autosuccessJun08

AutoSuccess 2008 Synergy Sessions Recap, page 16

June 2008

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OVERCOMING “IT COSTS TOO MUCH”

BRINGING IN OUTSIDE HELP TO INCREASEYOUR BOTTOM LINE

SURVIVING AND THRIVING INTHE NEW EFFICIENT MARKETPLACE

Dale Pollak, Founder of vAuto, Talks About the New Used Car Market

JimAdams

TomHopkins

D.J.Harrington

DalePollak

RalphEbersole

VOICE MAIL - LIFE OR DEATH

PhilCalvert

DaymondDecker

INTERNET SALES 20 GROUP VI +2008 SYNERGY SESSIONS

ONE FANCY WORD

GrantCardoneSELLING IS A PREREQUISITE FOR SUCCESS

RISE ABOVE THE COMPETITIONDisplay Advertising Helps Your Store Stand Out Online

SeanV.Bradley &KarenUriarte

LEADERSHIP EFFECTIVENESS -FOUR FAIL-SAFE STEPS

JodyDeVereADDRESSING THE NEEDSOF WOMEN WILL INCREASE PROFITABILITY

JohnBrentlinger

PaulD.Cummings

THREE QUESTIONS FOR LEADERS

JoeCalaBE THE BEST YOU CAN BE TODAY

INTERNET FITNESS PLAN DRIVES CLOSINGRATIOS TO OVER 50 PERCENT

Strong Web site and CRM Breaks Barriers for Mike Patton Auto

RalphPaglia

BUSINESS DEVELOPMENT CENTERSHow to Make a BDC Work for Your Dealership

HelmiFelfelSTOP READING

SteveBrazillPOISON IN LOW DOSES

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www.autosuccessonline.com

TomHopkins

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OVERCOMING“IT COSTS TOO MUCH”

If you’ve been in this business longer

than a week, you’ve probably heard this objection from at least one potential new client: “It just costs too much.” Or, you might have heard it in this way, “I’m really interested, but I think I can get it cheaper somewhere else.”

Everyone wants a bargain, but not everyone really believes they can get it somewhere else for less. And, many who use this line will never invest the time required to shop around for a better price anyway. They’re just playing the game they think is part of buying a new vehicle. So, how do you handle this situation?

Begin by understanding that most people are afraid to part with their money. Money equates to security. It doesn’t matter whether you’re asking them to exchange $9,995 or $79,995 for your vehicle.

People are happy to spend their money when they see that there’s more value in having what you’re offering than in having their money. That’s where you need to take them in their thinking before they’ll consider making a buying decision.

When a client objects to your price, the fi rst thing you should do is to feed it back to them. Warmly say, “You think the truck costs too much?” (Notice I said, “warmly,” as if you’re asking for clarifi cation — not like you’re threatening them.) They’ll either agree or hesitate, re-thinking why they said that. If they agree, ask how much they had expected to pay for it with all the quality and options it offers. List the benefi ts they’ve mentioned they like about it briefl y. What you’re doing is building

value in order to decrease their money resistance.

Use ownership terms when

discussing the vehicle. You should have built some rapport, qualifi ed and presented the vehicle by the time they object. So, you’re not discussing “a” vehicle anymore. You’re discussing “their” automobile and “their” benefi ts.

• “When you drive home with your new truck, the neighbors will be happy not to hear you coming for a change, don’t you agree?”

• “Just picture the pride your child will display when the next time you pick them up after school, knowing you have room for their friends and their stuff.”

• “Knowing that your wife won’t have to worry about fi tting the kids and the groceries in her vehicle will be a load off your mind, won’t it?”

If they’re still stuck on the money, say: “It may very well be true that you can fi nd a similar vehicle for less money elsewhere. And, after all in today’s economy, we all want the most for our money. A truth that I have learned over the years is that the cheapest price is not always what we really want. Most people look for three things when purchasing a new vehicle: 1. The fi nest quality; 2. The best service; and 3. The lowest price. I have never found a dealership that could provide the fi nest quality and best service for the lowest price. I’m curious, for your long-term happiness, which of those three would you be most willing to give up? Quality? Service? Or, low price?”

No one wants to own inferior products. And great service is always important. These words help minimize the price issue and rationalize the decision to make the investment.

If they still hesitate, it could be that they had unrealistic expectations about

how much a vehicle of that type would have cost. In that case, you will want to determine how much less they would want to invest. When you hear, “It costs too much,” say, “Today, most things do. Can you tell me about how much ‘too much’ you feel it is?” If the difference between your price and what they want to pay is only a few hundred dollars, build the value once again. If the amount is larger, try the “reduction to the ridiculous” strategy.

It goes like this: Let’s say the challenge is $3,000. Next, determine how long they’ll keep or use the vehicle. “Mary, if you were to own this new minivan, how long do you think you would drive it? Do you typically keep a vehicle at least fi ve years?” Get them to give a number. Divide that number into the dollar amount to get an annual amount. If it’s fi ve years, then that breaks down to only $600 per year or $50 per month. Walk them through the math. You might even hand them a calculator to do the division themselves. People believe the numbers when they are the ones entering them. To break it down even further, divide by 30 days in the month. That now brings our $3,000 down to $1.66 per day. Then, you would say, “Mary, do you really think you should keep yourself from enjoying the safety and other benefi ts we’ve discussed with this new van for the next fi ve years for $1.66 a day? That’s less than you would spend for a cup of coffee.”

This strategy puts the larger amount into a daily perspective and makes it seem more manageable. If they see it as manageable, their hesitation very often loses its strength, and they go ahead with the purchase.

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

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GrantCardone

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SELLING IS A PREREQUISITEFOR SUCCESSSelling impacts every person on

this planet. Your ability or your inability to sell, persuade, negotiate and convince others affects every area of your life and will determine how well you’ll survive. No matter your title or position in life, no matter what your role is in a company or on a team, you will at some point have to convince others of your position. Your ability to do so will impact you in a way that will determine the very outcome of your life.

Selling is employed, every day, by every single person on this planet — no one is excluded. Selling is not just a job or career. Selling is essential to the survival and well being of every living individual on this planet. Your ability to do well in life depends on your ability to sell others on those things you believe in. You need to know how to negotiate and how to get another’s agreement at some point in your life in order to get what you want. The ability to get others to like you, work with you and please you determines how well you will survive. Selling is not a just job — selling is a way of life.

Selling: (Merriam Webster dictionary) The action of persuading or infl uencing another to a course of action or to the acceptance of something.

Who does this not impact?When I say selling, I am talking about anything to do with convincing, persuading, negotiating or just getting your way. This could include debating, getting along with others, exchanging goods or services, convincing a girl to go out with you, buying or selling a home, convincing the bank to give you a loan, starting your own business, persuading others to support your ideas, getting a customer to buy a product from you and so on.

It is said that the No. 1 reason businesses fail is because they’re undercapitalized, but the truth is businesses fail fi rst and foremost because their ideas weren’t sold quickly enough and in great enough quantities and the company ran out of money. NO business owner can build a business without understanding this critical element called selling. Think of any action in life and I assure you that there’s someone at one end or the other trying to persuade the outcome.

A golfer has a six-foot putt. He putts the ball and then does everything he can to persuade that ball to go into the hole. He talks to it, he pleads with it, he makes motions with his hands and he might even whisper a little prayer that the ball will drop. All the while, his opponent stands across from him doing the exact opposite. This example demonstrates that every one of us is always pulling for a certain outcome.

The degree to which you can infl uence the outcome of things in life is the determining factor of your success. For those who don’t want to trust the outcome of their fate to pleading, wishing, prayers and hope, they must learn to persuade, convince and negotiate successfully.

No matter who you are or what you do, you’re selling something. It doesn’t matter whether or not you call yourself a salesperson because you’re either selling something or someone is selling you. Either way, one of the parties is going to infl uence the outcome and it will either be you getting your way or the other guy getting his way.

A sale is made in every exchange of ideas or communication; every time and there’s no exception. Deny it if you will, but that won’t change the facts. You’re a

salesperson and you’re one every single day of your life. From the moment you wake up to the moment you go to sleep, I assure you that you’re trying to get your way. The fact that you don’t have the title of “salesperson” or that you aren’t being paid a commission is only an oversight. Selling is the ultimate secret to any success a person achieves in their life.

The CommissionI fi nd it comical when people tell me, “I could never be a salesperson because I could never work on commission.” I ask, “What do you mean? Your entire life is a commission. There’s no salary guaranteed in life. The whole world is on commission and the whole world is required to sell!” It’s been said that the best things in life are free, but I don’t agree with that. The best things in life are those things that come as a result of a commission for some extra, well-done effort. Happiness, security, safety, a great home, a great family, love, confi dence, friends, your church, your community, and on and on all are commissions for someone’s hard work at selling others on a better way of life.

