S E P T E M B E R 2 0 16

PA G E 7

D E A L E R B E S T P R A C T I C E S

WHAT LENDERS WANT TO KNOW

ABOUT YOUR DEALERSHIP

Vendor Management

S T A T E A F F I L I A T EDEALERNEWS

V I S I T U S AT W W W. O I A D A . C O M

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

T H E O F F I C I A L M A G A Z I N E O F O R E G O N I A D A

REP RESEN T ING AL L AU TO, T RUCK , T R A IL ER, RV A ND P OW ER SP OR T DE AL ERS OF OREGON

www.oiada.com SEPTEMBER 2016 / OIADA 3

>>

ACCELERATE / BY GWC WARRANTY

CASHING IN ON LEADS >> Do’s and Don’ts

URGENCY TO BUY HAS NEVER BEEN GREATER. A Google/Polk study recently found 81 percent of car buyers make a purchase within three months of beginning their online search and 51 percent buy within one month of their first clicks. Furthermore, a Cars.com survey found online shoppers are three times more likely to contact a dealership by phone than they are to reach out via email or chat.

What does that mean for you? It shows you need to be on your toes for each and every phone call that comes into your dealership. Here are some simple do’s and don’ts that will help you capitalize on Internet leads that find their way to your phone lines.DO’S

• Have a process. Without a process, you’re just guessing. Make sure you answer the phone consistently, ask for names, provide your name and treat sales calls as the golden opportunities they are. A Marchex Institute study showed 53 percent of answered calls were from shoppers with a clear intent to buy.

• Set an appointment. Don’t put the

phone on the hook without putting something on the books. If you haven’t set an appointment for a customer to come look around the lot or test drive a car they saw online, you wasted your time and your customer’s. They called because something about your dealership caught their eye. Find out what it is and get them in the door to take a closer look.

• Return calls promptly. Surprisingly enough, this may not be as simple as it sounds. Only about 20 percent of car shoppers begin their search looking at the brand they’re going to buy. You’re not the only dealer they’re looking at, but you could be if you’re the first to respond.DON’TS

• Don’t try to sell a car over the phone. Best Mark placed test calls to dealerships around the country and found 91 percent of salespeople attempted to sell a car over the phone rather than set an appointment. Nothing sells a car better than seeing it in person. A sale over the phone is rarely effective.

• Don’t wing it. Best Mark’s survey also uncovered the staggering fact that 95 percent of salespeople don’t have a defined road to an appointment. Like we said about creating a process, guessing at what will get your customers off the phone and in their next vehicle isn’t the most practical way to approach a lead.

• Don’t wait for an email. Online shoppers are often searching on a cell phone or mobile device. They have easy

access to a call button, plus we’ve already established they’re three times more likely to place a phone call than type up an email. If you think all your leads will land in your inbox, you could be sadly mistaken.

found 81 percent of car buyers make a purchase within three months of beginning their online search and 51 percent buy within one month of their first clicks.

>>A Google/Polk

study recently

AUCTION NEWS /

MANHEIM ANNOUNCES SELECTION OF TWO NEW LEADERS>> Digital Inventory Solutions and Retail Solutions

ADDING BENCH STRENGTH to its inventory solutions team, Manheim recently announced the selection of two new members to its leadership team. Derek Hansen is now vice president of Digital Inventory Solutions, reporting to Grace Huang, senior vice president of Inventory Services at Manheim. Also, Angela Babin is vice president of Retail Solutions, reporting to Shane O’Dell, senior vice president of Vehicle Solutions at Manheim.

“Clients have asked us to continue to innovate, enhance efficiencies and provide the best digital solutions to help them thrive,” said Huang. “Derek has been instrumental in growing our digital channels and continuing to meet clients’ evolving business needs.”

“Angie has deep industry experience and expertise in developing new businesses while growing sales,” O’Dell said. “We are excited to have Angie join our team to help us further develop our Retail Solutions’ offerings while delivering solutions that save time and enhance client growth.”

Derek Hansen was promoted from the interim position he has held since January. He now assumes full responsibility for Manheim’s digital operations as vice president of Digital Inventory Solutions. Hansen is responsible for setting the company’s long-term plan in the ever-evolving digital space and works closely with teams from Manheim, RMS Automotive and vAuto to create a customer-focused digital strategy that takes advantage of the deep expertise of these brands. Prior to his work with Manheim, Hansen was senior director of strategy for Cox Automotive.

In Manheim’s newly created role of vice president of Retail Solutions, Angela (Angie) Babin is responsible for executing a strategy designed to maximize market return and deliver optimal client service. Retail Solutions provides dealers with greater access to high-quality services that produce retail-ready vehicles and allows them to seamlessly obtain retail inspections, professional vehicle merchandising, and retail quality mechanical, detailing and reconditioning services. Babin recently joined the Manheim team after serving in a variety of leadership roles with Pep Boys, Central Parking System, Enterprise Rent-a-Car, Affirmative Insurance and zag.com.

4 OIADA / SEPTEMBER 2016 www.oiada.com

INSIDE

WHAT’S NEW2016 National Leadership ConferenceNIADA’s National Leadership Conference will be held September 26-29 at the Dupont Circle Hotel in Washington, D.C. Once again, the Leadership Conference will be combined with a Legislative & Regulatory Summit and Lobbying Day on Capitol Hill. This important event will help frame the NIADA Legislative & Regulatory agenda for 2016 - 2017 and beyond as NIADA’s legislative committee and association leadership meet face-to-face with legislators and continue their important work.For more information, visit www.niada.com.

