealership in these three steps:1. The Brand — When you look at highly successful and adopted brands like Virgin and Apple, there is a culture of excellence that permeates everything. It is a culture that is visible in their products, their employees and even their customers.

The CEO controls and drives the company brand. So, if your brand is positioned correctly, it will result in the right culture — a culture you are proud of. If, however, it is not positioned correctly (or if over time, it has picked up some faulty DNA), it will manifest itself in symptoms like weak morale and low productivity.

I want to strongly encourage you to take an hour this week and go through a brand re-positioning exercise. You can download a free copy of my favorite exercise at JoeAbraham.com/autosuccess. This is the mission-critical step in the process.

You’ll come out of the process with the equivalent of the mission statement that Tom Cruise did as Jerry Maguire.

2. The Team — Just like in the movie Jerry Maguire, when you present the new brand position of the company, some team members will not agree with it. They may disagree with it enough to even end up leaving you. That is a good thing, because it will extract any cancers in your business.

You’ll see past the politics, jockeying and water-cooler talk to fi nd out exactly who really fi ts the brand position you have engineered. You’ll be left with a team who believes in you — a team who will go to battle for you. You will have a team who isn’t just there to collect a paycheck, but there to make an impact (while getting paid handsomely for it).

The new team will live the creed/brand position and it will impact everything from how they market to how they operate and serve customers. Think about your last experience walking into a WalMart and an Apple store. The employees in both locations earn about the same hourly wage — but your experience in those two stores was probably quite different. (If you have not been into those two stores back-to-back, I’d strongly recommend that fi eld trip so you can experience what brand positioning can do for your business).

3. The Customers — If you do step 1 and 2 authentically, you will see your customer base transform. Oh, don’t get me wrong. You’ll still have the tire kickers and “I’ll-only-be-happy-if-you-lose-money-on-this-deal” people come by. However, you will notice the number of fanatical customers (I call them evangelists) will go through the roof. Fans become fans when they have something to be fanatical about. Again, walk through a WalMart and an Apple store and ask yourself where you feel more apt to make a purchase and tell people about the purchase experience.

Commit to these three steps, and your dealership will thrive and explode into this consumer marketplace while your competitors focus on beat-downs of their sales team and service managers.

Joe Abraham is a managing partner at En Corpus Group. You can contact him at 866.461.5751, or by e-mail atjabraham@autosuccessonline.com.866.461.5751, or by e-mail atjabraham@autosuccessonline.com.

JockSchowalterle

adership

solu

tion

ARE YOU OFFERING ACOMPETITIVE CONVENIENCE ADVANTAGE?Imagine that your dealership was the fi rst

to put up a Web site and capture the Internet customer in your market. Imagine further that your competitors didn’t catch on for months, or even years. That would be an enormous competitive advantage. Imagine how much money your dealership would have made if this had happened. It’s probably millions of dollars. Well, there is no time machine to go back and rewrite history; however, I believe the same opportunity to reap millions in additional profi t and take business away from your competitors is making itself available again today. I like to call this the “Competitive Convenience Advantage.” Consumers are busier than ever these days. Most households have two full-time incomes, with both Mom and Dad working full time. Throw in a couple of kids with school activities, sports, household chores, etc. and there is less and less free time. This free time is increasingly valuable, which makes the idea of spending an entire weekend haggling to purchase a new car less appealing than ever; especially since most consumers see new car shopping as about as fun as a trip to the dentist. So the consumer now has a choice. On the one hand they can spend their precious free time driving from dealership to dealership, enduring a high-pressure sales environment just trying to fi nd out what kind of a fi nancial commitment they have to make to purchase the vehicle they want. If there are children involved, they must pay for a babysitter or bring the kids along. This only adds to the stress. They have to spend money on gas. They are, in many cases, going to have to deal with sales staff who are not empowered to give them the information they are seeking, which only adds to their frustration.

On the other hand, the consumer can choose to negotiate online from the comfort of their home or offi ce. They can do this at their own convenience and save hours and hours of their valuable time. They can receive the information they need to make an informed

buying decision without the high-pressure tactics that have given the industry such a poor reputation. Whether or not your dealership is guilty of these types of sales tactics, you are a victim of this perception, even if you don’t deserve it. If you were the consumer, which path would you choose? Businesses have capitalized on the Competitive Convenience Advantage since the invention of the wheel. It is the main goal of innovation and technology. This value proposition says “buy our product; it will make your life easier.” Some examples are disposable diapers, microwave ovens and the washing machine. These products had profound impacts on our lives because they were convenient and saved us time and hassle. Beyond the core benefi ts of a new product, marketers often lose sight of the idea that part of the product’s success is how that product can be obtained. Let’s look at a few examples that made our lives easier by offering new ways to obtain an existing product or service. A great example of this is the Drive Through window. The In-n-Out Burger chain claims to have built the fi rst drive-through restaurant in 1948. Harry and Esther Snyder, the chain’s founders, built their fi rst restaurant in Baldwin Park, California, with a two-way speaker to enable patrons to order directly from their cars. A hungry consumer could go to any restaurant and get a hamburger and fries, but they could only go to the In-n-Out Burger if they were in a hurry and wanted to zip through the drive-through window. Harry and Esther offered essentially the same product (the meal), but provided a new way to acquire that meal. Today, you would be hard pressed to fi nd any major fast food chain that does not offer a drive-through window. Good ideas catch on quick. A more recent example is Netfl ix. Netfl ix will automatically send you movies every month in the mail. Netfl ix saw that there was a more convenient way for consumers to rent movies: by delivering them to the mailbox rather than making the customer get in their car and drive

down to the videostore. The coreproduct is exactly thesame. Watching TalladegaNights on a DVD from Netfl ix is no different than watching it on a DVD that you rented from BlockBuster. The difference is in the delivery of the product. On April 2, 2009, the company announced that it had mailed its two billionth DVD. So if all things are equal and you are the only dealer in your market to offer this convenience advantage, you will have an incredibly powerful competitive edge in capturing buyers that want to purchase their next vehicle by negotiating online.

If you would like to receive a free preview electronic copy of my upcoming book, On-line Negoti ation is Now a Reality, please e-mail me at the address below.

Jock Schowalter is the president and founder of DealerPeak.com and WideStorm. He can be contacted at 866.869.1108, or by e-mail at jschowalter@autosuccessonline.com.

17

the #1 sales-improvement magazine for the automotive professional

www.autosuccessonline.com

18

ToddStrausem

arketing

solu

tion

HOW CLEAN IS YOUR PREVIOUS CUSTOMER DATABASE?

FACT: Text messaging has risen 700% since 2006.Text “answer” to 89000 to see how many messages were sent in June 2009.

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I have been in the business for 19 years

and have found that there are key components that make a direct marketing campaign successful. Just like baking a cake or making the perfect swing on the golf course, if you stick to the fundamentals, it makes all the difference in the world.

The No. 1 priority for any dealer who is actively mailing to their previous customers should be to continuously cleanse their database. In fact, I recommend updating your data at least every six months.

It’s no secret how this data gets into a dealer’s DMS. In most cases, someone at a computer with mediocre typing skills is manually entering data. Misspellings and typos are easily made and rarely corrected.