True love is purely a commission for fi nding the right partner and taking care of them and continuing to create the relationship and keep it growing. There’s no guarantee in life that you’ll be loved. There’s no guarantee that a relationship will get you love. First, you’ve got to persuade the person to take interest in you. Then you have to fi nd out what they want and what makes them happy. Then you have to produce it and keep producing it. But somewhere along the line you’ve got to sell the other person on the idea that you’re the one that they can trust to create a life with. And if you succeed, and exceed the person’s expectations, guess what? You will get love. But you had to convince or sell the person fi rst!

Grant Cardone is an author and the CEO of The Cardone Group. He can be contacted at 866.865.3175, or by e-mail at [email protected].

“No matter who you are or what you do, you’re selling something. It doesn’t matter whether or not you call yourself a salesperson because you’re either selling something or someone is selling you.”

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Most dealerships still operate from a decades-old playbook when managing their used car business. To win, dealers need to adopt a more disciplined, investment-minded approach. The No. 1 reason that dealers are not recognizing the full potential of their used car operation is the fact that they don’t understand what it means to move from an ineffi cient to an effi cient marketplace.

An effi cient market is any market where buyers and sellers have relatively equal knowledge of choices and alternatives. Was the used car business effi cient before the Internet? No — people regularly paid more money for their used cars than they would have if they’d only known where other vehicles just like it were being sold for less. Is the used car business today effi cient, and getting more effi cient every day? Yes — the Internet makes buyers aware of choices and alternatives for any vehicle in any market.

Thanks to the Internet, the used vehicle market has become a commodities market. Buyers have a multitude of choices, and prices are easy to fi nd. Vehicles aren’t as unique as they used to be, no matter what some dealers would like to believe.

Consumers are no longer the losers when it comes to buying a used vehicle. The new losers are dealers who have failed to understand the dynamics of today’s Internet-driven market. The days of convincing people to pay more for a used vehicle than they should are long behind us. Rather, the used vehicle is going to bring in only what the market will bear in the new effi cient marketplace. All effi cient markets are governed by the same

principles. Whether it is the oil, grain, metal or automobile markets, if they’re effi cient, they’re governed by the forces of supply, demand and price sensitivity. These are the important factors that are playing out in governing the success of your used vehicle operations.

The new car business has been effi cient for many years. Customers shopping for new vehicles have clear choices of where to go for identical vehicles and better deals. Because the new car business has been effi cient for some time, dealers well understand what it means to own new inventory with a high day’s supply. They would never dream of purchasing new vehicle inventory with a high day’s supply and then pricing it over the market. Yet, that is exactly what car dealers across the country are doing in their used vehicle operations.

What if you had to choose: you could either pay attention to the age of the vehicle in inventory or its day’s supply in the market, but not both? My professional opinion is that you’d be way better off knowing the vehicle’s day’s supply in the market rather than how long you’ve had it in your inventory. Think about it. If you knew from the fi rst day that you had a vehicle in stock that it had a market day’s supply of over 100 days, how long would you be proud of it? Answer this question: How long would you be willing to advertise a new vehicle for over market money if there was 100-day supply of identically equipped vehicles in your market? I think the answer is that you probably wouldn’t do it at all. So why are you doing it in your used car operations today? I can show any dealer that they have vehicles with 100+ market day supply

being advertised for over market money.

The single most important metric to consider when deciding whether to purchase a vehicle, how much to pay, or how it should be priced is the supply and demand of that vehicle in the market. Consider what happens when dealers receive a new hot model from their manufacturer that has pent up demand and very little supply. Isn’t it true that you can ask and get anything you want for yours, regardless of what your competition is doing with theirs? That’s what effi cient markets do for sellers when you offer an item for sale that has more demand than supply — it rewards you with premium prices and profi ts. Conversely, when you offer vehicles for sale where supply outstrips demand, you can’t price those vehicles aggressively enough. It only makes sense. This principle is as time-tested as markets are themselves. In the effi cient market, when considering what to buy, how much to pay or how to price, you must know the vehicle’s market supply and demand.

Here’s an example: With gasoline prices soaring, we all intuitively understand that gas sipping cars are quickly becoming the rage. I thought it would be interesting to take three markets — Los Angeles, Chicago and Tyson’s Corner, Virginia — and show you the top fi ve gas sippers in each market (See Table 1). Note that the ranking is based on lowest day’s supply, in other words, the current available supply divided by the average daily retail sales rate over the past 45 days. These are the ones that people will beat your door down for, more than any others. If you know this, that’s valuable information.

Now that the used car business has become

an effi cient market, dealers are either sailing on the seas with the wind at their back or in their face, on a unit-by-unit basis, depending on the vehicle’s supply and demand. When I say the vehicle’s supply and demand, I mean its current availability (exact year, make, model and specifi c equipment) divided by its average daily retail sales rate over the last 45 days. There’s a direct correlation between equity, volume and gross.

The good news is that the Internet offers the same opportunities for dealers to examine their market, and software packages and management and technology partners exist that allow dealers to examine live analysis of used vehicle markets, along with up-to-the-minute information about used vehicle supply, demand and pricing in their specifi c markets.

This information is the holy grail, and can change a dealership’s destiny. Tell me a vehicle’s supply, demand and price sensitivity and I’ll give you a better answer as to whether I want to own it, how much I’ll pay for it and how to price it. It takes everything that I always knew about the investment nature of the used-vehicle industry and brings it to life in a simple and non-threatening manner. If I’m talking to a dealer, once they understand the concept of an effi cient market, we can have a rational and productive conversation about his inventory in terms of the vehicle’s supply, demand and price sensitivity. It makes perfect sense to them, and it’s changing the way they think.

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

Surviving and Thrivingin the New Effi cient Marketplace

POPULARGAS

SIPPERSChicago 2004 VW Beetle GLS Conv. 37 17 222005 Scion xB 50 40 352007 Toyota Yaris S 54 19 172004 Chevy Aveo 56 82 432006 Scion xA 60 32 24

Los Angeles2007 Toyota Yaris 38 47 552005 Chevy Aveo 45 94 952004 Scion xB 45 92 912007 Honda Fit Sport 47 26 252004 Honda Civic LX Sedan 54 116 97

Tyson’s Corner, VA2007 Toyota Yaris Base 32 18 252004 Honda Civic LX Sedan 40 35 392005 Chevy Aveo 42 32 342005 Honda Civic LX Sedan 54 93 772003 VW Beetle GLS Conv. 58 27 21

location/make days supply available sold

Check out Dale’s podcast entitled‘The Dynamics of the NewUsed Car Market’.visit www.AutoSuccessPodcast.com

Dale Pollak, Founder of vAuto, Talks About the New Used Car Market

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ONE FANCY WORDLiquidity — That is one fancy word

for what should be on every general manager’s mind, night and day. One of the most important job responsibilities of a general manager is to watch cash fl ow and make sure that the dealership has enough operating capital to maintain its health. Many general managers forget that watching cash fl ow is more important in the summer selling season than it is in the fourth quarter. Yet, most of us start searching for money when sales slow in the late fall and winter months.

The truth is it takes money to make money. During the summer selling season, we must stock more inventories (new, used and parts), pay off more trade-ins and have more contracts in transit. All of this takes cash. Here are a few tips to free up some of that frozen capital. If you get good at it in the summer selling season, you will be great at it in the late fall and winter.

Pretend Like You are Broke• Contracts in the Offi ce are not Contracts in Transit — A contract in transit is the time between when the contract leaves your dealership until the deal is funded by the lender. It is not measured from the time the car is delivered, sits in fi nance for a few days,

and is shuffl ed upstairs to accounting before someone has time to send it in.

Require fi nance managers to get contracts in at least on a daily basis (I prefer hourly). Require them to collect stipulations up front and get the clean contract to the offi ce. Make sure the offi ce knows that the contract must go out immediately. Nothing can come before converting contracts back to cash.

Money saving tip: Put more than one contract in your DHS or UPS next-day envelope. You can cut your next-day delivery bill in half by sending them together and using one tracking number.

• Get the Trade Title at the Point of Sale — Make it a point to send the salesperson with the customer to get the title. If there is a payoff, and the State holds the title, make sure fi nance gets a secure power of attorney so you can endorse the title when you get the lien release. A trade title lets you cash a wholesale unit or put a retail unit on the fl oor. Quick solution — Get the title.

