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An Interview By SusanGivens

FOCUSJob Descriptions With Legs

StephenR.Covey

26 WHATEVER YOU THINK THE PROBLEM IS -IS NOT REALLY THE PROBLEMAnd Deep Down, You Know That

JohnBrentlinger

08

CAR SALESMAN MAKES $200,000 INTHIS ECONOMYInternet Sales 20 Group XVI

SeanV.Bradley 10

IMPRESSIONSSteveBrazill 16

PRINCIPLES PREVAIL AT THIS MID-WESTDEALER GROUP

KirkManzo 11

THE “D’S” THAT MAKE THE DIFFERENCEComponents of Ultimate Success

PaulCummings 24

BATTLING THE ‘BRITTLE’ BANKSMichaelThomas 32HOW TO CREATE A FEMALE-FRIENDLY DEALERSHIP:Quick and Easy Check List to Achieve That Goal

JodyDeVere 34

START REBUILDING RELATIONSHIPSSteveCottrell 14CREATIVE PROSPECTING FOR TOUGH TIMESA Little Creative Effort Can Reap Big Rewards

MarcSmith 18FINDING A NEW WAY:GPS Technology Offers Dealerships a New Profi t Center

TonyAvila 22HOW TO IMPLEMENT A BDC AT NOADDITIONAL COST

MikeOvery 27

ALTERNATIVE THINKINGGiving Customers a Choice Might Keep Them In Your Service Department

ChipLofton 35VOLATILITY AND WHAT IT MEANS TO YOUDalePollak 36

THE

GOODTHE

BADuglyAND THE

TRUE CONFESSIONS OF A SUPERSALE COMPANY

OLD SCHOOL TOOLScottNorman 17

COMMIT TO MAKING POSITIVE CHANGESTomHopkins 30

USING GOOGLE ANALYTICS WITHE-MAIL MARKETINGIncrease Reporting Capabilities and Boost Relevancy and Response

PeterMartin 31

www.autosuccessonline.com

StephenR.Covey

FOCUSJob Descriptions With Legs

leadership

solu

tion

08

Peter Drucker said: “Knowledge-Age workers must learn to ask, ‘What should my contribution be?’ This is a new question in human history. Traditionally the task was given, either by the work itself or by the master. Until very recently, it was taken for granted that most people were subordinates who did as they were told. The advent of the knowledge worker is changing this, and fast…. And for this change, management is totally unprepared.”

This table sums up some of the key: differences between the Industrial- and Knowledge-Age mindsets that leaders must be aware of:

The Industrial Age is giving way to the

Knowledge Age, and leaders must welcome the shift instead of resisting it.

“I don’t resist it,” I hear you say. “I embrace it.”

I wonder. The legacy of Industrial-Age leadership is still with us. A friend tells me this story:

“I recently spoke with a man not yet 30 years old who graduated from college several years ago with an excellent degree and tremendous talent and energy to contribute somewhere. Today he is employed by a fi nancial-services company.

“I asked him several questions.

“‘What kind of goals are you working on?’ He didn’t know the answer.

“‘What is your company’s highest strategic priority right now?’ He couldn’t say.

“When was the last time you met one-on-one with your manager to talk about your role in achieving the organization’s goals?’ He said he hadn’t met with his manager one-on-one since his hiring three years earlier.

“Finally I asked him, ‘What have you personally contributed to your organization?’ He thought for a moment and quietly answered: ‘I think I’ve saved the company a half million dollars in the last year.’

“‘Who knows that besides you?’ I asked him.

“‘I make out a report once a week for my boss … but I don’t think he reads it.’

“This young man looked crestfallen. I felt deeply with him — his energy had been drained out of him, his vigor was gone, his dreams of making a great contribution had shrunk down to fulfi lling a mere job description. He has been reduced to a ‘job description with legs.’”

In the Industrial Age, workers saw themselves as subordinates who did as they were told. Knowledge-Age workers see themselves as volunteers. They are better educated and have far more choices about where they will invest their energies.

Industrial-Age workers were given a job description, similar to a “user manual” for a machine. It told them their function and what to do about it. Knowledge-Age workers want to be valued for the specifi c and unique contribution they can make.

Industrial-Age workers lived by the calendar. They put in their time and kept their appointments. Knowledge-Age workers live by their “wildly important goals” — the priorities they must achieve in order to make their contribution.

Industrial-Age workers worked for a

paycheck. If paid fairly, Knowledge-Age workers work to achieve their “wins,” the goals that lead to organizational and professional growth. They want to add measurable value, and they want to be valued in turn.

In the Industrial Age, leaders wanted “harmony” from the workers. They no more wanted to hear from the workers than they wanted to hear from the machinery — because that would indicate something wrong. Knowledge-Age workers insist on being heard, and they demand candor from their leaders.

Industrial-Age workers were expected to simply comply with standards, policies, and procedures. Knowledge-Age workers go beyond compliance. They question standards, policies, and procedures — they want to work in synergy with others, continually fi nding new

and better ways to do things.

Industrial-Age workers valued their two-week vacation above all. Because they found little satisfaction in their work, they sought it elsewhere. Knowledge-Age workers insist on fi nding satisfaction in their work, on the unleashing of their potential to achieve.

If I were you, I’d write on a notepad right now the practices in your organization that are reducing your people to “job descriptions with legs.” Brainstorm now how to transform those practices so that people can make their highest and best contribution.

Originally ran in CLO Magazine

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

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10

SeanV.Bradley

CAR SALESMAN MAKES $200,000 IN THIS ECONOMYInternet Sales 20 Group XVI

the #1 sales-improvement magazine for the automotive professional

11

sale

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I have to tell you that I love this business! I

really do. I love being a “car guy.” You truly get what you put into it. However, it didn’t always start out that way. I didn’t grow up and dream of being a car salesman. I had aspirations of being an Army offi cer, and when I got out I wanted to work in counter-intelligence.

Then, I got bit buy the car dealership bug. I saw an ad in the paper that was perfect for me. It said “free company car (demo).” At this time, I was a sophomore at the University and completely broke with a ton of maxed out credit cards. I have to tell you answering that ad was the best thing I could have ever done for my life. The fi rst year I got into rhythm, and the second year I cracked six fi gures and never looked back. Today, I own multiple companies and owe it all to being a car salesman. I am fi rst-hand living proof that anyone can make it and make it big in this industry. There are similar stories across the nation.

Chris Gramlich, from Peruzzi Toyota in Hatfi eld Pennsylvania, is one of these stories. Chris is in the top .5 percent of the automotive sales consultants in the United States in annual income generated. While his title might be “Internet Sales Manager,” he doesn’t manage the department. Chris is an Internet sales consultant, which means he works only with Internet prospects. Peruzzi’s Internet team has coordinators (appointment setters) who take the Internet leads to the appointment stage then TO them to the Internet sales managers for the relationship and value building, product presentation, demo drive and delivery. Chris’s two main roles are of TO support if the Internet coordinators can’t close an appointment or overcome an objection, and he is the relationship builder and closer.

I had the pleasure of interviewing Chris recently for this article. Here’s what he had to say:

Sean V. Bradley: How did you get started in the automotive industry?Chris Gramlich: I started off selling TVs, cameras and VCRs. A manager from a dealership came in and bought a camera off of me and offered me a job. That was nine years ago.

SVB: How many units per month are you averaging? CG: Right now about 30 units per month

SVB: How many units did you sell in your best month ever?CG: I sold 50 units. That was the month after I got married, and I pretty much lived at the store. It was September 2004, and back then, there was no Internet department. I planted my desk by the showroom main door and I literally took every single up that I could, and I answered the sales calls as much as humanly possible. It was, basically, good old fashion hard work. I had a sold six vehicles to a grocery store chain that month. But the main reason why I sold so many cars that month was because someone made a comment that I was going to fall off now that I had just got married — they were wrong.

SVB: What is the most you have made in a month and in a year?CG: I’ve actually made $24,000 in a month. And I made $225,000 in one calendar year selling cars on the showroom fl oor.

SVB: What do project you will make in 2009? CG: I am on track to hit close to $200,000. In this economy….

SVB: When you were a kid, what did you want to do when you grew up? CG: I wanted to be a lawyer.

SVB: How does it feel that, in a recession, you are making more money than some of the most prominent attorneys in the United States? CG: It feels great. I love what I do; I don’t

have a degree, and I have the opportunity to provide a great life for myself and my family. I love this business.

SVB: How do you fell about the ”Al Bundy” stereotypes of car salesman?CG: I don’t like it. I take a lot of pride in what I do. I understand that some people feel that way, but I hate that I sometimes get grouped into that category. Whenever I greet a customer, I always assume that is what they are thinking or feeling. It is always my strategy to change their perception of me and our industry from the second that I greet them. It might sound a little high-minded, but it’s the truth. I try to change people’s perception of the automotive sales industry one prospect at a time.