Not only does misinformation get entered, but there are other reasons for data inaccuracy. Customers move out of the marketplace daily, customers purchase a new vehicle and their

old vehicle stays in the system, resulting in multiple pieces of mail delivered with the same offer.

So how do you know if your current marketing company is cleansing your data correctly and protecting you from wasting money? Just ask them! Make sure they can explain in detail their processes. If they have trouble responding (which several will), you will most likely have your answer.

Don’t be impressed with certain words like “data extraction” and how they run your list through “NCOA” (National Change of Address). These are basic surface terms used by everyone.

Dig deeper. Ask them to talk specifi cs about their processes, such as how they remove duplicates, or which duplicate takes priority to stay in the system. Ask them how they complete “incomplete data” in the system to guarantee the customer can be reached. If you are satisfi ed with their answers and you

elect to use that particular company, you can always do a fi nal test.

My fi nal test is to review the overall improvement percentage after the cleansing process. If there is not a 20 percent minimum improvement of the data from the initial extraction, you can’t help to question their abilities. This percentage holds true even if you think your data was very clean to start. It will back up or disprove the direct marketers abilities.

Remember, direct marketers generally make more with higher volumes of mail sent. With less data cleansing, in most cases, more names will be available to mail, thus making your direct marketer more money — an instance, in some cases, where your best interest might not be the primary goal.

Todd Strause is the president of Strategic Marketing. He can be contacted at866.426.5182, or by e-mail attstrause@autosuccessonline.com.

SteveBrazillle

adership

solu

tion

FIX WHAT YOUR PEOPLE CAN’TGolfers observe that the quality of their

play improves in a foursome with stronger players, and declines in a round with weaker players. Free-agent athletes often base signing decisions on the perceived quality of future teammates in addition to the fi nancial benefi ts of a contract. Most of us understand that, regardless of the endeavor, our opportunity to achieve improves when we surround ourselves with high achievers.

This principle holds in dealerships. As a salesperson, I always knew my opportunity to prosper improved in a showroom full of salespeople who averaged 12 to 25 units per month and were CSI stars. Those stores put more cars on the road, generated more visibility, created more walk-in traffi c and produced more repeats and referrals. Business really does beget business. But the lift came from more than just increased opportunity. When I worked in an environment where everyone was serious about achieving, I was immersed in a learning laboratory. Every day was an opportunity to watch skilled people ply their craft, a chance to observe and learn something new and useful. Everyone was driven to continually sharpen skills because no one wanted to be the laggard on the team. Success tends to spiral upward to higher levels of achievement.

In contrast, there are showrooms in which salespeople average four to eight units per month and where a good delivery is the result of luck more than purposeful intent. Those stores generally put fewer cars on the road, generate less visibility, create limited walk-in traffi c and produce fewer repeats and referrals. Opportunity dwindles. But one thing is unchanged: Salespeople still learn from each other. In this case, rather than learning how to improve their game, they pass the day drinking coffee and smoking, blaming their lack of sales on bad management, lack of advertising and lousy inventory. New hires learn quickly that effort is futile. This is the downward spiral of failure.

Imagine for a moment what would happen if a skilled salesperson from the fi rst scenario was dropped into the second showroom. Assuming she didn’t fi re the organization (by resigning) in the fi rst week, her effectiveness would likely diminish with time until she was a full member of the Coffee and Complaint Committee. Similarly, imagine the outcome

of plucking a salesperson from the second scenario and dropping him into the fi rst showroom. His performance would probably improve immediately — if he wasn’t tossed from the bus by his teammates.

These scenarios could, of course, be rewritten to take place in service, parts or accounting.

So how do you get this feature of human nature to work for you? There are three basic steps:1. Recognize that just as you have

expectations of your people, they expect you to be effective in your position.

2. Your people have primary responsibility for their own performance, but their ability to perform is often limited by things beyond their control. They can’t control the quality of management, advertising and inventory. If it’s bad, they can’t fi x it. You can.

3. Your people can’t control who their teammates are. They don’t hire and they don’t fi re. You do. Hire carefully and communicate performance standards that are clear, concise and realistic. Monitor regularly for compliance, comparing individual performance to the standards, then reviewing with each employee. Teammates who consistently fail to perform to defi ned standards should be retrained, reassigned or removed. Explain your standards (unit sales, CSI, whatever) to potential new hires during the interview process, explaining that you have standards to protect their future opportunity to achieve. If a prospective new hire is afraid of your reasonable standards, that might be a clue you want to observe before you make the hiring decision.

The managers of professional baseball clubs are responsible for putting the best team possible on the fi eld. They regularly (constantly) review player performance and make diffi cult decisions about who is on the team and who is not. Those decisions are often diffi cult, but making them is part of the job. Isn’t it also part of yours?

Steve Brazill is the chair of automotive marketing for Northwood University, Texas Campus. He can be contacted at 866.861.1515, or by e-mail atsbrazill@autosuccessonline.com.

19

the #1 sales-improvement magazine for the automotive professional

While summer vacations and

national holidays typically provide a break for everyone who would be considered a member of the working public, there is one big break ahead that’s a priority on most everyone’s calendar — retirement. And while it may be closer for some than it is for others, everyone needs to make sure they are fi nancially prepared when the time comes to take a permanent leave from the ranks of the employed. Personal circumstances make planning for retirement different for each individual, but there are several considerations that apply if you break it down by the amount of time you have left until you retire.

If you have at least 10 years to go until you plan on retiring, you still have the advantage of time on your side. One of the most basic principles of investing is putting your money into different investment vehicles and then leaving it there so you can reap the benefi ts of long-term returns. With more than 10 years to invest, you might be able to afford to take on a little bit more risk with your investments. While equities — such as stocks — have an inherent risk of losing money, they also have a history of providing signifi cant returns over a long period of time. Just keep in mind that past performance is no guarantee of future results.

Probably the biggest advantage of getting an early start is the benefi t of compounding earnings. Based on the investments in your retirement portfolio, the money you put in has the potential to earn more money for you — whether through interest payments, dividends, or other means of growth. In many cases, those earnings can be reinvested into your portfolio, further enhancing the total value of your savings and allowing your money the opportunity to “make money” for you.

If your retirement is less than 10 years away, then it’s time to start making subtle adjustments to your investment mix. Hopefully, at this point you’re not just getting started, but rather taking a look at how your investments are allocated and making sure they appropriately match your risk tolerance, your investment objectives and your

relatively short time horizon. Because you have less time to work with, you still want to have some investments that offer growth, but you also want to begin looking at preservation of principal through fi xed income alternatives such as bonds, which may provide a little more stability in your portfolio and help reduce your overall risk.

Finally, at some point you’ll reach that day that you once thought was so far off. When you fi nd yourself offi cially in the position to retire, you will have a whole different outlook on those funds you have set aside for just that purpose. Instead of making contributions to your retirement funds to help them grow, you’ll be looking to maintain income from those investments. You’ll likely begin taking distributions from them to pay for your day-to-day expenses. A thorough review of your investments will help you clearly see just how much you have saved, and how you will have to plan your distributions so you don’t run short on funds during your retirement.

