dealer magazine - january 2010

ED TONKIN 2010 NADA Chairman

Ron Tonkin Dealershipspage 20

Vol. 17 No.1January 2010

Jim Ziegler:Riders on the Storm

page 10

Leadership:Recommit to

Personal Growth in 2010!

page 14

F&I:Federales Eying

Discriminatory Pricingpage 52

Fixed Operations:Hired any LazyIdiots Lately?

page 54

Just as you are trying to keep your store(s) on the cutting edge, we are doing the very same thing as we venture into a new frontier in the publishing biz.

We can get this digital version in your hands 2-3 weeks faster than the print version, giving you the freshest information possible. You can click on links at the end of each article to email the author of such. And you can click on the ads to link to that advertiser’s website (and you’d REALLY be helping us out by doing just that).

It’s quite intuitive…I don’t think that someone who uses the Internet to make a living will have any trouble easily figuring it out.

Please let me know what you think about it… [email protected]

Welcome to the digital editionof Dealer magazine!

Michael Roscoe Editor-in-Chief

ED TONKIN 2010 NADA Chairman

Ron Tonkin Dealershipspage 20

Vol.

17 No.1January 2010

Jim Ziegler:Riders on the Storm

page 10

Leadership:Recommit to

Personal Growth in 2010!

page 14

F&I:Federales Eying

Discriminatory Pricingpage 52

Fixed Operations:Hired any LazyIdiots Lately?

page 54

DD 2 January 2010 DigitalDealer-magazine.com

ABLE OF CONTENTSTJANUARY 2010

PRESIDENT AND CEOMICHAEL ROSCOE

VICE PRESIDENT AND EDITORIAL DIRECTOR

CLIFF [email protected]

248-351-2620

EDITORLINDA DI PIETRO

[email protected]

PUBLISHERGREG NOONAN

[email protected]

ART DIRECTORJOE BIRCH

PRODUCTION MANAGERELIZABETH BIRCH

PRINT PRODUCTIONNICK THOMAS

COVER DESIGNJOE BIRCH

COVER STORY PHOTOGRAPHYSTEVE ALEXANDER

CIRCULATION SUBSCRIPTIONRICH JARRETT314-432-7511

[email protected]

NATIONAL ADVERTISING [email protected]

607-264-3359

Dealer magazine makes every attempt to ensure the accuracy of all published works. However it cannot be held responsible for opinions expressed or facts supplied herein. Nothing may be reproduced in whole or in part without written permission from the publisher. All rights reserved. The publisher encourages you to submit sug-gestions. Submitted materials become the property of Horizon Communications, Inc. and will not be returned. Send material for publication to 330 Franklin Rd., Suite 135A, PMB 386, Brentwood, TN 37027. The editor re-serves the right to edit material; submission of material constitutes permission to edit and publish that mate-rial. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is presented with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. From a Declaration of Principles jointly adopted by a Commit-tee of the American Bar Association and a Committee of Publishers.

A PUBLICATION OF

! " # # $ % & ! ' ( & " % )

FEATURES Digital Dealer Cover Story 18 Juan Teran, Sales Director, Dewey Automotive Group

COLUMNS AAISP Notes 8 Embrace the Future Cliff Banks

Internet Sales 10 The Colonization of Retail Phil Sura 12 Managing the Phone Conversation Rob Lange

14 Five Powerful Steps to Chatting with Shoppers Todd Smith 16 Is your Web Site Giving Car Shoppers What They are

Looking For? George Nenni

Technology Trends 22 Seeing is Believing Sandi Jerome

BDC/CRM 24 It’s Not About the Software Chuck Barker

DEPARTMENTS 4 Digital Dealer E-mail 6 News

ABLE OF CONTENTST

4 Dealer January 2010 Dealer-magazine.com

JANUARY 2010PRESIDENT AND CEO

MICHAEL ROSCOE



248-351-2620


[email protected]


[email protected]





COVER STORY PHOTOGRAPHYJESSICA SHEPARD


[email protected]


607-264-3359


A PUBLICATION OF

! " # # $ % & ! ' ( & " % )

Dealer magazine (ISSN 1537-6141) is published monthly by Horizon Communications, Inc., 754 Armstrong Place, Brentwood, TN 37027. Periodicals Postage Paid at Brentwood, TN and additional mailing offices. POSTMASTER: Please send address changes to: Dealer magazine, P.O. Box 16770, St. Louis, MO 63105. Subscriptions are $48.00 per year, 12 Issues per year, monthly. Back Issues, $10.00 each. Make check payable to Dealer magazine. Send to: P.O. Box 16770 St. Louis, MO 63105. Reprint Requests: (412-548-3954). POSTMASTER please send change of address to Dealer magazine, P.O. Box 16770, St. Louis, MO 63105.

FEATURES Dealer Advocate by Jim Ziegler 10 Riders on the Storm

Cover Story 20 Ed Tonkin NADA Chairman Ron Tonkin Dealerships

COLUMNS 13 Cliff’s Notes ???

Leadership by Dave Anderson 14 Recommit to Personal Growth in 2010! Ownership 16 Honda Alters its Dealer Planning Volume System Richard N. Sox

18 When it Comes to Credit Today, Bigger is Better Erin Kerrigan

Advertising 24 Putting ‘Spiral Integration’ Into Play Jim Boldebook

Sales & Marketing 51 The Importance of Time Management Jack Bennett F&I 52 Federales Eying Discriminatory

Pricing Gil Van Over

Fixed Operations 54 Hired any Lazy Idiots Lately?

Ed Kovalchick

DEPARTMENTS 6 Editor’s Note 8 Dealer Mail 53 Dealer F&I New Products

SPECIAL SECTION INSERTDD18 Juan Teran Sales Director Dewey Automotive Group

DD12 Managing the Phone Conversation

DD14 Five Powerful Steps to Chatting with Shoppers

DD22 Seeing is Believing

DD24 It’s Not About the Software

Full Digital Dealer table of contents on page DD2.

pg. 25

DITOR’S NOTEE


The boss, Michael Roscoe, is on hiatus this month. That’s why I’m writing his column – as our production manager is beating me for missing another deadline.

Michael, who signs my paycheck, says he’s not going to write anymore columns until you register for the National Automobile Dealers Association Convention and Exposition this year – which means, it’s up to me to write it. He’s passionate about the association and the convention (maybe a little too passionate, if you ask me – tongue in cheek, sort of).

He spent his entire column last month urging you to attend NADA, which is scheduled for February 13-15 in Orlando this year. Now, it’s my turn to take up the baton.

I know the questions – Can we afford it this year? Is it worth it? What do we really get out of attending the convention?

Legitimate questions, true. You have to do what’s right for your business. But the truth is, you need a strong association in Washington fighting for your interests. And attending the convention is one way to help NADA remain strong.

There is no question NADA was bloodied this year. I’ve heard the criticisms that the association didn’t do enough to protect its dealers. My opinion is, the criticism isn’t valid. Yes, we lost way too many dealerships in 2009, but there was little NADA could do to reverse that, even though its officers and directors tried hard.

In the last six months, NADA has won some big battles. It, more than any other organization, was responsible for getting Cash for Clunkers off the ground.

It also managed to keep dealerships from being included in the oversight by the Consumer Protection Financial Agency. A quiet win to be sure, but a big win. You probably would have seen your F&I profits dwindle to almost nothing in the next couple of years if NADA doesn’t succeed there.

Another win is the recent legislation that grants eliminated Chrysler and General Motors dealers the right to seek arbitration and possible reinstatement. A month ago, that legislation was dead with no chance of making it to the Senate floor for a vote.

NADA also has worked hard, going back to September of 2008, to pry floorplan capital from the banks. It was instrumental in crafting several strategies that are now being employed by various govern-ment agencies to loosen up credit for dealers. It’s slow going, but once the banks get religion, these measures are going to help dealers who need it most.

The question you should be asking is how can I afford not to go the convention?

If dealers don’t show up at the convention, NADA will be weakened significantly in the future and will be much less effective protecting your flanks. If dealers don’t come, vendors won’t come – vendors who are a major source of revenue for NADA.

Supporting NADA is reason enough to attend. But the benefit extends far beyond helping an association.

The NADA convention, simply put, is for winners. The dealers who attend are the ones who constantly are looking for ways to improve their business and make more money. They want to beat their competition.

Every year, on the exhibit floor, are the latest and greatest solutions designed to help you be more prof-itable. And often, dealers at the convention get the first look at what’s new. I often hear of dealers who negotiated in a vendor’s booth at NADA an exclusive territory for use of a new product or solu-tion, and thus, keeping it out of the hands of the competition in their direct market.

And don’t forget about the workshops. Some are better than others, but you will always find great ideas you can take back to your stores.

So, in attending the convention, you’ll help an association that pro-tects you to remain strong, and, you’ll come away with some new products and ideas that will help you make more money. And for those of us in the great white North, the Orlando sun in February is an added bonus.

There’s one more thing – by attending, you’ll be telling Mike to get back to work….

We’ll see you on the exhibit floor at booth #582.

Cliff Banks Vice President and Editorial Director

Tell Mike to Get Back to Work

Cliff Banks

“The truth is, you

need a strong

association in

Washington

fighting for your

interests. And

attending the

convention is one

way to help NADA

ABLE OF CONTENTST


JANUARY 2010PRESIDENT AND CEO

MICHAEL ROSCOE



248-351-2620


[email protected]


[email protected]





COVER STORY PHOTOGRAPHYJESSICA SHEPARD


[email protected]


607-264-3359


A PUBLICATION OF

! " # # $ % & ! ' ( & " % )

Dealer magazine (ISSN 1537-6141) is published monthly by Horizon Communications, Inc., 754 Armstrong Place, Brentwood, TN 37027. Periodicals Postage Paid at Brentwood, TN and additional mailing offices. POSTMASTER: Please send address changes to: Dealer magazine, P.O. Box 16770, St. Louis, MO 63105. Subscriptions are $48.00 per year, 12 Issues per year, monthly. Back Issues, $10.00 each. Make check payable to Dealer magazine. Send to: P.O. Box 16770 St. Louis, MO 63105. Reprint Requests: (412-548-3954). POSTMASTER please send change of address to Dealer magazine, P.O. Box 16770, St. Louis, MO 63105.

FEATURES Dealer Advocate by Jim Ziegler 10 Riders on the Storm

Cover Story 20 Ed Tonkin NADA Chairman Ron Tonkin Dealerships

COLUMNS 13 Cliff’s Notes A Snowball’s Chance in...

Leadership by Dave Anderson 14 Recommit to Personal Growth in 2010! Ownership 16 Honda Alters its Dealer Planning Volume System Richard N. Sox

18 When it Comes to Credit Today, Bigger is Better Erin Kerrigan

Advertising 24 Putting ‘Spiral Integration’ Into Play Jim Boldebook

Sales & Marketing 51 The Importance of Time Management Jack Bennett F&I 52 Federales Eying Discriminatory

Pricing Gil Van Over

Fixed Operations 54 Hired any Lazy Idiots Lately?

Ed Kovalchick

DEPARTMENTS 6 Editor’s Note 8 Dealer Mail 53 Dealer F&I New Products

SPECIAL SECTION INSERTDD18 Juan Teran Sales Director Dewey Automotive Group

DD12 Managing the Phone Conversation

DD14 Five Powerful Steps to Chatting with Shoppers

DD22 Seeing is Believing

DD24 It’s Not About the Software

Full Digital Dealer table of contents on page DD2.

pg. 25

DITOR’S NOTEE


The boss, Michael Roscoe, is on hiatus this month. That’s why I’m writing his column – as our production manager is beating me for missing another deadline.

Michael, who signs my paycheck, says he’s not going to write anymore columns until you register for the National Automobile Dealers Association Convention and Exposition this year – which means, it’s up to me to write it. He’s passionate about the association and the convention (maybe a little too passionate, if you ask me – tongue in cheek, sort of).

He spent his entire column last month urging you to attend NADA, which is scheduled for February 13-15 in Orlando this year. Now, it’s my turn to take up the baton.

I know the questions – Can we afford it this year? Is it worth it? What do we really get out of attending the convention?

Legitimate questions, true. You have to do what’s right for your business. But the truth is, you need a strong association in Washington fighting for your interests. And attending the convention is one way to help NADA remain strong.

There is no question NADA was bloodied this year. I’ve heard the criticisms that the association didn’t do enough to protect its dealers. My opinion is, the criticism isn’t valid. Yes, we lost way too many dealerships in 2009, but there was little NADA could do to reverse that, even though its officers and directors tried hard.

In the last six months, NADA has won some big battles. It, more than any other organization, was responsible for getting Cash for Clunkers off the ground.

It also managed to keep dealerships from being included in the oversight by the Consumer Protection Financial Agency. A quiet win to be sure, but a big win. You probably would have seen your F&I profits dwindle to almost nothing in the next couple of years if NADA doesn’t succeed there.

Another win is the recent legislation that grants eliminated Chrysler and General Motors dealers the right to seek arbitration and possible reinstatement. A month ago, that legislation was dead with no chance of making it to the Senate floor for a vote.

NADA also has worked hard, going back to September of 2008, to pry floorplan capital from the banks. It was instrumental in crafting several strategies that are now being employed by various govern-ment agencies to loosen up credit for dealers. It’s slow going, but once the banks get religion, these measures are going to help dealers who need it most.

The question you should be asking is how can I afford not to go the convention?

If dealers don’t show up at the convention, NADA will be weakened significantly in the future and will be much less effective protecting your flanks. If dealers don’t come, vendors won’t come – vendors who are a major source of revenue for NADA.

Supporting NADA is reason enough to attend. But the benefit extends far beyond helping an association.

The NADA convention, simply put, is for winners. The dealers who attend are the ones who constantly are looking for ways to improve their business and make more money. They want to beat their competition.

Every year, on the exhibit floor, are the latest and greatest solutions designed to help you be more prof-itable. And often, dealers at the convention get the first look at what’s new. I often hear of dealers who negotiated in a vendor’s booth at NADA an exclusive territory for use of a new product or solu-tion, and thus, keeping it out of the hands of the competition in their direct market.

And don’t forget about the workshops. Some are better than others, but you will always find great ideas you can take back to your stores.

So, in attending the convention, you’ll help an association that pro-tects you to remain strong, and, you’ll come away with some new products and ideas that will help you make more money. And for those of us in the great white North, the Orlando sun in February is an added bonus.

There’s one more thing – by attending, you’ll be telling Mike to get back to work….

We’ll see you on the exhibit floor at booth #582.


Tell Mike to Get Back to Work

Cliff Banks

“The truth is, you

need a strong

association in

Washington

fighting for your

interests. And

attending the

convention is one

way to help NADA

remain strong.”

Have you ever dreamt of having the ability to be in all places, at all times? The ability to

follow your service advisors, technicians and other personnel around to ensure customer

interactions and vehicle inspections were being performed at your high standards?

By utilizing our innovative tools, reports and processes, you’ll be able to implement,

measure, and review your employee’s execution of a World Class Inspection™ process.

Our system allows you to know and see exactly what’s going on in your service drive

and shop each and every day. Now is the time to give your dealership the edge it

needs to signi!cantly increase the revenue contribution from it’s !xed operations.

Call us today to learn more about our results driven MPi EDGE™ system, or to schedule

a free on-site evaluation.

be everywhere, see everything

800.997.1674 | mpifix.com |Look for us at booth #1052


Hi Jim,Another great article this month! It’s

always a great day when the new issue of Dealer magazine arrives so I can get my dose of Ziegler and Dave Anderson.

As you tend to have a good insight into various manufacturers, I have a question for you. I have a small empty showroom (noth-ing was taken away, I just expanded into a larger space across the street with one of my import franchises). While we do a decent used car business, I’d like to consider filling in the open space with something and the two opportunities that are not represented in this area are Mitsubishi and Suzuki. Our market (2.2 million people) is currently represented by two Suzuki dealers and one Mitsubishi dealer (down from five!).

From a UIO standpoint, Mitsubishi makes sense as there are certainly orphan owners in our market and the only remain-ing point is clear on the other side of town, so the immediate fixed ops upside looks OK. Our service capacity is not a problem as I have 30-plus highly productive stalls across three lines and room for seven to eight more.

Also, Mitsubishi appears to have some interesting products coming in the future. The downside is that the brand has been put into a position where they have lost nearly all of the “equity” they enjoyed in the ‘90s, and are in a position where they need to “re-invent” themselves. The question is whether they can pull it off and regain the potential they once had, but squandered.

I pose the question to you as you were pretty high on Suzuki a few years back, yet the brand appears to be slipping of late. The only thing they appear to represent is cheap all-wheel-drive technology, which is useful

in this market, but only if a customer is attracted to the product. If the investment (and it would need to be minimal initially) were comparable between the brands, what does your “crystal ball” say is the wise move?

Thanks for taking the time to read and hopefully reply. Looking forward to the next issue…

Name withheld by request

Dear Reader,Thanks for the compliment! Both

Mitsubishi and Suzuki have been severely beat up in recent years, but I am still high on the future of Suzuki. My reasoning is that there will be another gas crisis, and this time I anticipate it will be a more permanent price increase. Mitsubishi has waffled so much in the U.S. market that I am not totally confident in its business plans, which seem to change with every crisis.

Suzuki, on the other hand, builds great quality, small, fuel-efficient cars. They were caught up in the same financial crisis all other manufacturers suffered, especially with floor plan and retail financing. Personally, of the two choices, I’d go with Suzuki.