SVB: Has your success been gradual?CG: Yes it has. I came from a family of sales professionals, so the inspiration was there, but there is a learning curve selling automobiles. I learned how to do it over time. As time passed, I evolved. I learned skills, tactics and style. It took me nine years to get to where I am today, and I still feel as though I have a lot to learn.

SVB: What one idea or strategy can you outline for our readers that helped you become so successful?CG: Hands down, ask good questions. Qualify your prospect properly. I think this is what a lot of sales people miss. As a matter of fact, NADA says the No. 1 reason why someone does not buy a car is that they are landed on the wrong vehicle. So, qualify your prospect thoroughly.

We’ll continue our discussion with Chris Gramlich next issue.

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

KirkManzo

PRINCIPLES PREVAILAT THIS MID-WESTDEALER GROUP

sale

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tion

Dickens once wrote, “It was the best of

times, it was the worst of times….” The current state of affairs is by all observations a trying one for our industry. The seasons of life and business change from spring to summer. Fall is always followed by winter, and clearly our industry fi nds itself in a period of winter. When there is snow on the ground, you may choose to stay inside or you can go skiing. Here is one way you may choose to make the most of the current situation.

In order to grow or maintain profi ts in your sales department, there are three primary variables you can affect. First is the number of transactions (units); unfortunately, this variable is the most diffi cult of the three to improve because of the current reduction in overall demand. The second is to increase the frequency of purchase. Like the fi rst variable, this is also diffi cult to capitalize on at the moment.

The third variable to focus on is profi t per transaction. This area represents the best opportunity to increase and/or maintain profi tability.

To achieve this, you have to fi rst win the most important, and diffi cult, negotiation — the negotiation with yourself. The temptation to not start every deal at the full asking price can be overwhelming.

Remember that Pareto’s Principle of the 80/20 rule still exists today. While yes, it may seem unlikely that a customer will pay you all the money for your product, the one thing we know with certainty, is that if you don’t ask, it will never occur.

Everything begins with deciding whether you and your team are going to start the negotiation by making a presentation of numbers, or will you request an offer from the customer to begin. Think of this like a game of Tic Tac Toe. In order to win, what is necessary? You must make the fi rst move.

The principle of starting at the full asking price of the vehicle, requesting a higher than expected down payment, holding some on the trade, and, yes, offering up payments at a shorter term are all fundamental to this strategy.

You may choose to adjust the down payment percentages, but 20 percent is often most effective. The trade should have approximately $500 of room to work with, while the payment offer is best calculated at 48 months for most proposals (used vehicles will occasionally need 36 or 42 months to start).

The key to maximizing on this approach is that every deal means every deal. You will not increase your profi ts by trying to pick and choose when to apply the strategy. You must allow the percentages to work for you, not against you.

The format of how you decide to present the numbers — a traditional Four Square or some variation from your CRM — is not the most important element. However, making sure your desk manager is consistent in structuring the fi rst proposal is critical. This will be the key to your success.

One such dealership that recently adopted this philosophy achieved an immediate increase in gross for their stores in the Midwest. The Gurley Leep Automotive Family began using this approach in February. By raising their standards of how they would be selling vehicles, their results increased gross profi ts immediately.

The key to making this approach work at your store starts fi rst with a commitment to change the way you currently do business. As we all know, the defi nition of insanity is often referred to as doing the same thing over and over again while expecting a different outcome.

Once the commitment to change is accomplished, training your team to handle the conversation is critical. You can choose to self-implement or have a fi rm come in from the outside to assist. Either way, in the end, the day-in and day-out heavy lifting will be done by you and your staff; make sure you fi nd a process and a program that is easily duplicated from one person to the next. The simpler and more practical the better.

Kirk Manzo is the president of The Manzo Group. He can be contacted at800.858.6903, or by e-mail [email protected].

featuresolution

12

13

How do you turn 9,742 mistakes into a wining strategy?

We interviewed Pat Gunning, President of G&A Marketing to fi nd out.

From their worst mistakes to their best life-lessons, Pat shares the good, the bad and the ugly from the inside out.

AutoSuccess: G&A has been around for 16 years now….Pat Gunning: While some may not think 16 years in the business is a big feat, consider the fact that the life-span of the average staffed event company is less than two years. Being around for 16 years is a long time in our industry, but with all that experience came a lot of mistakes — 9,742 of them to be exact.

AS: What does working with an experienced company mean to the dealer? PG: It’s about knowing the difference between right and wrong. We’ve made a lot mistakes and learned a lot in the process. As a result, we are constantly evolving to fi x any issues and ensure we do not make the same mistakes twice.

While the staffed event industry may appear to be an easy one to enter, new companies are constantly showing up and then quickly dissolving because of inexperience. In many cases, they have not learned from their mistakes and are using the dealer’s store for trial and error.

AS: Why are your mistakes so important to the dealers you work with? PG: We’re not perfect and we will be the fi rst to tell you that. If we take on an opportunity that doesn’t quite work out, we don’t give up on it. We take ownership, review the issue, enact a plan, fi x it, and move on. In the end this learning process has lead to an array of new services and stricter policies.

AS: In your experience, what have you learned about sales teams?PG: It’s no secret — the staffed event industry has a bit of a bad rap when it comes to their sales teams. Because of this, we quickly learned the importance of focusing on three main aspects of handling teams: hiring, training and holding them accountable.

AS: What made you realize that your hiring process needed special attention?PG: In the beginning, we found ourselves faced with a few tough issues stemming from some oversights in our initial hiring process. When we fi rst started out, we rushed through portions of the hiring process and paid the price in the long run. That price was a lesson in the importance of discovering one’s talent and character, both during sale hours and after.

Once we realized our mistake, we decided to take it slow. By using a prolonged hiring process, we gave our management staff time to assess skill levels, personality profi les and character to help ensure we were making the right decision, and to better protect both our image and the image of our dealers. For every team member we bring on, we require that they work with one of many experienced G&A sales teams who have been with the organization for fi ve or more years. Putting new team members with well-established teams helps us to better identify the new employee’s talents and characteristics. Additionally, this opportunity gives the new member time to learn G&A’s systems and processes from the inside out, before they go out to represent us and the dealer.

AS: Sounds like a comprehensive process. How do you manage to support something like that?PG: Well, we couldn’t do it without our VP of Teams. We took our top team leader, Larry Langford, who for six years was our most profi table team leader, almost doubling the gross profi t per event of any other team. Because of his performance, it was obvious he had the strongest skill set for the job. We brought him on in a leadership role so he could teach our teams everything he knew, and streamline the process by which each of our teams operates.

AS: You mentioned that training was also a key point you chose to focus on. What spurred this?PG: As we continued to hire additional team members, we realized three things that directly related to training. The fi rst thing we noticed was that if we didn’t teach them our management style, they would do things their own way. We knew we needed to “McDonaldize” our teams, meaning we needed to make sure each team operated in the same manner no matter what. So we created a systematic process for each our teams to follow, ensuring team consistency from one sale to the next.

The second thing we came to realize was that most managers in the auto industry had not been through any formal management training. To solve this, we invested $700,000 in hiring a company to formally train our managers on how to manage in a non-confrontational way. As a result of this training, our managers were better able to keep their team members and dealership staff working toward the same goal during each event. When this happens, everyone makes more money and the dealership staff often will ask when we are coming back.

In addition, we also realized that positive encouragement is a powerful way to get more out of people. Instead of focusing on the downfalls, we learned to use positive reinforcement to help sales people self-discover what’s right and wrong. Through our experience and training, we discovered that when you lead people down a path and let them make their own decision, they will take more responsibility and put forth more effort to make their chosen outcome a reality.

However, no matter the amount we spend or the effort we put forth to make sure our teams are appropriately trained, we knew we needed to

put strict accountability measures into play to make sure they practiced what we preach.

AS: So what kind of accountability measures did you put into place?PG: One of our tools is what we call our “black ball list.” Essentially, it’s our way to make sure any previous offenders don’t easily fi nd their way back. The list “outs” any issues with previous contractors. In addition, we require everyone to sign a code of conduct policy so they are aware of exactly what is expected of them. We conduct detailed background checks and utilize an in-house licensing department to ensure each sales person is properly licensed prior to an event. We take our reputation and that of our customers seriously, which is why we don’t take offenses lightly.

Likewise, it is important to reward those teams who do the right thing by assigning them to the most desirable sales. When you are looking at sales where dealerships have invested $25,000 to $100,000 in advertising budgets with inventory from 100-500 vehicles, our teams want to get on those sales. The team’s track record helps to decide which teams are worthy of that next big event. It all comes down to detailed sales tracking.

AS: Why is tracking so important?PG: It’s vital. To better assess our team’s performance, advertising effectiveness and market trends, we consulted with a software developer to create an in-depth event tracking tool we call “GA Manager,” that measures everything from the type of cars sold to what area banks are currently buying deals and more.