Money saving tip: Send a certifi ed check to the lender that holds your title until your check clears when you are paying off a trade in. Include a note that says, “Attached is a certifi ed check. Please mail lien release today and fax a copy to the following number.”

• Avoid Employee Accounts Receivable at All Cost — I am a tender-hearted devil too. If you must loan them money, open up your wallet. This is a business and not a not-for-profi t corporation. I know that sounds harsh, but you can open yourself up to litigation if you loan one employee money and not another.

Money saving tip: If you allow your employee to charge service or parts, cap it to an amount that you could collect from their fi nal check

• Take a Long, Hard Look at Your Inventories — It does not matter what we like. It only matters what the customer likes. Run your vehicle inventory like the parts department. In parts, we have phase-in/phase-out criteria. In parts, we have a way to identify our top-moving inventory and obsolescence. In the sales department, we buy or keep what we like. Remember

that the customer is the judge and jury of our inventory. If they don’t like it, they will not buy it. If they do not buy it, it gets old. When it gets old, we lose money. Period.

Take a snap shot of your inventory. Compare your current new and pre-owned inventory to your past 60-days sales history by make, model, year, mileage and actual cash value. You may be amazed at how your current inventory looks compared to what you are actually selling. You also may fi nd out that certain vehicles sell well at certain price points. You may fi nd out you need to fi re your used car manager. Think about it. We have hundreds of checks and balances in place for our parts inventories, and very little for our new and used car inventory.

Keep no more than a 45- to 60-day supply of pre-owned inventory.There is nothing more volatile than pre-owned vehicles. It is more work to replace what you sell as you sell it; however, it is exponentially more profi table. Buying vehicles on today’s market makes more money and makes more sense.

Money saving tip: We sell cars one at a time — why not buy them that way? There are more outlets than the auction to buy inventory. Street purchase, rental companies and cyber auctions can help you fi ll voids without going to the auction and buying units just to fi ll a truck load.

• Sign every check: Look at the bill. In a Dealer 20 Group exercise, I sent a bill for $20 to every dealer in my group. At our meeting, I handed out 13 checks to dealers that remitted payment on my bogus invoice. Ask some questions. Why do we need it? Do we still use it? You will be amazed at the amount of things you can discontinue without anyone noticing.

Here are just a few tips on ways that we can free up frozen capital and make our dealership healthy, happy and prosperous.

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

“Here are a few tips to free up some of that frozen capital. If you get good at it in the summer selling season, you will be great at it in the late fall and winter.”

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This month is going to be a special

edition, combining the Internet Sales 20 Group and the Synergy Sessions columns. I want to thank all the dealers who attended the event, which was held on May 13-14, and all the sponsors, exhibitors and speakers for their participation, passion and expertise. This was an awesome event, and I’m proud to say that, based on the feedback, we exceeded everyone’s expectations.

This was one of the fi rst major events in New Orleans since Hurricane Katrina, and, rest assured, New Orleans is defi nitely a great place to attend a show. The W Hotel is a nice, modern hotel and they did a great job putting the event showroom together.

There is so much to go over, I am smiling as I am typing out this article. I had so much fun there! Let’s start with a special thanks to Jeff Kershner from Dealer Refresh. Jeff allowed Dealer Synergy and AutoSuccess to post a contest on his Blog (http://www.dealerrefresh.com/my_weblog/2008/03/win-a-free-trip.html). The contest was to get managers and dealers to post ideas to Dealer Refresh on what they thought would make the Synergy Sessions the best possible event

INTERNET SALES20 GROUP VI

in the automotive industry for Internet sales, BDC and technology. We received a lot of feedback and a lot of great ideas.

Jeff picked a winner of the contest — Brian Tucker, Internet Sales Director of Swope Toyota in Kentucky. Brian won a VIP trip to New Orleans, registration for the event, a complimentary hotel room at the W for the entire event, fl ights to and from the event, a digital video camera, and VIP rock star treatment. Brian just posted his experience and insights on Dealer Refresh. Feel free to check it out.

All I can say is that the speakers really did their thing! We had an all-star line-up of the automotive industry’s Who’s Who — the Elite of the Elite. D.J. Harrington kicked off the 2008 Synergy Session. D.J. is a certifi ed public speaker, a veteran of the car business, a motivational speaker and a truly gifted speaker who got everyone going at 8 a.m. He was hysterical — very inspiring, very motivating and very fun. If you haven’t seen D.J. speak before, you’ve got to see him, or at the very least hear him. He is truly a legend in the game.

Dealer.com had the polish, energy and content with a powerful presentation about search engine optimization (SEO) and secrets for a very successful Web site campaign.

Charlie Volgelheim, the VP of automotive

for JD Power and Associates, presented the most up-to-date statistics and information as it relates to automotive Internet sales. Charlie also moderated a panel with D.J. Harrington. The panel had some incredible dealer experts on the front lines:

• Ed Naczi of Herb Chambers• Jeff Kershner of DealerRefresh /

MileOne• Lindsey Toscano of Nelson Mazda• Joe Cala of Gateway Toyota• Eric Painter of Peruzzi Toyota

All of these dealer experts and their dealerships have achieved national recognition for their success in automotive Internet sales and BDC. The audience was fully engaged with the panel, which was one of the many highlights of the Synergy Sessions.

TK Carsites, Dealix, Skoots.com, HomeNet, vAuto, AutoTrader.com, Carsdirect, Carfolks, Franklin Covey — these companies were all on point, and they all came with their “A” game. I don’t have enough pages to break each and every speaker’s presentation down. All I will say is that the massive amount of feedback we have gotten about the speakers and the content was powerful and positive. Everyone seemed to get something from all of the speakers.

Some I spoke to were really enthralled about the TK Carsites presentation about the “Power of 5” — the concept of having multiple Web sites within the main site. Creating a multi-level Web site platform

will assure the organic SEO domination they proclaim. Others have said that Ken Potter from Carsdirect had a truly refreshing perspective and appreciated his speaking style. Everyone seemed to love the stats from JD Power and Cobalt. There were “oohs” and “ahhs” when Skoots and vAuto presented some seriously unique technology.

Franklin Covey got a lot of respect from the audience. When we asked attendees what some of the favorite parts of the Synergy Session were, the Franklin Covey presentation and the interpretation of The 7 Habits of Highly Effective People as it relates to Internet Sales departments scored highly.

I love training and speaking in front of large crowds, but this event wasn’t a Dealer Synergy Bootcamp. This event was about getting the best of the best in the entire industry, including gurus, technology experts and more. We got the most respected research and data companies in the industry, like JD Power and Associates and Dealix. We got the most passionate and talented speakers in the entire industry like D.J. Harrington, Jeff Clark, Dean Evans and Mike DeCecco, James Bradford, Ken Potter, Tom Azbill, Tim James — just to name a few. Then we got all nationally recognized dealership frontline experts to present.

We also decided to kick it into a completely new stratosphere — we brought in Franklin Covey. The 7 Habits of Highly Effective People is offi cially the most successful and infl uential business book of all time, with

over 15 million copies in print in several different languages. Then, to top it off, we threw in a straight-up rock star VIP party that was hailed as better than most VIP parties at NADA.

I had a blast presenting, too! On the fi rst day I presented on Video Search Engine Optimization (VSEO), elaborating on the interview I did for AutoSuccess a few issues ago. I seemed to blow people’s minds with some of the most up-to-date statistics in regards to videos and the Internet. On the second day, I gave my interpretation of Dr. Stephen Covey’s The 7 Habits of Highly Effective People. That was awesome to do, and to get such positive feedback from the Franklin Covey organization on my interpretation just made the whole experience that much more special for me.

In next month’s Internet Sales 20 Group column, I will be going into detail about “The 7 Habits of Highly Effective Internet Sales Departments.” I look forward to all of your feedback on that upcoming article.

I could go on and on about how awesome the 2008 Synergy Sessions were. If you were there, you know exactly what I’m talking about. If you weren’t, don’t worry; Kaizen Multimedia, who has clients like Sony and Walt Disney, provided a state-of-the-art mobile video production team to archive the entire Synergy Sessions and its incredible line-up of expert speakers, along with the thoughts of those who attended.

Kaizen is hard at work editing the more than 40 hours of content, testimonials, presentations and the VIP party and will soon have a lot of video to post on our Web sites and on the Internet for your viewing pleasure.

We have decided to do the 2009 Synergy Sessions in March in Atlantic City New Jersey. We are planning something huge and special for Atlantic City. Please let us know if you have any ideas on what you would like to see for the event. We are going to start mapping this out in the next 30-60 days. Our goal at Dealer Synergy and AutoSuccess is to blow all of your minds and outdo the 2008 Synergy Sessions in New Orleans.