Financial preparation for retirement is something that is different for every individual. To make sure that you’re on the right track, take the time now to assess your own situation and see what you can do to make sure you’re ready when it’s time for you to retire.

John Freund is the senior vice president of investments for Moors & Cabot. He can be contacted at 866.599.9162, or by e-mail at jfreund@autosuccessonline.com.

JohnFreund

PLANNING FORRETIREMENTIN STAGES

www.autosuccessonline.com

20

leadership

solu

tion

“Finally, at some point you’ll reach thatday that you once thought was so far off. When you fi nd yourself offi cially in the position to retire, you will have a whole different outlook on those funds you have set aside for just that purpose.... A thorough review of your investments will help you clearly see just how much you have saved, and how you will have to plan your distributions so you don’t run short on funds during your retirement.”

www.autosuccessonline.com

22

BillPhillips

FOCUS ON THERIGHT THINGS

leadership

solu

tion

Want to improve the performance and

accountability of your Internet department? There is a solution — one that has been proven in store after store with successful e-commerce operations. Simply put, your upper management staff, mid-level management staff and anyone getting paid on Internet sales must be involved, on a daily basis, with the business on which they collect money. Running reports and asking general questions such as “How many appointments do you have?” is not involvement. The process must be started, inspected and managed every day by those who profi t from it. I have successfully worked retail for quite a few years, and I know you think I’m asking for more of your time. Actually, I’m not. I’m telling you that you need to reprioritize how you spend your time every day. Your business model is changing, and you need to change your activity to match.

Focus on Building YourOwn Team, ProcessesI refer to the “savior complex” as the method by which dealers and managers believe that, when they fi nd the right person, all their problems will be fi xed and their Internet departments will be properly managed. These individuals will bring in their own process and, sometimes, their own crew or followers. They will work for you as long as they are happy or don’t get a better offer; when this changes, they will take what they came with and leave with it, leaving you back at where you started. Sound familiar? In an industry with a higher-than-average turnover rate, this situation is reality. I am about managing reality; if you are reading this and I’ve touched a nerve, then you are, too.

These saviors often pack the numbers and feed management results that are not real. Prospects brought in from brokers, Costco, Sam’s Club, AAA and referrals are not

e-commerce business. And, to complete this point, neither is a consumer who walks on to the lot and says he or she found you via the Internet. You will often fi nd leads attributed at the point of sale to the dealer’s or the manufacturer’s Web site to create a closed deal from this source. For those of you who challenge this behavior, you have probably never checked to see the gap between suspect leads and DMS entry times, or even phone monitoring logs. (This is a way that Internet managers without talent often use to fool their employers.)

Hopefully, dealership owners and upper managers will now have at least a small understanding of why many third-party providers scream “foul” at the claim that their leads are of lesser quality and close at ratios below your own. What I am attempting to do in this article is shake the dust from the current, antiquated perception, which tells you that you don’t have to inspect what you expect from your e-commerce business. I have just barely scratched the surface of what must be managed in the e-commerce business process. You must change your thinking about who manages your Internet department and what is being managed. More managers must be involved, because the business issues that currently are being overlooked compromise your results more than you may realize.

Focus on ResultsOn a positive note, it is possible to get your Internet department under control. Regaining control will give you a handle on where your business is headed and help you put into place a management staff that is more in control and less reliant on a savior to tell you that you are. I want to encourage you to realign your staff to pay closer attention to the process aspects of your business. Managing the end results of a poor process has led many in this industry to see with

blinders. You can get control of a process in your store. You can make decent gross profi t on e-commerce-originated consumers. Managers do have time to manage it because their fl oor traffi c is dying without it. Your dealership can either plan for the future or be left struggling in what is shaping up to be a diffi cult year. A saying we have all heard seems appropriate: Failing to plan is planning to fail.

Many trainers in today’s market focus on the development of specifi c Internet sales skill sets. While this isn’t a bad thing to get in line, it is, by far, not the fi rst thing that needs attention to bring your e-commerce business under control. E-mails blasted or personally sent do not sell cars: People still sell cars. Phone scripts memorized or read do not sell cars: Personality and skill sells vehicles. In fact, managers are most always the ones selling the cars. Unpleasant as it can be when you’re busy, if you’re a manager, you and a few others in your store touch almost all the deals and actually cause them to happen. For this reason, managers must get involved at a whole new level, one that may be much lower than they may want to bend. Find a training company that can teach your managers who have a full plate to utilize their time effectively so they properly monitor both your e-commerce process and fl oor traffi c.

Focus on Profi tsYou will fi nd gold at the end of this journey. It’s worth the work, and you might be surprised to fi nd that even those who resisted fi nd it fun. Wouldn’t it be great to have fun selling cars again? Because we all know that is when the real profi t is made.

Bill Phillips is the president and CEO of Automotive Internet Management, Inc. He can be contacted a 866.593.7212, or by e-mail at bphillips@autosuccessonline.com.

www.autosuccessonline.com

24

How many vendors approached you last

year with the miracle cure for your woes? With all of these programs you have bought into, is your ELR any higher? Are your “sales per RO” any greater? Did you drive more customers in the shop with that advertising program? Wait, you also have an awesome technology tool so your advisors can be more professional and your technician’s can perform better multi-point inspections? How is that working out for you?

Question: Why is it that you are not seeing more profi t?

The problem with all of these programs is not the program. Nor is it the vendor. I have trained many service advisors and technicians on these different computer-enabling tools. I support their use and recommend them often. They perform exactly as they are designed to perform. They will get you an increase in your key performance indicators (KPIs). What happens when you do not see the results you expected?

A vendor provides a solution to the dealer for a symptom. The symptom is your KPI, which is an indicator of drivers to profi tability. I submit that often we do not look beyond the KPI. It is easy to mask the symptom and feel good that the problem is gone away. Then a few months later as the net profi t does not change, many search for another band aid.

That begs the question, “How can I drive more traffi c, increase my KPIs and still have less net profi t?”

The real problem in the shop is production. Time after time I have performed an evaluation in a shop where the manager tells me repeatedly that traffi c will solve all the problems. He is only looking at the symptom. More traffi c will only cause more headaches and grief. More traffi c is not the cure.

I submit a different solution. Production is the key to success. The only way to sustain long-term profi ts in your repair shop is production. Production is the solution to the problem that ails you.

If your production system remains the same, it is nearly impossible to stuff 1,000 repair orders into an 800-repair order shop. Driving more fl at rate hours in your shop will give you the customer retention performance and the net profi t you need in your dealership today.

The three responsible ways to increase production are to hire more technicians, to remove the obstacles of production and establish individual production targets. I submit that either you keep growing your shop with technicians, or you are falling behind. Now, before you run out and just put two more tool boxes in your shop, you better know exactly how you plan on feeding these professionals. Hiring a technician will initially get you a spike in production. The end result is usually the status quo. As important of a step that this will become, fi rst look at removing the obstacles of production.

The fi rst step in removing obstacles is to determine the current situation. Learn and observe your process. Once you understand what is currently going on in your shop, you can then begin to improve the system. Soon you will be recreating your own high-performance system. Let me share just a few possible hindrances to your profi t:

Dispatch — Examine your system of dispatch. I suggest that the ROs should be handed out to technicians by the closest person in his or her peer group. Do you have lead technicians? Conventional dispatch systems work very well, also. It is just as important that you have examined the process looking for roadblocks and bottlenecks. Throughout your examination, solve those issues.