We learned early on that the more information we had, the greater the benefi t to the dealer and to our teams. By managing each step of the process before, during and after the event, we can hold everyone —from our own staff to the dealership staff — accountable for meeting certain benchmarks and deadlines. No matter if it’s a dealer’s fi rst sale or 25th sale with us, we make sure everything is done by the same process every time. We hold our staff accountable for meeting certain deadlines, and remind dealership’s staff of their responsibilities as they pertain to preparing each sale.

Similarly, by tracking beacon scores, banks, ups, vehicles sold, down payment amount by ZIP code and type of cars to buy per sale, the dealer is kept in the know about what’s taking place in his or her dealership. This transfer of valuable information creates a strengthened bond between our company and the dealers we support, helping to create a long-term strategy and lasting relationship.

AS: Tell us about a mistake that your company learned a hard lesson from.PG: Well, advertising compliancy can be a touchy issue, especially if you’ve ever landed in the hot seat. Many years ago, we had an ad campaign that raised the eyebrows of a few Attorneys General, and resulted in some hefty fi nes and a lesson in the importance of playing by the rules.

AS: Sounds rough.PG: The line created by AG’s is constantly moving, and we crossed that line for some of them. We accepted personal responsibility and ensured our client’s identities were withheld. When some companies may chose to run and hide, we stepped up to the plate and took the bullet for our dealers, ensuring they would not have to pay as a result. In response to our rather public mishap, we stepped up to the plate with a compliancy commitment to our clients, which comes complete with a guaranteed seal of approval from an attorney. We now guarantee every ad in every state will be 100 percent compliant by that state’s current regulations, and we stand by that.

AS: What were some lessons learned?PG: Although our compliancy problems were an expensive wake-up

call, they were not without benefi ts. We were forced to reevaluate our approach and come up with concepts that still drove traffi c while playing by the rules. The result was the development of more than 26 different ad themes that are both effective and compliant.

AS: What advice can you offer on avoiding the compliancy nightmare? PG: Effective advertising just needs to be creative. Keep the mix fresh and stay apprised of your state’s regulations.

AS: What’s another common mistake that you have learned to avoid over the years?PG: Assumptions. We all know what assumptions supposedly make out of you and me. Assumptions are the mother of all screw-ups. Why? We have made more than our fair share of assumptions over the years, only to realize 90 percent of the time, they were wrong.

We had to change our mindset. We believe in addressing any and all potential concerns by bringing them to the forefront to get them off the table. This open-communication tactic is known to our employees as “In The Way, In The Way,” which is one of over 151 sales and management rules followed by our staff. However, getting to this point was a long and eventful process. Early on we made assumptions that every dealer had the same issues and would benefi t from the same program. The problem was that we never asked questions. We just assumed we knew it all and we had it all. It didn’t take long for us to realize we were defi nitely wrong.

AS: How did you fi x it? PG: We started to ask a lot of questions as a part of our initial meetings with clients. It proved not every dealer is alike, and not every dealer will benefi t from the same product. The result became an array of varying products and services, dealing with everything from new cars sales to one-manager teams and Do-It-Yourself Staffed Event packages. Dealerships are not cookie cutter, and the solutions we develop to help them succeed shouldn’t be cookie cutter either.

AS: So, how do your mistakes help you to improve?PG: The burden of proof is always on us — be it good or bad. Admitting your downfalls can be a very hard thing to do, but it’s the fi rst step towards making an improvement.

In today’s economy the ability to adapt and improve is perhaps more important than ever before. Consumers’ buying behaviors are continuously changing with each dramatic swing in the market. It’s our responsibility to give our clients a proven strategy to market and sell cars the way people want to buy them. While this concept may seem simple, creating a truly successful strategy calls for a lot of experience.

There are a lot of companies out there offering proven solutions to solve the world’s problems. But the truth is no one really knows how to do it right until they have done it wrong. Maybe someday we’ll have fi gured it all out, but until that point we’re going to keep our eyes open for mistake number 9,743….

For more information about PatGunning, president of G&AMarketing, contact him at866.618.8392, or by e-mail [email protected].


14

SteveCottrell

START REBUILDING RELATIONSHIPS

marketing

solu

tion

In tough times, a company

implementing good business practices and following those practices every day will usually weather any storm. A company that doesn’t follow those practices will fi nd tough times catastrophic. We are now seeing this play out every day in our industry. As a vendor working in auto retailing, I have come to know and observe hundreds, if not thousands, of great people working at and owning dealerships. So I know they have the resolve to weather this storm, too.

As a business owner, I know fi rsthand how heart wrenching it can be when you need to “let employees go.” Whether you call it “downsizing,” “rightsizing” or “restructuring,” it all boils down to the same thing, people (often good people) lose their jobs. In the auto-retailing side of the business, it becomes more of a challenge, as most dealerships don’t have a lot of bench strength when it comes to their management and employee teams. Naturally, there are exceptions to this rule, but employee turnover overall is extremely high in dealerships. In good times we staff up to have some bodies in the showroom. Heck, any green pea sales person can demo a car and the manager at the tower can take over after that.

Not too long ago, the sales teams in our dealerships were the consummate networkers. They were involved in local community activities, networked after business parties, and friends and neighbors knew that Ed or Sally was the person to see if you needed to buy or lease a car or truck. As the good times picked up, and as Detroit pumped out more iron, dealerships needed to steadily increase the volume of their sales, and the pressure was on to bring more people into the showroom.

We didn’t have time to go out and fi nd these “A” team networkers for our sales force, as we needed people now. The result was twofold. First we were forced to boost our advertising expense per car to more than

$600 in order to keep customers coming in the door. Then, to cover the showroom traffi c, we lowered our hiring standards for sales professionals and competed against fast-food restaurants for employees. The end result was a lowering of customer service standards. And so the vicious cycle began. We need to get back to hiring those “A” team players and giving them the tools to do a great job.

No one has accused our industry of being on the cutting edge of trends; we have built it on slow and steady practices honed over decades. Changes both in our industry and in the global economy, however, are forcing us out of our comfort zone and no dealer can afford to maintain a business as usual policy.

I believe there is always a silver lining to every situation. This, too, shall make us stronger, smarter and give us an opportunity to rebuild, restructure and develop organizations and teams that can weather any cycle or storm that comes up. So let’s begin to look at where you can start the rebuilding process.

First off, stop paying lip service to customer relationships. Repeat after me: “Loyal customers are the lifeblood of our business; take care of them.” This sounds like a simple task, but as we have found it isn’t that easy. As our society gets more mobile, customers don’t stay in one place, they don’t keep the same phone number and they often vary their favorite communications methods. Our customers move from apartments into a home, and then relocate into bigger homes as their family grows. Unless we have a way to keep track of them, we fi nd out that we don’t even know where they live.

Did you ever make a follow up or “birthday” call to a customer only to fi nd the phone number is no longer in service? More people are giving up their landlines and maintaining cell phones as their primary phone numbers and, too often, we don’t have that information in our DMS. Then,

in marketing to them with a simple e-mail blast program, we fi nd 40 percent of the communications bounced because of an outdated e-mail address. Are you starting to see where I am going with this? It is tough to stay in touch and build rapport with a customer you can’t fi nd.

Advertising and marketing costs continue to skyrocket, so every dollar we spend should be targeted to just the right customers and we should have a high level of confi dence that our message will be received by a majority of our customers. Research shows us that about 30 percent of the customer information in your system is incorrect, often due to duplicate records or outdated contact information. If you don’t have a system in place to identify which customer information is out of date, you are wasting marketing dollars.

Sean Stapleton shared in a previous AutoSuccess article that only 50 percent of your delivered vehicles are ever likely to return to your dealership and that only 20 percent of your sales customers will be converted into service customers. I found those numbers staggering, but agree with him that this creates a great opportunity for dealers to reach out to those customers and bring them back into your dealership.

The reality is, you can’t afford to lose touch with any customers in this or any business environment. Engage your staff to update information or look for solutions that can provide effi cient, cost-effective ways to keep your information current. The dealers who continue to succeed in the long term will be the ones who are staying close to their customers.

Steve Cottrell is the CEO of DMS Update, a division of Authenticom. He can be contacted at 866.696.4957, or by e-mail at [email protected].


16


17

SteveBrazillsale

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IMPRESSIONSThere is always some kid who may be seeing

me for the fi rst time. I owe him my best.— Joe DiMaggio, professional baseball player

Sometime today, a prospective customer will visit your dealership for the fi rst time. What will that fi rst impression be like?

Convenience — Is your dealership easy to fi nd? Is the entrance from the street well-marked? Have you made it a no-brainer for the customer to fi nd parking for service and parts as well as the showroom? Is your customer parking adequate? Is it full of vehicles that were demonstrated three hours ago, but not reparked?

Appearance — How many weeds will the customer see between the property line and the building? How much wind-blown litter? Does the glass in your entry doors look like an experiment conducted by the FBI fi ngerprint lab? These visuals are silent spokespeople for your dealership and they begin speaking to customers before your paid employees get in the game. What are they telling your customers?