Jim

Dennis Higginbotham,Great cover story interview in the

November 2009 Dealer magazine – I just finished reading it. I thought that I recog-nized you on the cover. Your story nailed it for me. I, too, worked for Chevrolet in Detroit, Denver and Wichita.

Your comments about factory people and their lack of retail knowledge is so correct. And what they did with dealer eliminations was beyond criminal!

I remember telling my Wichita zone

manager some reasons we were getting beat by Ford trucks – colors and option stuff. He told me to leave his office and “Go sell what you’ve got!”

I left – and soon left Chevy. The ship was sinking then.

Best of luck to you and your family – yours sounds like a great group.

Jerry HaleyCape Haze, [email protected]

Dennis Higginbotham,The year 1981 does not seem that long

ago when we stood under a palm tree and you lectured me about debt and told me to get rid of mine. It only took 20 years but I made it thanks to you. Glad to see you back in retail. Corporate was never you.

Joe Bertolami President & GM Toyota West Statesville, [email protected]

ealer MAILD

Dealer welcomes your letters and after verification will run them signed or unsigned. Letters may be edited for space and clarity.

Send letters to: Dealer • 330 Franklin Rd. • Suite 135A-Box 386 • Brentwood, TN 37027FAX: (615)-370-8181 • e-mail: [email protected]

9

progressive

new dates

State Association 1 or 2 Day Schools Available

Class size limited!

Special 20 Group 1 or 2 Day Schools Available at your meeting

to produce the workbook andtraining techniques for...

www.probac.com, email [email protected] up to date class schedule visit:

or call 904-264-7408.

It took 28 years circling the globe...to work with over 50,000 Dealers and Managers, from many countries, CALL TODAY!904-264-7408MARCH 18-19, 2010JACKSONVILLE BEACH, FL

SEATING STILL AVAILABLE!

THE INTERNATIONAL

USED CARS C H O O L

THE INTERNATIONAL

USED CARS C H O O L


I knew in advance this was going to be a tough marathon week on the road, and I was totally prepared for it, or so

I thought.No matter how you cut it, I was going

to be scrambling from airport to airport with tight schedules. Even if all of the stars lined up, this trip was promising to be a real ball-buster.

Even though I anticipated there might be a bump in the road with my schedule, I never dreamed I’d have to endure the pain of the ordeal that lay ahead of me.

It started on a Monday morning, December 7. It never occurred to me it was Pearl Harbor Day.

I got up at 4:30 a.m. to fly from Atlanta to Milwaukee. OK, as it was, the flight was on time and the dealer’s driver was there to meet me at the airport. We were driving an hour and a half to Madison where I was set to do a private management seminar for my long-time good friend, Jason Brickl, and the Balweg Automotive Group.

That first day was incredible… my pri-vate seminar with Jason and the manage-ment team at Balweg was a huge success. The next day I performed a sales and leasing seminar for their Chevrolet ad group, the Badgerland Chevy Dealers. That’s when the wheels began to come off.

The weather reports were calling for snow, lots of snow — not the wimpy-ass little dusty snowstorms we get in Atlanta once a year. This was going to be a Wisconsin-style, upper Midwest, badass, full-blown winter storm coming in.

Excuse me? Hey! What do I know? I’m just an Atlanta guy who actually had to buy a winter coat last weekend just to make this trip.

At 3:00 p.m. when the session was over, my driver and I walked out of the Marriott (first time I’d been outside). The sky was as dark as night and the snow was already swirling. Gut feeling – this ain’t good.

It was absolutely necessary that we make it to Milwaukee ahead of the storm for my 6:30 p.m. flight to Atlanta, and then con-necting to West Palm Beach with 45 min-utes to spare. I actually packed underwear and socks in my briefcase in case I made to West Palm but my luggage didn’t, what with the tight connection and all.

My cell phone rings; it’s Debbie. She says Delta Airlines just called and my flight’s been cancelled. The Milwaukee airport is shut down.

I called my client in West Palm Beach, an old friend, Randy Wilson. Randy is with the Napleton Group.

Panic was setting in for Randy and I. We’d been planning this private seminar series for his group for a long time. He had managers coming in the morning from all of the Florida Napleton dealerships.

Randy said, “Have you tried Chicago O’Hare airport?”

A quick call to Delta Medallion Services confirmed there were still some flights scheduled out of O’Hare. It was going to be really tight. We only had three hours to get there, but we just might make it if my driver can get through the storm. I told Delta, “Book that flight, we’re on our way.”

Snow was swirling in heavy wet chunk. My driver was really concentrating just to stay on the road because visibility was ter-rible. Some cars slid out and others were pulled over on the side of the road. He was a professional driver, but all the same, he was wide-eyed, intense, focused and fully

concentrated on driving.As for me, this was a high-stress, white-

knuckled experience.On top of everything else, I was on dead-

line…actually past deadline to write this article. They were holding the magazine for me and there was nothing I could do about it. So, I called Liz and Joe Birch who layout the magazine and I told them my situation. They are the greatest; no hyste-ria, they understood and felt for me. Now, my hardship was making it difficult for others too.

Finally, we made it…got to O’Hare…alive… with maybe 20 minutes to spare before they closed out the flight.

I checked my luggage and boarded the plane. Had a cocktail. I felt I was home free. I somehow I had actually pulled it off. Now I am mentally slapping high-fives with myself.

They de-iced the plane at the gate as the storm was pounding the airport hard. We need to get out fast or they’ll shut down O’Hare too.

We got in line and made it all of the way to number three for take-off position when the pilot announced we had to go back to the gate for additional de-icing. Double-damn! There goes my connection to West Palm.

Finally, I arrived in Atlanta at nearly mid-night…worn out from stress and travel.

ADVOCATERiders on the Storm

Jim Ziegler

!"#$%&'#()"*$+!$,%(!*-!#.%,$/%*0*%&'#($+'#"%&,&-1(,.#!&$2&,%,(,&-!#(3456

!"#$%&'()*AUTOMOTIVE

CHEVROLET

37588799979:59(;(<=>?@ABACDEFA?G1HI(J?KL(M"##(+'+(CI(ABACDEFA?G

All these dealers have two things in common. They’re #1 in their market, and they work with CBC.

Want to see YOUR logo here? Call us today!

YOUR LOGO HERE

$"#(N*/("#$+N(%*()#(O3!

Dealer-magazine.com January 2010 Dealer 11

I had already spoken to Delta Medallion Services and had re-booked to leave for West Palm at 8:00 a.m. The all-day meeting with the Napleton managers would only start one hour late. Randy was OK about it; we can live with that.

It took Delta two hours to locate my luggage and bring it upstairs. It was some of the poorest customer service and the worst attitude I’ve ever experienced from them. When they finally did get around to finding my luggage, it was soaking wet. At 2:00 a.m. I caught a cab and asked him to take me to any cheap hotel near the airport.

Everything was booked …obviously every hotel near the airport was filled with other stranded travelers because the entire airlines system was backed up. Three hotels later I finally found a vacancy. I won’t say the hotel was awful; it was sort of clean, though well worn. To give you an idea of how cheap this place was… the woman at the desk told me the room was $79 a night and then apologized for the high rate because of limited availability.

With only three hours of sleep and a hot shower, I suited up and went back to the airport. The flight was on time. I was able to sleep on the plane a little, which also helped. When we arrived in West Palm Beach, Randy’s driver picked me up and we drove straight to the hotel where 40 managers and Napleton partners were wait-ing in the meeting room. I walked right in to the meeting, set up my audio-visual…and then lectured and trained for the next eight hours on my feet.

Then finally, I got to sleep and performed another full day with their salespeople. The next day, I worked with the other half of their salespeople in a similar session.

Now, here I am relatively rested, sitting in my room in an upscale luxury hotel in West Palm Beach. I just had an incredible seafood dinner and more than one cocktail with the guys (No Louis XIII). Kicking back…all I have to do now is finish this article. All of the notes for this article are lined out and I’ll be home with my wife and puppy tomorrow night. I am excited that things are going so well but I feel so beat up at the same time.

I will finally get to rest over the week-end…of course, on Tuesday it starts all over.

I have 60 managers flying in for four days of automobile seminars in Atlanta. Oh well! This is the life I chose and I love it.

At one time or another every one of us has been forced to ride through the storm and we’ve all had to scramble…making rapid-fire adjustments and snap decisions when plans fell through. We all endured working under high stress and missed deadlines. Maybe it’s the only time you’re

truly alive when your intensity level and awareness is highly focused and tuned in to reacting and adjusting to unforeseen events as they come at you.

Fritz has left the buildingBack in October, when writing my

November article, I wrote that I would be surprised if Fritz Henderson would still be with GM at Thanksgiving. Well, that didn’t


actually happen. I was scratching my head, thought I had that one right.

Then, on December 1, I was the key-note speaker for the Massachusetts State Automobile Dealers Association Annual Convention in Boston. Right in the middle of my speech I was commenting on the fact that I had missed that prediction.

At that exact moment, a gentleman in the audience raised his hand. Ordinarily, I don’t take questions in the middle of a keynote speech, but this time I did. He said… “Jim, I just received a message on my Blackberry that Fritz Henderson just resigned (ousted) from General Motors.”

Needless to say…that really pissed me off. I missed it by three days. And furthermore, I think Fritz did it on purpose just to spoil my accuracy stats.

In my November article featuring Jim Press, titled “Pop Goes the Weasel,” I wrote the following paragraphs…

In regard to the announcement of Susan Docherty’s promotion to replace Mark LaNeve…

“I wonder how Brent Dewar received the news? Susan is no doubt qualified and deserving of the position but I’m sure many insiders were thinking Brent would be LaNeve’s replacement.

“All of the indecisiveness and contin-ual reversals are giving me a headache… déjà vu… is Fritz the guy? No doubt that General Motors needs a strong leader with

vision and charisma. I’m wondering if Fritz will be eating Thanksgiving Dinner at Renaissance Center.”

Those are the paragraphs I wrote back in October.

Well, it didn’t take long for the second shoe to drop, did it? Today (December 10) Brent Dewar has rendered his resignation, saying he will leave General Motors within four months according to multiple sources. Did I not call this one? It was obvious.

I liked Brent Dewar, considered him to be a friend. Actually, I felt he was one of the most talented and in-touch managers in the company. I am gravely concerned.

I am in no way commenting on Susan Docherty’s ability or qualification. She has actually reached out to me to meet with her when I am in Detroit. I am really looking forward to meeting this exceptional execu-tive and getting to know her.

All I am saying is what in the hell did they expect Brent Dewar to do after

Dealer Advocate, Ziegler (continued from P-11)

continued to P-56

“At one time or another

every one of us has been

forced to ride through

the storm and we’ve all

had to scramble…making

rapid-fire adjustments

and snap decisions when

plans fell through.”—Jim Ziegler


A Snowball’s Chance in…

What a mess. Over the next six months, we could see hundreds of General Motors and Chrysler

eliminated dealers seek arbitration to regain their franchises.

President Obama signed a law last month providing that right to dealers who lost their franchises because of the bankruptcy proceedings last June.

The legislation is rife with challenges. Many of the eliminated dealers do not have access to the capital necessary to ramp up operations again. And good luck trying to find a bank willing to fund the effort. Without capital, there is no inventory, no payroll, and in some cases, no facility…you get the idea.

Another problem for dealers – the arbi-tration process could be costly.

It could get real messy for GM and Chrysler. Both automakers have given many of the franchises they “stole” to other deal-ers. If arbitrators end up reinstating hun-dreds of franchises, don’t be surprised to see two Dodge franchises across the street from each other.

It could happen. Neither GM or Chrysler has provided sound reasons for getting rid of hundreds of dealers. Nor have they answered the question to anyone’s satisfac-tion how they made the decision of which dealers to cut.

Chrysler could be in a world of hurt because there is evidence it went after dealers the business centers didn’t like. I know of at least three who were eliminated because they fought back on some issues in recent years.

Despite the challenges, lawyers tell me they are swamped with calls from elimi-nated dealers who want to move forward with arbitration.

Meanwhile, Chrysler is hinting it might fight the legislation in court. Don’t be sur-prised if GM announces all of the fran-chises it slated for elimination are eligible for reinstatement.

It could be a brilliant move for GM. On the surface, it would play well with Congress and with the media. Beneath the surface, it would be a Machiavellian approach and still will result in hundreds of franchises closing, which is what GM wants. Of the dealers who already have shuttered operations it is likely they will not be able to reopen because they won’t be able to find the necessary capital. Meanwhile, GM avoids all of the costs associated with arbitration.

Even though the legislation falls far short in providing eliminated dealers proper remuneration, it at least gives some deal-ers a fighting chance.

It’s the right thing to do. Far too many dealers saw their life’s work, and many times, the businesses created by grandpar-ents or parents, ripped from their hands and handed to a competitor.

Somehow, that needs to be rectified. I don’t care who you are, watching that happen last summer, you had to ask your-self at some point, “Is this really America?”

How we got to the “solution,” is just as messy as the solution.

A snowball’s chance in you know where is what I – and most other experts – fig-ured NADA and the Committee to Restore Dealer Rights were when they began trying to broker an acceptable resolution last summer.

First, the two didn’t agree on the end-game. NADA favored arbitration while the CRDR, led by Tammy Darvish, Jack Fitzgerald and Alan Spitzer, were adamant the automakers restore all of the eliminated (stolen perhaps is a better word) franchises to their rightful owners.

Darvish asked NADA’s board of direc-tors for money in June. It refused. Darvish, Spitzer and Fitzgerald ended up putting their own money – hundreds of thousands of dollars – behind their efforts.

After a public spat, the two organiza-tions agreed to form a united front, but

behind the scenes, there was little unity. There were too many interests to serve. NADA had to carefully balance how much support to give to dealers who weren’t deal-ers anymore, especially when several of its larger and more powerful members pushed the association to focus its energy on help-ing surviving dealers. As a result, much of NADA’s fight occurred behind the scenes very quietly.

The CRDR, meanwhile, went public and fought loudly, putting a lot of pressure on Congress. Although, there was some “bad” blood between NADA and CRDR, Darvish, Fitzgerald and Spitzer served a useful purpose. They could do NADA’s dirty work, providing the association with cover with its surviving members who wanted the eliminated dealers to go away.

A bill passed in the House of Representatives died in the Senate, which all but eliminated any leverage NADA or the CRDR had to force a settlement. GM and Chrysler, wanting to put an end to the wrangling, said they would offer nonbind-ing arbitration based on the criteria used in June to determine which franchises to close.

They miscalculated. Two weeks later, President Obama signed the legislation giving dealers the right to seek third-party arbitration.

Even though it ain’t pretty, what NADA pulled off – with the CRDR’s help – is pretty impressive.

For those of you entering the arbitration process the next several months, I wish you Godspeed and good luck.

Send us an e-mail and let us know how it’s going.


Cliff’s NotesCliff Banks


Recommit to Personal Growth in 2010!

I highly recommend that you make this the year you work harder on yourself than ever before. This is because last year left little

time for many leaders to upgrade and expand their personal capacity because they were so busy with the emergency of the moment. They lost focus on the importance of lifting their own lid so they could in turn elevate the abilities of their team. That being said, what is your plan for personal growth this year? I can promise you that you won’t automatically grow because growth must be intentional and life won’t just come along and improve you. A plan for personal growth has numerous poten-tial components. With respect to the space allowed, I will focus on four areas of personal growth that hold great potential for increasing your abilities and credibility.

CharacterBuilding a strong character means more than

being honest and forthright with others. Strong character also covers ground like a strong work ethic, remaining teachable, persisting in the face of difficulties, meeting deadlines and keeping promises. These aspects of character are built or diminished with your daily deci-sions, and these decisions are rooted in values you’ve chosen and embraced long ago. Building character means that you do what is right and not what is easy, cheap, popular, proximate or convenient. It also means that you do what is right regardless of the cost. Without continu-ing to make the right character choices, you will nullify the impact of your talent. In fact, a strong character protects your talent. If you’re not sure what your character blind spots are, ask those who know you best and don’t shoot the messenger when they answer. Believe me, they have the answers.

CompetenceI’ll narrow the scope of suggested compe-

tencies to upgrade to that of people skills and working within the disciplines of priorities. Without a doubt, your ability to accomplish much of what you aspire in the coming year will depend greatly upon your ability to get things done through others and to maximize and manage your time each day.

People skills. Efforts to improve your people skills will take a giant leap forward once you start caring more about people. I know, I know. The economic times have you worried about money. But the more you become obsessed with money, the less you tend to care about people! Improving your people skills means that you engage others by asking more questions and listening to their answers. You take the time to connect with them rather than expecting them to chase you down in order to build or sustain a relationship. It also means that you learn to motivate them as unique individuals rather than as numbers. It also helps if you reinforce them by bringing closure to the things they do well rather than ramble on about what they missed or could have done better.

Working within the disciplines of priorities. To pull this off, you’ll need to decide exactly what your priorities are. Hint: it’s probably not the crisis of the moment. In fact, if you’d spend more time on your genuine priori-ties, you’d probably have fewer crises of the moment! Next, you’ll need to decide what to stop doing so that you’ve got time to execute the non-negotiable disciplines you’ve identi-fied as priorities. Finally, you’ll need to catch yourself more quickly once you get off track and begin to major in minor things, and make quicker adjustments to realign your activities with your priorities.