Parking Lot — Are you maximizing the parking lot for your technicians? How long does a mechanic spend wandering the lot fi nding and moving cars? How many fl at-rate hours will you gain, or lose, while your technicians roam the lot?

Keys — How many places are keys kept in the service department? How many sets of keys are in a technician’s tool

box? No, wait, how many keys have made the trip home to your technician’s house? Where exactly should a technician place the keys when he is fi nished with the vehicle?

Parts — Why do we get parts the way we get parts? Because that’s how it’s done, right? Is there a better way? Can we have cabinets or carts in the shop? Can parts be delivered to your techs? I have even seen dealerships without back counters. That works, too. I am not telling you which way is best for you. I am only suggesting that you examine your way. Can it be better?

It is just human nature for us to work harder and strive to achieve goals. This is especially true if our paychecks depend upon them. Develop targets that stretch each employee.

Hold your technicians accountable for hitting these targets each day. Utilize a morning meeting and review your fl at-rate hours every single day. Now, you have structured your system to evolve and grow. Now, hire more technicians. I submit that you should always be recruiting and hiring the right technicians.

You can take your shop to new levels by rolling out the white paper. Grab a pen and start talking to your people. Ask them questions about how to make things better. Determine your own obstacles to technician production. Make changes and then follow through. Your people will praise you for your efforts. If you examine the direction and make course corrections each and every day, you will be successful in your endeavors.

Once you have a well-designed production system that accounts for every step from A to Z in the shop, now start the advertising, start the ASM training, start your inspections, start your walk- around, start your engines and let your production system drive profi ts through your shop.

Steve Shaw is a partner and performance coach for M5 Management Services, Inc. He can be contacted at 866.201.3043, or by e-mail at sshaw@autosuccessonline.com.

SteveShaw

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www.autosuccessonline.com

26

The life blood of any business is its

customers. The most successful salespeople and companies understand the need to establish long-term relationships with their previous customers.

Airlines use frequent fl yer programs. Credit card companies offer cash back on purchases and other fi nancial rewards.

In recent months there has been a renewed interest in a topic that seems to come and go from favor: leasing. Every few years, the pendulum seems to swing favorably towards leasing, and based on recent conversations, 2010 looks like one of those years.

In order to capitalize on this opportunity it would be best to adjust your current selling systems to integrate a lease option on your current worksheets. One suggestion might be to offer a side-by-side format to present both options (conventional fi nance and leasing) consistently to all buyers.

The idea would be to apply the same strategy used in the F&I offi ce for many years now. Offer 100 percent of the products to 100 percent of the customers 100 percent of the time. This principle will by itself increase your current lease penetrations without radically changing your process.

So why even bother?

Well let’s examine a few numbers that may help encourage you to reconsider the benefi ts.How could you increase your sales by 30 percent? On the surface, accomplishing this task may seem overwhelming. The best way to approach this is to breakdown the elements needed to achieve this outcome.

First you will need to increase your total number of customers by 10 percent. While not a simple task, with hard work and good efforts the increase is attainable.

Secondly you will need to increase your value per transaction or gross per deal by

10 percent. This is best accomplished by committing yourself to increasing both your product knowledge and your sales skills by reading and studying both topics intently. The improvements we seek in results begin fi rst with improving our skill set. Additionally, starting all your deals by asking for 20 percent down won’t hurt either.

Lastly, you will need to increase the frequency of purchase for each customer by 10 percent. This is where offering a lease option consistently will help. Lease terms, by comparison to conventional fi nance options, will be shorter, thus allowing for a greater frequency of purchase.

Here are a few points you should incorporate into your lease presentation strategy. Nothing earth shattering here – just a few helpful reminders. When redesigning your worksheet and presentation, include the following:

Section 1 – PriceThe selling price of the vehicle you’re purchasing today is $XX,XXX (Apply incentives as available)

Section 2 – TradeBased on similar vehicles we’ve seen in the last 30 days, we’ve looked at your vehicle and we’re willing to buy it today for $X,XXX up to $X,XXX.

Section 3 – Down PaymentAs I’m sure you are aware, most lending institutions would like to see as much as a 20 percent cash down payment for premium and preferred fi nancial programs. In your case, we would like to see $X,XXX.

Section 4 – Monthly Payment(Conventional Finance)Your estimated monthly investment will be 48 payments between $XXX and $XXX a month.

Section 5 – Monthly Payment( Lease Option )We have also provided you with a lease option of 36 payments between $XXX and $XXX a month.

Your Guaranteed Purchase Option will be $XX,XXX based on a program of XX,XXX thousand miles per year.

Section 6 – The QuestionWhich of these two options makes more sense?

If your customer selects the lease option, go to Section 8.

If your customer selects the conventional fi nance option, go to Section 7.

Section 7 – Lease 1-2-3(Name of Customer), the reason we offer all of our customers a lease is to provide you with three options.

First, you can sell the car for a profi t at the end of the lease.

Second, you can simply turn it back in.

Or third, you can buy it and keep it.

Since the lease offers so much fl exibility, would you prefer the lease or the conventional fi nance program? (Once your customer selects a program go to Section 8)

Section 8 – The CheckJust go ahead and write me a check for $X,XXX made out to (your dealership name) and I’ll get your paperwork started.

Then SHUT UP, and wait for their reaction. They may surprise you and actually write you a check. Most will not, and that’s OK. Be calm and relax.

Good luck and good selling!

Kirk Manzo is the president of The Manzo Group. He can be contacted at 800.858.6903, or by e-mail atkmanzo@autosuccessonline.com.

KirkManzo

IS LEASING THE KEY TO INCREASE YOUR SALES BY 30 PERCENT?

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800.858.6903, or by e-mail atkmanzo@autosuccessonline.com.

Slow Traffic, Slow Sales —Does Anything

The Answer is Yes.Actually Work?

ASK JIM & TRAVISAnyone who knows us will tell you that we’re straight shooters,

and it’s time for some long overdue talk about automotive advertis-ing and the way most agencies and so-called “marketing companies” prey on car dealers, take their money and deliver products and programs that are DOA (Dead On Arrival).

Dealers are desperately trying gimmicks of all sorts: circus sales, stale mailers, same old, lame old radio and TV ads chock full of cliche car gobbledygook and running footage and every other one-hit wonder under the sun, but they just don’t create any lasting result – if any results at all…

There is another way, a tested, proven and unique way, rooted in human psychology and behavior, that doubles traffic and sales, increases net profit and positions you as a responsible dealer instead of a predator. If you’re tired of spending, spending, spend-ing and getting lack-luster response and worn-out solutions with short-term results you are not alone. Read on...

Automotive advertising and marketing waste is a fact of life.

Whether it occurs due to boring creative, unoriginal ideas, inferior tracking mechanisms or bad/nonexistent strategy, the impact on your dealership, your employees and your personal bank account is real. It’s a manhood challenge. The typical marketing approach just pushes you further into the commodity market and erodes your gross. So do these one-size-fits-all marketing approaches work?