Treatment — Eventually, a prospective customer will encounter your personnel. Are they greeted promptly? Are they greeted courteously? Are they greeted with enthusiasm? Does every employee who comes within 10 feet of a customer make eye contact, smile and say something appropriate, even if only “good morning”? People seldom buy on logic alone, which means feelings matter. Making customers feel good about being in the dealership is vital, but at some point your people will be called upon to actually do something for the customer. Are your people competent? Have you hired the right people with the right skills and attitudes? Have you established processes that actually work? Have you set performance standards and communicated them clearly to your people?

It is easy to become so accustomed to the environment in your dealership that you stop seeing it the way your customers do. Customers start keeping score before they cross your property line and they continue as they encounter your facility and your people. The score you earn determines what will happen when the customer reaches the buy-or-leave decision point.

You can infl uence that score greatly by controlling the message your customers receive. Take a look at your store and determine what message you are sending. If you can improve it, do so. Don’t expect, however, that you can control the message by simply calling a meeting or writing a memo. Staying on message is an all day/every day job that starts at the top and is too easily forgotten in the course of everyday events. When you grow tired of the task, think of Joe DiMaggio. There is always someone visiting your dealership for the fi rst time. You owe him or her your best.

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

ScottNorman

OLD SCHOOLTOOL

leadership

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In my fi rst accounting class at Old Mizzou,

we learned about something called “sources and uses of cash.” Today there are other names attached to the same report, but the most popular in use today is the cash fl ow statement.

In today’s economy, where most of us are cutting expenses and trying to hoard cash, one would think that a cash fl ow statement would be one of our most valuable tools. Yet, in my dealer 20 Groups, I fi nd few dealers using one. In my CFO groups, more than half use the cash fl ow statement to assist the dealer in answering the age-old question, “We made money last month, so where’s our cash?”

Let’s look at some simple basics to explain this tool. To prepare the cash fl ow statement we use only the balance sheet, but we need the current month’s and the previous month’s operating statements because we’re measuring the change in balance sheet accounts to explain the increase or decrease in our cash balance from month to month.

Any cash fl ow statement will list all the balance sheet accounts and their increase or decrease from the end of one month to the end of the next month. Adding the resulting increases and decreases will total the increase or decrease in our cash account.

Well, that’s all very simple, but what does it tell us? Let’s take a basic scenario. If we made $50,000 in profi t last month and everything on our balance sheet stayed the same, we would expect our cash account to increase by $50,000. However, if only one thing changed, such as an increase in used vehicle inventory of $30,000, this would mean we used $30,000 of our $50,000 to purchase used vehicles, and our cash balance would only show a $20,000 increase.

Therefore, we intuit the following effects on our cash account:

• If an asset increases, that is a use of cash— As in the example above, our used

vehicle inventory increased and that used up cash.

• If an asset decreases, that is a source of cash

— If our parts inventory decreases, we have sold some of it, so that creates cash.

• If a liability increases, that is a source of cash

• If our payables increase, we may have purchased product which we sold and created cash, but just haven’t paid the

vendor for the product yet.• If a liability decreases, that is a use of

cash

When we pay our fl oor plan payable, thus decreasing it, we use up cash.

For years we have preached asset management. When times were better than they are currently, that message didn’t pierce as deeply. Today it means more, as cash and fi nancing are tight. Ironically, today nothing is new on the asset management front. The message is the same: Generally, don’t carry more assets than it takes to do business for the next couple of months. Generically, that statement is true for new, used and parts inventories, and most other asset accounts with a few tweaks.

Unfortunately, many of us were not managing our assets to those standards when the TARP hit the fan, and we are still struggling to get to some profi table asset levels.

A few years ago we began to see software products that would help us manage our used vehicle inventory. Since we all use software to manage our parts inventory through the demand, holding and phase-out cycles, it is only logical that someday we will all use similar software for our used inventory through the same cycles. We have had nearly all of those companies present at a 20 Group recently.

Last fall, one of them presented to a group of mine, and several members investigated further. A couple of members had the software up and running by the fi rst meeting of 2009. In that group, in every case where a dealership was using this software, they all had in excess of 13 turns per year in their used inventory! To save you the calculation, that’s less than a 30-day supply. Retail and wholesale grosses were up in every case, as well.

So here’s the message: Don’t give up. We have to have a heightened awareness daily of our need to reduce the number of assets we put to work to try and earn our profi t. The fewer assets employed for the profi t we make results in a higher return on assets. The cash fl ow statement is one of the more valuable monthly tools to measure our progress in turning our assets into cash.

Scott Norman is a fi nancial statement instructor for NCM Associates. He can be contacted at 866.747.0868, or by e-mail at [email protected].


18

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MarcSmith

CREATIVE PROSPECTING FOR TOUGH TIMESA Little Creative Effort Can Reap Big Rewards

marketing

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Times were tough in the early 90s when

I entered the automotive sales business. I soon determined that it would take some additional effort to achieve the desired level of income that I wanted to achieve. Simply waiting for customers to walk into the dealership was not going to cut it.

I decided that I would have to develop some prospecting techniques of my own that would get immediate results and produce high levels of income. As I have said in previous articles, there are three kinds of people: those who make things happen, those who watch what happens and those who wonder what happened. I knew that I would have to move into the “make things happen” category in order to accomplish my goals.

Many of the traditional tools had been provided to me by the dealership, such as the “orphan owner” list, the “90-day lease coming due” list and the basic “cold call” list. Although I was grateful for the info, these leads were often not as fruitful as I would have liked them to be.

In 1990, I was an oddity in the car business in the fact that very few salespeople in the industry had a personal computer and maintained their own database. Having owned my own business for many years and coming from a retail background, I was comfortable using a computer for inventory control and database management. For those computer enthusiasts who might be curious, I was using an 8088 processor, the predecessor to the 286. Wow, that really dates me, doesn’t it?

After much consideration, I decided to create a mailer. At the time I was selling Ford, Lincoln and Mercury products in Florida. The Mercury Grand Marque was the best selling car in the state and, in the early 90s, it was the perfect car for the ever-growing population of retired people in the Sunshine State. With this in mind, I

decided to target this market and mail into the upscale retirement communities. It was a little more diffi cult in those days to get the names and addresses, but I was able to do so by being a little creative. After speaking with the appropriate representative for many of the private retirement communities, I convinced them that I simply wanted to conduct a survey and that it would require nothing more of the recipient than to respond or discard the information. Other names and addresses were secured from the county appraiser’s offi ce, all of which can now be done online.

Next, I had to build an effective mailer that would guarantee results. I surveyed friends, family and, most importantly, customers as to what they would respond to. After listening to the customer, I knew that the mailer had to look personal and not something that looked like a mass mailer so that the prospect would not immediately discard it without opening it. The contents would have to be simple and to the point and require little effort on the part of the prospect. I decided to use a letter format with a return address and prepaid postage-stamped postcard included inside. The address and return address (my own) were handwritten to make it personalized and to ensure that it would be opened by the recipient.

Now what was to be on the post card? I wanted to accomplish four things:

1. Offer to give them something 2. Make it easy to choose and return their

request3. Get information on the prospect’s car4. Create a reason to follow up and set an

appointment

On the backside of the postcard was the dealership logo. It opened with “My name is Marc Smith, and I would be happy to give you information on any of the following products. I may be reached at 999-999-0000.” The next line started with the fi rst word in a larger bold font:

Yes, I would like you to send me more information about the followings vehicles.

Below were the make and models with a check box beside them making it easy to select. At the bottom of the card was the following sentence again starting off in a larger bold font:

Please tell me about your car.

This was followed by year, make, model and condition and contact number, with adequate space beside each. With the exception of the names that I secured from the county appraiser’s offi ce and the dealership, many of the prospects had to be followed up by mail.

The dealership paid for the outgoing mail and I shared my brother’s business bulk mail stamp for the return postage and had it printed right on the postcard. This way I could track it and was only charged for the ones that were returned. You may note that I used the phrase “send information” instead of “contact”; this made it less threatening for those who may not be ready for personal contact.

My fi rst mailer of 160 generated two sales and with the second of 340, generated three sales. In less than three months I had generated and additional $16,342 in gross, resulting in an average of $3,268.40 per copy on the front end.

If you are wondering — yes, the last mailing was addressed by computer in a cursive font.

Since all of this type of information can be done online and takes less time and effort, what is your excuse? I know — times are tough. That’s when the tough get going. Get creative and throw a little effort into it.

Marc Smith is the president and CEO of Marc Smith International LLC. He can be contacted at 866.665.4479, or by e-mail at [email protected].

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22

Are you ready for some good news for a

change? Here it is: Recent advances in GPS technology now make it possible for F&I departments to sell these devices that can be used not only to recover stolen vehicles, but to deter theft in the fi rst place. What’s more, these devices are also capable of increasing service drive revenues, and generating subscription revenues on top of that.