Emotional maturityPublicly controlling your emotions, admit-

ting mistakes, listening to criticism and consid-ering points of view contrary to your own are all part of emotional maturity. Over the past year or so, economic upheaval and increased pressure on the bottom line has squeezed the worst out of many leaders. They wear their attitude on their sleeves, publicly complain and blame and overreact to the insignificant. Since the pressures bearing down on your abil-ity to make a profit aren’t likely to disappear anytime soon, it would be wise to practice choosing responses to situations that enhance your personal standing with your team rather than tarnish it. One of the best methods for accomplishing this is to increase the time you

take in responding to a provocation, if only by a few seconds. It is normally the instant, impulsive, unthinking response to events, bad news, offensive remarks or unpleasant situ-ations that you must apologize for and take you forever to live down.

DisciplineDiscipline is the fourth area for personal

growth and it is the one that ties the other three together. Without a greater level of discipline, you won’t consistently make the right charac-ter choices, connect with your people, execute priorities or control your emotions. Frankly, people without greater levels of discipline have no one to blame but themselves because disci-pline can be developed. You’re not born with or without it. The catch is, you won’t develop greater levels of discipline until you first get seri-ous enough about what you want to accomplish and to begin making yourself do more of what you know is important, even when you don’t feel like doing those things. In other words, you need more and bigger “whys.” Once you have a big enough “why,” what you must do and how you must do it becomes easier.

In order to take your organization to a higher level in 2010, you must first elevate your own performance. Organizational excellence begins with personal development and sacrifice from the leader, and addressing these four aspects for personal development is an essential place to start your journey.

Dave Anderson is president of LearnToLead, a sales and management training organiza-tion. He is the author of 10 books, including, “How to Run Your Business by THE BOOK: A Biblical Blueprint to Bless Your Business.” Dave has spoken at the NADA Convention for the past 10 years and is a panelist on MSNBC’s Your Business.

If you wish to discuss this article with other dealers, or with the author, please go to the “Discussion Forums” at www.Dealer-magazine.com and enter the “Leadership” forum or e-mail him at [email protected].

LeadershipDave Anderson

The Wingman’s clients include BG Products, Bank of America, Koons Toyota, Michelin, Shell Oil, Home Depot and many more. If you would like Waldo to speak at your company meeting or if you want to sponsor his “Never Fly Solo” book tour, call 1-866-925-3616 or e-mail [email protected]

!"#$%&'()$%*+,-$)"$."#/0+1023)$4")2')+&*$&*"'25$

You need wingmen to win!

Order online at www.neverflysolo.com.100% of Waldo’s advance purchase profits will be donated to veterans!

In Never Fly Solo (McGraw-Hill), former combat decorated fighter pilot and leadership speaker Lt. Col. Rob “Waldo” Waldman shares a flight plan for success in business and life.

Whether you are a seasoned executive, entrepreneur or new to the business world, your success depends on the mutual support of trusted partners to help you maximize your potential.

Fighter pilots call these partners wingmen.

Waldman shares a message that is both human and business critical: we all must overcome the missiles of adversity and change and we can’t do it alone.

YOU’LL LEARN TO: ! Commit to the core wingman values of integrity, service and excellence

! Transform relationships with colleagues into interdependent partnerships for success

! Take courageous action and ask for help when adversity strikes

! Communicate effectively in high stress situations

Available inbookstores everywhere.

!"#"$%&'(%)*'*


Honda Alters its Dealer Planning Volume SystemWhy this matters to Honda dealers

We have received reports from our Honda dealer clients that Honda has altered its system for assign-

ing planning volume goals to its dealers. Historically, Honda issued planning volume objective(s) to its dealers on an annual basis. However, dealers are now receiving updated planning volume objectives on a quarterly basis. Why is this important to Honda deal-ers? Among other reasons, a dealer’s planning volume is integral to Honda’s calculation of the dealer’s facility requirements and meeting planning volume is critical to receiving the highly sought-after President’s Award.

Let’s take a step back and look at the definition of a dealer’s “planning volume.” Planning volume is generally understood to be the number of new vehicles a dealer is expected to sell within a given period of time. Typically, a dealer’s planning volume is set annually by the manufacturer based upon the manufacturer’s assessment of the availability of product and the sales opportunity available within the dealer’s market area.

In contrast, a dealer’s expected sales perfor-mance is the number of vehicles a dealer must sell in order to equal the manufacturer’s sales standard, which is generally based upon the performance of other same line-make dealers within the dealer’s zone, the dealer’s state, the dealer’s region or nationally. Expected sales performance is a function of the performance of other dealers and is typically assigned as a percentage of the average performance within the designated territory (i.e. 90% of same line-make dealers sales performance in the state).

Dealers must pay attention to the manu-facturer’s assignment of “planning volume” for several reasons, not the least of which is that facility guidelines are based in large part on planning volume. Manufacturers use planning volume to determine the amount of showroom space, service space, parts storage space, service stalls, customer parking space, inventory parking space and overall acreage a dealer must have to properly accommodate expected sales and service customers.

Obviously, if planning volume is being

ratcheted up a dealer could unknowingly set himself up for a new “minimum” facil-ity requirement. In addition, if a dealer’s planning volume is not consistent with the realistic sales expectations for the dealership, the manufacturer is likely using the planning volume to demand that the dealer unnecessar-ily expend precious capital to meet arbitrary facility requirements. In some cases, the dealer may not be able to meet the manufacturer’s facility requirements without moving to a larger parcel of land. If suitable land can be

found, the dealer will undoubtedly experience a higher monthly overhead.

Honda’s move to quarterly planning volume objectives is troubling for its dealers in that the increase is coming more often and is coming in significant percentages. In fact, it appears that Honda is penalizing its high performing dealers by continually increas-ing those dealers’ planning volume. Honda views a dealer’s increased sales volume in the prior quarter as an indication that the dealer is capable of selling even more cars the next quarter. But, for the dealer whose sales are flat or declining, Honda presumes a lower planning volume for the next quarter. Honda’s calculation of planning volume is clearly unfair and becomes an unattainable goal for its highest performing dealers.

Honda dealers tell us that one very

important result of meeting planning volume is being eligible to receive Honda’s President’s Award. Dealers informed us that the morale of dealership’s personnel is impacted by the dealership receiving the award and that the award is a critical component of their advertis-ing campaigns.

As you have read repeatedly in this column, dealers who don’t believe their assigned planning volume is reasonably attainable must respond to their manufac-turer in writing objecting to the planning volume. Dealers should request the details of how the manufacturer arrived at the dealer’s planning volume and then respond to any component of the manufacturer’s formula that is erroneous.

GM franchise buy-sell activity picking up

Since the “old” General Motors sold its assets to the “new” GM, the dust has begun to settle somewhat with regard to which dealers are remaining in the market and which appear to be going away. Even with dealers who are going forward with GM, we are beginning to see an interest by some in selling their GM franchises. As has been printed here and else-where, during the bankrupcty proceedings old GM offered (as part of the reorganization of the GM dealership network) “participation agreements” to dealers with whom the new GM desired to continue to do business after the bankruptcy sale. These agreements set out new rules and guidelines by which these retained dealers were required to operate as a member of GM’s dealership network. In par-ticular, the participation agreements required dealers to agree to comply with undisclosed requirements with respect to image and facil-ity. GM is finally getting around to sharing with its dealers these image requirements, as GM field representatives contact dealers to discuss GM’s expectations as to both image and facility.

Over the last few weeks, our dealership transactions partner, Robert Bass, has seen an increase in GM dealership buy-sell activity,

OwnershipRichard Sox

“[I]t appears that

Honda is penalizing

its high performing

dealers by continually

increasing those

dealers’ planning

volume . . .”—Richard Sox


with both sellers and buyers coming to us for representation. In structuring these dealership buy-sells, we have stressed the importance of understanding GM’s dealership network initiatives. These initiatives, found most recently in GM’s Essential Brand Elements incentive program, will impose financial burdens on a dealer, and, as a consequence, will affect the economics of a transaction.

GM’s EBE incentive program contains a major emphasis upon facility image, facil-ity size and exclusivity. Putting aside for the moment whether state franchise laws will limit GM’s efforts in this regard, a buyer of a GM franchise must factor in the expected cost of changes to the dealership facility in order to qualify for the EBE incentive monies. Without the incentive monies, the buyer could be placed a competitive disadvantage against a dealer in the market, which does qualify for the EBE incentives. GM is sending out its designated architectural firm to meet with dealers and begin the process of draw-ing up plans, which will result in a qualifying facility. If the potential buyer intends to keep the franchise at its current location, he or she should ask to review any facility plans that have been approved by GM or, if no such plans have been created, have GM’s architec-tural firm perform a review of the facility and provide preliminary expectations for the facil-ity. Likewise, if the potential buyer intends to relocate the GM franchise then it is imperative that he or she have a clear understanding of what GM will require at that facility.

Apart from quantifying the cost of any required facility renovations, a buyer must be careful in agreeing to purchase certain dealership assets such as furniture and signage. GM’s new image requirements may render the furniture or signage obsolete.

GM’s image/facility elements should be considered by both seller and buyer. When setting their price, sellers should be realistic and take into account GM’s image/facility costs; buyers will bear the burden of those costs and therefore they should build that cost into the price set out in their purchase offers. Understanding GM’s image plans at the outset of buy-sell discussions will contrib-ute to productive negotiations. The parties will quickly learn what they can and cannot live with in regard to the change in economics as a result of GM’s image/facility plans. Early

discussions will help to minimize disagree-ments later during the buy-sell process.

Richard Sox is a lawyer with the firm of Myers & Fuller PA, with offices in Tallahassee, Florida and Raleigh, North Carolina. The firm’s sole practice is the representation of automobile deal-ers in their quest to establish a level playing field

when they deal with automobile manufacturers.

If you wish to discuss this article with other dealers, or with the author, please go to the “Discussion Forums” at www.Dealer-magazine.com and enter the “Ownership” forum or e-mail him at [email protected].


When it Comes to Credit Today, Bigger is Better

There seems to be a growing divide in this country between the big and the small. Big banks are getting bigger

(see Chart 1), while regional and small banks are closing (120-plus at last count). Corporate bond issuances hit record levels in 2009, while private companies had difficulty obtaining any form of debt. Is the market telling us that bigger is better?

Chart 1Source: Wall Street Journal

*Top 10 Banks: JP Morgan Chase, Goldman Sachs, BofA, Morgan Stanley, Citigroup, UBS, Credit Suisse, Deutsche Bank, Barclays Capital, RBS

If you look at our industry, the answer is a resounding “yes.” While many small dealership groups are struggling for survival, the largest groups have turned the corner on the Great Recession. Most have returned to profitabil-ity. Many have recapitalized with fresh debt and equity. This past fall, Sonic Automotive raised $172 million in convertible debt and $94 million in equity, while Lithia Motors raised $46 million in equity. All of this occurred when only 14 dealers were able to obtain a mere $16 million from the Small Business Administration’s loan program!

To be clear, the debt that public compa-nies have been able to raise is not necessar-ily a reflection of their lower risk profile. In fact, speculative-grade companies, or those with “junk” credit ratings (Sonic Automotive included), issued more than $123 billion of new bonds in 2009, compared with just $48 billion in 2008. It seems big companies are believed to be less risky than small ones. Why? Unfortunately, the answer is circular. Small, private companies are often perceived as riskier because they typically have less access to capital; however, they have less access to capital because they are small and private.

The public equity markets provide addi-tional evidence of the preferential capital treat-ment received by large companies. Public deal-ership stock prices have increased over 400%

on average since March 2009. No private dealership group can say the same about their value. In fact, most have seen values drop dra-matically as earnings and multiples decline in tandem. Sid DeBoer, CEO of Lithia Motors, commented to Automotive News, “This is the reason I went public…being public gives you access to equity capital. Privately held com-panies have to find debt to grow.” This is the reason many believe more private equity capital is needed in our industry.

Chart 2 further reveals the premium being placed on larger companies’ equity value.

As you can see, AutoNation and Penske Automotive Group (the two largest public dealership groups) trade at nearly double the blue sky multiple of their smaller public rivals. Even at these very high multiples, the largest companies continue to attract strong investors (Bill Gates purchased an additional $18 million of AutoNation’s stock in November and now owns about 13% of the dealership group).

Chart 2Public company blue sky multiples

Armed with capital, public dealership

OwnershipErin Kerrigan

Chart 2

Chart 1


groups are sounding the acquisition drum. Lithia announced that it intends to buy $400 million in revenue in the near term and grow its dealership network by 10% annually. Similarly, in addition to committing $150 million toward capital expenditures, AutoNation plans to make several acquisitions this year. Dealership consolidation may be the theme for 2010.

Is this good news for private dealers who are looking to sell? The answer is probably no. Today, the public dealership groups do not intend to bid up blue sky values. They are taking a very disciplined approach to valuation. Lithia is aiming for a 20 to 40% after tax cash on cash return on its acqui-sition. To achieve that level of return, sell-ers will be paid roughly two to three times their net income for the purchase of their entire business, including blue sky, working capital and fixed assets – hardly a home run price. As further evidence of the challenges associated with selling to a public dealership group today, AutoNation recently purchased

a Honda and Acura dealership for 40% of its 2006 listing price.

In conclusion, I return to my original ques-tion. Is bigger better? While today the answer is yes, in the future it will depend on market conditions. If the debt markets reopen for pri-

vate dealers, the capital playing field will level off – making credit access less of a competitive edge. Furthermore, it is likely manufacturers will continue to prefer the private dealer to the public. However, the public dealership

groups will be a force to reckon with as they expand their market share and invest in new technologies and systems.

In the end, when the credit markets nor-malize, profitability, rather than size, is what will really matter. Until then, remain nimble. Auto retail is evolving. The dealers that are ready and willing to accept the evolution will be the most successful.

Erin Kerrigan is senior vice president of AutoStar, a leading provider of long-term capital for auto dealers. AutoStar counts among its clients North America’s largest public consolidators and pri-vately-owned franchise dealers.

If you wish to discuss this article with other dealers, or with the author, please go to the “Discussion Forums” at www.Dealer-magazine.com and enter the “Ownership” forum or e-mail her at [email protected].

www.fullcirclesolutions.com

Start !e New Year With Marketing Solutions !at Work!

Attend a FREE webinar, andreceive an iPod Shu!e®!

*O!er expires 3/31/10. O!er valid while supplies last.

1-866-391-0888Call Now

CUSTOMER JOURNEY

INCREASE REACHDRIVE BETTER RESULTSREDUCE PRINT COSTS

“When the credit

markets normalize,

profitability, rather

than size, is what will

really matter.”—Erin Kerrigan


Incoming National Automobile Dealers Association Chairman Ed Tonkin is a second-generation dealer from Portland, Oregon, who says he wants to help reshape NADA into a more efficient organization and involve more of the 62-plus directors around the country in board meetings,

plus find a way to more effectively reach out to the organization’s 19,000 dealer members.

He steps up to lead NADA following a year of historic industry turmoil and says the organiza-tion will be deeply involved in grappling with ongoing negotiations with manufacturers over the

fallout from the GM and Chrysler bankruptcies, lobbying for dealers surrounding issues such as CAFE, proposed IRS tax code changes and Congressional Legal and Regulatory proposals, in addition to working on easing continuing floorplan and working capital challenges for dealers.

Recently, we spoke with Tonkin about his career as a dealer and his agenda for NADA in 2010.

COVER STORY

Ed TonkinNADA ChairmanRon TonkinDealerships


YOUR FAMILY HISTORY RUNS DEEP IN THE CAR BUSINESS. PLEASE TELL US WHAT ATTRACTED YOU TO THE INDUSTRY.

My father was in this business when I was a young boy so I was always around cars; he drove very cool, impressive cars and of course that influenced me. I worked my school breaks in the business in all of the various departments; even learned to drive on the back lot. I washed cars, worked in the service and parts depart-ment, sold cars, and it kind of gets in your blood. Our company is called the Ron Tonkin Family of Dealerships and our tagline is, “For the love of cars.” I think America has a love affair with the automobile and our tag plays to that but also is reflective of our family; my dad’s and my brother’s and my real love of cars. For us we couldn’t be selling widgets or lawn furniture; for us it has to be cars. So it was just a passion for automobiles; always was and still is. My dad was a Ferrari dealer in 1966 when I was 12 years old and I got to ride around in a Ferrari, so it gets into your system.

I worked through college in the business and had no idea I would go to law school until I took two law courses as an undergraduate and had two professors at the University of Washington who made it very intriguing to me. I wanted to get the law degree to help me in business, especially ours, which is such a heavily regulated industry. I graduated from law school in 1979, passed the bar right away, worked for a major Portland law firm and two years later, in 1981, I joined my father’s dealership full time. We had a Chevrolet store since 1960 and he’d just acquired a Toyota store. We also had the Ferrari dealership, Ron Tonkin Gran Turismo, at that time. It’s still a family business with my father and my younger brother Brad. We all own it and it’s grown to 15 stores in Portland with 16 franchises and also a dealership in Reno, Nevada. My Dad, brother and I are all dealer principals. Dad is still president of the corporation. Brad and I are vice presidents.

Do you remember how you made your first sale?