In a nutshell, we’ve discovered a simple truth: every dealer’s marketing problem is unique. Sometimes it’s simple… sometimes it’s not. The one-size-fits-all gimmick or “canned” approach just doesn’t work every time or at all. Then what? No more hope? Don’t give up… not yet…

You can get new, completely original ideas every month that make you stand out and sell more without spending more.

Most automotive marketing vendors from the “mail sale” to the “big agency” all use the same old, lame old ideas and then turn around and sell that same turd to every dealer on your street. That’s what they’ve always done and it makes sense that they're still doing it today.

But it’s a fact that over 50% of your advertising is wasted (actually our studies show it’s more like 78%). Some of it works for a while and then fizzles out. Yet, they keep selling it to dealers and you keep buying it and hoping for new and better results.You don’t have to be a marketing genius to get the picture here.

You need fresh ideas in order to cut through the clutter and win the attention and trust of today’s customer. You need very strategic creative (not creative for the sake of being creative) that’s custom-ized for your store and a message that makes you visible, credible and likable to your market. One size doesn’t really fit all.

You need to be plugged into a source of bleeding edge automotive advertising, copywriting, persuasion and psychology. You need new

ideas every single month and you need a sound blueprint for marketing your dealership that is proven to work over the long haul. You need a real marketing plan you can feel confident in that works for you and pays its own way.

After extensive research we’ve created a program that seems to deliver the greatest results period (we’re talkin’ doubling sales and tripling net). At the Rich Dealers Institute (RDI) we view automotive marketing not as a thing you buy to get some traffic this month but as a way to build relationships and sell to more people by solving problems rather than merchandising vehicles.

Your marketing should be unique, current and fresh every single month. It should tap into the conversation your customers are already having around the water cooler at work (like American Idol, politics, major events and news stories) and answer the two biggest questions every ad must address to cause someone to get off their butt and buy from you this week: 1. Why choose you over every other option? (service, location,

brand, years in business or prices don’t count)2. Why choose you right now?

RDI has a 3 Step Gravitational Marketing Process for attracting customers, standing out and

selling more month-in and month-out.

For over 97% of dealers who were struggling with decreased traffic, slow sales and poor marketing ROI who have implemented the RDI method, this formula has skyrocketed sales and net profits without an additional dollar spent in marketing. In fact, if you implement Gravitational Marketing and don’t see a 50% to 100% increase in traffic you won’t pay a single penny.

Regardless of the market – big or small – we have taken dealer-ships from 19 cars a month to 73 cars a month in two months and 65 cars a month to 150 cars a month in six months and increased net profits from $100,000.00 to over $1,000,000.00 in a single year. One of our clients just reported a first quarter 2010 NET PROFIT of $595,000.00 working out of a too-small, too-old facility...

If you want new ideas every month that make you stand out and sell more then you should call the Rich Dealers Institute and speak with one of our Rich Dealers Advisors. They will let you know how you are losing over one million dollars in net profit and how you can put that profit back in your pocket. They’ll explain the Gravitational Marketing process and how the Rich Dealers Institute can help you sell more, sell more easily and sell more often.

Call the Rich Dealers Institute at 1-866-852-0145 right now to schedule a Rich Dealers Discovery Session (a 30 minute phone call) and regain your position in your market, fill your bank account and get back your manhood.

www.RichDealers.com/seeforyourself

www.autosuccessonline.com

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Here is a stark but simple fact: For the

past year, the marketplace has offered fewer active buyers than needed to sustain the dealer community. A Darwinian fi ght for survival proceeded, and over the past year, an alarming number of dealers went out of business. Those who have survived this fi rst shakeout have proven they can deal with adversity. Going forward, those that thrive must gain and cultivate an operationally persistent competitive edge.

How can a dealer leap into this evolutionary winner’s circle?

The answer to this life-or-death question is hidden behind another: Where do dealers have the greatest opportunity to impact a buyer’s choice of dealership? This is key. If you know the moment of truth — the moment when the customer is most open to a dealer’s courting rituals — you gain a distinct advantage over competitors.

Two incontrovertible facts guide us. First, more

than 80 percent of car-buying customers use the Internet to gain an information advantage as they prepare to interview dealers who seek their favor. Consumers do this because they prefer to engage prospective dealerships from a distance until they have gained more information and have built trust. Second, an increasing percentage of customers extend their remote engagement further by sending their fi rst expression of interest (a lead) over the Internet to multiple dealerships. Dealers who thrive in the midst of the shakeout will have fi gured out how to seize advantage in the domain of the Internet customer.

The moment of truth, of course, is the point where the consumer has sent a lead to three to fi ve competing dealerships. The dealer who leaps in front of the pack and fi rst initiates the courting ritual, and then is gently persistent with insightful words and offers over time, leaves his competitors clamoring in the dust.

Rapid response and effective follow-up are the one-two punch that knocks out the other

guys. Experience shows that dealers who can deliver an immediate response with a price quote every time when a customer submits a lead, and personalized follow-up every time when the customer doesn’t buy, will see at least a two percentage point increase in close rate on average. Get these two critical steps right and you’ve made the leap into the winner’s circle. Why? Because so few dealers can pull it off.

Speed is key, but it’s not the only important factor. Evolutionary advantage is also tied to the content of the dealer’s message. Customers want the dealer’s price. Dealers who hide it hurt their prospects for a sale.

A fast, relevant and transparent response is important in order to build customer confi dence and trust. If delivered on every lead every time, a dealer will grow sales signifi cantly.

Tom Mohr is the CEO of ResponseLogix. He can be contacted at 866.503.8322, or by e-mail at tmohr@autosuccessonline.com.

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WINNING ONLINE

Automotive Dealer Live Chat Buyers’ Guide 11 Key Questions to Ask any Live Chat Provider before You Buy

Dealership live chat is a hot topic for

2010. Shoppers are increasingly using this technology and service to interact with your dealership, get answers to questions and receive immediate information. What is the right chat solution for your dealership? What features are must-haves to successfully engage your shoppers on your dealership Web site? Today, we are going to uncover the answers to three key questions you need to know to make an educated decision about selecting your chat provider.

Does the chat vendor offer a service that will allow you to connect your Facebook profi le and fan page with your live chat software, to fully take advantage of social media marketing?Connecting with Facebook users is a great way to engage and drive more traffi c to your Web site. Facebook is the world’s largest and fastest growing social networking platform, with more than 350 million registered users. Competitive dealerships are looking for an edge in their marketing. Having your chat application on your “wall page” helps to connect your fans and friends with your dealerships. Some chat providers only offer a chat link on an alternative section on your fan page. Yet, statistics state that 95 percent of all your fans only visit your wall and will not click through to alternative sections. This makes it vital to ensure that your chat application will integrate directly with your fan page and/or profi le “wall page.”

Can your solution provider let you chat while streaming vehicle videos to create a dynamic multi-media experience for your shoppers, increasing the engagement during the chat? Today’s consumers demand more than just a quick instant messaging conversation online. Engaging shoppers and supplying them with a virtual test drive helps move them further down the sales funnel, which is critical to online sales success. Providing a rich media experience during chat creates powerful

rapport and excitement with shoppers, while delivering a similar experience to what the shopper would have in your showroom. Video is fast becoming an essential way to stand out online and create a competitive selling advantage.