Karen Uriarte is the vice president of business development for Dealer Synergy. She can be contacted at866.698.8719, or by e-mail [email protected].

Sean V. Bradley is the CEO and founder of Dealer Synergy. He can be contacted at 866.648.7400, or by e-mail [email protected].

2008SYNERGY SESSIONS

17

photos from left to right; Brian Tucker of Swope Toyota, Sean V. Bradler of Dealer Synergy and Jeff Kershner of DealerRefresh; 2008 Synergy Sessions audience; Susan Givens, publisher of AutoSuccess;

Mike DeCecco of Dealer.com; Audience participant Brian Tucker; D.J. Harrington; Charles Volgelheim of JD Power and Associates; Mark Dubis of the Dubis Group and Carfolks; House of

Blues VIP Party Band; VIP Party audience; Sean V. Bradley of Dealer Synergy

S P E C I A L E D I T I O N • S P E C I A L E D I T I O N • S P E C I A L E D I T I O N • S P E C I A L E D I T I O N • S P E C I A L E D I T I O N • S P E C I A L E D I T I O N • S P E C I A L E D I T I O N • S P E C I A L E D I T I O N

KarenUriarte

18


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BRINGING IN OUTSIDE HELP TO INCREASE YOUR BOTTOM LINEYour team is the most important

part of your dealership. If the team isn’t fi ring on all cylinders, you’ll have missed opportunities, which means lower revenues and high turnover.

If your sales people are selling more, they’ll make more money for themselves, which makes more money for your dealership, and a boost can always help jump-start them into becoming happy, wealthy selling machines. Sometimes, you need a little extra help from the outside to make sure your dealership is operating at a high level of performance in all departments.

There are many businesses out there that offer training and consulting that can help you hire, train and work with the best people to deliver the best results.

A good consulting company will start by assessing your strengths and opportunities in order to help your dealership determine where you can grow your business. They’ll analyze the dealership’s facility, people, processes, pay plans, inventory, advertising and more. Their consultants will share the latest industry best practices to help you customize a strategy to increase revenue, profi ts and market share.

Then they roll up their sleeves and help your team learn the best way to sell more cars. They’ll walk you through the process and make sure your people are selling the best way possible. Some even have workshops for learning about and planning your strategies to use the Internet to your best advantage.

A quality consultant can prepare you with a custom business plan and strategic

blueprint for implementing a successful digital marketing strategy within your dealership. They’ll help you analyze where you are, where you want to be and how you want to get there. A good Internet workshop gives your people the knowledge and skills needed to get the results you want to achieve, utilizing the Internet to its fullest, most profi table extent.

A good training consultant will evaluate your entire sales process, including the pre-sale, sale, post-sale and resale. Consultants will be able to perform services such as training your managers, customizing sales-process training, setting up a complete strategy for customer service on incoming calls, setting up a profi table Internet strategy, implementing a complete follow-up system for unsold customers, helping you set up a complete customer relationship center, setting up an in-house training program with tools and training of your in-house trainer, and helping you make ongoing continuous improvement and evaluate your progress.

No matter whom you hire, make sure they are staffed with fully qualifi ed consultants with years of experience in the automotive sales industry. The team members should be Google AdWords certifi ed, knowledgeable about emerging technologies and have experience and expertise in dealership consulting.

A good training and Internet sales consultant will help you stay ahead of your competition and take your dealership to the next level. It will help you close more deals and generate incremental profi ts while building a loyal base of satisfi ed customers. When hiring a consultant, don’t expect anything less.

Daymond Decker is the product marketing manager for ADP Digital Marketing. He can be contacted at 866.860.6287, or by e-mail [email protected].

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the #1 sales-improvement magazine for the automotive professional

JoeCala

BE THE BESTYOU CAN BE TODAY

leadership

solu

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LS

“Success means doing the best we

can with what we have. Success is doing, not getting; in the trying, not the triumph. Success is a personal standard, reaching for the highest that is in us, becoming all that we can be.” - Zig Ziglar

Do Your BestWhen we do the best we can — where we are, with what we have now — we will live in success. So many people hold back and save their best for later. They wait for a reunion, an occasion, an event, a specifi c job, an important person with a special title or even a stranger before they show off everything they know and can do. The difference between “The Average Joes” and “The Pros” in sports, business, the automotive industry and in every area of life is the discipline to do your best in your fi eld everyday.

So many times we can get hung up on focusing on the things we don’t have, rather than the things we do have. We think we need more equipment, more programs, more incentives, more people, more training, and more money to be our best. Don’t misunderstand me; more equipment, more programs, more incentives, more training and more money is good and will add value to our lives, helping us become and release our best. However, if we are not maximizing what we have in our ability, in the areas of infl uence and equipment we have now, we won’t when we get more, either. Use what you have now. Sharpen your skills you have now. Master your craft. Practice doing your best and when it comes time for “Game Day” you’ll perform your best.

“Don’t be afraid to give your best to what seemingly are hard jobs. Every time you conquer one it makes you that much stronger. If you do the little jobs well, the bigger ones tend to take care of themselves.” - Dale Carnegie

Give your best in every matter, both small and large, and you will experience the best each matter has to offer.

Don’t Wait Until TomorrowGive your best now. Don’t wait until later or tomorrow. Start where you are now. Don’t let circumstances, people or excuses hold you back from giving your best. If it’s in your power to do it now, don’t wait

until tomorrow. Matthew 6:34 (New Living Translation Bible) says, “So don’t worry about tomorrow, for tomorrow will bring its own worries. Today’s trouble is enough for today.” Tomorrow has enough worries, problems and situations of it’s own. Why add more on top of it to make things even more diffi cult to deal with? Deal with it today. I once heard someone say that today is a gift, and that’s why it’s called “the present.” We need to open up our today with the same excitement, attitude and efforts as if it really is a present. We are alive today. Today, we can make a change. Today is always the best time to deal with ourselves. Today!

Don’t Worry About itOne of the biggest problems that face our today is our worry about tomorrow. Worry is one of the greatest issues that paralyze people, keeping them from moving into the greatness for which they have been created. I once heard someone say, “I don’t worry about the things I can change, because I

can change them. I don’t worry about the things I can’t change, because I can’t change them. Therefore, I just don’t worry.” This is probably the most liberating statement I have ever heard. Stop and think about the truth of that statement. How many times have you changed the situations you were going through by worrying about them day and night? And if they did change from you worrying about them, they probably changed for the worse. Someone once said, “Worry is like a rocking chair—it gives you something to do but it doesn’t get you anywhere.”

Share your best with the world today, don’t worry about tomorrow, and no matter what happens, you will be an Ultimate Success.

Joe Cala is an author, seminar leader, and Internet/Fleet sales manager of Gateway Toyota. He can be contacted at 866.859.6402, or by e-mail [email protected].

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22


We live large in the car business.

Almost everything we do is big. The vehicles we sell are expensive. Our capital investments are huge. The checks we write (or electronic equivalents we authorize) are routinely for amounts with fi ve or six digits to the left of the decimal point. Every fall we think nothing of ordering millions of dollars of products we have not yet seen. It’s no wonder the little things in life get lost in the traffi c.

But little things can matter — especially those that are repetitive. Consider the value of a minute of time. By most standards, a minute is not a big deal. It’s about half the time needed to rehash last night’s football game, a third the time needed to drink a cup of coffee, and a small fraction of the time needed to fi nd a misplaced set of customer keys. Dealerships leak minutes all day long. We know it happens and, in a perfect world, we would do something about it. But, with so many big things to tend to, we can’t let ourselves be distracted by something as little as one minute. Right?

Maybe, but the accumulation of leaked one-minute time intervals can add up in a hurry. A simple arithmetic exercise can demonstrate how valuable one minute actually is to a dealership.

Consider a service department in which every technician wastes one minute every hour. We’ll assume 10 techs in the department, each working an eight-hour day. (see fi gure below)

It’s clear that losing just one minute per hour per tech will cost this sample dealership more than $27,000 in lost gross profi t every year. Across a 30-year career in the business, that equates to more than $800,000 of profi t lost — one minute at a time. Regardless of position in the dealership — dealer, service manager, service advisor, technician, parts manager, parts countersales, etc. — everyone eats off the same plate. When that kind of money is taken out of the compensation pool, everyone pays a price.