03 CASHING IN ON LEADS

06 SECRETS TO A SUCCESSFUL BHPH BUSINESS

07 WHAT LENDERS WANT TO KNOW ABOUT YOUR DEALERSHIP

08 WASHINGTON UPDATE

10 TRADITIONS AND TRENDS NEED TO WORK TOGETHER

12 DOES YOUR CONTENT MARKETING STRATEGY INCLUDE VIDEO?

14 SUCCESSFUL FAILING

ADVERTISER’S INDEX ADESA Northwest/Portland ............................... BCAutotrader ..........................................................5DAA Northwest/Seattle ..................................... IFCManheim.com ...............................................10, 11NextGear Capital .................................................7VAuto .............................................................. IBC

OFFICEOregon Independent Auto Dealers Association 1475 Capitol St. NE • Salem, OR 97301800-447-0302

NIADA HEADQUARTERSNational Independent Automobile Dealers Associationwww.niada.comwww.niada.tv2521 Brown Blvd.Arlington, TX 76006-5203 phone (817) 640-3838OIADA Dealer News is published 12 times per year by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone 817-640-3838. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 6006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of OIADA Insider or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of NIADA , does not constitute an endorsement of the products or services featured. Copyright © 2016 by NIADA Services, Inc.Inc. All rights reserved.State Magazine MGR./Sales Troy Graff • troy@niada.comEditors Jacinda Timmerman • jacinda@niada.comAndy Friedlander • andy@niada.comMagazine Layout & Graphic ArtistChantae Arrington • chantae@niada.com Senior Art Director/ Production Manager Christy Haynes • christy@niada.comPrinting Nieman Printing

PRESIDENTTommy Wilson, Jr.

EXECUTIVE VICE PRESIDENT Siamak Lotfi

BOARD OF DIRECTORS1ST VICE PRESIDENTJim Weaver

SECRETARYGary Brooks

TREASURERSalvador Alvarez HerreraZamora Auto Sales

CHAIRMAN OF THE BOARDGary Sargent

ACCOUNTING SERVICES Delap, CPAAdam PuckettLake Oswego, OR 97035503-697-4118ADVERTISINGAffiliated Media LLCAaron Jarvis503-683-2574Carsforsale.comAaron Oestretch605-306-3302AutoTrader.comEd Merrick 503-747-9162Cars.comJames Lynch312-601-5052UsedCars.com by DealixTamara Garris847-397-1700AUTO SERVICES & ACCESSORIESAuto Marketing SpecialistGary Palaniuk503-519-7725AUTO DETAILERShow Room NewMike BartheP O Box 822073Vancouver, WA 98682360-882-8162Northwest Auto AccessoriesCraig Lessard503-288-5700

ASSOCIATE MEMBERSSHOWROOM/ BUSINESS JANITORIALShow Room NewMike Barthe 360-882-8162COMMERCIAL CLEANINGJaniKingMorgan Thomas541-868-8080 PRIVATE AUCTIONSBrasher’s Northwest Auto AuctionMark Melton541-689-3901Brasher’s Portland Auto AuctionJerry Hinton503-492-9200Crosspoint NW Dealer AuctionBrian Hardy503-594-2800Manheim Portland Auto AuctionRay Priest503-286-3000OUT-OF-STATE AUCTIONSADESA Seattle Auto AuctionJason Arcaro253-735-1600 x 213DAA NorthwestMitzi Vanvoorhis509-244-4500DAA SeattleDave BlakeAuburn, WA 98002253-737-2200 Manheim Seattle Auto AuctionRay Priest206-762-1600

PUBLIC AUCTIONS & AUCTIONEERSCommercial Industrial AuctioneersRay Beal503-760-0499Insurance Auto Auctions, Inc.Ryan Hall503-253-1500Petersen Auction Group of OregonCurt Davis541-689-6824Rick Leathers AuctioneersRick Leathers503-668-5326Woodburn Auto AuctionSteve Morin503-981-8185DEALER SOFTWAREFrazer ComputingMichael Frazer888-963-5369FINANCINGCredit AcceptanceJohn Bragg360-980-2214Credit ConceptsJason Moon541-342-8545JP Morgan Chase Auto FinanceJeff DeGarmo503-201-4370Lobel FinancialTom McConkey503-653-8000Nationwide InsuranceMark Tischer503-339-4165

Oregon Auto FinanceGary Veum541-868-0472Oregon Community Credit UnionRich Black541-681-6311PacWest LLCJohn Keifer341-868-2595Reliable Credit AssociationDavid Marx503-462-3022Smartway Auto AdvisorsSheldon Harris503-795-7700The Equitable Finance Co.Brandon Fox 503-808-7939United FinanceTodd May503-238-6488FLOORPLAN FINANCINGLobel FinancialTom McConkey503-653-8000Floorplan XpressJosh Chandler503-621-9260NextGearRobert Torbet503-358-3911INSURANCE & BONDINGHecht & Hecht Insurance AgencyEvelyn Hecht503-542-1131

KMI Agency, Inc.Kelly Martin503-625-2615Shepard & Shepard Business SolutionsTodd Shepard509-396-0488The Summit Group of OregonJohn Petrie503-581-2825LEASINGOregon Roads, Inc.Joseph McKinney541-683-2277SERVICE CONTRACTSA.U.L./D.P.C.Jim Bangert 360-834-3333Automotive Business DevelopersShannon Meany541-944-9186Auto Services CompanySusan Williams800-442-7116DPC, Inc.Jacob Bangert360-834-3333Protective Life InsuranceDylan Doran818-836-1455TRAININGOIADA/NIADA CertifiedPauline Sill503-362-6839

>>

SAFETY WATCH / BY USED CAR NEWS

CHEVY RECALLS IMPALAS FOR AIR BAG ISSUES>> Damaged Wires Could Disable Passenger Air Bag

GENERAL MOTORS LLC IS RECALLING 289,254 model year 2009-10 Chevrolet Impala vehicles manufactured April 25, 2008, through Feb. 16, 2010.