Good News for F&I Departments...Dealerships have been selling vehicle-recovery devices for decades, yet the market leader is pretty much the same product now that it was 20 years ago. Today, like then, it uses an antiquated radio-based technology that is completely incapable of discovering that your vehicle is missing. In this age of instant information and gratifi cation, consumers aren’t going to get excited about a product that requires them to discover that their vehicle is missing, and then takes hours or even days to recover it.

Fortunately, you can now sell a GPS-based device that recovers a stolen vehicle in minutes — and might even prevent the vehicle from being stolen in the fi rst place.

This technology allows the consumer to create a “geo-fence” around the vehicle and to receive an instantaneous alert whenever the vehicle is moved beyond that boundary. The consumer can then go online to see, in real time, where the vehicle is and where it’s headed, and allow the police to do the same thing. This means that a stolen vehicle can now be recovered almost immediately. In fact, a thief who sees a parked vehicle with a window decal saying “Protected by GPS technology” will learn to not even think about stealing it. After all, who in their right mind would steal a vehicle knowing that the police will be on their trail almost as soon as they shift into drive?

What all of this means is that your F&I

department will be able to position a GPS-based device not merely as a vehicle-recovery product, but as a theft deterrent. And that should lead to a signifi cantly higher closing rate.

...and for Service DepartmentsThe F&I department is not the only part of the dealership that will benefi t from improved GPS technology. This technology can actually alert the dealership’s service department whenever the vehicle’s check engine light is on, as well as tell them what the cause of the problem is. What’s more, it can also provide an alert just before the customer reaches a suggested service mileage milestone. Both types of alerts will allow a service manager to call the motorist, inform him or her of the type of service that’s required, and schedule a service appointment.

Dealerships are understandably dissatisfi ed with the relatively small share of vehicle maintenance revenues their service drives have garnered over the years. But now, thanks to advances in GPS technology, these “maintenance alerts” can help the dealership ensure that the vehicles they sell will make many profi table return visits over the years.

Bonus FeaturesModern GPS technology also offers a tracking capability that allows the consumer to go online at any time to check on the vehicle’s location. This feature has many useful applications, such as when the consumer is concerned about a loved one who is driving the vehicle, but cannot be reached by cell phone. The consumer can also arrange to receive alerts whenever the vehicle is being driven in excess of a specifi ed speed, which might come in handy if someone in the family has a problem with a “lead foot.”

Fiscally SoundDespite its many signifi cant advantages,

state-of-the-art GPS-based technology represents an outstanding value to consumers. Its price to the dealership should allow it to be sold for no more than the leading radio technology system. In addition, in some cases, consumers may get unlimited usage during the fi rst year with no subscription fee.

This new technology makes terrifi c fi nancial sense for dealerships as well. The theft deterrent positioning will allow F&I departments to increase their sales, and the “maintenance alerts” should increase revenues for service departments. In addition, the device manufacturers may be willing to share their subscription revenues with the dealership, and — when the device is preloaded on a vehicle — to allow the dealership to use it to track the vehicle’s location until the vehicle is sold. Finally, the device can be installed very quickly and hence inexpensively by the dealership, as it hooks up in minutes to the vehicle’s OBDII connector.

The Right Technologyat the Right TimeIt’s no secret that these are challenging times for both consumers and dealerships. And that is why the timing could not be better for the arrival of this new technology. For consumers, it provides the best protection possible at a time when the risk of vehicle theft could be as high as ever, and it does so at a very reasonable price. For dealerships, it offers a strong selling proposition focused on theft deterrence, increases service drive retention and generates subscription revenues down the road.

Tony Avila is the CEO of Innovative Aftermarket Group. He can be contacted at 866.900.9717, or by e-mail [email protected].

TonyAvila

FINDING A NEW WAY:GPS Technology Offers Dealerships a New Profi t Center

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With my advertising barcode technology, I track every up, every sales rep, every advertising campaign. I can even automatically send a follow-up email to every customer.

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PaulCummingssale

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I still remember the anticipation in my gut

as I arrived at the Legendary “K” Club just outside of Dublin, Ireland. My anticipation was heightened for many reasons: 1) The opportunity to play golf at an amazing golf course, 2) the opportunity to spend time with Bill Cullen (an automotive legend in Ireland) who I had recently met at NADA, and 3) visiting Ireland was on my “dream destination” list.

As I walked into this amazing hotel I was instantly struck by the thought: A Big Dreamer is in charge of this place. It was stunning from top to bottom.

My grandfather always said that going fi rst class was more a matter of purpose than money. As I walked through the “K” Club, I knew whoever built this place had tons of both. I later learned the immense wealth accumulated by the owner of the “K” Club came about as a result of dreams, desire and determination. Through conversations with Bill Cullen, I learned the owner of the “K” Club was a Big Dreamer. Sir Michael Smurfi t, KBE, LL.D (honorary), born 1936 in St Helens, Lancashire, England, is a businessman holding dual Irish and British citizenship and is a legend in Europe. I might add that my friend Bill Cullen is also a giant of a man in many ways because of the D’s that make the Difference.

Dreams – What one dream would you “dare to dream” if you knew you couldn’t fail?

I fi rmly believe the road to success is easier traveled with powerful dreams as your fuel. So many times I meet people who have given up on their dreams. Somewhere along the journey they had a tough setback and they lost sight of the big prize. For whatever reason, they stopped believing in the possibilities of life and settled for the visible realities of life. I call this location of life “a rut.” What is a rut? It is, simply stated a grave with both ends dug out. Life is challenging and, in fact, it can kick you squarely in the mouth and knock you to the ground, bruised and bleeding. The difference in people is what they do when this happens. Let me let you in on a little secret: Dreamers die hard. What about you? Are you still a dreamer, or have you let go of your dreams and settled for far less than you are capable of? What will you do now?

Desire — If you greatly desire something, do you have the guts and will power to stake everything on obtaining it?

I can certainly attest to the power of desire. Still ringing in my ears after 34 years are the words of my high school coach: “Cummings, how bad do you want it, son? How bad do you want it? It’s all about desire, son!” Flash forward to the summer when I sold books door to door for the Southwestern Publishing Company. I knocked on 80 doors a day, to make 30 presentations in order to close six sales a day. Those were 14-hour days in sweltering heat, walking in between houses, smiling with the sound of slamming doors

THE “D’S” THAT MAKETHE DIFFERENCEComponents of Ultimate Success

ringing in my ears, laughing at all the “no’s” and celebrating all the “yes” responses. There is success at the end of struggle, but you never will get there without desire. Bill Cullen sold apples out of a cart for a penny a piece as a kid in Dublin, and today he is rich beyond your comprehension. Check out his best selling book, It’s A Long Way From Penny Apples. How high is your level of desire? Did you know you could shorten the road to your dreams by 50 percent just by increasing your level of desire everyday? How badly do you want it?

Determination — How did Bill get from the penny apple cart to jet helicopters, Irish castles, summer estates and crazy wealth? He did it with big dreams, desire and a ton of “in your face” Irish determination. Bill pushed through adversity with energy, enthusiasm and passion. He was, and remains to this day, a non-stop optimist about the future. His determination allowed him to see value in opportunities that others who were pessimistic and lacking determination were blind to. How about you? How determined to succeed are you everyday? If you had to rate your level of determination on a scale of 1 to 10, what would your number be? What are you willing to do to be more determined now? I can promise you, without desire and determination, your dreams will elude you.

Paul Cummings is president and CEO of Paul Cummings Enterprises. He can be contacted at 866.865.3171, or by e-mail at [email protected].


26


27

Human nature is set in stone, just as the

laws of nature. The nature of the customer is that they want things their way. They don’t like force, pressure or someone else making their decisions for them. They don’t like being turned over, handed off or introduced to a manager who uses more force and pressure than the salesperson. They don’t like a salesperson who will not shut up and listen. They do not like to see a manager destroy a salesperson in front of them. They do not like unrest, disharmony and trouble within the dealership, and don’t think they cannot see it. They do not like the emotional violence which accompanies much of our selling. Why? For the same reason that dogs don’t meow. It is not their nature. Since now is the only time we have to change, and since everyone says that car sales are down, and since what we have been doing has not worked for a long time now, this could be a good time to go back to the basics and start over. “Start over, me? I’ve got 30 years experience, why should I start over? I am sick and tired of hearing from trainers that I should start over. I plan on doing what I have been doing for the last 30 years and if you don’t like it, get someone else.” The fi rst sign of intelligent life on earth is when we realize that what we are doing is not working, we make the decision to try something else. The fi rst sign of non-intelligent life is someone who just keeps on doing the same plodding thing, knowing it is not working, hating the results, but doing it anyway because it’s easy, it’s familiar and “no one is going to tell me what to do.” If You Want to be Understood,Start ListeningIn sales, we have been taught to talk, talk, talk. So we talk, we demonstrate, we negotiate, we participate, we attempt to keep the customer focused on what we are saying. We think that if we let the customer

talk, we have lost control, and we certainly can’t have that. We have been taught to handle objections, so we handle objections. We argue, we try to impress the customer with our knowledge, we try to keep the customer off balance, and all the while, we actually think we are doing a good job. So we meet and greet and we talk. We ask their name and we talk. We show them what we want to sell and we talk. We present and we talk. We qualify and we talk. We trial close and we talk. We close and we talk. We do a walk-around and we talk. Then, when the customer does not buy, we think it is their fault. How would you like to be treated like that when you go to buy something?