I was nervous as heck and every night I had to come home and have dinner at the family dinner table so I was under a lot of pressure because I wanted to do well, not only for my dad but to prove myself. So this couple was on the fence and I just said, ‘Look, my last name is Tonkin, I’m Ron’s kid, and I’ve got to make the sale, so if anybody’s going to get you a good deal, I’m the guy who’s going to do it for you, so this is your best shot,’ (laughter) and we

did it. It was a nice couple and they bought a new Chevrolet.

How have you grown your business?Like most business owners you wish you

could say you made 100% correct decisions but as a business owner if you make at least 51% correct decisions, you’re doing okay. So we’ve made our mistakes over the years. My dad always wanted to try new franchises and my brother and I were probably a little more conservative but he also was influenced by the Honda bug. He was one of the first dealers to have Honda automobiles. Of course everybody laughed at the Honda 600 when it first came out; we all know how that’s turned out. So we’ve had franchises when our timing hasn’t been correct but over time we’ve developed a good portfolio of products, domestic and Asian makes – you can’t call them imports anymore because so many of them are made here in the U.S. – but we’re diversified. I like to say we resemble the story of “the tortoise and the hare.” We’ve seen a lot of hares come and go but we do what we do consistently, and I like to think it’s served us and our customers well and we’re still in the race. In fact, in June 2010 we will celebrate our 50th anniversary.

How are your stores performing in this tough market?

We’re not unique in the sense that we’re suf-fering like everyone. Our business is off 35% for the group as a whole. Profits have come down, although I’m pleased to say that we’re still profitable and have been every month this year – but we’ve had to make a lot of adjust-ments. We saw this coming and reacted early. We put together a task force called “Operation Tight Squeeze” and we took two managers from each department from throughout the company and culled through every expense in every dealership and really pared them down. We did hold on to our people and believe loy-alty goes both ways, so we did not want layoffs. We have reduced our personnel through attri-tion and not re-hiring. To survive and remain profitable we cut expenses, our inventory, and our advertising; we cut in all types of areas.

So even though it’s a tough year we’ve been profitable and the key is to try to stay lean as the recovery comes. We’re hopeful and seeing signs of life but we have to stay lean and mean. We’re probably down about 150 of 800 employ-ees through attrition and probably cut back

between $4 and $5 million. It’s amazing what expenses you can find when you comb through them. I think we were spending over $180,000 a year on balloons and helium for our stores! It’s absurd and this task force really knocked themselves out finding things we could cut back. We survive just fine without balloons! It’s important to remember that every time you cut a dollar in expense that’s 100% that falls

to the bottom line. You can’t save your way into a profit but when you sell

a car or a part, only a percentage of that falls to the bottom line.

Let’s shift gears to talk about NADA. You’ve held a number

of important positions within the organization and of course

your father also led the organiza-tion. What made you decide to get active in NADA?

Obviously my father influenced me a lot, not just by being involved himself but also by involving me, and what I mean is when he was president in 1989 they put together a task force called “Project 2000” and the idea was to identify trends and forecast what the automobile business might look like in the year 2000. It was a think tank that put out this white paper. I traveled back to NADA headquarters in McLean, VA regularly. I was around many of the NADA staff whom are still there today and I’ve known them from the mid ‘80s; they are just wonderful and dedicated people. That experience influenced me greatly and I enjoyed the intellectual debate, which required combin-ing your knowledge of the industry with some forecasting ability. Also, watching the way my father committed himself to the industry made an indelible stamp on me as an example of the way you serve the industry that’s been so good to you and to all the dealers and their employ-ees. I think you owe it to give back. It’s easy to give money but hard to give your time and energy. It’s just something I decided I would do.

What do you find most rewarding about the work?

What’s most rewarding is that we make a difference. I’ve seen the great work NADA does on behalf of dealers. Up on Capitol Hill we lobby and we’ve had such a great impact. You know there aren’t people in Congress who are thinking about ways to introduce bills to help auto dealers, it’s usually the other way around. So I think that what’s most rewarding is to see the kind of benefit NADA has for dealers on a day-to-day basis. We’re one of the most heavily


regulated industries in this country; I think there’s in the neighborhood of 180 agencies that regulate our industry. Day-to-day business might be impossible if NADA didn’t educate the regulators to prevent them from creating rules in a vacuum without understanding how the real world works for dealers. On a personal level what I find most rewarding is that one gets validated by one’s peer group and there is no finer compliment than to be appreciated by the great people in your own industry. A real bonus is that I have met extraordinary people who I have forged friendships with that I hope will last a lifetime.

NADA has been in the trenches with dealers impacted by the Chrysler and GM bank-ruptcies. What are we likely to see going forward?

This story isn’t finished yet. I am fortunate to be on NADA’s industry stabilization task force, a small group of us who met with the Obama Automobile Task Force as these com-panies went through the bankruptcies and continue to negotiate with the manufacturers over dealer terminations. The “hyper speed” at which GM and Chrysler progressed through bankruptcy resulted in hasty dealer network decisions that proved disastrous not only for the dealers and their employees, but also for the companies themselves. And we’re seeing that now; manufacturer’s market share has not improved and in one case has declined. We’re continuing to negotiate with both Chrysler and GM on rectifying the decision to termi-nate or wind down so many dealers. I can’t publicly say where we are in the negotiations but I can tell you we’re moving the ball for-ward and are not going to let this issue die. One of our roles is being a watchdog to make sure that all dealers are treated fairly.

Obviously this was an unprecedented period where you had the unthinkable happening with these companies going through bank-ruptcy and being rushed through at that. We have to take care of all the “regular” responsi-bilities NADA has and also stay very tuned to manufacturer-dealer relations; how they treat their dealer body – and fairness must be para-mount. Up until recently NADA, for political reasons, has been pretty quiet on what we’ve been able to accomplish while others have been crowing loudly. We were in a very untenable position, because NADA is the voice of all dealers. We therefore represent two groups of dealers, the go forward dealers and dealers who were terminated or “wind-down” dealers. We were stuck in the middle, so we’d be criticized

by the go forward dealers saying, ‘Leave them alone, you’re going to screw up the deal and the government will pull out the money,” and the terminated and wind-down dealers were saying, ‘Come on, you’ve got to fight for us!” But I will say this: without any question, NADA saved a lot of dealers from being terminated and wound down. Now then, even one ter-mination is unacceptable, a tragedy, but the 789 number of Chrysler dealers was going to be far greater than it turned out to be and NADA was responsible for whittling down that number. And I also know that we were responsible for reducing the eventual number of GM wind-down dealers. And I’m not exag-gerating when I say we negotiated face-to-face, toe-to-toe, standing in each others’ faces yelling at each other. The General Motors participa-tion agreement, which was terribly onerous for the GM go-forward dealers, became completely different as a result of a four-hour meeting we had with GM officials at NADA headquar-ters in McLean; a meeting that was originally scheduled to be an hour and a half.

As far as what I can say about going forward, Congress has pending legislation calling for automatic reinstatement of all dealers who were either terminated or who got wind-down agree-ments. That’s probably not going to happen, so the effort is to allow each dealer to receive a thorough and fair hearing on their particular situation with complete transparency from the manufacturer as to why they were selected for termination/wind-down and the criteria used to determine such. We are pushing for third-party arbitration as well. We’ve been meeting with GM and/or Chrysler every other week and there’s an old saying in the law, “the wheels of justice grind slowly but they grind fine.”

Negotiations are not moving along as quickly as we and Congress would like but I’m encouraged by the direction the nego-tiations are taking. A lot of the legislation is contained in a House appropriations bill that has to move along or die by the end of the year. The president has said he’d veto this legislation and I’m convinced that a lot of what was done was done by the White House task force. I know personally through a meeting with Jim Press that he was exasper-ated, getting direction from administration to reduce the dealer network and still to this day nobody has provided a reasonable or intelligent explanation about why it was important to cut the dealers. It’s completely ironic. The goal in a re-structuring bank-ruptcy is to allow the exiting company to

prosper. Ninety percent of manufacturers’ revenue comes from dealers ordering cars so it makes no sense to cut their customer base.

What else do you see as some of the top legislative and regulatory challenges and what initiatives are we likely to see?

Legislatively if this year ends and the bills for dealer rights expire that would remain a top legislative issue, to get that back on the calen-dar, but we have a lot of other issues. CAFE (Corporate Average Fuel Economy) is one; having a national or local standards leading to a terrible patchwork of mileage standards is a major issue. Tax issues, such as UNICAP, which is the IRS taking the position that certain expenses (in service and parts primarily) have to be capitalized instead of expensed, creating a real cash flow problem for dealers, LIFO and of course, the estate tax issue remains. The newly created Consumer Financial Protection agency is another concern. NADA was successful in getting an amendment exempting automobile dealers from regulation under this act. We still must be mindful of staying away from more governance in this area as we are already so heavily regulated. Working to loosen credit also is something we will be working on as the credit crisis is certainly not over.

Particularly in our industry we have to be sure dealers can get floorplan financing and capital loans when they need them and banks are reticent right now to finance the auto-mobile dealer business even though they’ve gotten government money, so we’ve worked to get the TALF money out and the SBA to guarantee these loans. Right now we have a situation where GMAC was given money to take care of the Chrysler dealers and they temporarily did but then after vetting the dealers many are having trouble getting their loans. If they can’t get their flooring they’re going to go away.

What in your view is the job of the NADA chairman and what do you hope to be the legacy you leave behind?

I have some clear goals as chairman, internal and external. Internally I want to try to reshape NADA so we are a more efficient organization and better communicators. We have 63 directors from all over the country who are great dealers and great minds and no one person has a monopoly on great ideas; we need to involve more directors in NADA board meetings and I will find a way to do that. We also need to find unique ways to communicate with our 19,000 dealer members; we have to do a better job of reaching out.






248-351-2620


[email protected]


[email protected]







[email protected]


607-264-3359


A PUBLICATION OF

! " # # $ % & ! ' ( & " % )


COLUMNS AAISP Notes 8 Embrace the Future Cliff Banks








Externally we have to stay vigilant on lob-bying efforts. That’s critical because, after all, we’ve gone through the most unprecedented time in the history of the auto industry in this country and we’ve been able to have access to and talk with Congress because of our history of being active. We have to reach out to our members around the country by working closely with the state associa-tions to reaffirm and reintroduce people to the many and varied benefits of NADA and what it does for dealers. This past year has been very difficult because we’ve been caught in the middle and have not been able to tell our story, mostly for political reasons, but it’s time to tell that story. These negotiations will wrap up fairly soon and it’s time to let people know where NADA was in the process and how vigorously we fought on behalf of dealers. I stand in awe of the dealer directors around the country and the NADA staff and the work that they do. Their dedication is remarkable. I don’t really have an idea about leaving a legacy. I’m not in this to go down in history as somebody who did this or that, but to work as hard as I possibly can on behalf of dealers and this industry that’s been so good to me and my family. I have been doing that and I’ll continue to and hopefully NADA will be a little better off after I’m gone than it is when I come in.

I would add that the NADA chairman needs to be a leader; clearly and simply, needs to set the tone for the organization, both directors and staff. I remember when I ran the legal and regulatory affairs com-mittee, which I chaired for three years, which made sense because I am a lawyer, but I gave them a homework assignment at one of the committee meetings and you would have thought it was the most hor-rible thing. But as a result of that meeting we had a national policy change for GMAC on how they viewed and purchased nega-tive equity deals, so you have to lead and set the tone and I think that’s the role of the chairman.

What types of things do you like to do to relax?

I like to cook. I’m a bachelor and I did Thanksgiving for the whole family. I hosted it and did the cooking and that takes your mind off of things. I read an awful lot and I like to fly fish, but I’ve not had a chance to do it. I have a home on the coast and I like to go down there and kind of decompress, but gosh, I think I’ve had 31 trips in the last 42 weeks, and these are long-haul trips because when you’re talking Portland to DC it’s across the country, a five and a half hour trip. So I haven’t had a lot of time but that’s what I like to do, that’s what I dream about (laughter).

If the bailout debate taught us anything, it’s that in some quarters, dealers have an image problem. What can the individual dealer do to promote his or her reputation locally? Yes, and it’s unfortunate because in large part it’s a hold-over reputation that came from many years ago before dealers evolved into the great businessmen and women they are today. These people are noble in their com-munities, the ones always called upon to donate to the churches and the Little League and Boy Scouts and Girl Scouts and on and on and they always step up. Dealers also get involved politically so I just think we have to continue to demonstrate by our actions what kind of people we are. It’s interesting; a “white paper” was done not long ago, and people said they don’t care for auto dealers and so forth, except they all loved their own auto dealer, and that’s because they know what kind of people they are. It’s a slow process and we can’t exactly go out and advertise and say, “Hey, dealers are great,” but you prove yourself through your actions and the marketplace has done a good job of weeding out the few bad apples. You just continue to be good citizens, contribute, show by your actions and customer processes that you care and do the right thing and the dealer image will continue to improve.

[email protected]

DEALERSHIP PARTNERS IN PROFIT:

Dealer management system (DMS):ADPDealerTrackepencil

Customer relationship system (CRM):DealerPeak

Sales & marketing toolsDealerPeak

Internet lead providers:DealixAutobytelAutoTrader.comcars.comKelley Blue BookEdmunds.com

F&I tools: DealerTrackEFG Companies

Web site providers:CobaltDealerPeakDealer.com

Consultants/trainers:AYESCardone Group

Accounting/financial: ChaseBank of AmericaWachovia

Auctions: Manheim

Service dept. tools: CastrolSnap-on ToolsMac ToolsMobile One OilsSpencer EnvironmentalMOCPossy

Advertising:RWest

Data services:ExperianMitchell Int’lPaychecksAutoCheck

Service contracts, Etch, GAPResource GroupProtective

Inventory mgmt. Tools FirstLook

Insurance/Risk Mgmnt.American Hardware

Miscellaneous:Rhino LinerKey Track

Putting ‘Spiral Integration’ Into Play

About 10 years ago I wrote my first arti-cle in Dealer magazine on the concept of “spiral integration.” The objective

is to utilize each advertising medium’s great-est strengths to complement and enhance the effectiveness of other mediums and promotional components of a marketing campaign, with the ultimate goal of a one-on-one relationship with the potential customer. Some readers got it out of the chute. Others really struggled with the practicality of such an idea. After all, we ad folks have been stressing continuity of message across all platforms for eons.

Recently, I had the experience of successful spiral integration marketing with a service I became interested in. Let me share the market-ing concept step-by-step to illustrate exactly how this strategy works.

Step 1: Mass medium – In this instance, it was radio. For some weeks I had been intrigued by an advertisement on the radio about ways to cut my effective income tax rate. The advertise-ment, by a successful tax lawyer, invited listeners to call a toll-free number for a free report. I must have heard this ad at least five or six times. One day while driving the ad came on and this time I would capture the telephone number on my cell phone. The radio ad didn’t sell anything, other than a hook to move into the “marketing circle” and I was hooked, so I called. A recorded announcement asked me to leave my informa-tion; name, address, e-mail address and phone number, and a report would be sent out to me within several days.

Steps 2 and 3: E-mail and mail – Within several days I received an e-mail thanking me for my interest and letting me know informa-tion was on the way. A few days later I received a package containing the “free report.” A few days after that, I received another e-mail inviting me to participate in an online seminar with a group of 10-12 other individuals. The cost was $199. I would need to guarantee payment with a credit card at time of reservation with the caveat that my card would not be charged until after the seminar was over and I had agreed that the information imparted was worth the price of admission. Hooked again – I registered.

Another e-mail arrived to confirm my online-seminar appointment, along with worksheets that I was to print out in preparation for the conference. There was also a general outline of the seminar and suggestions on how to make it most effective.

Step 4: Telephone call – Just a few days before the seminar was scheduled, the phone rang and a coordinator reminded me of the seminar time, call-in number, password, etc. On the evening before the seminar, I received one more call just as a reminder.

Step 5: Online seminar – These actually work very well with various programs out in the market today such as Go-To-Meeting.com. I could envision a car dealer conducting a “by invi-tation” presentation of a newly released model, or perhaps a service seminar for customers who recently purchased a vehicle. In these seminars, participants log onto web sites with pre-arranged user names and passwords, and then call a tele-phone number to listen in on the meeting, ask questions or offer advice. The facilitator of the meeting retains control over who may speak and when. In the tax seminar I participated in, I was in agreement that the information imparted was worth the price so my credit card charge was authorized. As the seminar wrapped up, the host made another offer to participants. He offered a generous discount on a more involved and personal consultation on taxes, one-on-one. I wasn’t sure if I wanted to pursue that avenue so I did not commit.

Step 6: Telephone call – The coordinator who originally contacted me called to review information and re-visit the more in-depth pre-sentation. I informed him I would like to meet with my accountant, review the information and make a decision.

I was fairly impressed with the tax saving implications, but even more impressed with the smooth, natural transition of true spiral integration of the various marketing channels, each one clearly defined for specific purposes. Radio was used as the mass medium to go fish-ing. The direct contact of traditional mail, as well as the efficiency of electronic e-mail was implemented. The personal one-on-one of the

telephone contact; the efficient, effective use of the Internet, followed by more one-on-one via the phone and e-mail. Every medium was used to its highest potential value, spirally integrated to reach me, the customer, in the most conve-nient manner to meet my needs.