The front passenger seat frame may contact and damage the wires of the passenger presence sensor module. If the wires are damaged, the passenger presence sensory system may fail to recognize the passenger seat is occupied, disabling the air bag. Damage may also cause the air bag fuse to short resulting in a loss of all air bags and seat belt pretensions. Both conditions increase the risk of injury during a crash.

GM will notify owners, and dealers will double wrap the wires with anti-abrasion tape and replace damaged wires as necessary, free of charge. GM’s recall campaign number is 36110.

seat frame may contact and damage the wires of the passenger presence sensor module.

The front passenger

The front passenger

6 OIADA / SEPTEMBER 2016 www.oiada.com

BHPH PERSPECTIVE ///

>>

BHPH PERSPECTIVE / BY DUSTIN KERR

WHAT’S THE SECRET TO A SUCCESSFUL BHPH BUSINESS?>> Some Best Practices for Success

I HAVE THE PLEASURE of meeting Buy Here-Pay Here dealers all over the country when I travel. I see owners of both small and large operations. Sometimes, I meet a BHPH owner who is just starting out. Other times, I meet one who’s been going strong for many years. I’ve even encountered retail dealers who are seriously considering a jump into our industry.

Even with all these differences, there’s one universal question that unites these people: What’s the best way to run a BHPH business?

You may not like my answer.It’s a question I take very seriously, so I

answer it honestly. And I’m not going to lie. So, generally speaking, they aren’t very satisfied with my answer!

Why? Because I genuinely believe there are many successful ways to run this business. There’s no cookie-cutter solution. Success depends on your available capital and your day-to-day involvement, your commitment to collections, and so much more. How the business performs is heavily influenced by your temperament and your market – there are dozens of factors that can make or break BHPH dealerships. I see different business models every day that are highly successful.

Pick your method – but follow best practices.

Even though I heartily believe the right success model depends on your circumstances and attention to detail, each of the profitable BHPH businesses I’ve encountered operate with a few best practices I believe you should follow to maximize your business and mitigate your exposure to risk.

1. Understand this is a collections business, not just a sales business. I see more dealers struggle with this idea than any other because they just don’t understand this simple, but crucial, point.

It’s especially hard sometimes for someone who has built a successful franchise or independent business where sales, gross and expense control were the keys to success. In the BHPH business, we cannot just sell our way out of bad collections! To make the most of the business, our collectors have to be the dealership’s most talented, best trained and best compensated employees. A well-run collections department can make up for a lot of mistakes in other areas.

2. Get serious about compliance. If you don’t have the wherewithal to devote time every day to compliance, I suggest not getting into this business. If you’re already in and still not serious about compliance, I suggest getting out while you still have a business and a choice!

The CFPB and the Department of Justice will do everything they can to put you out of business if they even think you are not following their rules. Ignoring compliance puts everything you have in jeopardy. If you can’t (or won’t) manage that reality, you shouldn’t have a BHPH dealership.

3. Be an advocate for BHPH businesses. Reread No. 2. If you want life in the BHPH industry to be easier, you have to fight for it. One way is to join the state and national associations that are fighting for your business’s survival against the likes of the CFPB and DOJ. Not only should you be a member, but it is very important you contribute financially to these associations so they can fight for your rights.

Connect with your city council members, senators and state/national representatives and other important political figures in your area. Make sure they understand just how much your business contributes to the local economy – and educate them about the industry, so they realize you aren’t the “bad guy” consumer advocacy groups like to make you out to be. Find out their stance on the

CFPB and DOJ and vote accordingly.Remember the quote by Edmund Burke:

“The only thing necessary for the triumph of evil is that good men do nothing.” Stand up for yourself and others.

4. Join a 20 Group. The best career move I ever made was joining a 20 Group. Nothing else I tried made me a better operator – or provided a better ROI – than the insights I gained from that group.

The power of peer collaboration and accountability you receive in a 20 group setting is magnificent. Imagine sitting in a room with 20 other dealers talking about your business. You get to see the good, the bad and the ugly, and have literally hundreds of years of experience in the room with you!

The one warning I will give you, though, is that you must have an open mind and be ready to go back to your dealership and make meaningful change because your fellow 20 group members will hold you accountable to making your business better. Even when you’d prefer they didn’t.

BHPH success is possible – and important.

I love this industry. Although we often get a bum rap, BHPH dealerships provide a valuable service to the vulnerable in our community. We help people learn to be financially responsible, and we give them the means to get up on their feet and improve their lives. It’s amazing.

So, no, there’s no perfect business model for success in this industry, no matter how many times people may ask me to show them the way. But if you take our work seriously, commit to helping people while making a profit and follow the best practices I’ve outlined above, you’ll make it. And if you encounter bumps along the way, give me a call and I’ll help you out!

Dustin Kerr has been in the automotive industry for 15 years with the last 10 spent exclusively in the Buy Here-Pay Here and Lease Here-Pay Here industry. Dustin serves as an NCM consultant and sales and collections trainer to the Buy Here-Pay Here industry. This article originally appeared on NCM’s Up to Speed blog (http://blog.ncminstitute.com) and is reprinted with permission.

>>

Success depends on your available capital and your day-to-day involvement, your commitment to collections, and so much more.

www.oiada.com SEPTEMBER 2016 / OIADA 7

>>

DEALER BEST PRACTICES / BY CHET HEUGHAN

VENDOR MANAGEMENT >> What Lenders Want to Know About Your Dealership

VENDOR MANAGEMENT has become somewhat of a buzzword in the consumer lending industry, especially around auto lending. It has always been a financial institution’s responsibility and obligation to know who they are doing business with and how loan applications are reaching their institutions. The Consumer Financial Protection Bureau, however, has further emphasized financial institutions are responsible for the end product. This is to say that any negative actions taken by the dealer will become a problem for the lender.