In management we have been taught, usually by example, that if we hire and fi re with regularity, if we set the rules and force obedience, if we only hire people we know will not cause any trouble, if we call those who ask “why?” troublemakers and show them the door, if we oversee every deal, if we control our people, our plan and our policies, we think then that we are doing a good job as a manager. How simply sad, how melancholy, how freaking mediocre, and all the while we think the salespeople are to blame for poor sales results. How would you like to work at a business where you were treated like that?

There is a simple solution to this situation. Stop talking. Start listening. Stop trying to force everyone else to see things your way. They are not going to, anyway. Why? Because it is not their nature. As humans, we all have self-interest. We usually know what we want and we try to get it. The people we shut out fi rst are the ones who stand in our way. Managers, if you want a sales force who does their best for you, who will work their tails off, stop telling them what you want, stop telling them what to do, what to say and how to say it, and just start listening to them. No one, and I do mean no one, knows more about their customers than they do. Listen to your salespeople. Find out what they want, fi nd out

what they need — and then help them get it. If, by this time in your career, you still think that you can get what you want by forcing others to see things your way, I feel sorry for you. You just don’t get it. Telling other people off is not a sign of maturity, it is a sign of second-grade playground behavior. Any manager can talk and talk and hire and fi re, but it takes a mature leader to listen and help and encourage. Salespeople, if you want loyal customers who buy from you, if you want to have better grosses and more sales, stop talking your customers to death. Stop talking, start listening. Every customer who walks in your showroom or drives on your lot is under-listened to. No one listens to them, especially salespeople. They may have been to three local lots, and called fi ve others, and you can be sure that no one listened to what they want, need and are willing to pay for. That is why they are on your lot. Stop talking, just listen. It won’t cost you anything. Listen to what they want, what they need and how much they have to spend. Then, help them get exactly that. This whole philosophy about learning to stop talking and start listening is the most positive thing you can ever do, no matter what the relationship. Kids, spouses, neighbors, co-workers, salespeople, customers — just start listening. If you want to be understood, listen. No matter what your sales goals are, your management goals and your personal goals, you need others to help you reach those goals. The only way to get substantial help from others is to listen to them, discover their goals, and as you help them reach their goals, you will automatically reach yours. The most positive thing you can ever do is to shut up and start listening.

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].

JohnBrentlinger

WHATEVER YOU THINK THE PROBLEM IS - IS NOT REALLY THE PROBLEMAnd Deep Down, You Know That

leadership

solu

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HOW TO IMPLEMENT A BDC AT NO ADDITIONAL COSTWhy are many dealers skeptical about BDCs?

The answer is money.

What if you could implement a BDC initiative without it costing you any additional expense?

The reason BDC continues to be a subject of conversation in most dealerships is simply our inability to consistently handle and manage our customers through traditional methods, and yet there is an ever-increasing need to do so.

However, the failure of dealerships to manage customers has normally been the result of choosing the wrong people because they are unprepared to pay a competitive income, or they simply execute it in a half-hearted manner. A BDC cannot fail; it may not fulfi ll your expectations, but with the right people it will provide you with the edge that you have been looking for. Having a competent BDC manager is mandatory, as it is in every other department; “So goes the manager, so goes the department.”

I am always astounded by the fact that we are prepared as an industry to continue to spend millions of dollars to attract new customers, but continue to do nothing to protect the customers that already exist in our database. Why?

I am also surprised by how accepting we are with salespeople selling six to eight vehicles per month (who are probably costing the dealership anywhere from four to six sales per month through their inadequacies) and continue to pay them $2,500 to $3,000 a month. When we hire a phone specialist at similar pay, it is considered an expense.

The whole purpose of the exercise is to continue to create traffi c, and then be as profi cient as we can possibly be to manage that traffi c into sales opportunities.

So, how can we achieve these fundamental actions without it costing additional money?

Easy; as all good businesses do, reallocate the dollars to accomplish a more profi cient model. Here are some recommendations:

• Advertising — Take fi ve to 10 percent of you overall ad budget and invest it in the preservation of your existing customer base. If you want to increase your market share, you cannot achieve this without retaining the ones you have.

• Eliminate Unnecessary Sales/Service Staff — Eliminate the poor performers and replace them with lead assassins that on a day-to-day basis communicate with your customers in a professional manner.

For example: What would be the better combination: Having 15 sales people selling 120 (an average of eight per person), or having 12 sales people and two or three “lead assassins” partnering to sell 150 (average of 12 units per month)? Motivating and retaining your top performers should also be paramount in these changing

economic times.

• Eliminate sub-contracted vendors who are currently providing services that can be facilitated in-house.

• CRM/Technology Consolidation — Eliminate or consolidate your technology to enable a more streamlined approach and save money. Most dealers have unneccesary programs that are either poorly utilized or duplicating the process.

• Evaluate pay plans to ensure that they are performance based, similar to all other positions in the sales/service environment, and eliminate guarantees or salary-based plans.

• Combine the activities of the departments and create a centralized BDC, which, in many cases, will result in the reduction of staff required to perform the day-to-day responsibilities.

• Introduce a marketing fee of $25 to $50 in all departments for proactive business, whether that includes motivating existing customers to spend more money or providing new customers from their marketing efforts (50 vehicle sales @ $50 = $2,500 and 100 additional R.O’s @ $25 = $2,500 for a total of $5,000)

• Perform direct mail and other marketing from this department

• Create an Internet marketing arm that allows your dealership to communicate with your customers in every department and build an e-mail directory through BDC. This could decrease your ad budget and touch your customers more regularly and more effectively.

Our average BDC is able to complete an average of 75 to 100 calls per day, of which they will connect with approx 25 to 30 and provide approximately eight to 10 appointments from their efforts (two BDCs x eight = 16 appointment per day).

No advertising, including Internet marketing, will provide the sort of guarantees an operational and effi cient BDC will give to you.

Contact me with the information below for a complimentary on-site assessment.

Mike Overy is a managing partner at Proactive Dealer Solutions. He can be contacted at 866.721.1201, or by e-mail [email protected].


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TomHopkins

COMMIT TO MAKING POSITIVE CHANGES

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In my seminars and my books, I have

a lot to say about the vast importance of having goals that pull you forward, instead of relying on your needs to drive you. I’m not alone in believing that goals are vital; practically every modern thinker or speaker on the subject of success extols the benefi ts of goal setting. So let’s review the basic rules of putting the power of goals to work for you.

1. Write your goals down. Unwritten goals are wishes or dreams; written goals drive you to taking action.

2. Review your goals regularly. Otherwise they’ll fade from your memory and amount to zero.

3. Keep your goals with you. If you keep a card you’ve written your goals on with you, you can review and revise them in spare moments. The whole idea is to make them a living, vital part of your life and a powerful infl uence on your daily decisions.

4. Make sure your goals are realistic. Goals you don’t believe you can achieve are worse than useless because they blind you to goals you really could achieve. And, they discourage your belief in the whole goal-setting and achieving process.

Let me tell you about the second goal I wrote down when I was 21 years old. This is how vivid I want goal setting to become.

I was sitting in an airplane. It was my fi rst fl ight. I was fl ying from California to Arizona. I’d never been in a plane before. You might remember your fi rst fl ight. I was sitting there scared to death. We were taking off, and I looked out the window to the right and on the runway next to our plane, this beautiful little plane took off.

I asked the man next to me, “What is that

cute little plane?” He said, “That’s a jet — a corporate jet.” I said, “Boy, that’s cute.” I took out my goal sheet right then and there and wrote it down — “Jet, 10-year goal.”

Now the surprising thing about a goal that’s in writing is that, if you concentrate on it every day, it will become real. I will never forget the day my jet arrived. It was 10 years later to the day. I had just fi nished teaching a seminar in Baton Rouge, Louisiana, and as I stood there on that runway and that little plane came out, I thought, “This is it. Ten years and I’ve arrived.”

When I got on the plane, the pilot welcomed me on. I thought I was in heaven. I so enjoyed that fi rst trip and started thinking about the fun I’d have taking my family and friends on trips in it. However, the fi rst time we landed to re-fuel, the pilot came back and said, “We’ve refueled,” and handed the receipt to me — $882. I said, “Is this for the month?” It wasn’t. That long-term goal turned out to be a $30,000-per-month goal, which turned out to be unrealistic for me. Even though I was earning enough to afford it, I decided it was an unnecessary extravagance. Having that plane was out of my comfort zone. It just wasn’t a part of my reality. That’s why I only had it for two months.