This example has discussed minutes wasted by technicians, but that’s not meant to imply that technicians alone are to blame for wasted minutes. Certainly, every minute spent smoking a cigarette, drinking coffee, or replaying football games carries a cost. But those minutes cost no more and no less than minutes squandered while waiting for parts, fi nding lost keys, clarifying poorly written repair orders, locating misplaced special tools, or countless other events that routinely sabotage effectiveness. W. Edwards Deming, the American consultant

many consider a founding father of Japan’s postwar culture of quality, taught that 85 percent of a worker’s effectiveness is due to the system he works within, while only 15 percent is the result of his own skill. In a dealership, who designs the systems and processes? Who hires employees? Who trains them? Who is responsible for assuring that established processes are followed? Where does the buck stop? Before dealers blame their staff of employees, they need to take a hard look at their own role in the dealership.

The good news is that most dealerships have many opportunities to recapture minutes currently being wasted. Every improvement you make will help reverse the profi t drain and put money back into the compensation pool for the benefi t of the house, the managers and everyone else. While this article has focused on the service department, we can poison ourselves in other ways in all corners of the store. Take a careful look at everything you do repetitively and chances are good you’ll fi nd a variety of low-dose poisons pulling you down. Dealerships are full of repetitive activities. Think about vehicle sales, parts sales, F&I, accounting and payroll.

How can dealers best identify areas for improvement? Step back and observe the operational aspects of the dealership. Solicit information from dealership employees. Bring in an outsider who isn’t part of the internal politics and can offer an objective assessment. (Consultants are objective and contribute best practices from other experience in similar dealerships.) The important step is to begin — then make it a process of continuous improvement. Don’t let the cumulative impact of little events poison the payoffs of big decisions.

Steve Brazill is the chair of automotive marketing at Northwood University, Texas Campus. He can be contacted at866.861.1515, or by e-mail [email protected].

a.b.c.d.e.f.

g.h.i.j.

k.l.

m.n.o.p.

q.r.s.

Technicians 10*X (times) Minutes wasted by each tech every hour 1X Hours per day 8*= (equals) Minutes wasted per day 80X Working days per month 21*= Minutes wasted per month 1,680X Months per year 12= Minutes wasted per year 20,160 Minutes per hour 60= Hours wasted per year 336X Dealership’s effective labor charge per hour $85**= Lost labor sales per year $28,560X Profit margin on labor sales 67.5%**= Lost gross profit on labor sales per year $19,278X Average parts sales per dollar of labor sold $0.90**= Lost parts sales due to missed labor sales $25.704

X Average profit margin on parts sales 33%**= Lost gross profit on parts sales per year $8,482Total lost profit labor + parts per year $27,760

* Insert your numbers ** Insert your averages

( = line l x line o)

( = line n x line r)

SteveBrazill

POISON INLOW DOSES

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VOICE MAIL -LIFE OR DEATH

I knew a man who was a retired Army

colonel. Known to me only as Colonel Huff, he took a job at a very large fi rm in Florida. I called for at least 10 days in a row and reached voice mail every time. “Hi, this is Colonel Huff. I’m sorry I’m away from my desk. Just leave your name, number and a brief message and I will get back with you as soon as possible.” Finally, in desperation, I dialed the next extension number and told the sales rep who answered that I had been trying to reach Colonel Huff.

The woman at the other end of the phone gasped and reluctantly replied that Colonel Huff had been dead for two months. Apparently, he was one of several victims of a fatal small airplane crash.

His passing was sad enough, but I thought that the lack of courtesy, human decency and not to mention the corporate miscommunication with the voice mail message was inexcusable. Why didn’t someone disconnect the Colonel’s voice mail, or at least tape another message for his extension? Leaving the customer in the lurch was not professional, and I felt bad that I hadn’t known earlier.

The next time you are unable to connect with someone after leaving a voice mail message, tell them that you read this column, relay the story of Colonel Huff, and leave a message saying “I just want to know if everyone is alive and well.” Keep in mind these techniques when using voice mail.

Return calls promptly. Don’t save voice mail with hopes of calling them later. Write down pertinent information, hang up and start making your call backs.

Apologize in your voice mail message. Let callers know you’re sorry that you aren’t available to take their calls. More importantly, keep your message up to date.

I called an association in late January and heard Christmas music in the background, and a familiar voice wished me “Merry Christmas.” Let callers know why you can’t take their calls — something like, “I’m in a meeting all day on Friday, June 20th” is appropriate. Tell them how they can reach another party. “I will return your call on Monday; if you want to speak with someone else, please press zero.”

Ideally, voice mail was invented to give everyone time to catch up on paperwork, but you’ll have plenty of time for that if customers stop doing business with you because they can’t reach you.

D. J. Harrington is an author, journalist, seminar leader, international trainer, and marketing consultant. He can be contacted at 866.855.5781, or by e-mail at [email protected].

23


24


Online, car shoppers need to look no

farther than a quarter-inch away from your listings to see what your competition has to offer. What are you doing to make your store stand out? How do you differentiate your listings from the competition’s? Let’s take a look at how online display advertising can help set your store apart.

To catch the attention of car shoppers driving past your store — and to avoid blending in with nearby businesses — many of you have developed special signage or leveraged the help of a giant infl atable. If you have, you know it is important to stand out and to catch the eye of those driving by your lot.

It’s the same online. Well-designed banner and dynamic display ads on the Internet help your store to stand out from adjacent listings and encourage car shoppers to stop and have a look around.

Using Online Display Ads to Brand Your StoreWhile the majority of online car shoppers are, fi rst and foremost, deciding what to buy, the next decision will be where to buy. Give car shoppers a reason to choose your dealership with online display advertising. An effective ad tells car shoppers about your business philosophy and what they can expect when they do business with you. Determine your competitive strengths in your market and build messaging around those criteria. Maybe your store is a volume leader, or perhaps you’ve recently remodeled your store or added a service department with ASE-certifi ed technicians. Whatever the case, these messages defi ne your store with car shoppers and help to make your inventory more attractive to them.

What Online Display Optionsare Available?Third-party automotive shopping sites typically offer banner ads (which usually show up as “leaderboards” that run horizontally at the top of the page and “skyscrapers” that run vertically along the side) and dynamic display ads that can be custom-confi gured for your store.

RalphEbersole

RISE ABOVE THE COMPETITIONDisplay Advertising Helps Your Store Stand Out Online

marketing

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MS

Many dealers use animation in these ads to feature marketing messages and photos of the vehicle makes and models they carry. Other dealers utilize dynamic ads that feature actual vehicles from their inventory. Customers clicking on the individual cars can then be directed to a page containing details about the listing and additional pictures.

A recent, innovative addition to these third-party Web sites are dynamic display ads that scan your inventory and present the customer with relevant options to consider. These ads use rich-media technology that dynamically updates ads based on a variety of factors determined by the dealership. A dealer can choose to highlight, for example, vehicles that have been on the lot the longest, vehicles that were built by a specifi c manufacturer or cars offered for sale within a certain price range. Dealers also can align the featured vehicles with a car shopper’s search requests, including similar models by different manufacturers.

Design an Effective Display AdAn effective display ad should show your inventory and your store in their best light. You’re promoting your dealership itself as much as the cars, so you want to be sure you give customers a convincing reason to do business with you.

A display ad should include bright colors and bold text, your store’s logo and contact information, a clear call to action and vehicle pictures. If you use pictures of several vehicles — especially with dynamic display ads — you’ll want to make sure the photos are evenly exposed and taken from the same angle. This attention to detail refl ects well on your store and the quality of the cars you sell. Finally, include animation in the ad, if possible, to better catch shoppers’ attention.

What’s Your Call to Action?Now that you have shoppers’ attention with your ad, you want them to take action. Whether you want potential buyers to look at more of your inventory, land at your Web site or visit special listings, a clear call to action will help turn views into visits. By asking shoppers to take the next step, you

increase the likelihood that they will reach out to you for more information. Once you’re in direct communication with car shoppers, it’s easier to move them toward the next steps: scheduling a test drive and making a purchase.

Measuring the Impact of Your Online Display AdvertisingOnline display ads include your location and contact information and, like a good listing, drive traffi c to your store in four ways: walk-ins, phone-ups, e-mails and clicks to your Web site. Keep in mind, though, that the visual impression your ad makes on the car shopper usually proves more critical to your success than how many car shoppers click on the ad. So while display advertising is measurable, be sure to account for the less-measurable branding effects.

Consider, for example, customers who see your store’s display ad on the search results page for the car they are researching. The buyer is more likely to seek out your listings and click on them for more information versus the display ad itself. Dealers similarly report success with display ads that appear on individual listings. If the car shopper doesn’t care for that particular vehicle, offered by another dealer, he or she can click on your ad to see what you have available.