Within franchised dealerships the vendor management requirement is aided by a strong presence from the manufacturer. For example, a franchise dealer has certain covenants that require financial reporting, including minimum capital thresholds, required training and certifications. Franchised dealers also benefit from the monitoring of customer satisfaction surveys, detailed inventory tracking and industry benchmarks provided by other franchise dealerships selling the same brands.

Independent auto dealers represent a unique challenge for many lenders. Independent auto dealers often vary in size, financial strength, operational models, inventory and experience. Unlike most franchise dealerships, independent auto dealers do not have the support of a franchise offering multiple checks and balances. It is easy to understand why lenders then tend to gravitate toward independent dealers that look and act more like a franchise dealership.

As indirect auto lending has become more competitive and lenders struggle to increase yield, many have had to broaden their credit spectrum and move closer toward subprime lending or expand their dealer network outside their traditional relationships. To do this lenders have had to modify their dealer underwriting and dealer management models to fit smaller dealerships with more diverse revenue and sales models.

In years past independent auto dealers had to meet the same minimum criteria for doing business with the lender as a franchise dealership, but times are changing. Many lenders have multiple programs and mitigate the risk of smaller dealerships with low working capital and minimal experience by using a third-party risk mitigation platform.

With many of these platforms, small or new independent dealerships can gain access to the same national programs as large franchised stores. Lenders are able to serve independent dealers because third-party risk mitigation platforms are helping bring efficiency and transparency to the transaction.

For example, independent dealers may be subject to more frequent underwriting, additional verification steps and less direct access to loan underwriters. While there is more work on the dealer’s side, these steps also benefit the stores’ owners by helping identify fraud attempted by customers or rogue employees.

The days of simply signing a lender’s dealer agreement and providing a few supporting documents to gain access to their retail financing program are drawing to a close. Lenders are being required to truly know and manage their dealer relationships. This means updating key pieces of data and underwriting each dealership on an annual basis.

As an independent auto dealer it’s important to understand what lenders are looking for and be prepared to provide the documentation needed annually to avoid disruptions in your lenders’ retail financing programs.

Lenders will be evaluating the dealer principals, the dealership itself and inventory. They will be looking at credit reports that indicate bankruptcies, tax liens, past-due accounts, and potential fraud or identity theft. In addition, lenders will check criminal history reports and verify addresses, property ownership, bank statements, business financial statements and tax returns.

Lenders will also be looking at more subjective data such as references from your auctions, floor plan lenders, warranty providers and personal references. You should be prepared to provide proof of insurance, copies of bonds and licenses, and expect a yearly site visit and basic inspection of your facility.

Lenders really want your business, but they must first know who you really are. Creating your own internal process for managing due diligence requests from lenders and third-party risk mitigation service providers will make this process easier and more efficient for you. Understanding what lenders are looking for and providing it in a timely manner goes a long way toward building a strong profitable relationship along with the ability to compete with your neighboring franchise stores.

Chet Heughan is director of AppOne® Risk Mitigation Services and Indirect Lending for Wolters Kluwer. For more information, please visit www.wolterskluwerfs.com.

8 OIADA / SEPTEMBER 2016 www.oiada.com

>>WASHINGTON UPDATE /

NIADA GOVERNMENT REPORT HERE’S A RUNDOWN OF SOME of the latest governmental issues and activity affecting the used car industry from NIADA lobbyist Sante Esposito of Key Advocates and NIADA senior vice president of legal and government affairs Shaun Petersen.LEGISLATIVE REPORT

S.2663, Reforming CFPB Indirect Auto Financing Guidance Act

The bill, which mirrors House-passed H.R. 1737, would rescind the controversial auto financing guidance action regarding dealer discretion on interest rates issued by the CFPB in March 2013 and provide a more transparent and accountable process for dealing with the issue.

While H.R. 1737 passed the House by an overwhelming bipartisan vote, the Senate companion bill’s chance of being considered is considered remote at best. The bill faces opposition by Senate Democrats – particularly senators Elizabeth Warren (D-Mass.), Charles Schumer (D-N.Y.) and Richard Blumenthal (D-Conn.) – who fear it will open the door to other CFPB changes that will have the effect of “gutting” the bureau, and by the White House, which has threatened a veto.

As part of a series of meetings with key legislators on July 11, NIADA legislative committee chairman Henry Mullinax, senior vice president of legal and government affairs Shaun Petersen and Key Advocates met with staff of Sen. Richard Shelby (R-Ala.), who chairs the committee that has jurisdiction over the CFPB, and requested the senator convene a meeting with the bureau and stakeholders to begin the process of resolving the issue administratively.

H.R. 5485, Financial Services and General Government Appropriations Act, 2017The fiscal year 2017 appropriations bill passed by the House in July includes provisions to curb the CFPB’s authority – among them, a provision that the CFPB would be funded through the annual congressional appropriations process rather than through transfers from the Federal Reserve as currently provided by Dodd-Frank in order to make the bureau more accountable.It would also require the CFPB to report quarterly to various House committees about funding, obligations made during the previous quarter and actions taken to achieve its goals, objectives and performance measures.The bill would limit the CFPB’s ability to regulate pre-dispute arbitration agreements – the bureau has already released a proposed rule restricting those agreements. And the bureau’s leadership would be changed from

a single director to a five-member board appointed by the President.Seeking support for this bill was NIADA’s primary focus issue during the July 11 meetings.In addition, NIADA’s team met with staff of Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee, to support his draft bill, the Financial CHOICE Act, which includes similar reforms for the CFPB.