How can you harness spiral integration in your marketing campaign? The idea is not to sell every product and service in the same way in every medium, but rather to provide a circle of information, spirally wound to end up at the closest point of comfortable communication with your potential customer. You’re looking for a television or radio ad or direct mail piece that creates enough interest to bring visitors to your 24/7 communication center…your web site. Then have information on your web site that further stimulates your potential customer to drill deeper, via e-mail, texting or phone. And finally, a human being who manages the pro-cess in the most effective, customer convenient manner possible.

Remember, spiral integration is the concept that every media dollar you spend has a free-standing purpose, while supporting the overall marketing effort to gain the customer’s atten-tion, provide information, build brand recall and develop an ongoing, interactive, positive relationship with the customer.

Spiral integration of your advertising will help you surround your potential customers with messages that make sense, build trust and foster long-term relationships, while helping you spend your advertising dollars in the most effective, effi-cient manner possible. What’s wrong with that?

Jim Boldebook is president of Creative Broadcast Concepts (CBC), an advertising/marketing agency working with some of America’s most successful dealerships.

If you wish to discuss this article with other dealers, or with the author, please go to the “Discussion Forums” at www.Dealer-magazine.com and enter the “Advertising” forum or e-mail him at [email protected].

AdvertisingJim Boldebook


JUAN TERANSales Director

Dewey Automotive Group

page 18

January 2010

Internet Sales:Managing the Phone Conversationpage 12

Five Powerful Steps to Chatting with Shopperspage 14

Technology Trends:Seeing is Believing page 22

BDC/CRM:It’s Not About the Softwarepage 24






248-351-2620


[email protected]


[email protected]







[email protected]


607-264-3359


A PUBLICATION OF

! " # # $ % & ! ' ( & " % )


COLUMNS AAISP Notes 8 ??? Cliff Banks







Simple. Online. Business.

Nearly every consumer (over 89%)* starts their car purchase process online. Can you bring your dealership to them?

With BZ, he can search your inventory, get real-time quotes, evaluate his trade-in, and begin ! nancing – without ever leaving his house (bean bag optional).

!"#$%& !'()%")&'!'*&!+%,!

Available for any dealer websiteTo learn more:

www.bzresults.com847-485-4888

*Capgemini Cars Online 9/10 Study . BZ Results, an ADP, Inc. Company, 2000 Nooseneck Hill Road, Coventry, Rhode Island 02816 ©2009 ADP, Inc. – Dealer Services Group / BZ Results and the BZ Results logo are registered trademarks of ADP, Inc.

!"#$%&'()'!%*+%",%*-

!""#$%%#&%'(


Dear Mr. Sura,Thank you for your articles in Digital Dealer

magazine. I find them most informative. I have recently been assigned with revamp-

ing the Internet department at our store. We have a full-time Internet manager and he is doing OK. We would like to focus more of our dealership’s potential in Internet. I’ve read a number of your articles and in every one you mention dealerships putting more money into Internet advertising. Does this mean advertis-ing on others’ web sites, and if so, what sites have you seen the most success? Any input you can give would be greatly appreciated.

Thank you,Jake McDowellInternet departmentThomasville FordThomasville, [email protected]

Hi Jake,Thanks for the e-mail. I appreciate your inter-

est in my articles. Dealers have an opportunity to spend their ad

dollars going the traditional route that would include the following examples: newsprint, 30-second network or cable spots, radio, direct mail or they can embrace an alternative to reach the market with an online strategy. Examples would include focusing advertising dollars with AutoTrader, Cars.com, Google ad words, video strategy (to drive conversion), e-newsletters, a clear SEO strategy and linking your inventory content to any online site that you can (there are a number of options in every city). The percent-age of dollars spent with the online side divided by total ad dollars will tell you how progressive you are. Some dealerships have assigned 80% of their budgets to online strategies. I know of at least one major group that refuses to spend one dollar on the traditional side. The average dealer that I have met with only allocates 25 to 35% of their budget to this side of the equation. It is still the Wild West when it comes to these online strategies, but the key is testing in many areas. The investment is a fraction compared to the expense on the traditional side. Congratulations on being focused on making this shift.

Phil Sura

Hi Sandi Jerome,I am catching up on back issues of

Digital Dealer magazine and just read your “Counting your Assets” column from April 2009’s issue. Could you please share your cash flow spreadsheet? We’re constantly going over the numbers from all different perspectives; I’d love to see what you do!

Thanks!Best regards,Jennifer MoylanControllerOpen Road Auto GroupEdison, [email protected]

Hi Jennifer,You can get that spreadsheet from my web

site: www.sandijerome.com. Click on the left, free downloads, and enter download page. Be sure and save it to your own computer instead of opening it.

Thanks,Sandi Jerome

IGITAL DEALER E-MAILD

Digital Dealer welcomes your letters and after verification will run them signed or unsigned. Letters may be edited for space and clarity. Send letters to [email protected].

The Technology Magazine for Dealers & Managers

April 2009

Association of AutomotiveInternet Sales Professionals

www.AAISPonline.org

OFFICIALOFFICIAL

Association of AutomotiveInternet Sales Professionals

www.AAISPonline.orgAssociation of AutomotiveInternet Sales Professionals

www.AAISPonline.org

PUBLICATIO

NPUBLICATIO

N

VOLKERJAECKELe-Commerce Director SONS Automotive Group

page 22

VOLKERJAECKELe-Commerce Director SONS Automotive Group

page 22

Internet Sales:Why Do I Need to be on Facebook?page 10

Are your Online Vehicles‘Consumer Optimized’?

page 12

Technology Trends:Counting your Assetswith Technologypage 25

BDC/CRM:You Cannot Have Faith andFear at the Same Time

page 26

Internet Sales:Why Do I Need to be on Facebook?page 10

Are your Online Vehicles‘Consumer Optimized’?

page 12

Technology Trends:Counting your Assetswith Technologypage 25

BDC/CRM:You Cannot Have Faith andFear at the Same Time

page 26


IGITAL DEALER TECH NEWSD

vAuto introduces the industry’s first and only

used car lifecycle managerAutomotive dealers now have the ability to better manage their used vehicle end-to-end processes with the release of vAuto’s LifeCycle Manager.vAuto’s LifeCycle Manager provides dealers with the ability to tightly track all processes from the moment of acquisition to time of sale. Working from a central dashboard, deal-ers can drill down car by car to proactively correct any delays or process gaps. Dealers are able to examine time through reconditioning, time through service, time through generating descriptions and uploading photos as well as a multitude of additional dealership specific milestones.“With increased pressure on margins, the need to manage used vehicle time-to-market is greater than ever,” said Keith Jezek, vAuto’s president and CEO. “Our LifeCycle Manager provides a detailed view into a used car’s prog-ress through many varied processes, all of which are critical to turn and ultimately the bottom line.”In addition to LifeCycle Manager, vAuto has introduced a scrolling feed to provide current dealership news as well as recent inventory updates to all vAuto users. Having a quick snapshot of what is taking place and what needs immediate attention is another effort to assist dealers in managing in real time.The company’s “Live Market View” technol-ogy currently allows more than 2,000 dealers to manage their used-car inventories based on comprehensive supply-and-demand infor-mation mined by vAuto for their specific market area. Details on millions of pre-owned vehicles are maintained and updated on a daily basis within vAuto’s database.The nation’s five highest-volume franchised dealerships by brand currently use vAuto pric-ing, appraisal, stocking, and merchandising systems. vAuto was recently ranked number

22 in Inc. magazine’s 2009 annual ranking of the fastest-growing, privately held companies in America. The company’s chairman and founder, Dale Pollak maintains a blog for the discussion of used-car trends at www.dalepollak.com. www.vAuto.com

AutoUSA announces new mobile leads

program for dealersAutoUSA, a leading provider of the highest quality Internet leads to auto dealers nation-wide, has announced a new mobile leads pro-gram for dealers that uses an iPhone/iPod Touch application developed by Carperks to generate new and used vehicle leads from on-the-go car buyers. AutoUSA will be the exclusive distributor of leads from the Carperks app, which can be downloaded by iPhone/iPod Touch users for free from the Apple App Store.The Carkperks car buying discount iPhone app allows mobile car shoppers to access, search and view car inventory from dealer participants in AutoUSA’s Carperks program. It highlights those dealers within the shopper’s local market area that are available to provide price quotes.App users can search for a dealership based on the vehicle make(s) and model(s) they are interested in and, where allowed by law, immediately generate digitally formatted discount certificates valued at $100 for the new vehicle(s) of their choice. Consumers using the app save time and money by quickly finding the inventory they want at their local participating dealer. To learn more about the Carperks app go to www.carperks.net/mobile or download it here from the iTunes store.The iPhone is packaged with a variety of applications or iPhone web apps that make it a wonderful browsing experience for the user, therefore, applications on iPhone are growing extremely fast in popularity. The

approximately 1.3 million iPhone users nationwide tend to use their handheld device more than others to access the Internet. In fact, a recent study found that nearly 85 per-cent of iPhone purchasers regularly use their handheld device to access content on the web.www.AutoUSA.com

DealerStar, Inc. announces new versions

of DMS systemDealerStar, Inc., has announced two new versions of its emerging DMS system. The new ASP version enables dealerships interested in DealerStar get to know how it works by using the CRM/BDC module, data mining, and data warehousing along with reporting features. It has an easy data upload for customer, inventory, repair order, parts, and accounting data from most exist-ing DMS systems.After a dealership uploads its data, it can create mailings, e-mails, and analysis of their data in an easy to use format with an export to Excel/Word. Initial pricing is $285 a month with no long-term contract. DealerStar IT is for dealership groups with an IT department that want to own the DealerStar code and install on the dealer-ship’s server. They can start using the CRM/BDC and data warehousing features today and customize their DMS system for the future. These two new versions join the existing reseller plan where a technology company can own the code, private label, and resell DealerStar to their client base.According to Vice President Sandi Jerome, “Our biggest demand for DealerStar has been from dealership IT departments that want to make a long-term investment in their own DMS system. They are tired of trying to adapt to the existing systems and want to customize their next DMS system.” DealerStar’s open database is MySQL and it uses a wizard-like code generator to create the PHP/Javascript user interface. “Using open source products not only reduces IT costs for dealerships but ensures the life-cycle availability of the DMS system,” adds Jerome. www.dealerstar.com

7

wounded

warrior

For Sgt. Poscius, the battle continues.

CFC #11425. Wounded Warrior Project is a 501(c)(3) non-profit organization

The greatest casualty is being forgotten.

MIKE POCIUSWounded in Iraq

Below-knee amputation

Please join us in honoring our returning heroes, many of whom have been wounded in mind, body or spirit. We offer services that ease the burdens of those injured and help smooth their transition back into civilian life. To learn more about what we do and how you can help, go to woundedwarriorproject.org.


Embrace the Future

The other night, I watched the Indianapolis Colts defeat the Jacksonville Jaguars 35 – 31 – on

my Sprint Blackberry Tour phone.I don’t get the NFL Network, which is the

only channel the game was on, with our cable package, but I do on my phone, at no extra cost. I also have access to numerous other shows that I can watch when I want, where I want. Sort of like the OnDemand packages offered by cable companies.

It’s a novelty right now, but pretty soon, it’s going to be a way of life for us. I’m not sure where all this technology is taking us, but I do know how we watch TV and how consume entertainment and information is going to be far different in a few years than it is today. We’re talking maybe two or three years from now.

Developments are happening at a break-neck pace.

Comcast is acquiring NBC Universal in the next several months – if the government allows the deal to happen. A cable provider owning a network? That deal alone will open the floodgates to numerous changes in how we consume media. It could mean the end of network television as we know it.

Comcast might have another deal up its sleeve. Rumors are that it has been in talks with a pretty big company in the automotive space. That one could break sometime this year, and it would be a blockbuster if it does.

Meanwhile, Google recently launched its Android phone, and with it, several mind bog-gling applications. Things Gene Roddenberry of Star Trek fame never envisioned.

So what does watching a football game live on my phone have to do with selling cars?

The answer is, I don’t really know. I do know it’s going to change how we sell and market our businesses. It’s the “how” I’m not sure about. But some of you already are figur-ing out the answer to that question.

In a couple of years, we’re not going to be limited by technology. Instead, our only limitation is going to be our imagination. As cloud computing (Google it if you don’t know the term) takes off, marketing online and to mobile devices will be a simple task.

Our service departments will communicate directly with vehicles, automatically setting up appointments based on what the vehicle actually needs.

Imagine really being able to target the right vehicle to the right consumer at the optimal time, to the right device. I know it’s an old myth we’ve talked about for years, but we really will be able to get the right information to the right people at the right time.

We won’t be going online. Rather, we’ll be online all the time. We’ll be connected on the grid 24/7, just like breathing.

It’s already happening because of Facebook and Twitter. Many of you tweeted live updates from the last two Digital Dealer Conferences and Expositions.

There are dealers who have created social media management positions in their stores. These are people who are responsible for building a brand for the dealership on Facebook, Twitter and other applications.

Some of you, though, have banned your employees from creating Facebook pages out of fear of what they may say. It’s the same mentality that proclaimed the Internet was a passing phase. You have every right to be concerned and careful, and even provide

guidelines for how your employees are to behave online. But the revolution is happen-ing, and it’s here to stay.

It’s time to embrace the future. Technology no longer is to be feared. We can grasp it now and use it to our advantage. Let your imagi-nation run wild on how new technology can help your business, and help your dealership sell and service more cars.

I’m going to engage in a little self-promo-tion here. The Digital Dealer Conferences and Expositions held twice a year are great places to let your imagination run wild. Listening to some of the top dealers in the country show how they are using technology along with sharing ideas with your peers in networking sessions and seeing the latest solu-tions will only get your creative juices going.

I hear constantly from dealers how they’ve picked up an idea at the Digital Dealer Conference, took it back to their store and improved upon it.

Additionally, this magazine is filled with ideas and best practices that can help you.

The next several years are going to be excit-ing. Some of you are going to design new solutions or practices that will revolutionize the industry. Some of you will make more money than you’ve ever dreamed of.

I believe the next few years are going to be the golden age of automotive retail. It’s time to embrace it.


IGITAL Dealer AAISP NOTESDCliff Banks

877-738-3313www.homenetinc.com

[email protected]

List It

Video OnlineHomeNet’s high quality Video Online can turn static

site-based ads intodynamic visual ads that generate

signi!cantly greater emotional response while dramatically

increasing the optimization of your vehicle listings.

IOL 2GoCreate emotional ads faster, distribute them sooner, and save your dealership

hundreds to thousands of dollars a month in the process. IOL Pro and its mobile

version IOL 2Go make it easy to create the most compelling and search engine

optimized vehicle display ads online.

SEO Vehicle Display PagesIOL Hosting now turns every Vehicle Display Page into a

content-rich, Search Engine Optimized (SEO) micro-website.

Dynamic, dealer inventory landing pages incorporate search

engine aggressive technology, so more buyers see your

inventory and !nd the car they’re looking for.Leveraging Inventory

To Drive Sales

Like You Mean It!

Visit HomeNet at NADA!

Booth 2107


The Colonization of RetailAre the manufacturers attempting to use colonization as a means of controlling the dealer?

The relationship between the manufac-turer and the dealer has always been a complicated one. Both sides play a

critical role in the partnership. Let’s define the most basic responsibilities. The manufac-turer builds the car. The manufacturer is then responsible for casting a national marketing vision for the brand (Tier I advertising). The dealer is responsible for selling the car, provid-ing service and marketing the brand on a local level. Both share in determining how to use the Tier II ad dollars. There has been a shift with some companies like General Motors, for example, to allow a higher investment in a digital focus.

Some dealers in the past have been guilty of believing that they could do a better job of advertising the cars, across all tiers. Some dealers have also believed that they could build a better car if given the opportunity. An example was the Penske run at Saturn. The manufacturers in the past have tried to show that they were better at retailing cars. There have even been full invasions from the manufacturer. An example was the Ford Auto Collection in Salt Lake City. Ford purchased all but two or three dealerships in Salt Lake. Ford felt that if they had a monopoly, they could control prices and drive sales. It may have sounded good on the white board, but it didn’t work. I attended a one-day workshop with the general managers involved with the project in Salt Lake City in 2002, just before Ford abandoned the idea and sold the dealer-ships back to retailers. The project didn’t work because the free market forces were taken out of the equation. The general managers ended up fighting each other and they were overly concerned about the remaining independent dealers who did not sell out. Something hap-pened when the balance shifted to one con-trolling force. The competitive edge was lost that successful retailers understand.

As mentioned above, the manufacturers

failed with the retail dealer invasion but are they attempting to use colonization as a means of taking over and should this be a concern for retailers? Consider the transition over the past 15 years. In the past, retailers had control of the dealer brand. The retailer was able to influence the type of advertising, amount of money being spent in advertising and the actual message being projected in the local market. Dealers could also choose if they wanted to be focused on gross average or volume. Galpin Ford, as an example, may elect to give up gross income to maintain its status of being the largest Ford dealer in the country. Galpin has the right to market its operation as a volume leader. Co-op dollars started to change some of this with the major-ity of the dealers. Dealers who wanted to receive additional advertising dollars from the manufacturer had to follow a specific formula. The dealer ads had to have certain colors and font size and include an approved message. Then tiered level rebates were introduced. The majority of dealers would start each sales campaign assuming that they would hit the top level of sales for the month or quarter. The financial incentives were too strong to ignore. As a general manager for a Mazda operation in 2003, I can recall the Mazda sales rep explain-ing that if I sold 120 Mazda 6s in two months, I could make an additional $1,200 per deal. If I sold 50, I would get $400 and at 49, I wouldn’t make anything. With a picture like this, optimism, greed and lower new car gross averages always follow. Of course, I would sell 120 new Mazda 6s, even if I had to buy one myself. The manufacturer had developed an effective tool, which would give the ability for Detroit, Japan or California to set standards for the gross average, as well as the models being pushed. Only the fools on the retail side elected to pass on these opportunities. We were joining hands with the manufacturers to put up a united fight to gain market share.