Give Yourselfa Competitive AdvantageAs car buyers narrow their search for a vehicle, they’re faced with two critical decisions: what they plan to buy and where they will make the purchase. Display advertising helps to shift the odds of landing the sale in your favor. Not only does it build the top-of-mind awareness that helps you stand out from the pack, but it highlights your inventory and builds your brand – more fl exibly than a dancing balloon and more powerfully than a giant infl atable gorilla.

Ralph Ebersole is the director of automotive consulting and training at Cars.com. He can be contacted at866.861.0546, or by e-mail [email protected].

26


What is the difference between

the “average manager” and a “world-class leader” in the automotive industry? Why do some dealerships have low turnover, high CSI, improving sales results and high profi ts? What is the primary difference between winning and losing organizations? Why do some managers build high-performing teams and others can’t keep a team together for a single selling season? The answers to each of these high-quality questions are the same and it can best be described in four simple steps that will elevate your standing as a leader.

1. Teach SomebodySomething TodayGreat leaders are teachers fi rst and foremost because they understand the power of educating their team members. I am amazed as I travel and teach my seminars and boot camps how few automotive managers follow the simple premise of teaching daily. Remember: By teaching somebody something today, you might in fact change a career and, in some cases, you might even change someone’s life.

The remedy: Write a defi ned goal everyday of who, what, when, where and why you will teach a specifi c strategy, technique or philosophy. By doing this, you will immediately become a difference-maker to your team members.

2. Observe and Coach Somebody TodayGreat leaders understand that players only improve through practice and active coaching. Are you an active coach on a daily basis? Coaching is best described as “advice given after observation occurs.” Let me explain: Once you teach a player a technique, you must then observe this technique in action and practice. After observation, you are now armed with the

fi rst-hand knowledge you need to offer intelligent guidance to the player. This approach garners individual leaders a new level of respect. When you care enough to coach your players, they will care enough to produce.

The remedy: Write a defi ned action plan everyday regarding who you will coach on a specifi c strategy, technique or philosophy. Schedule the coaching session in advance, and be prepared to offer the critique and the solution to the player.

3. Council and MentorSomebody TodayGreat leaders understand the power of mentorship as it applies to the development of a championship team. What most managers do not understand is that you cannot mentor before you teach and coach the individual player. Trust and respect must fi rst be established before a player will seek a manager out for council. If I asked you how many people do you mentor currently, what would your answer be? I can always judge the effectiveness of a manager based on this response. Do you know your players individual dreams, goals and aspirations? Do you know what they truly want? I spoke at a Manufacturer’s Meeting last year to 800 dealers and not one answered “yes” to those questions. The remedy: You need to develop a playbook for each individual you lead on a daily basis. This book should be used to develop a player profi le that will allow you to teach, coach and mentor to the individual player’s point of need.

4. Inspire and LeadSomebody TodayGreat leaders understand that it is more important to inspire a player than it is to manage a player. Managers manage things and leaders inspire people. Which term

best describes your approach? What would your people say if I asked them the same question? Would you be confi dent in their response? If your answer is “no” then this is your wake-up call.

To inspire any player you must fi rst invest in their future through teaching, coaching and mentoring. If you are a bottom-line “highway/my way” manager instead of a “people-fi rst” leader, this approach will escape you. Do you represent the values and standards of a principle-based vision to your people every day? Are you a fountain of enthusiasm for them to draw inspiration from every day? Are you a true “customer champion” for them to observe every day? Are you a tough and fair decision maker every day? Are you a leader who operates with unbridled passion every day? The big question: Are you a consistent leader? Your people need to know what to expect. Have you stamped your personal leadership philosophy fi rmly on the screen of their minds?

The remedy: You need to create a personal leadership philosophy and share it with every player on your team. My grandfather gave me the gift of his PLP years ago. It had such an amazing impact on my life I leveraged the content and philosophy into a highly respected leadership book and today it has been reproduced as a virtual education platform watched by thousands of managers and leaders all over the world. Without a time-tested and taught philosophy, your people will never achieve their potential for greatness. Begin today to assemble and teach your own personal leadership philosophy.

Paul D. Cummings is president and CEO of Paul D. Cummings World Wide Enterprises. He can be contacted at866.865.3171, or by e-mail at [email protected].

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STSPaulD.Cummings

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DON’T JUST SURVIVE. THRIVE.

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28


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MSPhilCalvert

First things fi rst, let’s look at the

different types of business development centers: sales BDC, service BDC, in-house BDC, outsourced BDC, call centers and phone rooms. When someone asks me if they should use a BDC, my answer is almost always “yes.” When asked what type of BDC they should use, I usually say, “That’s a good question. What are your goals?” “Sell more cars” is what I usually hear, so let’s start there. Today, dealers have the choice of building an in-house BDC or using an outsourced BDC.

Option One: In-House BDCMany dealers like the idea of having their own in-house BDC. They like having that department right down the hall. It feels good to see the employees every day in the BDC doing their job. Dealers like to know that their customer database is locked away safely in their own computers. And then reality hits — an average sized in-house BDC will generally cost about $60,000 to build. This would include computers,

phones, furniture and software. Then there is the monthly expense of running an in-house BDC — management, staff, training, compliancy issues and legal support. The monthly expense for an average sized in-house BDC runs about $40,000 a month.

Option Two: In-House Phone RoomThe in-house phone room will generally work for small single-point dealers in outer metro areas, and may have an advantage over the competition. The phone room concept has been around for decades. Salespeople spend an hour or two every day either prospecting or making unsold follow-up phone calls. This process has a small impact on sales, but it’s better than nothing.

Option Three: Call CentersFor some large dealer groups, using a call center can have advantages. For example, service prospecting, service reminders, maintenance scheduling and service follow-up can all be executed through a quality call center. Many dealers look at this expense as a part of their advertising dollars in which they are creating goodwill and customer loyalty. However, I would never recommend using a call center for the sales department.

Option Four: Outsourced BDCFor most dealers, outsourced BDC is the ultimate solution, but fi nding the ultimate outsourced BDC can be diffi cult. Here is my guide to fi nding the right outsourced BDC company:

Step 1 — Find a BDC company that is owned by an experienced car person with a quality track record.Find out, for example, if the owner of the BDC company has real automotive experience managing — or even owning — his or her own dealership. How long have they been a dealer or manager at the same location? Did they ever implement a BDC service at the dealership they owned? You need to know that you’re dealing with real car people — people who have been there and done that.

Step 2 — Ask about their BDC process and what can you expect as a result. Be careful; some outsourced BDC companies are really call centers with nice packaging. A true BDC company should be able to demonstrate their services relative to the way you sell cars. With inbound sale calls,

for example, the BDC company should answer the call in a timely manner relative to your marketing campaign. They should then schedule an appointment, later call back to confi rm and make sure that the appointment shows. Each and every day, the BDC manager should have contact with the dealership’s sales manager to fi nd out who showed and who didn’t. At that time, the BDC manager should re-contact all appointments who didn’t show and fi nd out why, then reschedule another appointment.

Step 3 — One of the most important aspects of fi nding the right outsourced BDC company is custom scripts. Great scripts have great relativity to their purpose. Appointment scripts, confi rmation scripts, rescheduling scripts, follow-up scripts and survey scripts should be relative to the campaign with defi nite results.

Step 4 — Defi ne the word “results.” What is a result? To some BDC companies, a result for follow-up is four attempts and a postcard, or for the appointment setting program, they will answer the call, schedule the appointment and never call back to confi rm the appointment. This results in a low show rate and very few cars sold. Remember: A good BDC company will be clear in defi ning the word “results.”

Step 5 — When it comes to paying for outsourced BDC services, pay for results rather than paying for the activity. Paying for an activity is the old call center model. Pay by the minute or pay by the hour — you’re going to pay for something. When you engage with an outsourced BDC company, be very clear on what you want as a result, and only pay for that result.

Step 6 — Avoid long-term contracts. When it comes to contracts, I always recommend short, 90-day or less agreements; stay away from long-term contracts.

Once you’ve found an outsourced BDC company, defi ne your terms, identify the results and only pay for the services. You will sell more cars.

Phil Calvert is the president and founder of Pinnacle Direct Marketing and PinnacleBDC.com. He can be contacted at 866.855.5925, or by e-mail [email protected].

BUSINESS DEVELOPMENTCENTERSHow to Make a BDC Work for Your Dealership

Why

Dea

lers

hip

s N

eed

A B

DC

Serv

ice

81%67%83%38%91%70%94%83%67%82%

Prospects tell the salesperson they were just looking.

Prospects visited four or more automotive Web sites before visiting a dealership.

Visited seven or more automotive Web sites after thier fi rst visit to dealership and before they buy.