What level of “after the sale” best practices’ training is available to help you continuously improve your ability to connect, communicate and convert your online shoppers into sales? Because chat continues to evolve, you want to partner with a vendor that has both retail automotive experience and the capabilities to continuously improve the software and services. This helps ensure the chat solution will meet the ever-changing needs of your dealership’s online marketing. Partner with a vendor who can analyze your chat results and Web site data to help you make better business decisions for continuous improvement. It is also important to work with a team that will share best practices to help you engage more shoppers and convert more of them into sales opportunities.

For 11 more key questions and answers to help educate your live chat provider selection, contact me at the address below to download the free eBook Automotive Dealer Live Chat Buyers’ Guide. It is available to help you make the best decision in selecting the vendor that is right for your specifi c dealership chat needs.

Todd Smith is the co-founder of ActivEngage. He can be contacted at 866.387.9061, or by e-mail attsmith@autosuccessonline.com.

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KEY QUESTIONS AND ANSWERS FORSELECTING YOURLIVE CHAT SOLUTION

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SusanGivens

TOP DEALERS WORK TOGETHER ONNEW AD NETWORK

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More than 90 percent of consumers start shopping on the Internet, and most use

search engines like Google to fi nd their next vehicle. Since it is diffi cult for local dealers to appear on top of the search engines for broad search terms, some of the most successful dealers are working together with a network to increase their search engine visibility for the most popular national and regional search phrases. The network was created by industry veterans Brian Pasch, Sean Wolfi ngton and David Boice to help dealers use their collective power to compete with third-party lead providers for online shoppers, and generate high-quality leads for less money.

National third-party lead providers have long had the advantage for the most popular search phrases because of their footprint and corresponding search authority. Now, dealers are using the network to establish a national footprint to increase their authority, and are appearing ahead of the lead providers for popular national and regional search phrases.

Manufacturer Owned Lead ProviderSome manufacturers created their own lead generation Web sites because third-party lead providers were inviting consumers to receive quotes from competing brands in an effort to generate more revenue from the same lead. To protect their brand, Ford created a national network of Ford dealers and launched FordDirect.com, a captive consumer site that sells leads to their dealers, and not to GM, Honda and Toyota as others do. “The Ford Direct leads have a very high closing ratio because the leads are not sold to 10 different dealers who are trying to sell the same customer,” said Sean Wolfi ngton, founder of BZ Results and Cyber Car, the company that trained all of the Ford dealers on FordDirect.com when it was launched years ago.

Now some of the top dealers in the country are working together through the network to generate their own leads for less money from CarDealerSale.com and hundreds of regional Web sites that delivers unlimited leads exclusively to members of the network for a nominal membership fee of $995 a month.

The network generates traffi c through national digital marketing strategies, content publishing and through hundreds of regional consumer sites that are optimized to appear on Google’s fi rst page for the most popular regional search phrases like “boston dealer,” a phrase that receives more than 20,000 consumer searches a month.

It is diffi cult for dealers to come up on top of the search engines for these phrases because there are many lead providers competing for the same 10 results on the fi rst-page. “The network has the national and regional search authority, so our vehicles appear on top of the results in our market,” said Brian Benstock, GM of Paragon Honda/Acura, the No. 1 selling Honda/Acura dealer in the world.

The Superbowl of Online AdvertisingThe competition to be on top of Google’s search results has never been as apparent as it was during Cash for Clunkers when the search phrase “cash for clunkers” became the No. 1 most-searched phrase above “paris hilton” and “barack obama.”

“Never before has every manufacturer and dealer had the same program with the same offer,” said Brian Benstock from Paragon Honda, who sold more Hondas to clunker consumers than any other Honda dealer in the country. “Cash for Clunkers was a jump ball and every manufacturer, car dealer and lead provider tried their best to come down with it.”

Although manufacturers and national lead providers had the advantage because of their national footprint and their corresponding authority on the search engines, a group of dealers dominated the top of the search engines by working together through the network. “When consumers typed in a national search phrase like ‘cash for clunkers,’ our network of Web sites appeared in three of the 10 results on page one,” said Paragon Honda’s Brian Benstock, who sold more Hondas to clunker consumers than any other Honda dealer in the country. “When consumers typed in a regional search phrase like ‘cash for clunkers new york,’ we appeared fi ve out of the top 10 results and

the same is true when they searched locally for ‘cash for clunkers queens.’ We received more than 1,000 leads in a day and had to hire a call center to handle the volume. Alone, we could not compete with national lead providers. By joining the other dealers in the network, we made each other stronger.”

The Toyota Recall OpportunityThe most recent “jump ball” in the search engine optimization game was for the term “toyota recall.” Dealers are using the new ad network to dominate the national, regional and local search results for this historically popular phrase. “When a customer searches for ‘toyota recall’ (national phrase), ‘virginia toyota recall’ (regional phrase) or ‘chesapeake toyota recall’ (local phrase), we appear multiple times on the top of Google page one results,” said Brian Pasch. “Dealers in the ad network are getting the top results because the network mirrors the search behavior of consumers by optimizing a national Web site for national search phrases, a regional Web site for regional search phrases and a local Web site for local search phrases.”

“We have a smart strategy to optimize our own Web site to appear on top for local search, but the network helps us reach people who type in the more popular national and regional search phrases like ‘toyota recall’,” added Alex Snyder from Checkered Flag Toyota in Virginia Beach.

“The network helps us dominate search results for everyday search phrases that are the bread and butter for organic traffi c and fi rst party leads,” said Timothy Martell, Internet Director of the Albrecht Group in Massachusetts.

Dealers Use Their Network to Generate Exclusive LeadsThe network’s inventory advertising system gives dealers broader exposure for their new and used inventory online by helping them appear where customers start their shopping process — search engines and social media Web sites like Facebook. “All our cars are available for consumers to see on CarDealerSale.com and the hundreds of regional and local sites that have top position on the search engines,” Snyder said. “The ad network is our best new source of leads because they have a high closing ratio and are inexpensive because we pay a fl at fee no matter how many leads we receive” said Jon Sherrell, Internet Director at the Rairdon Group

in Washington State.

Susan Givens is the publisher of AutoSuccess. She can be contacted at 877.818.6620, or by e-mail atsgivens1@autosuccessonline.com.

http://www.autosuccessonline.com

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BudAbraham

IF YOU DO WHAT YOU’VE ALWAYS DONE, YOU’LL GET WHAT YOU’VE ALWAYS GOT

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Most of us have heard this phrase: “if you

do what you have always done, you will get what you have always got.”

Or, stated another way: “Doing the same thing over and over again and expecting different results is insanity.”

Not to be arrogant, but it appears that many auto dealers ignore the wisdom of these statements when it comes to their detailing/reconditioning departments. For most dealers, the detailing department is the stepchild of the dealership: dirty, messy, disor ganized and manned by undependable employees whose work habits result in low-quality work that takes too long to complete. In general, the department is costly and troublesome to operate. Labor, supply and chemical costs in relation to cars detailed is far too high. So how does a department like this exist in an otherwise effi ciently operating and profi table dealership? Because dealers keep doing what they have always done with regards to the detailing/reconditioning department.