From a facilities perspective, the dealer lost the ability to have a building with his/her own personality years ago. Dealers have been required to build larger or improved structures on prime acreage or lose the support from the manufacturer. Dealers who wanted the right mix and proper allocation of new inventory, simply complied with the demands of the OEM by investing millions into buildings. As profits were shrinking, dealers were pushed into large magnificent structures worthy of being in Architectural Digest. As I have trav-elled to other parts of the world, the concept of the dealer in a $50 million facility with 1,000 cars in stock doesn’t exist. I know that at least some dealers would gladly give up their new facilities in exchange for their old rent factor from 10 years ago if they could. Some of this was brought on by the dealers who refused to conform to minimum standards, which would clearly affect sales but did the expectations go too far?

The concept of keeping up with the guy across the street has been fueled in part by the colonization effect. The goal appeared to vary from manufacturer to manufacturer. Some took a McDonald’s approach, not over the top but all buildings representing a specific brand needed to look the same. The goal was to easily identify the retailer with that specific brand. That was logical. Other manufacturers appeared to push lavish structures in the community. We could also spend time discussing the expense require-ments associated with quick lube lanes, light-ing, signage, restaurants, and theater rooms. Some of this was also clearly driven by retailers themselves who were interested in projecting a certain image. Bottom line: some dealers today believe that the facility model required by some manufacturers in the future will be more modest with much smaller inventories to help reduce expense and make it easier to achieve black ink. The expectation will be to

IGITAL Dealer INTERNET SALESDPhil Sura

Visit us at NADA inOrlando, Booth# 2575

Our Users Ranked US #1-• Speed in Getting Changes and Modifications Made• Maintenance of Your Daily Business with Minimal Interruptions• Problem and Concerns being Fixed Correctly the First Time You Call• Prompt Follow-up to Handle the Needs of You and Your Staff

An endorsed providerPhone: [email protected]

an Affordable, Simpler, Innovative DMSVisit us at NADA in

Orlando, Booth# 2575

The Most Likely Recommended DMS Delivers –Not Simply Software as a Service, But Software With The Service!When asked in the recent NADA 2009 Bi-Annual Survey of Dealership Satisfaction with Dealer System Providers’ Products and Services

DigitalDealer-magazine.com January 2010 DD 11

provide a clean and presentable environment, but the expectation of size may change.

The current trend has been the focus of the dealer’s web site. If we agree that the web site is the first impression of the dealership, this is a major deal. If all web sites are identi-cal, how do you brand the identity of the individual operation? How will the retail-ers compete in the market for the precious in-market customer? The average consumer visits multiple dealer web sites during the sales process (the number that I continue to hear is five to six individual sites). If you are one of 65 competing Nissan dealers in Los Angeles, the web site is the lifeline to survival. If you can tell a more compelling story on your web site than the dealership down the street, you will have additional walk-in traffic and more phone ups (conversion).

Some flexibility is provided by some OEMs, but in other cases, the dealers have zero control. If the battle for market share is online, the ability to control the look and feel of the web site should be a major point of discussion. The web site is a key link to the market. The progressive dealers are leveraging their sites

through SEO, SEM, custom video, links to Facebook, and micro sites linked back to the main site. It is my hope that the dealers will have the ability to make choices related to their web sites. I clearly understand that guidelines should be implemented. From the manufactur-ers’ perspective, some dealers have created an embarrassment to the automotive community after years of screaming, dressing in animal costumes or selling the free hotdogs. Other dealers have been negligent in keeping their sites updated. I still see dealer sites that do not even enter the basics such as monthly specials.

There is not a major brand in the world that allows total independence from the man-ufacturer. You don’t see the general manager for the local Menards Hardware operation during a 30-second spot taking off his clothes and telling customers to come in on Saturday for free hotdogs. In case you have not seen this spot, an agency has created an ad where an actor pretending to be a salesperson takes his clothes off to suggest that they are not hiding anything from the public. Five key questions are:• How can dealers and manufacturers learn

from the past to avoid mistakes and find bal-ance with the rights to the dealer web site?

• How do we take the web sites to the next level but allow the dealer a chance to brand his or her operation?

• How do factors like personality, creativity and originality enter into the discussion of web sites?

• For the dealer who is capable and willing, will that dealer be given the opportunity to have more latitude with the web site?

• Should a menu of approved options and authorized vendors be provided to the retail-ers to allow additional choices?

Phil Sura is a VP of the Automotive Division of UnityWorks Media.

If you wish to discuss this article with other dealers, or with the author, please go to the “Discussion Forums” at www.DigitalDealer-magazine.com and enter the “Internet Sales” forum or e-mail him at [email protected].


Managing the Phone Conversation

Recently, I wrote an article, “Back to Basics,” about the need for salespeople to refocus attention on their phone

interactions with customers. After listening to actual calls, mostly inbound, it was apparent that this important part of the sales process had taken a back seat, costing sales. In my opinion, the inbound call is easier to handle than outbound since most customers call after becoming familiar with your web site and online inventory. With outbound calls you typically speak with customers in varying stages of the shopping process.

Handling the phone call properly to secure the appointment, leading to the sale, is the summit of the mountain. There is a big dif-ference between managing the conversation and just being part of one.

Having a plan and practicing makes it easier to quickly gain confidence on the phone. I’m certainly aware that no two calls are alike, but again, having a game plan will allow you to manage the conversation and engage the customer.

Start with a warm, professional greeting

Enthusiasm and personality go a long way in drawing customers into a conversation. With outbound calls, a good way to “take the curse off the call” is to introduce yourself, acknowl-edge receipt of their “request for information” (calling it a lead immediately implies you will attempt to sell them, making the customer defensive) and confirm that you responded to their e-mail. Regardless of whether they have seen your e-mail response, it confirms that you acknowledge their preferred method of con-tact. Next, tell them you are simply following-up to make sure they received your e-mail and you are available to answer questions.

It’s important you follow-up with this open-ended question:

“Some of my customers prefer to tell me what they hope to accomplish, others prefer to have me share how we can be of great benefit

to them – where would you prefer to start?”What you will find is that by giving them a

choice and allowing them to control this early conversation many will openly and comfort-ably engage in conversation.

DiscoveryThis might be the most important part of

the conversation as you learn the buying moti-vations of your customer. Clarify the informa-tion they have provided and using open-ended questions seek to understand what they hope to accomplish.

Example: “I have some basic information here (customer’s name), but so I can better understand could you confirm:• Review vehicle they have requested informa-

tion regarding• Review possible trade information• Provide overview of dealership trade pro-

cess (if applicable) and how it benefits the customer

• Ask additional open-ended questions

Review and summarize the conversation

Example: “(Customer’s name), thank you for sharing the information with me. I have a much better idea of what you’re hoping to accomplish. Based on what we discussed, the way I understand it is…” (Repeat a summary of all you learned in the “discovery” process).

“Is that what we need to accomplish in order to move forward?”

Provide broad, solution-based information

This is where salespeople instinctively tend to sell the car rather than the reason to visit the dealership. The likelihood of sale is much higher if the customer visits, of course, there are exceptions and customers will purchase over the phone. Your best bet is to provide broad options. Again, there will always be excep-tions for the customers who know exactly what they want and in these cases you must deliver

or risk losing the customer by withholding information.

Example: “(Customer’s name), in addition to specializing in working with Internet customers, like yourself, and delivering the simplest buying process, I also have a thorough understanding of how to help you enjoy your new vehicle, while saving you money. You’ll get the right car and should you be considering making monthly payments I’ll work with you to explore options that provide the right terms for you. I recently helped others in a similar situation and they had no idea there was so much flexibility in helping them get their car at their budget. I’ll be more than happy to do the same for you.”

Transition to set appointment for dealership visit

Of course the desired result is to schedule an appointment for a dealership visit, but provid-ing choices allows the customer to decide and either way you move closer to a sale.

Example: “(Customer’s name), to begin saving you time and money we can move for-ward one of two ways:

You can provide me with a bit of detailed information so I can begin exploring financing options for you.

Or we can set aside time for you to visit. I’ll be waiting for you with specific options or a specific car and our time together will provide all the answers so you can decide how you might like to proceed.

(Customer’s name), how would you prefer to proceed?”

Rob Lange is the national sales training director for Kelley Blue Book.


IGITAL Dealer INTERNET SALESDRob Lange

!"#$%&'()*+"$,---E17+</7-F"#:$"

$%$5'<$//$"-01%/$%/-01%%$0/'-718-/1-'10#+<-%$/51"4'2

!"#$%&'-'*+"$-."$+/-01%/$%/222

3+4#%.-%$5-01%%$0/#1%'-61"-7182-

9%%1:+/#:$-;%$5'<$//$"-)1<8/#1%'<17+</7&"#:$"2013-=->??@A?B@?CAD


Five Powerful Steps to Chatting with Shoppers

As chat becomes another mainstream contact method used on dealership web sites, it will become crucial for

dealerships to develop processes to support this new communication tool. By just submit-ting a lead or calling a dealership, it is pretty easy to learn which dealerships get “process” as a tool and which stores don’t.

The first impression and interaction with a dealership online, on the phone or anywhere, is such a critical time in the sales process, but it is still overlooked by many dealerships. In this article we are going to focus on leveraging chat to actively engage your shoppers while creating a great first impression that you can carry into your showroom.

Here are the five major points that need to be addressed:1. Speed: Have you ever picked up the phone on the last ring just to have an angry cus-tomer or no customer on the other end? Speed online is a cornerstone of success. We set the benchmark at five seconds or less to grab and online chat to deliver our opening message. The faster you can engage the shopper with chat the more effective your conversation will become. Dedicate multiple people at your dealership to ensure all hours of the day are being covered to never miss an opportunity to chat with a shopper.2. Conversational scripts: You have a writ-ten sales process for showroom ups and I am sure you have a phone script lying around the dealership somewhere. If you are suc-cessful online you probably have a series of e-mail templates too. With chat you need a script just the same, because after analyzing over 500,000 chat conversations over the past couple of months, a pattern has emerged. Conversation during a chat take one of the following six paths:a. Availability of a specific vehicle?

b. Specials or rebates and incentives for a vehicle?

c. Price/payments information of the vehicle?d. Features and options available on the vehicle?e. Service or parts related conversation?f. General customer service or follow up?

Understanding that the chat conversation is going to go down one of these six paths lays out an easy structure for you to develop a chat script around each conversation path.3. Technology: As much as vendors want you to believe all chat technology is the same, this is like saying every person on Earth is the same because we are all human. There are many differences in technologies and it is best to educate yourself before you decide what is best for you and your dealership’s needs. A little extra money can afford you an incredible amount of functionality.4. Measurement/conversion: Tracking and measuring your online chats is a great way to benchmark your performance and help to create a continuous improvement process for your dealership online. Statistics that should be measured are as follows:a. How many chats per month as a percentage

of unique visitors?b. How many chats converted to a name,

e-mail address, or phone number lead by chat rep?

c. How many chats set an appointment during the chat conversation by chat rep?

d. Average length of chat conversation by rep?e. Average wait time for shopper before they

were engaged in chat?f. How many missed chats during the month?g. How many chats converted to a sale at

the dealership?5. Management: Chatting at the dealership

requires discipline and management oversight to measure and improve performance. Set realistic goals and coverage hours for your

staff. Set up the system to only allow a chat rep to handle two to three conversations at one time. Build your chat conversation scripts to ensure proper handling of each chat. Strive to build rapport with the shopper before asking for information or to take any actions.

In conclusion, proactive chat is becoming a fast and powerful way to connect with your shoppers and to take the online sales experience to a new level. Technology now offers you a way to not only instantly con-nect with the shoppers while they are on your web site, but you can also co-browse with the shoppers to give them a complete rich media experience.

Dealerships that are leveraging proactive chat correctly are creating a wow factor and experience for shoppers. Chat offers your customers access to instant answers instead of forcing them through the e-mail gauntlet or requiring the shopper to change the medium and call the dealership, in which over 80% of salespeople have to call the shopper back with the information that they requested during the phone call. Chat allows you to deliver the right information at just the right time, and to create a great first impression for you and the dealership.

Todd Smith is the president & CEO of ActivEngage, Inc. He has over 18 years of retail automotive experience coupled with a passion for technology, which has helped him to create real world processes and solutions for dealership clients.


IGITAL Dealer INTERNET SALESDTodd Smith


Is your Web Site Giving Car Shoppers What They are Looking For?

When shoppers visit your web site, are they greeted with an experi-ence that is tailor-made to them?

You already know that in order to be successful, you need to arm yourself with dynamic web site design, strong search engine optimization campaigns and a slate of tools to help you reach out to car shoppers. Take it to the next level by engaging in some behav-ioral targeting (also referred to as “behavioral marketing”).

Behavioral targeting is a marketing method that targets consumers based on their behavior on web sites. The technology behind behav-ioral targeting looks at what content your site’s visitors are viewing, tracks what they’re doing on your web site, and makes adjustments to the content to suit the shoppers’ interests.

A good example of behavioral targeting would be the ads that appear on the right side of Google’s search results pages. When you perform a search in Google, those ads are relevant to the search terms you used and your location.

Behavioral targeting has become an increas-ingly popular marketing technique in the last few years. In fact, eMarketer found reports showing that about 70% of Internet users are interested in seeing targeted online ads. Another study said that nearly half would rather have ads based on their activity on web sites in exchange for the ability to view free content.

A recent JupiterResearch report suggested that this type of marketing is often used by advertisers who have smaller, more focused inventories and want to target a specific group of people. That’s why behavioral targeting is an ideal marketing method for the automo-tive industry.

JupiterResearch also performed a case study with a major automotive manufacturer

and their success with behavioral targeting. The company’s goal was to drive more qual-ified traffic to the web site so they could reach out to people who were looking to buy specific makes and models of cars. They used behavioral data to target their online presence to these consumers and saw a sig-nificant increase in the click through rates of their online ads and, in turn, more traffic to their web site.

Behavioral targeting works extremely well at the dealership level because online car shoppers typically visit dealership web sites specifically to view available inventory, mean-ing you will be able to see which cars attract the most shoppers.

Since eMarketer’s reports said online shoppers don’t mind being tracked as long as they’re getting something in return, the ideal way to start your behavioral targeting campaigns is to utilize a tool that will follow your site visitors’ activities and build a spe-cial certificate around the vehicles they most recently viewed.

This type of tool assigns a cookie to each shopper to track the user’s activity on your web site. The tool then automatically designs a special around the content the visitor recently viewed and makes a certificate appear when the shopper accesses another part of your site, such as the home page.

According to a study by ChoiceStream, 39% of online consumers are more likely to respond to a coupon that has been tailored to their interests than non-personalized ads. These customized coupons will grab your shoppers’ attention and make them more interactive with your site. In order to fully cap-ture their interest, provide a form they can fill out in order to receive additional information.

Many marketers have accomplished their goals by utilizing behavioral targeting

methods, and it has steadily become a more popular way to target consumers within the last few years.

Since its success tends to be stronger in more concentrated markets, it is a great mar-keting avenue to use at the local dealership level. By participating in behavioral target-ing, you’ll receive more qualified leads from people who are further along in the vehicle purchase process.

George Nenni has been with Dominion Enterprises since 1993 and now serves as the vice president and general manager of Dealerskins and Dominion Dealer Solutions. He is respon-sible for Dominion’s web site and inventory management businesses.

If you wish to discuss this article with other dealers, or with the author, please go to the “Discussion Forums” at www.DigitalDealer-magazine.com and enter the “Internet Sales” forum or e-mail him at [email protected]

IGITAL Dealer INTERNET SALESDGeorge Nenni

“Behavioral targeting

works extremely well

at the dealership level

because online car

shoppers typically visit

dealership web sites

specifically to view

available inventory…”—George Nenni

DigitalDealerMagazine.com January 2010 17 DD


COVER STORY

Juan TeranSales Director

Dewey Automotive Group


Juan Teran, the 42-year-old sales director for Dewey Ford and Dewey Dodge Jeep, both located in rural Ankeny, Iowa, takes his inspiration where he can find it. He freely admits to converting from a typical “bricks and mortar” car guy to an Internet sales enthusiast after watching his young son Carlos using his Xbox chat feature to figure out his next move during a fast-moving online game. He says he knew then that the world had changed and the dealership’s approach to online sales

had to ramp up to meet the challenge. A year of Internet initiatives followed and so did the sales. Today the Dewey stores’ Internet teams account for 20 percent of overall sales and Teran and his team are working to increase 2010 sales from 700 to 1,000. We talked with Teran recently about

how they achieved that success and what they plan in the days ahead.

Juan, tell me what first attracted you to the auto industry.

After my immigration from Nicaragua in 1984 at the age of 16, I finished high school and enrolled in college the following year. I worked and went to college at the same time. With funds running very tight, I answered a car sales ad that seemed promising since it offered more income potential than what I was earning. My intention was to save money to finish college. As it turned out my educa-tion is still ongoing in the car business.