REGULATORY REPORTConsumer Financial Protection BureauThe CFPB proposed an amendment to

Regulation P to give financial institutions that meet certain conditions an exemption from the Gramm-Leach-Bliley Act requirement to deliver annual privacy notices to customers.

The proposed rule says financial institutions are not required to deliver an annual privacy notice if they limit their sharing of nonpublic personal information to nonaffiliated third parties so the consumer does not have the right to opt out, and the institution’s policies and practices for disclosing nonpublic personal information have not changed from the most recent privacy notice provided to the customer.

Institutions must still deliver to consumers an initial privacy notice and provide any opt-out disclosures required under the Fair Credit Reporting Act, which can generally be provided in the initial notice.

Federal Trade CommissionSettlement with Ohio dealer: The FTC

approved a final consent order against Progressive Chevrolet Company and Progressive Motors, Inc., of Massillon, Ohio. The FTC charged the dealership deceived consumers with advertising that touted low monthly car lease payments and down payments but failed to disclose other key terms of the offers, such as credit score requirements and the fact that the payment did not include tax, title and fees.

Refunds for bogus warranties: The FTC is mailing nearly 6,000 refund checks totaling more than $4 million to people allegedly tricked into paying thousands of dollars for bogus “extended auto warranties” through robocalls.

The checks are part of the FTC’s efforts to collect on a $4.255 million judgment entered against Fereidoun “Fred” Khalilian and his company, The Dolce Group Worldwide, LLC.

The FTC alleged the defendants, doing business as My Car Solutions, conned people by leading them to believe the company was affiliated with auto dealers and manufacturers and was offering to sell them extended auto warranties. In reality, no one received a warranty extension and people who tried to get their money back found it nearly impossible.

Videos: The FTC released a series of online videos designed to help consumers through the used car buying experience, including financing, understanding add-ons and spotting deceptive car ads. Links to the videos can be found at www.ftc.gov/news-events/press-releases/2016/07/ftc-mobile-friendly-

videos-help-consumers-shop-cars.Department of JusticeUsed car dealer sentenced: Andysheh

Ayatollahi pleaded guilty to conspiracy to commit financial fraud and filing a false tax return and was sentenced to 74 months in prison followed by four years of supervised release.

According to court documents, Ayatollahi, a 50 percent owner of in the Car Store in Virginia Beach, conspired with others to defraud Navy Federal Credit Union by using individuals as straw buyers/borrowers to apply to NFCU for car loans because the actual buyers were not sufficiently creditworthy to qualify.

Ayatollahi also submitted fraudulent car loan applications to NFCU with false supporting documents, made telephone calls to NFCU impersonating buyers applying for car loans, provided false employer telephone numbers to NFCU and impersonated the employer while verifying the applicant’s employment and wages, and fraudulently inflated the true purchase price of vehicles and split the excess with the buyers.

In total, Ayatollahi fraudulently caused NFCU to issue 61 car loans with a total loan amount of more than $1.1 million. More than $850,000 worth of those loans went into default.

Illegal repossessions: DOJ filed a lawsuit against the COPOCO Community Credit Union alleging that it violated the Servicemembers Civil Relief Act by repossessing protected servicemembers’ motor vehicles without obtaining the necessary court orders.

DOJ claims COPOCO’s repossession procedures did not include any process to determine customers’ military status – such as checking the Department of Defense’s database – prior to conducting repossessions.

a series of online videos designed to help consumers through the used car buying experience, including financing, understanding add-ons and spotting deceptive car ads.

The FTC released

The FTC released

10 OIADA / SEPTEMBER 2016 www.oiada.com

>>

sales on a consistent basis? CRM and Personal Relationship-

Building There’s no question technology-driven

Customer Relationship Management programs are firmly established as a trend. In all likelihood, CRM will become a tradition over time. But for now it’s still a relatively new and shiny toy many dealerships have embraced as a bedrock organizational and sales tool.

CRM enables data mining about customers as well as regular communication with them. In essence, it can serve as the engine that drives relationship-building because it brings evidence-based intel to the table.

Depending on the CRM used (and how consistently and completely it is adhered

to), salespeople can gain valuable information about buying history and preferences, and communication preferences. It’s gotten to the point where CRM can tell a dealership how often to communicate with a customer via email, and what not to do (e.g., overwhelm with too many emails that end up alienating the customer).

But without tires the vehicle won’t move very far. All the technology-driven protocols in the world can only go so far toward the time-honored tradition of relationship-building. This is the ability through interpersonal contact to establish and maintain trust, comfort and likeability with prospective and present customers.

In the rush toward technology trends (e.g., Internet car-shopping and pricing tools), there’s a tendency to embrace the former and forget the latter. The truth is successful salespeople need both – the “scientific” piece that CRM systems can bring to the table and the “artistic” ability to develop rapport one-on-one.

When the two work in harmony, dealerships get the best of both worlds. Buyers are “primed” by the CRM outreach that shows the dealership understands them and gives them useful information. In-person relationship-building then seals the deal.

Here’s what can happen if the two aren’t working side by side: a prospective buyer walks into a dealership and is basically ignored by salespeople nearby because they’ve been schooled not to be too pushy or aggressive. (In some cases, it’s just plain laziness.) Armed with the amount of information available online, salespeople today too often assume a prospect will seek them out if interested. In the interim, they give them space.

In reality, this is the worst way to proceed. It’s happened to me. I wound up feeling ignored rather than valued. Instead, a salesperson could have introduced himself/herself and offered to help – without coming across as pushy. This would have set the tone for a pleasant and productive discussion and potential sale.