The following are some attitudes that dealers and their management personnel have about the detailing/reconditioning department that result in their doing what they have always done:

1. The detailing /reconditioning department is an expense area.

2. It’s a necessary evil.3. It’s not worth much management time.4. Provide little supervision of the

department. 5. Invest nothing new in technology to

improve performance and production. 6. Hire the same type of people they have

always hired. 7. Pay as little as possible for employees. 8. Don’t hire a competent department

manager.9. Provide no formal or ongoing training

for the detail manager or technicians. 10. Allow an attitude to prevail in

the dealership that the detailing/reconditioning department is the “lowest place in the dealership.”

What Should A Dealer Do? The following are some of the recommendations we make to dealers in evaluating their in-house detail departments:

1. Recognize that detailing is an “in-demand” automotive service for the motorist and consider selling the service to the public. They should at least look at the department as a “profi t center,” even if it only sells its services to the new and used car departments.

2. Change the paradigm about detailing. View it as an important and critical part of the dealership’s success.

3. Devote management time to the detailing/reconditioning department. Face it: The dealer principle is the prime mover in the dealership. If your personnel see you giving your time to insuring a successful and profi table detail department, it will be just that. Do not expect others to care anymore about the detail department than you do.

4. The dealer does not have to personally supervise the department, but they must insure that a competent management level person is assigned to supervise the department.

5. Whether you realize it or not, there is a lot of advanced technology available that will increase productivity, maximize labor, improve quality and reduce the time to process a vehicle. You must be willing to invest more than a few dollars for a shop vacuum, portable extractor, squeeze and spray bottles.

Employing the UnemployableProbably the biggest problem a dealer has with the detail department is the people they hire for the detailing department. For all the criticism I hear from dealers about their detail/recon personnel, they persist in hiring the same type of people.

Why do dealers persist on hiring these type of people? The answer lies to some degree in what has already been mentioned. For example, if you do not see the department worthy of your or your manager’s time then why would you hire better people? Or, if

your pay scale is low, you are building in constant turn-over.

Low pay is a direct refl ection of the dealer’s attitude about the importance of detailing/recon, and its importance in the dealership. For example, what if you paid the detailing department supervisor a salary of $40,000 plus bonus per year? If a detailing technician received $12 per hour, plus benefi ts? I am not saying you must pay these kinds of wages, but paying low does send a message to the employees themselves, as well as others in the dealership, of what the dealer principle thinks of the department

Every department in the dealership has a competent manager. The skills for a good detail manager depend not on whether they can detail a car but whether they can manage. However, almost without exception, in dealerships you fi nd a detailer assigned as the manager/supervisor. Most, I have found, have absolutely no management or people skills. All they can do, at best, is detail a car. And that is even questionable because they have had no formal training.

Considering the problems dealers have with their detailing departments, few, if any, make any effort to provide their detail/recon personnel any formal training to perform their job better. Don’t kid yourself; the detail employee knows very well that they are not afforded any training to improve themselves in their trade. Don’t dealers offer their sales personnel, mechanics, collision repair technicians, etc. on-going training? Why not detail/reconditioning technicians?

If a dealer wants to eliminate the problems they experience with the detailing department, they must do most or all of the above-mentioned things. These efforts should help to eliminate the attitude in the dealership that the detailing department is “the lowest of the low.”

Bud Abraham, is president of Detail Plus Car Appearance Systems. He can be contacted at 866.205.8499, or by e-mail at babraham@autosuccessonline.com.contacted at 866.205.8499, or by e-mail ataaaaaaatttataaaaaatattaaaatataaaaaatataatataaat babraham@autosuccessonline.com.

MarshBuice

TURNING T.R.A.S.H.INTO TREASURE

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After reading a recent article about Carlos

Slim surpassing Bill Gates as the richest man in the world, I am intrigued by the underlying message in the article. Somebody forgot to tell the 1,011 billionaires that the world is in a recession. There have been 218 new people who joined the list of billionaire status in a recession. Do you think they are standing around talking about how bad things are or, when talking to them, is it like sitting next to raw plutonium enveloped by an air of excitement and optimism oozing from their pores? Warren Buffett aptly wrote, “When it’s raining gold, reach for a bucket, not a thimble.” It is raining gold, but can you see it? Can you see the opportunity that is before you?

If you look for the opportunity you will fi nd it. Ask the 25-year-old billionaire Mark Zuckerberg, who heisted an idea from his frat buddies and put the idea into motion to develop a four-billion-dollar fortune named Facebook. He saw an opportunity and ran with it. Too many people in this world talk of ideas while others seize the opportunity, act on it and are rewarded for it. Which one are you?

As talented as Lebron James is, it would be hard to dribble down the court with no air in the basketball. As precious time ticks away and James is chosen to hit the game winning shot, he would have a hard time dribbling down the court if the ball was fl at. Or what about Garrett Hartley kicking the winning fi eld goal in the NFC championship game to send the Saints to their franchise’s fi rst Super Bowl ever? I imagine the ball would have taken a different direction if the football was defl ated. As sales professionals we have let the air out of our ball. We have stopped looking for the opportunity and have chosen to focus on circumstances beyond our control: the economy, lending practices, etc.

You can literally rationalize this business away. (“It’s too cold, too hot, rain, poor

incentives, etc.”)

The defi nition of “opportunity”

is defi ned as “a possibility to a favorable combination of circumstances.” May I suggest a favorable combination of circumstances to get you back on the road seizing your opportunity? My prayer daily is to be able to see treasure where everyone else sees trash. See the opportunity (and act on it) where others do not. Be willing to do what others are not.

Become a trash man. Not the kind you normally think of when you hear the word “trash.” The decaying, rotting carnage left in the refrigerator from Sunday dinner two weeks ago. I mean the sweet smell of T.R.A.S.H.

T Turn up the intensity. Pressure makes things happen. Be focused and go to work to work.

R Remove the negativity from around you. Get away from those who have the “stinkin thinkin” mentality. It takes more effort to be negative than it does to stay positive; focus on what you can control, which is your attitude and your perspective. It’s easy to criticize.

A Ask yourself and your mentors how you can better yourself. Are you all you can be? Have you reached a point in your career that you think “you know it all?” If you want to earn a lot, learn a lot (read more). If you are not moving forward, you will eventually move backwards.

S Set goals. A goal not written is simply a wish. In the book What They Don’t Teach You in the Harvard Business School, Mark McCormack tells of a study conducted on students in the 1979

Harvard MBA program. In that year, the students were asked, “Have you set clear, written goals for your future and made plans to accomplish them?” Only three percent of the graduates had written goals and plans; 13 percent had goals, but they were not in writing; and a whopping 84 percent had no specifi c goals at all.

Ten years later, the members of the class were interviewed again, and the fi ndings, while somewhat predictable, were nonetheless astonishing. The 13 percent of the class who had goals, but did not write them were earning, on average, twice as much as the 84 percent who had no goals at all. What about the three percent who had clear, written goals? They were earning, on average, 10 times as much as the other 97 percent put together.

H Have fun. Go back to the days of having fun. Things will get better. Vast wealth is going to be made, but you must act on the opportunities. If what you are doing is not fun, change it. If you can’t do that, fi nd something else to do.