Prospects had actually visited two other dealers before buying.

Of salespeople fail to follow-up after the prospect left.

Prospects purchased a vehicle within 14 days of their fi rst visit. Of those, 74% purchased within 48 hours.Of salespeople never attempted to write a sale during the fi rst visit.

Buyers could not recall the name of the salesperson one year later.

Buyers would not buy from the same salesperson or dealership again.

Buyers were never contacted after delivery by the salesperson.

Statistics provided by The Selmor Group

Sunday – Day OneRegistration1:00 pm – 8:30 pmExhibit Hall Booth Setup1:30 pm – 5:30 pmReception in Exhibit Hall6:00 pm – 9:00 pm

Monday – Day TwoBreakfast in Exhibit Hall7:00 am – 8:45 amGeneral Session9:00 am – 10:15 amBeverage Break10:15 am – 10:30 amLegal Jeopardy10:30 am – 12:00 noonLunch in Exhibit Hall12:00 noon – 1:30 pmEducational Sessions1:45 pm – 5:00 pmBeverage Break3:00 pm – 3:15 pmReception in Exhibit Hall5:00 pm – 6:30 pm

Tuesday – Day ThreeBreakfast in Exhibit Hall7:00 am – 8:45 amEducational Sessions9:00 am – 12:00 noonBeverage Break10:15 am – 10:30 amLunch in Exhibit Hall12:00 noon – 1:30 pm

Roundtable Discussions 1:45 pm – 3:00 pmConference Adjourns3:00 pm

Preliminary Agenda

Call Today for your CompleteRegistration Packet

888.490.0909

2008 Special Finance Convention August 17th – 19th, 2008

Moderators and Speakers

Emily Beck Kevin Day Greg Goebel Tom Herald Tom Hudson Kris Wright

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32


RalphPaglia

marketing

solu

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MS

If Web sites could set endurance

records, Mike Patton Auto might be dominating the books. Over the past year, the LaGrange, Georgia dealership’s online traffi c has climbed to an average of 2,900 visitors or more each month. Their Web site, MikePattonAuto.com, averages up to 180 unique visitors per day, (18 percent of those visitors turning into leads), and the number is steadily growing.

Like a weightlifter, Mike Patton Auto has been building and strengthening their Web site since 2005. The “before” Web site was a mere “brochure page,” and the dealership itself had no Internet department to speak of.

The “after” Web site, however, is consistently getting praise from customers for its ease of use and depth of information. There is a description and a virtual test drive for each of their brands: Ford, Lincoln, Mercury, Honda, Chrysler, Dodge and Jeep. The virtual test drive offers a summary of colors, interiors, safety features, performance and reviews. Even customers who are already at the store are encouraged to take a virtual test drive. The “Pre-Owned Super Center” gives 10 to 12 shots of each car, and offers videoes of the unit.

Working with a marketing partner, the Mike Patton Auto Family remodeled their Internet department into a team of eight CRC specialists, all working to turn leads into appointments. In a typical month, Mike Patton turns 80 percent of their leads into set appointments. They have an appointment show average of 76 percent, resulting in an average 200 sold units per month. Of

INTERNET FITNESS PLAN DRIVES CLOSING RATIOS TO OVER 50 PERCENTStrong Web site and CRM Breaks Barriers for Mike Patton Auto

those 200 units sold, about 120 of them are directly related to the CRC staff (ideally, the CRC handles all phone and e-mail leads). The CRC is responsible for more than 60 percent of all store sales. “This has exceeded our expectations,” said GM Michael Anderson. “We thought it would cap at 35 to 40 percent.” Turnaround time — from the time a lead arrives until the lead is contacted — is almost instantaneous during business hours. Once appointments are set, the CRC creates a fi le on the customer, and hands it to a sales representative.

The typical car transaction, according to Yahoo Answers, takes anywhere from three hours to all day. Mike Patton’s car-buying process is much slimmer by comparison. While still on the phone to confi rm the appointment, the sales representative and his or her team leader get as much information as possible, allowing them to fi ll out much of the paperwork in advance. “When the customer arrives, we try to have the car parked and waiting for them,” Anderson said. “The goal is to be able to let the customer in and out of our dealership in a less than an hour.”

The dealership’s most successful business practice is their “negotiation free” policy. Mike Patton long ago dumped the hardball haggling, which can make salespeople appear untrustworthy. Instead, they pre-discount every vehicle — meaning every buyer gets the same price tag. Customers have driven as far as 600 miles one way (at least one buyer is from the U.S. Virgin Islands) to take advantage of prices that can run hundreds of dollars under the list price — with no forced accessories.

Mike Patton backs its pricing pledge with smart ad campaigns and mass URL-exposure. The URL is visible throughout the store. Banner ads appear in e-newsletters, small publications, and television and radio spots. “We build our e-mail database by collecting e-mails from Internet and phone leads,” Anderson said, “from lead providers (Cars.com and AutoTrader.com) and gather them in the store, and from our service customers.”

An automated BDC manager keeps track of the dealership’s activities, such as unique visitors, leads, contacts, appointments set, appointments shown, referral sales, and so on. The data lets Mike Patton centralize and quickly access their client database. Furthermore, it lets them create personal benchmarks for sales staff. They can also measure the amount of leads contacted by their CRC staff, and the resulting close ratios (currently just over 50 percent).

Mike Patton Auto optimistically predicts a steady sales surge, now that Sewon America, Inc. is building a supplier plant in LaGrange, creating hundreds of future jobs. On a more personal scale, they are constantly seeking ways to “slim down” their sales process, and make the Web site more informative than ever. They would like to make service scheduling easier by offering appointments online. Their fi nal goal, overarching the rest, is to create enough trust and brand loyalty that their buyers become customers for life.

Ralph Paglia is the director of digital marketing at ADP Dealer Services. He can be contacted at 866.883.9250, or by e-mail at [email protected].

34


JohnBrentlinger

THREE QUESTIONS FOR LEADERS

leadership

solu

tion

LS

There are three fundamental

questions that cover important issues in the car business. Everyone else is asking these questions; perhaps it’s time for leaders to consider them and formulate some good answers. Facing these questions can change the dealership, your people and your life. 1. Why do we spend so much money on advertising?The price of advertising has never been higher. The return on advertising dollars has never been lower. Newspaper subscriptions are so low that most papers refuse to print their subscriber number. Cable has more than 100 stations — which one do viewers really watch? Ever heard of channel surfi ng? Radio is so yesterday. The scan button is there for a reason. As soon as the golden oldie is over, it’s on to the next station. Care to seriously compare net yearly profi t with a year’s advertising budget? For many dealerships, the numbers are frighteningly similar. Ever stop to consider that local media outlets consider car dealerships as cash cows? It costs more to advertise, and ups are down, so the truth is that dealerships are spending more and getting less. In the last 40 years, not one medium has changed the way they advertise. Talk about the dark ages. And about all that is left to advertise is price, so dealerships are paying media to send them price buyers.

Did I mention that Starbucks spends more on training than on advertising? Why do we continue to spend so much money on advertising?

2. Why do we have more prospects on our lot when we’re closed than when we are open?In America, we love our cars but we hate the car-buying process. If there’s one issue that must be faced squarely, it is understanding how prospects feel when they drive on your lot or enter your showroom. Prospects hate the car buying process. That is why they cruise the lot during open hours, and do not get out of the car. And that is why they spend a half hour looking at vehicles when the lot is closed. Someone is responsible for that

phenomenon, and it’s not the prospect. It is us — dealers, managers and salespeople. It is what we do to them and how we make them feel that keeps them away from the lot when we are open, and brings them in droves after hours. It’s how we make prospects feel. It’s how we pressure them. It’s how we question them. It’s how we push, pull and drag them inside, when all they wanted to do was look until they were ready to buy. What is there about that fact that dealers, managers and salespeople just do not understand? Like Randy Jackson says, “Yo, check it out dawg, check it out.” When prospects do come on the lot and attempt to look, we force them to stop looking, and pressure them to stop what they are doing and try to get them to see things completely our way. H-e-l-l-o…. We clean the lot, we arrange the lot perfectly, we fi ll in all the holes, we put up expensive lighting, hang streamers from the poles, spend a fortune on advertising, and then, when they come in, we won’t give them a chance to look. Would someone please explain that? Let’s merge the fi rst two questions — advertising and prospects on the lot. Our advertising is not bringing us the ups we want while we are open, and prospects love to look at our vehicles when we are closed. Think about things as they really are, and let’s come up with a solution. How can we solve the advertising problem — more money for less ups — and how can we solve more prospects on the lot after we close thing? 3. Why do we allow our managers and salespeople to work schedules that simply burn them out?Is there something we can do about the serious imbalance between life and work in the car business? We all know that a balanced family life makes for a more stable workforce. We know that when employees get to share time and life with their families, they do better at work. We also know that when they have no life of their own and no life with their families, broken homes and broken lives are the result. Why, then, do we make them spend so much time at the dealership? What

does that madness accomplish? Broken homes, divorces, single parents and terrible turnover. And on their way out the door, the manager has the gall to say to them, “You knew it was long hours when you hired on.” That is no solution.