Internet Shopping vs. Instinct Another “trend” (yes, many will say it’s

MANAGEMENT GAMEPLAN / BY SCOTT BERGERON

TRADITIONS AND TRENDS NEED TO WORK TOGETHER>> Finding a Successful Blend

THERE’S A REASON traditions exist. They grow out of established, credible and time-tested circumstances. Trends, on the other hand, can be today’s hot attraction, which may or may not stand the test of time. How can a dealership capture the best of today’s trends and blend them successfully into a tradition-based program that drives more

www.oiada.com SEPTEMBER 2016 / OIADA 11

here to stay) is Internet-based car shopping and pricing. There’s no doubt the abundance of Internet information has led to much more savvy and educated buyers. This is great because it opens the door for a salesperson to build rapport based on instincts instead of just answering pedestrian questions about a potential car or sale.

However, exercising those traditional instincts seems to be a lost art in too many dealerships. Salespeople often are cast as order-takers, there to follow through on customer requests. As with the CRM example above, this is leaving a big (some would say the biggest) piece of salesmanship on the salesroom floor.

Instincts can be wonderful because they work at a level technology doesn’t. Properly tuned in, a salesperson can intuit buying clues just by observing a prospective buyer’s body language, movements, gestures and actions.

For example, a prospect is viewing pricing information on a particular vehicle, then throws up his hands. That well could indicate frustration, or is it exhilaration? The alert salesperson will make sure to find out, and take the conversation in the direction it needs to go from there.

While instincts themselves can’t be trained, awareness of when and how to use them can. This needs to become, once again, a key part of salesforce training – at the time of hiring, and periodically thereafter. Even if the new hire is a seasoned pro, the “hows” of exercising instinct may need to change depending on previous experience and current dealer aims.

Iron-Clad Internet Pricing vs. Art of the Deal

Following through on the trend of all things Internet, one-price-no-dickering shopping has become the rule, not the exception. Why? Yes, I know a gazillion surveys have said buyers don’t want to haggle or be hassled in the price-shopping arena, and that a one-price policy makes them feel much more at ease and trusting.

Well, that’s great for those people. But what about those who like to haggle? There are still many buyers out there who live for the art of the deal. If they can’t feel like

Then, of course, there’s the hybrid – a buyer who wants the firm price and wants to negotiate from there. Decide if/how to address this scenario.

In short, prepare your salesforce to deal with all types of buyers. Because just as the U.S. is a melting pot of different ethnicities, so is the car buying population a melting pot of preferences. Those preferences can best be addressed by honoring both trends and traditions.

Former dealer executive Scott Bergeron is the founder and principal at Daily Gameplan (www.dailygameplan.com), a sales team performance company. Daily Gameplan’s Red Books and cloud-based CRM have been used in

thousands of dealerships throughout the United States. Bergeron can be reached at 303.918.3169 or scott@dailygameplan.com.

they’ve achieved a lower price through negotiation, they won’t buy at all – or at least they will be reluctant.

Here’s another perfect example of how trend and tradition can complement each other perfectly. The trend is no-haggle pricing. The tradition is to play the negotiating game. Both are valid. It depends on buyer preferences.

So find out what those preferences are, then go one direction or another – or both. Read the prospective buyer carefully, then adjust as gut feelings dictate. If someone comes in and is adamant from the get-go about a firm price, so be it. If it’s unclear what their preferences might be, ask. (Then, have an option to fit their preferences. If they want to negotiate, be prepared to shift gears from one-price shopping.)

The trend is no-haggle pricing. The tradition is to play the negotiating game. Both are valid. It depends on buyer preferences.

12 OIADA / SEPTEMBER 2016 www.oiada.com

My Name _______________________________________________________________

_______________________________________________________________________

Dealership Name _________________________________________________________

Dealership # _____________________________________________________________

Dealer License Expiration Date: (Month)________________________________________

(Year)________________ Signed: ____________________________________________

Date ____________________________________________________________________

FAX TO: 503-364-7331 MAIL TO OIADA, 1475 Capitol St NE, Salem, Oregon 97301

I certify to OIADA that I have personally read these articles in The Oregon Dealer News Magazine for September 2016. STOP!! Before you sign and send this form, make sure you have answered and completed all the quiz questions to receive Continued Education Credits.

OI A DA C O N T IN U IN G E D U C AT I O N P RO G R A M

READ & RESPOND AND CERTIFY BELOW

COMPLE TE THIS TEST AND CERT IF Y BELOW THAT YOU HAVE RE AD THE ART ICLES FOR SEPTEMBER 2016.

“WHAT’S THE SECRET TO A SUCCESSFUL BHPH BUSINESS?”True/False: There are many successful ways to run a BHPH business.True/False: You should try to conquer all social media platforms at once.

“VENDOR MANAGEMENT”True/False: It has always been a financial institution’s responsibility and obligation to know who they are doing business with and how loan applications are reaching their institutions.What do lenders evaluate when considering a dealership?a) The dealer principal.b) The dealership itself.c) Inventory.d) All of the above.True/False: Understanding what lenders are looking for and providing it in a timely manner goes a long way toward building a strong profitable relationship along with the ability to compete with your neighboring franchise stores.

“TRADITIONS AND TRENDS NEED TO WORK TOGETHER”What essential role can a CRM program play?a) It’s just a shiny toy among today’s trends.b) Take the place of personal communication.c) Serve as the engine that drives relationship-building.True/False: With the trend of Internet-based car shopping, salespeople are really just order-takers and no longer need to exercise traditional instincts.True/False: The various preferences of the car buying population can best be addressed by honoring both trends and traditions.