You see, one thing you have to realize about long-term goals is there will be times when you have to make decisions to change your goals. Some people are so afraid of a long-term goal, that they’ll set no goals. That’s the sad part of it.

• Act on your goals. Nothing happens unless you make it happen.

• Give yourself rewards for achieving a goal. Your drive to achieve will wither and die if you don’t feed it some benefi ts at least once in a while.

• Plan how you’ll make your goals happen. If you don’t plan in detail how

your goals will be achieved, how can you make them happen?

• Resolve confl icts between goals immediately. People often set up goals that are in direct confl ict with each other: Spend more time with the kids; spend more time planning and preparing for sales work. When you discover such a confl ict, it alerts you to the necessity of making hard choices and scheduling more effectively.

• Make your goals relevant to your family. Unless you involve your family in them, your goals will confl ict with the aims of your loved ones. This is certain to increase tension within your family and make the achievement of your purposes more diffi cult. Don’t leave them out; instead, get them on your side. “If I win this sales contest, we’ll all go to Disneyland.”

• Preserve the inspiration of your goals by keeping them up to date. Your life is dynamic; your desires and capabilities are under constant change. New information may at any time make some or all of your present goals obsolete. When things change for you, change your goals. They’re not carved on Mount Rushmore.

• Review your goals annually. On or about the anniversary date of the creation of your fi rst goal list, go over every goal you set and see how much you’ve really accomplished. You’ll be pleasantly surprised at how many have been accomplished. This is a great motivator in which to launch a whole new, even more productive year.

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].


31

PeterMartin

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Today, many e-mail service providers are

integrating Web analytics with the reporting functions of their Web-based e-mail marketing solutions. This greatly enhances the products’ reporting capabilities and it gives you incredibly useful and pertinent information that you can use to increase the relevancy of future e-mail campaigns and, therefore, increase subscriber response. In fact, a study by JupiterResearch found that e-mail marketers who use Web analytics to generate targeted e-mail campaigns produce average open rates of 33 percent, click-through rates of 14 percent, and conversion rates of 3.9 percent, compared to mass e-mail campaigns which produce rates of 20 percent, 9.5 percent, and 1.1 percent respectively. Integrating Web analytics with e-mail marketing will help you gain a better understanding of your subscribers’ online habits, which will allow you to better predict future responses. However, it can be overwhelming at fi rst since it delivers vast amounts of subscriber data. E-mail marketers are used to track open, read and click-through rates, but Web analytics offers much, much more.

Beyond Click-ThroughE-mail marketing reporting tools can only follow subscribers up to the point where they click-though the call-to-action button and land on the Web site. After that, Web analytics takes over. E-mail marketing solutions that have integrated Google Analytics (freely available at www.google.com/analytics), for example, gives you the complete picture of your subscribers’ actions. That is why it is so important to use both tools.

Marketers rely on a number of key performance indicators (KPIs) to run successful e-mail marketing campaigns. Common KPIs include the percentage of subscribers who opened the message, read the message (determined by the length of

time the e-mail message remained open), and clicked-through a call-to-action button on the e-mail. These percentages are important as they measure the effectiveness of each campaign. Over time, marketers use these reports to develop benchmarks and goals for upcoming campaigns, to streamline business processes needed to support campaigns, and to increase the accuracy of the e-mail messages. These KPIs are vital to the success of the e-mail marketing strategy. They also provide marketers with information that can be used to grow their subscriber base and increase response rates. However, the click-through rate isn’t the same as the true conversion rate. Google Analytics allows you to track the subscribers’ clickstream data so you can easily see your campaign conversion rate and ROI.

Clickstream data is the information that users generate as they click from page to page through a Web site. In the past, it has been used by Web designers to track the visitors’ path through the site so they could improve the site’s navigation. However, today marketers are tracking clickstream data through Web analytics to fi gure out how customers are interacting with their Web sites.

For example, say you sent out an e-mail campaign inviting 10,000 subscribers for a discounted oil change. Using the tracking features of the e-mail marketing product, you can see that you had a 15 percent click-through rate.

You can then use Google Analytics to track the page views of the subscribers that clicked-through your e-mail. You will see which subscribers left your site after reviewing the information on your landing page. You will know which subscribers were drawn away from your initial offer through other information on your site that had a greater importance to them. And you will also fi nd out which subscribers reviewed the information but decided not to make an appointment at that time. In addition, you

will also be able to tell when the subscribers visited the site, how many times they returned to your site, and what pages they viewed on each visit.

Knowing these metrics takes the guesswork out of your reports. But it also gives you valuable insight into your subscribers’ viewing and purchasing habits that can be used to develop more relevant e-mail campaigns and landing pages in the future. Also, it gives you the information you need to create specifi c drill down campaigns, directly targeted to the subscribers who have shown interest in your previous offer.

Drill Down E-mail Campaigns Drill down, or behavioral targeting, is a powerful technique e-mail marketers can use to increase relevancy and results. Drill down e-mail campaigns are targeted e-mails sent to the subscribers who have started, but haven’t completed, a key action. Google Analytics allows you to build intelligent drill down campaigns based on your subscribers’ previous actions.

Even if the subscribers haven’t shown any interest in the product you offered them, you can still use Web analytics to send them a drill down campaign based on their specifi c needs. For example, if a subscriber clicked-through your e-mail offering one product, but he or she spent time reviewing another product on your Web site, you can use that information to send a drill down campaign focused on the product the subscriber actually reviewed. Web analytics optimizes your subscribers buying potential and analyzes their behavior so you can send your subscribers relevant, compelling e-mail messages targeted to their exact requirements. You will build stronger relationships with your subscribers and they will come to rely on you for their future needs.

Peter Martin is the CEO of Cactus Sky Communications, Inc. He can be contacted at 866.859.8052, or by e-mail at [email protected].

USING GOOGLE ANALYTICSWITH E-MAIL MARKETINGIncrease Reporting Capabilities and Boost Relevancy and Response


32

MichaelThomas

BATTLING THE ‘BRITTLE’ BANKSThere are some major issues with the

secondary lending market which have not only created an entire group of customers called “sub-prime” over the past 20 years, but have registered losses and sometimes taken “sub-prime” lenders completely under.

The fi rst issue is infl exibility. When banks were deregulated and began the consolidation into larger and larger “mega banks,” they became more and more infl exible with customers. They centralized their lending and collecting to “buying centers.”

Every good banker knows your performance in lending is only as good as your collectors. When you remove collectors from more immediate contact to geographically distant collection centers, you lose the relationship upon which the collecting is based. This disconnect causes loan performance to suffer; buying tightens and so do the other fl exible pieces of the system, such as loan extensions, fee generation from late pays, forbearances, etc. The collecting turns into a function, not the integral piece that must encourage payments to be made, talk with customers, understand their presenting issues and then adjust collecting practices accordingly. Negotiating with performing customers to a place of “win-win” is crucial in good collecting, and good banking. This is being done more and more in mortgage lending, and it is sneaking back into the direct/retail world.

This infl exibility has not always been present in banking. Before banking consolidation/centralization, bankers would encourage customers to interact with them about the customer’s situation. They did not report the “late pays” to the bureau and they allowed them to pay interest only or skip payments for a month or two while they got back on their feet. This allowed them to continue to generate late-pay fees, interest

was still accumulating and the customer was not adversely affected by negative bureau reporting. By the way, the days of score-driven loan strategies have come directly from centralization of banking. The larger “mega banks” have decided that they can mitigate losses by score-driven strategies. They are relearning that score-driven buying is not an exact science.

This brittleness in banking has created the current economic situation. Bankers and their examiners have used the collecting devices to function and not to encourage collecting and performing, which set up a reaction from the market as loans began to default — fi rst in the mortgage industry and then in the automotive industry. Large national sub-prime lenders are retreating in record numbers. They are taking billions of dollars and redirecting it to foreign markets. Their absence has left a huge hole in the option for the retailer. That is why the retail seller must take more control over their customer’s fi nancing options. The bank/lender is still dictating retail sales in the country. The major manufacturers have known this for years, hence the GMAC, FMC, TMC, etc. They took the next step to control their sales by creating a funding source.

Manufacturer fi nance sources are limited to supporting new car sales only. It is not that they do not fi nance used/pre-owned; it is that they are specifi cally created to support new car sales. When there is pressure from pre-owned sales, they must retreat and re-affi rm their support of new car and truck sales. This is another form of brittleness in the market, which undermines sales. We are in a constricting new car market, and we have been for years. The average age of the American automotive fl eet is older than it ever has been, and that is forcing buyers to buy. Because of the economic and domestic manufacturers’ challenges over the past few years, that buying has been re-directed away from new. Many times, the

banking/sub-prime world is also not satisfi ed with the older, less-expensive vehicle as collateral. Once again, this brittleness must be overcome by ingenuity and fl exibility to open up the market.