How did you land as sales manager at Dewey Automotive?

I started selling automobiles in 1987 at Hub Chrysler Plymouth South in West Allis, Wisconsin. My automotive career almost came to an end after a couple of weeks of wondering how I was to going to make a living only on commissions. The answers came thanks to a Zig Ziglar tape given to me by my general manager and Zig’s See You at the Top book, which I purchased with what I felt were my last dollars. After working at Hub South for two years I was recruited by a former manager to sell cars at Best Ford and Mazda. It was at Best Ford where I earned the opportunity to join the management team. Since then, I have been blessed to have teamed up with great partners and mentors in all aspects of dealership operations. Today the great-est blessing is the sales and management team we have at Dewey Ford and Dewey Dodge Chrysler Jeep, which include the warriors, as we called them, of the brick and mortar sales operation – my colleague and friend Dan Boettcher (general manager), Chris Glen (Internet sales director) Rob

Hinds (Internet business manager) and our e-Internet sales managers, Mr. Green, Bruce, David, Andrew, Peter, Jamie, Erin, Steph and Sherry.

Give us some background on the company.Dewey Ford has been in business for over

40 years and has been a pillar of the commu-nity with a strong reputation for easy dealing and great customer service. The impressive thing about Dewey is the fact that there are team members who’ve been with the com-pany since the beginning. Thanks to every-one’s efforts in sales and service, our parent company, the Ken Garff Automotive Group out of Utah, was able to expand with the acquisition of Dewey Ford in 2007. That’s also the year I joined Dewey Ford. By August 2008 the Dodge Jeep brands were added to the Dewey name and today we sell Chryslers as well.

Was the store using technology smartly when you arrived?

I believe technology was being used ade-quately, but the use of it and the process was more BDC style, where leads were handed out to the sales staff and not directed to a specific Internet sales team.

Even in this tough market your stores are improving Internet sales. What are your total unit/dollars sales this year versus last? What portion is from online sales?

I am humbled by the effort that every team member has put forth to make this a successful year. It gives me great joy to say that as a team we will have delivered over 3,500 vehicles this year. In comparison to last year, sales are up 8 percent at Dewey

Ford and 7 percent at Dewey Dodge. It is important to mention that in 2008 the number of online sales was only 7 percent. For 2009 the Internet sales team has been responsible for 20 percent of the overall sales, which translates to 700 online sales.

How did you manage to improve?I had an epiphany when I saw my 9-year-

old son, Carlos, playing his Xbox against other players around the world. My son was discussing via chat an attack strategy with his friend Patrick and his cousin Scott…all of them miles away from each other…but all of them connected on the Internet. The revelation was this…that if we did not radi-cally change our Internet sales strategy, just like dinosaurs… we would also be extinct. I realized right then, that in the long haul we would not survive with brick and mortar sales initiatives alone, because the world today lives, plays, shops and interacts on the Internet. I shared this realization with Dan, our general manager, and we agreed that our managers’ buy in was necessary to change our e-commerce strategy. Together, we set forth a plan that involved revamping our Internet sales process and our brick and mortar culture toward it. We made improve-ments to our web site on a daily basis; we brought in world class Internet trainer Jennifer Suzuki with e-Dealer Solutions to share new ideas with our dedicated Internet sales managers; we asked our marketing part-ners at Carrera and Fiorini to host a new web site and to manage SEO and SEM. From the onset, even though we stare at cornfields from our dealerships, we are all committed to a strategy of continuous improvement to

“Today the greatest blessing is the sales and management team we have, which include the warriors, as we called them, of the

brick and mortar sales operation,” says Teran.


ensure our success. The formula was simple: the right people plus a new process equaled desired results.

Are you doing anything else to build on your success?

2009 was a great year and we are excited about the opportunities that 2010 will bring. We know that our Internet team will help us increase sales this year. Our goal is to sell 1,000 vehicles just via the Internet. We know that in order to accomplish that goal, we must embrace change so that we can excel as market leaders. As we speak, we are changing, start-ing with a series of marketing initiatives at the regional level. In addition, we are also visiting with our partners to set in motion the initiatives that will help us serve and have a larger national market reach.

How critical are Internet sales at Dewey?The importance of what the Internet sales

department means at Dewey can be sum-marized in a simple statement… they are as essential as oxygen...they are the difference that makes us profitable.

What’s the process for receiving and dis-tributing Internet leads?

All of our Internet leads go through a round robin process to our dedicated Internet sales managers.

Do you have one or several web sites?We have four web sites: DeweyFord.

com, DeweyDodgeChryslerJeep.com, DeweyDodgeJeep.net. We also have DeweyTube.com, which is a hybrid between a home page for the other web sites and a social network site.

What lead-generation tools work best on your sites?

We have a high closing ratio with our credit applications and we also do very well with our Blackbook appraisal tool.

How do you use SEO?Our partners at Carrera and Fiorini help

us with SEO so that we can drive traffic and generate leads to our web sites by ranking high in the search engines for phrases that surfers use when shopping for cars, service, parts, etc.

How are you finding those ‘better’

keywords for SEM?We are finding key phrases by examining

weblogs for converting key words, by using a little intuition, which sometimes goes a long way, and by having discussions with our marketing partners at Carrera. Our experience and their expertise has been a good mix. For phrases that do not rank high organically, we then use PPC.

How do you use e-mail campaigns?We e-mail campaigns throughout the

month, which mirror the messages we have on traditional media. We utilize our CRM for client collection of specific target vehicles we need for our used car departments. We target clients in equity, we send service reminders and we also keep in touch with our customers with e-newsletters. We also borrow the idea of sending “teasers” to help us build excite-ment before a new product is coming out or before special events. It is very rewarding to see customers show up with their invitations and seeing them take delivery of their new or pre-owned vehicles and thanking us for the hassle-free experience.

What about your marketing expenses? Are they increasing or decreasing?

This year has been about practicing extreme expense control discipline. Our Internet sales team has had a tremendous impact in help-ing us reduce expenses while gaining sales in comparison to last year.

What’s the marketing mix between tradi-tional and online?

In 2009, the mix was 70 percent tradi-tional and 30 percent online. This data is helping us realize that the dollars spent to generate a sales and overall Internet pres-ence give us an ROI with components that are easier to track and manage…which begs the question… do we flip the ratios? For a brick and mortar car guy this could be a bit frightening, but in this fast chang-ing environment, it has become a serious consideration.

Are you big in the social networking arena?This is an area that we encourage our entire

sales team to utilize from the comfort of their homes. We are careful, however, because of the sensitive contents that can be viewed or the language that sometimes gets posted on those sites. We understand the exponential marketing power it has, nevertheless, we thread cautiously in those waters.

What new technology trends are you spotting?

Mobile web sites, software to automati-cally post updates and load content to social media networks, and software to host dealer’s inventory on the social networks might be the next big idea. In conversing with our partners, we wonder about the future battle of the portals…who will win? Google or social networks?

“I believe that it is our people and our teamwork, coupled with our Internet sales process, that has delivered and will continue to deliver great results,” says Teran.


DEALERSHIP PARTNERS IN PROFIT:

Dealership name:Dewey Ford/Dodge/Chrysler/Jeep

Web site URLs:Dewey Ford.comDeweyDodgeJeep.comDeweyDodgeJeep.netDeweyTube.com

Web site provider/hosting:Reynolds & ReynoldsDealer.comCarrera & Fiorini

Web site vehicle photos taken by:Dealer SpecialtiesDewey Internet Team Members

Vehicle Marketing:Dealer SpecialtiesDealer.com

DMS provider: Reynolds & Reynolds

BDC software/vendor:Reynolds & Reynolds

CRM program:Reynolds & Reynolds

Vehicle video vendors:Dealer Specialties

Vehicle valuation tools: BlackBookManheim Market Report

Online lead generators not including the OEM sources: Cars.com

List any third party ites where inventory is posted:AutoTrader.comCars.comCarSoup

Vehicle history reports:Experian Auto Check

Other vendors not listed above:E-Dealer Solutions

How does the group manage pre-owned inventory?

We do not stress new over pre-owned sales. Ideally, we would like to see a one-to-one ratio. The hard data indicates a 60 percent used and 40 percent new ratio. Our inventory policy is 60 days for used vehicles and there have been months that we have managed the same turn in new Fords. Today both Ford

and Chrysler goals, as well as ours, is to have a 60-day inventory across the board…which we all know…takes a great deal of work...but it is becoming the paramount discipline to remain profitable.

What else – technology or sales philosophy – sets you apart as a dealer group?

I do not attribute our success to technology.

I do believe that technology is important, but it’s like the newest set of irons or the newest and biggest driver in golf, both supposed to make you a better golfer when the reality is that if the basics of the swing are messy, the score at the end of the round will be just as messy and the game not enjoyable. That said, I believe that it is our people and our teamwork, coupled with our Internet sales process, that has delivered and will continue to deliver great results, as long as we always go the extra mile for our customers and for each other.

What’s your typical work week like and what do you do to relax outside of work?

For most of our team, we get to see great sunrises and great moonlights over cornfields from the windows of our showroom on a daily basis. We reward ourselves by spending time with the people we love and motivate us to work hard…our families. For me to relax it’s as simple as a watching sports, listening to an up-and-coming musician play the piano, or a game of chess... and for all of it, I am thankful to my inspiration and the greatest love of my life, my son Carlos.

[email protected]


Seeing is Believing

At the recent 7th Digital Dealer Conference in Nashville, I got to spend quite a bit of time visiting

the booths in the Expo Hall. Compared to NADA, where it is hard to spend time with the exhibitors, the Digital Dealer conference has booths and refreshments in the same hall. You can get shrimp and a beer and then enjoy visiting with the exhibitors. Two of the booths that caught my attention (in addition to being next to one of the best food stations) were eXtéresAUTO and ClearMechanic. Both of these exhibitors’ products were examples where seeing can be believing.

At ClearMechanic, they think dealerships

need to visually sell to build trust and increase profitability. For example, a Buick owner was told that by his local repair shop that his car needed approximately $500 of repairs, includ-ing a coil spring replacement. The customer, skeptical of these claims and looking to save money, declined the repairs. But this customer was worried about his safety and that of his family, so he brought the car to his Buick deal-ership and asked for a second opinion. This dealership happened to have ClearMechanic, a web-based software tool that allows dealer-ships to “visually sell” repair jobs.

With ClearMechanic digital images of the customer’s vehicle actually show the need for repairs. When the technicians put the Buick up on the lift, they noticed a large crack in the rear left coil spring. The crack could only be seen when standing directly underneath the car with a flashlight. Using a camera supplied

by ClearMechanic, the service advisor took a picture of the spring and e-mailed the cus-tomer a secure link to this image. He also used ClearMechanic’s software to provide a detailed online estimate of several additional recom-mended repairs, along with licensed video content about the need for the repairs. The customer believed what he saw and then used ClearMechanic to approve the repairs online.

Service advisors can still call the customers to see if they have any questions about the e-mail, but customers are generally cynical about these obvious “up sell” attempts from service advisors, which historically can have an approval rate of only 30%. ClearMechanic

has been experiencing over 90% of approvals because customers believe what they see and thus both trust and profitability increases.

According to CEO Brad Simmons, “Because consumers expect a frustrating ser-vice experience, the transparency provided by ClearMechanic stuns them. The result has been improved sales and tremendous word-of-mouth for our dealership customers.” ClearMechanic interfaces every few minutes with most DMS systems like ADP and R+R, including a live interface with the newest DMS system, DealerStar.

Speaking of trust, in the next booth was eXtéresAUTO who designed SAM, a high-tech revolutionary suite of tools that is like adding a virtual super-employee to a dealership – constantly updating dealers on their online presence. For instance, with just a few clicks within their back-office dashboard, they can

view their exact placement on all the major search engines for thousands of search phrases. And to back it up with third-party evidence, dealers can easily compare reports with live Google/Yahoo/Bing searches, so they can rest assured their reporting is accurate and com-plete. Additionally, every day SAM’s dealers can see what is being written about them online; across the customer review sites, online directo-ries and consumer complaint sites – every day all reviews are delivered into their back-office, with reporting on where posted.

The SAM back-office tool also delivers every usage of a dealership’s name, URL or inventory online, so dealers can be alerted to possible online piracy issues. And because dealers are typically forced to look in different locations to understand where their site traffic is coming from, or their customers’ search habits, a dealer logging into SAM can view not only where their customers are coming from (URL, search engines or links), but how many there are, what pages they’re visiting, and exactly which search phrases they’re using. As importantly as seeing and understanding the data, dealers receive the training and tools to take action on the various issues.

The next Digital Dealer Conference will be in Orlando in April. Hopefully we’ll see more exciting ways to have your customers seeing and believing!

Sandi Jerome is a former controller, CFO, system administrator, F&I, assistant GM, and fixed operations manager with over 20 years experi-ence in the automotive industry. She is the owner of Sandi Jerome Computer Consulting.

If you wish to discuss this article with other dealers, or with the author, please go to the “Discussion Forums” at www.DigitalDealer-magazine.com and enter the “Technology” forum or e-mail her at [email protected].

IGITAL Dealer TECHNOLOGY TRENDSDSandi Jerome

“The SAM back-office tool also delivers every

usage of a dealership’s name, URL or inventory

online, so dealers can be alerted to possible

online piracy issues.”—Sandi Jerome


It’s Not About the SoftwareWhile implementing CRM, many organizations lose sight of their customers

When I ask most dealers to tell me about their CRM initiative strat-egy they instantly default to what

piece of software they use and that is where it ends.

It’s funny how we focus almost 100% of our faith and attention on what is deemed as only 10% of the overall CRM initiative to deliver results -- the software which only facilitates good processes and people.

Investments in CRM applications have indeed produced a broad spectrum of results. Some dealerships have experienced dramatic increases in revenue and customer satisfac-tion along with significant cost savings, while others have experienced limited returns and disappointing results.

The benefits would be greater if more stores took CRM for what it is to the next level by designing their CRM strategy for future aspirations instead of just implementing software to support current capabilities. The focus on bottom-line costs and departmental goals limits the top-line potential of CRM investments. To gain a competitive advantage and promote sustainable, profitable growth, organizations need to take a holistic approach to CRM and develop bold strategies to win, know and keep their customers. It will only occur with professional process training and implementation of a disciplined approach. All else fails or offers semi-success.

While implementing CRM, many orga-nizations lose sight of their customers. Their attention centers on ratios and efficiency gains. They focus on single channels, ignore back-end integration needs and get only a limited view of the customer, resulting in missed opportunities and a negative customer experience. Organizations often automate existing bad processes instead of redesigning their customer-facing operations based on the new and improved best practices. It is time to refocus on what CRM is really about

“the customer” in order to achieve the results CRM has promised to deliver.

No business can exist without customers. No matter how good a product is or how efficient an organization operates, without customers there is neither growth nor profit-ability. Customers make the purchase deci-sion. They bid the price up or drive it down depending on the value they perceive in a product or service. The customer decides which way and when he wants to interact with a dealership and how he/she wants to explore and ultimately buy whether it be online, over the phone, in a store or through any other channel. It’s the customer’s perception of everything a company does and represents that creates an image of its people, brand and dealership and eventually determines its success or failure as a business. Thus, it is ever so critical for every corner of your store to be radiating these new “relationship build-ing” elements or your store looks just like everyone else and consequently your business will ultimately hinge upon ‘best price’ issues. We have to give customers real reasons to do business with us way beyond the money.

That is why successful companies build their business totally around the customer. They know who their most valuable custom-ers are and they understand their needs and

buying habits. They target and tailor their offerings and personalize the interactions with their customers. Successful companies design and continuously improve busi-ness processes across their entire ecosystem “including suppliers and channel partners” to respond quickly to changing customer needs. They strive to become fully customer-driven, deliver superior customer value and consistently provide exceptional customer experience across all customer touch points. They make every effort to build long-term relationships with their customers, recogniz-ing that keeping customers is more profitable in the long run than winning new customers over and over again. Essentially this is what CRM without compromise is about.

More than ever, relationship building training is so critical to organizational suc-cess. After more than a decade of harnessing cost-savings potential to remain competitive in an increasingly difficult economy, driving growth has replaced cutting costs as the most important goal for most dealerships. Hence it becomes no surprise that CRM is back on the agenda of many top executives. To stimulate new growth, wise dealers are beginning to explore a more disciplined approach to exploit untapped opportunities and make the most of relationships with customers. They seek new ways to increase wallet share, deploy new channels, penetrate underserved segments, reach out to new customers and enter entirely new markets. To ensure sustainable, profitable growth CRM processes must take a leading role in the value chain, enabling organizations to excel not only across, but beyond customer touch points and rapidly adapt to changing business needs.

When price and efficiency were the driv-ing forces of competition, many companies focused on increasing their competitive-ness by improving their internal processes. Continuous, standardized processes were

IGITAL Dealer BDC/CRMDChuck Barker

“More and more

organizations are

beginning to realize

that overall CRM success

depends heavily upon

how they treat their

employees.”—Chuck Barker


the key to new efficiency potential and to survival in the market. But the spotlight has since shifted to relationships with customers, employees and partners. Internal efficiency alone is not enough to guarantee market dif-ferentiation and competitive edge. Success is no longer determined only by price and product, but by well-designed sales chan-nels and well understood relational sales and service processes.