Marsh Buice is the sales manager of Mark Dodge, Chrysler, Jeep. He can be contacted at 866.535.5006, or by e-mail at mbuice@autosuccessonline.com.

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the #1 sales-improvement magazine for the automotive professional

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MarkTewartm

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ARE YOUA HUSTLER?Do you hustle? I mean really hustle.

As a kid growing up, I was a huge fan of the Cincinnati Reds — The Big Red Machine — baseball team. Pete Rose became my favorite athlete. Forget about Pete Rose as a man and all his personal shortcomings; Pete Rose gave it his all every time he stepped on a baseball fi eld. Pete truly earned his nickname “Charlie Hustle.” If you want to be successful, no matter your looks, talent, connections or anything else have going for you, you have to learn to hustle.

Recently I was in New York City on business. Later in the evening, after my meetings, I went to a famous Jazz Club called the Iridium Jazz Club to listen to T.S. Monk. T.S. Monk is a great Jazz drummer and the son of legendary Jazz musician Thelonious Monk. The music was incredible and I enjoyed the music and atmosphere tremendously. A funny thing happened in the Iridium Jazz Club that night. I learned more about business, marketing, sales and the hustle you must have to succeed than I did in any of the business meetings I attended. Go fi gure.

While watching the band, I noticed something. A young girl was invited into the club by the club manager; he gave her something to eat and then she took a professional-looking camera and starting taking action shots of T.S. Monk and his band. She made me curious, so I asked her what she was doing with her pictures. I was about to learn a lot from her.

This young girl was 19 years old and a student of Bowling Green University in Ohio. She had saved money and moved to New York for the summer to attend photography school and shoot photos of bands and musicians to build her music photography portfolio. This young girl had moved from a small town to a large city by herself with no connections to pursue her dream.

This young lady had put together unique marketing material that included a catchy brown envelope with rough texture and her name in an unusual font at the bottom. The envelope contained three photos of her work and a business card with a music-type photo of herself and contact info. The young lady went to school during the day and at night went to music clubs around New York City and asked if she could shoot pictures of the performers. While at the clubs she would tell everyone she met what she was doing and of her dream to be a photographer of Rolling Stone Magazine. She let the band know how excited she was to shoot pictures of them and that she would provide them the pictures for free for the chance to build her portfolio.

In between her school in the day and the picture taking at night, she would call on Rolling Stone Magazine and other music-related magazines trying to get an opportunity. I have no doubt this young lady will be successful. As a matter of fact, she already is. In creating her dream, she is living her dream. The young lady knows how to hustle.

Towards the end of the evening at the Jazz

Club I got to meet T.S. Monk. Mr. Monk told me that he went from playing Jazz to R&B music and had some hits and success, but when he decided to come back to Jazz music, his dad had already passed and some of the doors that might have been open before to him were no longer available. Having a famous dad had allowed him some opportunity, but he had to be able to deliver.

T. S. Monk talked to a jazz player who was a friend of his dad and asked if he could come out and play with him. The man said “sure” and told T.S. to come on out. T. S. sat there all night and never got to play. T. S. asked the man about the next weekend and the man said to come on out. Again, he sat there and never got to play. And so this same scene kept occurring for months. T. S. would go to the nightclub; he would sit and never get invited to play. Finally, one night he was asked to play. After that night he started to get invitations and opportunities started to open up for him. As T.S. said to me, he had to hustle and keep believing.

Whether you are Pete Rose, T.S. Monk, a young music photographer or a salesperson with big dreams, hustle is a common element of success.

Mark Tewart is the president of Tewart Enterprises, and the author of the best seller, How To Be A Sales Superstar. He can be contacted at 866.429.6844, or by e-mail at mtewart@autosuccessonline.com.

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DalePollak

ARE YOU HITTINGTHE MARK?

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As I travel around the country to speak

at conferences, 20 Group meetings, etc., I have had the opportunity to analyze the performance of many dealerships. This analysis has allowed me to put some clarity around whether or not a store’s online merchandising of used vehicle inventory is hitting the mark and helps to answer the “how do we know we’re doing a good job?” question I hear from decision makers who rely on third-party sites like AutoTrader.com and Cars.com to help them retail their used vehicle inventories.

I have noticed big differences across dealerships. The reasons for these disparities suggest that, despite the ubiquity of the Internet and its role in online shopping for used vehicles, the playing fi eld varies from market to market as well as from store to store. Here are some of the reasons for the variances:

• The number of “active shoppers” in a market — In metro markets, this number can reach seven fi gures, while smaller markets may only have 25,000 active shoppers. It is important for dealers and used vehicle managers to know the “pool” in which they are competing against other dealers for the attention of online shoppers.

• The size of a store’s inventory — It stands to reason: More vehicles translate to a greater number of opportunities for consumers to see and click on a store’s online listings. Of course, the “right” inventory stands a better chance of triggering a shopper’s decision to click on a listing. I have found that stores with a roughly 50/50 mix of franchise brand and off-brand vehicles tended to achieve more vehicle detail pages (VDPs) than those that carried a greater share (60 to 80 percent) of single franchise vehicles.

• The size of a store’s “e-real estate” — In my analyses, I compare the number of VDPs against the size of the investments made on AutoTrader.com’s platform (i.e., its “Partner” and “Alpha” programs). Indeed, stores that “paid up” tend to have higher VDPs. This is not an implicit recommendation to simply spend more. The stores that tend to pay more also invest additional time and energy into tweaking the fundamentals that drive merchandising success, including their vehicle descriptions, photos and videos; put another way, they’re investing in

their initial investment to achieve better ROI.

• A store’s inventory profi le — Stores that follow metrics like Market Days Supply to optimize their inventory around supply/demand dynamics in their respective markets show better search result pages (SRP) and VDP results. In addition, stores that manage their pricing profi le by consistently making relevant price changes log a greater number of SRPs and VDPs than those that are less attuned to market pricing dynamics. To me, this is a testament to the pricing knowledge that today’s used vehicle shoppers amass as they troll websites looking for vehicles that fi t their budgets and lifestyles. Simply put, they know a fair deal when they see one and they respond to dealerships that ensure their vehicles are priced right against the competition.

These are among the biggest factors that drive metrics like SRPs and VDPs. And there are measurable benchmarks. For example, top-performing stores see a consistent three to four percent conversion rate of SRPs to VDPs (essentially the click-throughs to specifi c vehicles from the search results page an online shopper selects). To me, this is the “money number.” If the conversion rate falls below this benchmark, it signals that something is amiss — the “right” inventory, competitive pricing, compelling photos, descriptions, seller’s notes — all of which play key roles in catching an online shopper’s interest. Likewise, if the conversion rate is higher, it suggests a store has achieved what I like to call “pixel profi ciency” with its online inventory listings.

I would encourage every dealer and used vehicle manager to do a review of their own SRPs, VDPs and VDP conversion rates. This is a daily exercise at many of the stores I have visited in the last several months as they seek to gain the highest ROI from their investments in third-party listing sites.

Dale Pollak is an author and the founder of vAuto. He can be contacted at 866.867.9620, or by e-mail atdpollak@autosuccessonline.com.

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