The franchise dealer would like to sell new vehicles, for obvious reasons, but a sale is a sale. Now, the franchise dealer must focus their attention, more than ever, to pre-owned sales. This group of buyers has been more affected by the centralization/consolidation and the resulting brittleness, so that their numbers have been cannibalized by the “sub-prime” reality. This means if you are a franchise dealer accustomed to selling and securing new car/truck fi nancing, and you are in a market where you’re selling more used, and those customers are “sub-prime” because of the brittleness of the market, there are fewer and fewer options. You have to look at dealer-funded fi nancing as a viable option, or lose those deals that the market is driving to you.

The dealer-funded program must be “fl exible.” The program must be able to respond to money down, shorter terms and less-expensive vehicles. The program must recognize the shortcomings of retail installment contracts, use the structure and security of leasing, require GPS/starter interrupt on every vehicle, include insurance to be “escrowed” in the payments, increase the payment cycle, “fl ex” with customer payments and extend terms for repairs and circumstances — all of which dramatically lowers the risks associated with secondary, and/or sub-prime lending.

Michael Thomas is the president of Prime Eagle. He can be contacted at866.895.5155, or by e-mail [email protected].

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JodyDeVere

HOW TO CREATE A FEMALE-FRIENDLY DEALERSHIP:Quick and Easy Check List to Achieve That Goal

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Women tend to be more prepared than

men when they walk into car dealerships. Women also buy more than half of the cars sold in America and infl uence 85 percent of all vehicle purchases, according to research.

Consequently, auto manufacturers have begun including more female-friendly features. Although this is a step forward for women who can now fi nd the models and features they want, many still fi nd treatment at dealerships unsatisfactory.

Across the nation, many women feel intimidated when they enter dealerships, and research shows that 77 percent bring a man along on car-buying trips, even though the she will be making the decisions.

There is still a lingering misperception about car salespeople and their historical reputation of suspicious maneuverings in trying to close a deal.

High-pressure sales tactics, smoking out

front, salespeople lined up like vultures out on point waiting to swoop down on her and waiting rooms, showrooms or bathrooms that really need a good cleaning can really put off her motivation to do business with you. I recently I visited six dealerships that can be described exactly like this. Is this your dealership?

Research reveals that women are indeed stressed out about the economy. And as the primary household purchasing agents, what women are looking for from car dealerships right now is to build an authentically fair and respectful relationship in a safe, clean and friendly atmosphere with your sales and service department.

You need to nurture a solid loyalty with women and your dealership or lose market share to your competitors who are taking steps to become more female-friendly.

Quick female-friendly dealership check list:1. A quick, effortless transaction.2. Sell to her, not to her boyfriend/dad/

husband/brother.3. No haggling on pricing. Quote a price

and don’t resort to games about getting that number lower.

4. If a deal is struck, make everything clear up front. Don’t try to add on services or upgraded features at the end of the transaction.

5. Offer comfortable and clean seating, restrooms and a play area for children.

6. Follow up with her after the sale.

I know this is a generalization, and may not apply to the luxury brands market, but overall, the experiences shared by women with me about their experiences with dealerships are far from spectacular. Car dealers could increase profi tability by simply treating women like valuable customers.

Jody DeVere is the CEO & president of AskPatty.com. She can be contacted at 866.849.9973, or by e-mail [email protected].

ChipLofton


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ALTERNATIVETHINKINGGiving Customers a Choice Might Keep Them in Your Service Department

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In today’s marketplace,

keeping the service center full is key. Many innovative dealers are looking outside of the box to keep customers coming back to their car care center. Today’s consumers are weighing out all their options, especially when the cost of repairs exceeds the book value of the car.

In past years, customers were more inclined to trade in their high-end car when faced with a stiff repair estimate. But today, they have to consider all their options, one of which is to replace original equipment (OE) with alternatives.

In the case of the customer who drives into the service department with an older Lincoln Continental, for example, hoping their fallen car might just need a little adjustment to its air suspension to get them back on the road, you might need to keep a medic on staff to revive them when they’re presented with a $3,500 estimate to replace the failed OE system. This usually results in the customer speeding out of the shop in search of another option. Why not retain this customer by offering them two alternatives? One choice would be the OE replacement system, while the second choice would be a less expensive,

non-OEM system. Not only are you giving the customer options, but you’re presenting yourself as being on their side, resulting in a feeling of good will, both for the service department and the dealership in general. Why not give them an alternative that can get them back on the road and allow you to be the hero? In our above example, an average non-OEM kit installed might book at $1,200 to $1,500 dollars. Adding this to your sales week serves your business much better than sending the customer packing with a $4,000 dollar estimate, and you have the added benefi t of increased customer satisfaction. One dealer related a story about a lifelong customer who spent more than $3,000 dollars in repairs to his car, which had a $1,900 dollar book value. The following week, the air ride suspension failed again and they were never able to diagnose the problem. The customer took the car to another dealer and traded for a new car, swearing he would never go back to the dealership that put on the air suspension parts. It’s assumed that this disgruntled customer told all his friends and neighbors and relatives about his experience. This is a dealer’s biggest nightmare — the power of word of mouth working against you. Keep in mind that, if there is going to be a difference in the way the car handles or feels, such as in the case of a suspension replacement, it’s always important to explain all of this to the customer and allow them to decide how they want to proceed. Non-OEM parts and systems have been around for decades. These products are easily found on the Internet and often shipped the same day. If going this route, it is recommended that the shop get a deposit from the customer, since these are special order product. Many of these products are offered with lifetime warranties, so your customer will never have to pay for this again. In today’s economy, the smart dealers are thinking outside the box and considering many options that can make their business more profi table. Customer retention is king, so why not consider adding non-OEM parts to your bag of new tricks?

Chip Lofton is the founder of Strutmasters. He can be contacted at 866.550.8910, or by e-mail at [email protected].

“In past years, customers were more inclined to trade in their high-end car when faced with a stiff repair estimate. But today, they have to consider all their options, one of which is to replace original equipment (OE) with alternatives.”


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DalePollak

VOLATILITY AND WHAT IT MEANS TO YOU

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“I can’t get my lender to fi nance this vehicle

for what I paid for it.”

“Gas prices are killing me on used SUVs and trucks.”

“My trade-ins have dried up and I can’t fi nd the vehicles I need to fi ll my inventory gaps.”

I’ve heard comments like these time and time again over the past several months at dealerships across the country. Inevitably, the used vehicle managers and dealers who share these struggles cite them as reasons for the double curse of declining sales volumes and lower-than-expected gross profi ts.

My explanation for these struggles goes something like this: These challenges underscore a broader, more complex undercurrent in today’s used vehicle marketplace. Like it or not, our business has become more volatile than ever before and

we would all be wise to accept this volatility as the new order of the day. This is our wake-up call to get smarter about how we source, stock and sell used vehicles.

So what makes a volatile market? In the stock market, volatility is measured by how much a given stock price changes or deviates from an average daily price. If a stock’s price moves up or down rapidly over a short period of time, it has high volatility. Conversely, if its price is stable, it has low volatility. Other defi nitions describe volatility as “fi ckle” or “inconstant.”

When I share this concept of volatility and its inherent risks with used vehicle managers and dealers, most nod knowingly. The proof is often sitting squarely in front of them on their used vehicle fi nancial statements — aged inventory, fewer sales, higher wholesale losses and profi ts that fall short of expectations — or in the push-back they get from lenders and the scarcity of buyers on their lots. Many also accept my

866-964-6397 imnLoyaltyDriver.com

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OUT OF THEM.

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assertion that all of us can expect more, not less, volatility in used vehicles in the weeks, months and even years ahead.

The more diffi cult part of the conversation comes when we discuss how to change used vehicle operations to effectively manage through this new volatility.

Take for example the way many used vehicle managers and dealers price their used units for retail. Most still base their retail prices on what they paid at auction or on the value they set for a vehicle at trade-in. As I’ve noted in previous articles, this approach has little, if any, bearing on what a prospective buyer might actually pay to own the vehicle. What’s more, this approach is even more prone to profi t disaster if these stores purchased their vehicles amid a buying frenzy at auction and their competitors didn’t.

In my view, this approach to pricing and assessing the wholesale value of a vehicle seems more like a speculative bet rather than the careful use of sound retailing practices that account for and mitigate the risks that underlie today’s volatile used vehicle marketplace.

The good news for all of us is that while volatility is here to stay, so are the tools and techniques that used vehicle managers and dealers can use to more proactively manage the opportunities and risks that any volatile marketplace creates.

In the investment world, savvy investors closely track the “volatility index” of the stocks they choose to purchase and sell. In effect, they are basing their buy/sell decisions on data that reduces their risk of loss and minimizes the more speculative elements of their business.

The same principles do and should apply to used vehicle managers and dealers as they decide what to stock, how much to pay and how much to ask at retail. The data and metrics needed to make these decisions in today’s volatile marketplace are available. The next question is this: Are you ready to use them effectively?

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

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