Next morning then, we run ads for new salespeople, promising a great career, big money, and a day off during the week. Did I mention that, a few months ago, Starbucks shut down every store for several hours to do training? So, advertising is expensive, and it brings fewer people to the lot. More prospects are on the lot after we close than when we are open. And, we are burning out our best people. What is a concerned dealer to do? How about this? Close earlier. Give prospects more time to look at the millions of dollars worth of beautiful vehicles on the lot. Make your lot more user-friendly. Make the “I’m just looking” experience something prospects can enjoy, rather than a chore they would rather do in the dark when you are not there. Stop advertising the cheapest deals in town. Everybody is doing that, anyway. Emphasize service, sincerity, quality, character, honesty and integrity. Stop trying to be the biggest/cheapest, and start trying to be the best.

Think of the money you would save by reducing the advertising budget. More prospects would have more time to look at your cars. By closing earlier and more often, your managers and salespeople will have more time at home with the spouse and the kids. More times for ball games and bath time and reading bedtime stories. More time to work on a happy marriage, less divorce, a more stable workforce.How about that? Work would become so pleasant you would not have to advertise. Think of it: Prospects would enjoy your lot as much when you are open as when you are closed. “Yo dawg, check it out, check it out.”

John Brentlinger is a sales and management trainer, executive coach and author. He can be contacted at 866.859.6504, or by e-mail at [email protected].

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36


sale

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ing

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STOP READINGNADA predicts auto dealers will

sell fewer cars than we did in 1998. Wall Street is forecasting demise in the fi nancial markets. HSBC and Citi Financial are leaving the subprime market. I’m predicting that most of you are reaching for a gun right now, so I’ll stop. Or rather, every dealer should stop. Stop reading. Or at least — stop believing. Or at the very least — stop participating.

Here’s the reality: We are not in control of the economy, fi nancial markets, weather, sporting events, political environment or whether the entire world is at war. The only thing we control is how we lead, operate and handle our business on a day-to-day basis.

Most dealers are running scared, hiding under their beds waiting for the big bad monster economy to pass. They believe they can stop spending and save their way to a profi t. They stopped “wasting” money on advertising, development and training, mistaking these important investments as expenses that can be cut. Huge mistake. Of course, these dealers are also on the phone each morning with their other dealer buddies commiserating about all of the reasons they aren’t selling as many cars as they used to — the market, weather, economy, blah, blah, blah.

Here’s the success strategy for when

everyone else is scared — be fearless. Never surrender. Never quit. Never give up, and never run scared. This is the time to embrace the only thing that got you here in the fi rst place. Embrace the passion that you once had to glorify and amplify the entrepreneurial spirit within you.

If you think I’m asking you to fl y blind, please understand that I am not. I’m talking about slowing down to evaluate your game plan. Now is the time to maximize every opportunity and, more importantly, create new and untapped opportunities. Grab the leads, prospects and profi t that other dealers are missing because they’re scared.

I’m not saying spend more; I’m saying spend smart. Never fi sh in muddy waters. It’s time to track the effectiveness of every advertising dollar. Would you keep a $200,000 employee who wasn’t producing? Of course not. So why do we keep a $200,000 ad campaign that isn’t working? Because we have no idea it’s not working.

When you fi nd something that’s not working, should you put that money in your pocket? No way — you should redirect that money into better fi shing waters and train your people how to convert more opportunities into appointments and buyers. Don’t be scared. You have the opportunity right now to competition-proof your business by

behaving like we’re in a roaring market.

Your hard work must result in more hard cash. How do you do that? Do less, get more. That’s right — make more money, get rid of stress and enjoy your life. Are you in? Here’s how:

First, evaluate your team members.You may have the right dream, but with the wrong people you’ll have a nightmare. Don’t be scared to hire people who are better than you in key areas. Hire the best people you can, pay them all the money they deserve and, almost overnight, productivity will improve, sales will skyrocket and turnover will stop in its tracks.

Second, put together a plan to implement the right processes and training necessary to develop your people.Most importantly, you must measure their progress and hold them accountable to your plan. Don’t worry; the best players want a plan, they embrace training and they welcome coaching, measurement and accountability. Failures in life will resist you, complain to anyone that will listen and covertly attack your plan. Who’s on your team?

Third, stop marketing and advertising your dealership like you did 10 or 20 years ago.In case you haven’t noticed, it hasn’t worked for the last fi ve years and I know for a fact it’s not working now. Find the right advertising mix that protects your brand, generates high quality traffi c your team can maximize and watch the profi ts roll in while the other dealerships are dimming their lights.

Here’s my point: Today’s market is not for scaredy cats. It’s for real car guys and ladies that are ready to reclaim their winning spirit, ignore the news of gloom and doom, create a plan, attack the market, hire the best and measure their results. The bottom line is it’s time to go big or stay home.

Helmi Felfel is an active dealer and president and CEO of HF Consulting, Inc. He can be contacted at 866.481.8812, or by e-mail at [email protected].

Here’s the success strategy

for when everyone else is scared —

be fearless. Never surrender.

Never quit. Never give up,

and never run

scared.

Recent results from surveys conducted

by CARMAX and Capital One Auto Finance concluded that women continue to be unsatisfi ed with their car-buying experiences. The fact that 85 percent of all car-buying decisions are infl uenced by women, and more than 62 percent of all new car purchases are made by women, suggests that, according to NADA data, the market for women buyers represented $80 billion dollars of new car sales in 2007. These numbers are rather disturbing considering that women are still buying more than 50 percent of all new and used automobiles, yet their car-buying experiences have not improved, according to these recent surveys.

Here is a recent quote from an article written on www.askpatty.com by Toby Bloomberg, Co-Owner of a well respected marketing Web site (The Diva Marketing Blog) on how to market to women: “As a card-carrying Diva, I must admit I love to shop. Shoes, clothes, books, music — I even like grocery shopping. However, there have been a few traumatic experiences in my shopping life, and several of those were centered around car shopping.”

It appears dealerships are defi nitely selling cars to women; the question is, will they “be back” to the same dealership for their next car purchase as a loyal happy customer? Several recent trends promise better results from dealerships and dealership groups who are taking these recent survey results seriously and “get” that women are controlling much of the profi tability of dealerships through their growing “buying power.”

Here are some of the strategies emerging from dealerships to improve customer satisfaction scores from women consumers:

• Recruiting, hiring and training additional female sales and service advisors

• Holding workshops and clinics for women to educate them on car care, fi nancing, service and maintenance

• Giving fl owers, gift baskets and spa treatments to women as thank-you gifts for new car purchases

• Training all customer-facing employees on effective communications with women

To take the word “traumatic” entirely out of women’s comments about their car buying experiences, dealerships need to listen to what women want and need, and learn to create a way to make buying a car as pleasant and rewarding as their other retail shopping experiences.

Many women really love to shop, and here lies one of the problems when “dealership salesman” and “woman shopper” collide at the dealership. When a woman says, “I am just shopping,” 90 percent of the time she really means she is just shopping! The well-honed and trained super dealer No. 1 professional salesman takes these words “I am just shopping” as a battle cry. Mr. Car Salesman immediately decides to take the challenge and take out his bag of dealer sales tactics and do whatever it takes to close the deal before she escapes. She may even end up actually buying a car, but in the end somehow “feels” manipulated and frustrated because she was not able to complete her mission and complete her due diligence and research by “shopping” before she makes her buying decision. Will she buy again at this dealership and report a good experience? I think not.

Communication and listening differences between car dealerships and consumer women are what I believe to be a core issue that dealerships need to address. By providing ongoing required educational training to adjust or modify sales tactics, dealers will insure the “buying power” of consumer women come into dealership showrooms and stay there.

Jody DeVere is the president of the Woman’s Automotive Association International and president of AskPatty.com. She can be contacted at 866.849.9973, or by e-mail [email protected].

JodyDeVere

ADDRESSING THE NEEDSOF WOMEN WILL INCREASE PROFITABILITY

marketing

solu

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MS37


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autosuccessJun08

Automotive

Transcript of autosuccessJun08