OIADA CON T INUING EDUCAT ION PROGR A M

>>>>ONLINE MARKETING /

BY KATHY R. TAFOLLA, LOBEL FINANCIAL

DOES YOUR CONTENT MARKETING STRATEGY INCLUDE VIDEO?>> Video Outperforms in Driving Conversions

VIDEO CONTENT is exploding across the Internet, in social media feeds and in social hubs. Given the growing quantity of visual content in newsfeeds on social media, you can capitalize on video marketing. Even more, you can shoot, edit and produce these videos inexpensively. How is this possible?

1. Write a script.2. Record a voice over.3. Use Adobe to create the graphics.4. Get a video recorder for live video.5. Use Adobe After Effects for video editing.6. Add music using sound effects.7. Publish.

You can also use PowerPoint to video edit if money is a factor and Adobe is out of your budget.

Video content marketing allows consumers to satisfy their information and entertainment needs all at once. It’s also a great way for small business owners to compete with larger businesses.

Video is unrivaled when it comes to reaching your target audience. YouTube reports over a billion viewers, almost one-third of the people on the Internet every day. Video content is straightforward, quickly shared and easily accessible. It’s easy to create a business channel where all of your video content can be found through an organic search.

Since buying a car is a visual experience and your dealership website is primarily based on images, it makes sense to include video content as a way to build relationships with customers. You’ll make personal connections through your website and build prosperous business connections in the process.

Some examples for you to consider are: • Stories from customers.• A fictional series.• Personal stories.• Documentary style videos.• An interview.All of these ideas will help your customers connect to your dealership.

This can be a fun and exciting way to not only brand your dealership but engage existing and new customers as well.

In content video marketing storytelling is crucial. It’s effective because people love stories and they connect to authentic human experience. It creates an emotional investment.

Content can be defined as experimental as much of it is based on trial and error. You post content and track it through Google Analytics to see how it’s ranking in the search engines. You want to know how many website visitors are clicking on it and how long they’re staying on the page.

Most B2C business owners know content marketing is the most commercially important part of your digital marketing campaign. Why? The object of content marketing is to help and inform consumers. It is to show people your business knows the industry and their expertise is credible. Mastering a video content marketing campaign will help you build relationships with your customers before they step foot on the premises.

Content tells people why your products are good and how it benefits them. For dealerships this might include financing options, reliability, and what sets you apart from the competition. Content allows the consumer to view your offerings, and if presented well, compels them to buy from you.

Online marketing reports indicate content videos outperform other content types in driving conversions. Videos increase consumers’ understanding of products and services and website visitors are more inclined to purchase a product after watching a video. Moreover, you can expect to see a rise in interactive and personal video content to help turn viewers into leads.

www.oiada.com SEPTEMBER 2016 / OIADA 13

OIADA ~ Oregon Independent Auto Dealers Association

Your only nationally recognized association since 1948. OIADA, here to help, support, educate and promote quality dealers in Oregon.

Here are the great benefits of OIADA membership: • Oregon Dealer News is delivered to our dealers monthly, filled with quality up to date

business articles.• Included in each Dealer News Magazine is 30 minutes towards continued education,

free to OIADA members, which now means returning eight answer sheets a year. This is a savings of $75 annually.

• OIADA Auction Punch Card: Our valued auction houses in Oregon, Washington and California are offering $50 savings on your buy and sell fees, a value of $1,100.

• OIADA offers members discounts on all meetings, educational programs and conventions, with an annual savings of over $200.

• OIADA members receive a discount on most forms, a savings of up to $100 or more annually.

• Quarterly regional dinner meetings, an outreach to bring programs, education and conversation to all areas within Oregon.

• Annual convention will host a variety of programs including eight or more hours of continued education. Quality Dealer of the Year Awards and Banquet. At a savings of $100 for OIADA members.

• Opportunities for OIADA members to be awarded Oregon’s Quality Dealer of the Year and to compete for the National Quality Dealer of the Year at our national convention.

• National education opportunities, becoming a Certified Master Dealer and more. • National access to Dealers 20 Groups .• OIADA has on contract a lobbyist to bring forth interests and to protect our dealers at

the state level. • OIADA hosts a required certified 8-hour Pre-License Class. Upon completion dealers

will receive the DMV required 8-hour certificate. • Title and registration classes, savings of $35 for OIADA members.• Help and support with your issues is just a phone call away. • Automatic membership with NIADA and the NIADA Used Car Dealer Magazine.• Access to NIADA’s annual convention.• Opportunities for scholarships, both state and national.• NIADA offers OIADA members a wide variety of discounts to members, from education

to everyday business expenses.

Contact OIADA at 503-362-6839 to start your enrollment for all these great opportunities as a member of OIADA.

Annual Savings$1100 Auction Punch Card$ 100 Forms$ 75 Education$ 100 OIADA Convention$ 50 Driven to Learn & Regional Meetings $ 1425 Bottom Line Savings

$325 Cost of Membership ~ OIADA helping you succeed.

Don’t let yourself run out of the forms you need to do business every day. OIADA has four ways for you to get forms:

Don’t be caught without a Secure Odometer Form or Secure Power of Attorney. These forms are DMV forms and each has a registered number assigned to the dealer who purchased them, so don’t lend yours out and do not borrow from your neighboring dealer.

When you purchase these forms, it’s a good idea to pull them out of the packet and slip a reminder near the bottom to call OIADA and order more. You can even add the phone number (503-362-6839) on the note.

Did you know that our members get a discount on most state forms? OIADA members save an average of $100 or more every year.

OIADA FORMS STOREYOU CAN EASILY ATTAIN FORMS NEEDED FOR EVERYDAY BUSINESS

You can order forms any time of the day online at OIADA.com. All you need is an email address.1.You can stop by one of three locations within the Oregon auction houses during auction day.2.You can pick up forms at the OIADA office, located at 1475 Capitol Street NE in Salem.

3.You can call the OIADA Office Monday-Friday. We will ship your order that day. In most cases, it will be delivered to you overnight by UPS.

4.

ASSOCIATION NEWS / /

OREGON INDEPENDENT AUTO DEALERS ASSOCIATION

14 OIADA / SEPTEMBER 2016 www.oiada.com

>>MANAGEMENT MATTERS / BY STEVE HALL

SUCCESSFUL FAILING>> Why Embracing Failure Leads to Greater Achievement

OUR CULTURE IS BUILT ON SUCCESS. Ironically, we can only achieve the highest levels of success by failing along the way.

Failure is the basis of knowledge. Imagine you’re back in elementary school. Your teacher has just placed two apples on each end of her desk and asked, “If I added these two apples to the other two apples … ” – she physically moves them together – “… how many apples would you have?” She waits, then says, “Okay, class, now count them. One. Two. Three. Four.”

This is how most of us learned in school: repetition and visual learning. Kids will chant along, correcting their answer when they realize it’s wrong. Failure in these very early stages is important – it teaches persistence and focuses on the importance of learning over knowing. And, in time, we all eventually did learn that two plus two equals four!

The Success-Only Cycle vs. the Failure-Achievement Cycle

Sadly, over time, we abandon the elementary school approach and focus more on knowing than learning. Failure changes from a useful tool to punishment. By the time we enter the workplace, most of us have fully accepted that failure represents the result of an action, and we view it as nearly insurmountable.

Honestly, how useful is that philosophy? This Success-Only philosophy allows for only one option: You succeed, or you fail. This approach rewards knowing and only works if you already know how to do something. If you don’t know how to do the task already, well, you’re in trouble.

The Failure-Achievement Cycle, however, focuses on failing fast – and then learning from your mistakes. No one is expected to perform flawlessly. Instead, failure is viewed as a feedback mechanism that allows you to improve your plan and try again to yield better results. Failure isn’t considered the opposite of success. Instead, this approach views failure as a critical component of it.

Successful Failing Failing when trying something new

or working towards solving a problem is admirable. This type of failure should be rewarded, provided two key components were included in the effort:

• First, did you plan the activity, initiative or process to the best of your ability for the information you had been provided at the time? Failure due to “just winging it” is not productive failure. Plan for success, work

your plan and adjust as needed.• Secondly, did you learn from your failure?

Successful failure requires you to analyze what happened and create a game plan for other possible solutions moving forward.

Failure Can’t Be a Show Stopper Mistakes aren’t the end of the line. They

merely delay achievement. When you fail successfully, you must make sure the delay is as short as possible.

As a progressive manager, who is always trying to grow your department, you should actively demonstrate to your employees that failure is welcomed. Give this a try. Hold a “learning from our failures meeting.” During the session, share some of the errors you’ve made in your career and how it helped you solve a problem. Encourage your staff to do the same, requiring them to explain what they learned from the experience and how it helped them become better in their positions going forward.

Not only will your less experienced employees gain valuable knowledge from the more experienced ones, but it will reinforce to your staff that successful failure is an important part of your process. Done in the right way, it creates a great learning experience. Keep everyone focused on how the person improved from the experience and how to avoid the same mistake themselves. (It can also be a fun team experience, especially when you discover how entertaining others’ past mistakes can be! Be sure to share some funny examples of your own!)

Failure is painful and, of course, we’d all rather avoid it. But when we apply successful failing, we learn how to bounce back quickly from failure and achieve even more in the long run.

Steve Hall is a full-time instructor for the NCM Institute and is responsible for the development of its Fixed Operations training curriculum. For more than 25 years, Steve’s experiences have encompassed almost every aspect of the retail automotive service, parts and body shop business. This article originally appeared on NCM’s Up to Speed blog (http://blog.ncminstitute.com) and is reprinted with permission.

Failure is viewed as a feedback mechanism that allows you to improve your plan and try again to yield better results.

INDUSTRY NEWS / BY SUBPRIME AUTO FINANCE NEWS STAFF

EFG AMONG BENCHMARKPORTAL’STOP 100 CALL CENTERS>> Only F&I Product Provider Named

EFG COMPANIES was recently the only F&I product provider to be named to the BenchmarkPortal Top 100 call centers for 2016. EFG also ranked in the Top 25 quartile for call centers with five to 50 staff members. The BenchmarkPortal Top 100 competition compares the performance of contact centers throughout North America by evaluating their key metrics against industry peers.

Based entirely on statistical comparison to the world’s largest and most respected database of call center metrics, the BenchmarkPortal Top 100 competition is designed to objectively identify centers who are achieving superior results both in financial and qualitative terms.

EFG’s average claims call speed to answer is less than 30 seconds, while 67 percent of its total claims are one-call claims. The company also said 96 percent of all claims are paid within one hour of receipt of invoice.

“Our clients rely on our expertise and quality customer service when it comes to administering customer claims,” EFG president and chief executive officer John Pappanastos said. “We operate knowing that our claims administration reflects back on our clients’ business and brand.

“By demonstrating our high level of expertise with this certification, we are giving our clients the highest confidence that all claims will be handled expertly, efficiently and respectfully, promoting a positive overall customer experience and driving greater customer loyalty for their business,” Pappanastos said.

“The EFG Companies contact center is among the best in its industry,” BenchmarkPortal CEO Bruce Belfore said. “This award was granted on the basis of objective, metrics-driven performance. EFG Companies stood tall against its competitors according to the world’s largest database of call center metrics. This is not easy to do, and we congratulate them on their accomplishment.”

FAILURE-ACHIEVEMENT CYCLE

SUCCESS-ONLY CYCLE