At first, companies focused on CRM for a single department or function. They often turned to niche CRM software vendors to not only support but be their CRM effort. However, while sales productivity, call center efficiency or marketing effectiveness may have improved, progression to effectively managed customer relationships was often prevented by an internal focus, deployment of tacti-cal departmental solutions and inadequate integration of front-office and back-office systems. Successful dealerships have realized that integration along the entire process chain is the only way to gain a lasting competitive advantage. But so far, few companies have used this time profitably, redefining their own strategies and reshaping business processes for a truly customer-driven enterprise.

More and more organizations are begin-ning to realize that overall CRM success depends heavily upon how they treat their employees. Hiring good people, setting high goals and expectations, providing needed resources, training and developing new skills, and holding people accountable for results seem to be critically important ingredients in organizational success. Employees who work in organizations with these qualities often exert more effort toward organizational goals, report higher levels of job satisfaction, and are more likely to stay with their com-pany over the next three years than employees working for organizations that do not possess these qualities.

Although the ingredients for organizational success appear straightforward, few compa-nies appear able to implement them on a consistent and comprehensive basis because many managers believe they do not have time

to interview properly potential employees, much less set clear expectations and develop skills. Nor are they much better at holding their employees accountable for results, as many managers do not take the time to con-duct weekly one-on-one performance much less annual reviews. If research vibrantly shows us that these leadership activities are related to an organization’s ability to attract and retain key talent and in turn provide us with superior results, and if managers are not doing them, then what other things are they spending their time on that could possibly be more important?

CRM Process Leadership is the required key in order to grow people, processes and customer base. It is now a new year and no better time to re-invent yourself, your people and your store. Say goodbye to the status quo and hello to new the CRM relationship principles that will encourage and sustain overall dealership growth.

If you are interested in receiving more enriching ideas that you can employ now send me an e-mail [email protected] and I will get them out to you. Also, if you have any questions or success stories I would love to hear about them.

Chuck Barker’s experience ranges from an execu-tive with a Fortune 200 computer corporation to the automobile business. He has held posi-tions as business development manager, sales manager, acting GM, ADP executive regional manager specializing in CRM and his own cur-rent company, Impact Marketing & Consulting Group, LLC, located in Virginia. His firm deliv-ers CRM process strategies, 21st century CRM sales training, CRM e-business deployment and CRM management leadership workshops. More information can be located at his web site: www.impactgroupcrm.com.

If you wish to discuss this article with other dealers, or with the author, please go to the “Discussion Forums” at www.DigitalDealer-magazine.com and enter the “BDC/CRM” forum or e-mail him at [email protected].

Advertiser .............................pg #

ActivEngage ..............................19

Autobase .....................................5

AutoPoint ..................................15

AutoSoft ....................................11

AutoUSA....................................26

BZ Results ....................................3

DealerPeak (Widestorm) ...........4

Homenet .....................................9

IMN Loyalty Driver ...................13

Wounded Warrior ......................7

Sales & Marketing


Nearly five years ago I wrote and article on time management. Boy, does the time fly, doesn’t it? We

were in the middle of 17 million unit sales; times were good. Yeah, the good old days... let me rephrase that. These are the good old days! There is no time like the present!

Yep, you heard me. Every day is just what it is, another day; what we did in 2005, 2006 or whenever does not matter. What matters is what are you going to do today. And that’s where I wanted to revisit that article on time management.

Salespeople, new and experienced, are always looking for the next deal, the next sale, or the next customer. They are always hoping that something will happen. Well, we all know that luck is the residue of intent and luck happens when preparedness meets opportunity, because if you are not prepared the opportunity will only make you look foolish.

Let me explain.Everyone and their brother talk of work-

ing smart versus working hard. And the only way I know to work smarter is through time management. Most salespeople on the floor, day in and day out, have no idea what to do or when to do it. They see a lot of other salespeople doing a lot of different things. They see one salesperson sitting at his or her desk with a customer at 8:15 in the morning. The new guy wonders, “How did he snag that up so fast?” Two other salespeople are at the coffee machine. One other salesperson is moving the front row of used cars. The new guy is thinking, “How does he know which cars go where?”

So what we have here is a lot of people with idle time and you know what they say about idle time? The devil’s workshop… okay, so it’s “idle hands are the devil’s workshop,” but you get my drift. Some salespeople and quite honestly, some sales managers, don’t really know the first thing about scheduling their day, making the most of the busy times and keeping them-selves busy during the slow times to keep

learning, growing and moving forward in their careers.

The best way to guide your sales staff, both new and experienced, is to have them set a schedule.9:00-9:30am Sales meeting9:30-9:45am Free time9:45-10:30am Inventory walk10:30-11:00am Follow-up calls11:00-11:30am Prospecting11:30am-12:00pm Paper work12:00-1:00pm Lunch1:00-2:00pm Product knowledge2:00-5:00pm Selling5:00-6:00pm Dinner6:00pm-close Selling

Sales meeting: If your dealership does not have a sales meeting every morning, it should. The length can vary but all sales-people need to get out of the gate on the right foot – every day. These should be well run and highly motivational – not lecture sessions.

Free time: Your staff spends more time together than they do with their spouses. Although I hate salespeople who hang out in groups and do nothing, you still need to give them time to visit – talking about their golf game, their new snowmobile or their upcoming wedding.

Inventory walk: Every salesperson must know the inventory, period. There are two types of product knowledge. Technical product knowledge, which we’ll talk about shortly and practical product knowledge, which is knowing what you actually have to sell. For example, how many trucks you have, how many used cars, how many used cars under 25,000 miles, etc.

Follow-up calls/mailings: This should be when salespeople call customers they’ve sold, prospects they’re working or ups they have not sold.

Prospecting: This would include cold calls, orphan owner letters, or any other form of generating business.

Paperwork: Following up on deliveries and paperwork, finding the keys or running the vehicle to subcontractors, etc.

Lunch: We all need lunch so encour-age your salespeople to take a lunch break. Some dealers schedule two-hour breaks in the middle of the day so they don’t lose salespeople during the busier dinner hours (know your employment laws).

Product knowledge: There should be a scheduled time when salespeople study the technical side of cars and trucks, the engine specs, designs, etc. Then test them, spiff them with contests or whatever to keep them on top of the industry. It need not necessarily be specific to your make either. Imagine what two hours of study per day over the course of a year would add up to!

Selling: When a salesperson has done everything listed above, he will sell more cars.

Obviously you need some flexibility. Some of your staff may want to do some of these things in the early afternoon. If an up comes in early, that could back things up. Some salespeople like to make calls at night, etc.

Motivate your salespeople to commit to these scheduling habits. When they hit the floor, you’ll know they have spent the bulk of their time sowing the seeds that will generate future business.

It’s all about time management. Good luck and great selling.

Jack Bennett is the author of “You Can And Should Sell Cars,” www.youshouldsellcars.com. He has been in the business for over 30 years and has trained thousands of salespeople across the country.

If you wish to discuss this article with other dealers, or with the author, please go to the “Discussion Forums” at www.Dealer-magazine.com and enter the “Sales & Marketing” forum or e-mail him at [email protected].

The Importance of Time ManagementGuide your staff by setting a schedule

Jack Bennett


Federales Eying Discriminatory PricingTwo tips to shield your dealership from prying eyes

I love to dissect, analyze and perpetually disagree with the airheads who claim to be college and pro football experts.

Listen to any of the sports networks, log onto any of the many web sites, read any of the numerous magazines and they all have predictions and prognostications about the upcoming weekend’s events. For example, as I write this, many of the air-heads are predicting a Saints-Colts Super Bowl. It will be interesting to see how this turns out.

I am also amused that many of the experts have losing records when their picks are tabulated. Most of the time most of them are wrong, no matter how boisterously they proclaimed that their predictions would be correct.

I guess that another way of looking at it is to remember that light travels faster than sound. Perhaps that is why the analysts appear bright, until you hear them speak.

In our industry, another expert recently made a rather bold prediction that I tend to put a lot more credence in than the football experts’ picks.

This consulting firm, which special-izes in providing compliance consulting services to financial institutions, opined that the Federales are feeling their oats. That under the current administration, the Federales have become emboldened and empowered to actively pursue businesses for alleged abuses of consumers.

PredictionThe Federales will be aggressively pur-

suing automobile dealers for discrimina-tory lending and sales practices. If this prediction turns out to be true, here are two process tips you should consider for your dealership.

Consistent, defensible payment quoting methodology

I once had a sales manager say with a straight face, “I can tell what a customer’s credit score is by looking at him across the

showroom.” Talk about a dealer who did not have a consistent, defensible payment quoting methodology in place!

I am not saying that you should quote payments in the sales process. That is a business decision you must make. If you do quote payments in the sales process, you must have a consistent approach to the rate that is being used to calculate the

payment. You must also be prepared to defend the logic of the rate you use.

Being consistent means that every cus-tomer is quoted payments using the same rate as every other similarly situated cus-tomer. If you pull a credit bureau before you quote the first payment, establish a rate matrix driven by model year and bureau score. Then use it every time.

If you do not pull a credit bureau, estab-lish a rate that is used to calculate every first payment.

Defensible applies to your rate matrix. The rates you establish based on credit score have to be appropriate to the risk. For example, establishing an 18% rate for customers with a credit score over 700 is not defensible. You would never be able to hang that deal with any credi-tor at that rate.

Price caps for F&I productsF&I products are the second area where

potentially discriminatory pricing can take place.

Take a look at your highest grossing deals. If an inordinate percentage of the deals were sold to members of protected classes, you may have issues.

Some states have regulated the pricing of certain products. Dealers in Florida must sell service contracts, etch and road hazard for rates they have filed with the state. Nevada and Texas regulate gap pric-ing. All states approve rates for credit life and disability insurance.

You might want to consider establish-ing product pricing for all of your F&I

products. If you don’t want to fully one-price your F&I products, you should establish price caps for all of the products sold in F&I.

Even if the Federales aren’t targeting your dealership, establishing a consis-tent payment quoting methodology and price caps for F&I products can help to deflect inquiries from other members of the dark side looking to attack at the first consumer complaint.

Good luck and good selling.

Gil Van Over is the president of gvo3 & Associates, a nationally recognized dealer compli-ance consulting firm. He assists dealers with F&I and sales compliance. gvo3 & Associates special-izes in F&I, sales, Red Flags and Safeguards compliance and training.

If you wish to discuss this article with other dealers, or with the author, please go to the “Discussion Forums” at www.Dealer-magazine.com and enter the “F&I” forum or e-mail him at [email protected].

F&IGil Van Over

“The Federales will be aggressively pursuing

automobile dealers for discriminatory lending

and sales practices.”—Gil Van Over


NEW PRODUCTSF&I

DealerTrack connects 800th financing source to its industry-leading networkDealerTrack, Inc., a subsidiary of DealerTrack Holdings, Inc., a

leading provider of on-demand software and data solutions for the U.S. automotive retail industry, has announced that the number of active financing sources connected to the DealerTrack network has reached 800.

“We are pleased to reach this milestone of 800 connected financ-ing sources–significantly more than anyone else in the industry,” said Mark O’Neil, chairman and chief executive officer of DealerTrack. “In today’s credit-challenged market, dealers clearly see the benefit of working with a diversified group of lenders, from national and regional banks to finance companies and credit unions. By providing dealers free online access to the large and growing number of lenders on our network, DealerTrack helps dealers expand their financing relation-ships and close more vehicle sales. And in fact, the pace at which we have added the last 50 new lenders to our platform has acceler-ated significantly versus the time to add the prior 50 new lenders. We believe that this is both an indication that the U.S. automotive market is improving and an ongoing expression of the strength of the DealerTrack network.”

Through DealerTrack, dealers can electronically submit credit applications to the industry’s largest and most diverse network of banks, independent finance companies, captive finance companies, credit unions and regional banks. In addition to its market-leading credit application network, DealerTrack is a leading provider of both on-demand dealer management systems (DMS) and inventory man-agement solutions in the United States. DealerTrack subscription and other transaction-based products integrate with the credit application process and provide an end-to-end dealership technology solution.

www.dealertrack.com

Finance Express integrates access to Carfax

Finance Express, a provider of web-based financial services and technology for independent auto dealerships, has integrated access to Carfax, allowing dealers to run Carfax Vehicle History Reports directly from the Finance Express platform.

“We are always improving the Finance Express system to help independent dealers streamline their operations,” said David Huber, president of Finance Express. “By having Carfax fully integrated in our system, it does just that. Dealers can build confidence with their customers, further enhance their reputation as a reputable dealer and ultimately sell more cars.”

Independent studies show that Carfax Reports improve inventory turn and profit per car. Using Finance Express, dealers can better market their premium inventory, such as Carfax 1-Owner cars, and include vehicle history highlights from Carfax on window stickers.

“Used-car buyers shop with dealers that provide Carfax Reports online and on the lot,” said Larry Gamache, communications director at Carfax. “Finance Express is making it easy for dealers to drive more traffic to their showrooms and help their customers make intelligent buying decisions.”

Velocity 2.0 Paint, Pixels & Profitability Now available! The new book by vAuto Founder and Chairman, Dale Pollak

Order today at amazon.com

NEW

!"#$%#!&'()*+,-+./012300444& &5676!"44489579874:$


Hired any Lazy Idiots Lately?OK then, that makes you normal

I find simply observing processes to be quite constructive. Sometimes just step-ping back and carefully viewing how

methodology is being carried out, yields the discovery needed to solve agonizing evils – and can be more effective than all the paper analysis four moderate-sized trees can create.

Take this observation – pleaseA rumpled and underdressed customer

service manager (advisor to most of you), is slumped in his chair behind a four-foot long tattered service counter littered with various repair order components, mini-notes, loose keys, bitten pens, and used nose hairs.

Behind this meager desk are two partially gray, bent up repair order racks, hanging precariously by four metal screws barely grasping an ancient dry-wall. It is obvious that at least two of these marginal fasteners had been yanked out of their hold previously, as demonstrated by the bowed corners repre-senting the bottoms of the racks. Papers of all sorts hung from slots, some inside some not, creating the look of a Christmas decoration gone bad. A few documents had managed to escape to the dirty floor below, where they lavished with imprinted boot footprints and coffee stains.

The walls contained a non-working elec-tric clock with the plug wire hanging down, oddly swinging like a pendulum in the slight breeze. The classic “Don’t Enter Here or You Will be Shot” sign gave the customers plenty of warning about what might be going on in the dark and dirty cave inside the doorway, where their cars were shuffled out of sight. A slight odor of burned coffee mixed with parts washing fluid was clearly evident, probably emanating from the t-shirted, hat backwards, tattooed, and chin-haired technician waiting for another slam dunk customer job.

Stop alreadyWould you hire these derelict employ-

ees? Absolutely not, you say. Well, some-one did and I have witnessed this and other wretched scenes, which frankly, saved me

from growing a unibrow. These losers sure don’t belong near customer service and frankly they represent the antithesis of the description. Unfortunately, hiring is com-plicated and a time-consuming task, which few dealership managers have the time to do correctly.

And it must be said that little, if any, training is provided/available to help guide a department manager in assuring a proper hire, although almost any employee can be responsible for driving dozens and even hun-dreds of customers to or from the business. Many hires are done on the “I like you” or “I don’t like you” basis, along with the famous manager’s prayer, “Please God, let this one work out.”

An inexpensive solutionI recently discovered a jewel of a booklet

titled “Finders Keepers”, a straight forward guide for finding and keeping dealership employees. Included are dealership stories outlining some “don’t do this” techniques (you will recognize them right away – I did), and more importantly “to do” guides along with forms, word tracks, and thorough, yet simple instructions.

There are multiple sections, including how to assess current employee perceptions,

complete with a tactful Employee Opinion Survey, and an interesting and informa-tive chapter demonstrating techniques for attracting viable job candidates. I found this area to contain an excellent list of dos and don’ts, and again I recognized more in the dang “don’t” category.

Where am I?A necessary chapter outlines in exact terms

what is needed for employee orientation. I guess pointing and saying, “You work there. If you need something, see someone else” isn’t enough these days. Life can be so complicated.

One portion features poignant guidance for ongoing management of employee per-formance, and throughout there are easy-to-use lists and forms keeping all these impor-tant tasks simple. The entire workbook is only 85 pages and an easy read, as well as an invaluable resource.

Ms. Wendi Venable, a long-time automo-tive professional, is the author/master of this superb information and she told me this meaty gem is available for only $35 from her company HireRite (phone: 1-877-579-4473 toll free). I don’t endorse much, but when the right thing comes along for my peeps, I gotta share it. This book is one of the few things worth more than it costs.

Ed Kovalchick is the CEO and founder of Net Profit Inc., an international fixed opera-tion consulting and training firm located in Alabaster, AL. Kovalchick and his firm have assisted hundreds of dealers and manufactur-ers and conducted workshops for thousands of students since 1979. He has written columns for Dealer magazine since its inception.

If you wish to discuss this article with other dealers, or with the author, please go to the “Discussion Forums” at www.Dealer-magazine.com and enter the “Fixed Operations” forum or e-mail him at ekovalchick@Dealer-magazine.

Fixed OperationsEd Kovalchick

“I guess pointing

and saying, ‘You

work there. If you

need something, see

someone else’ isn’t

enough these days.

Life can be so

complicated.”—Ed Kovalchick

;<4:.=0>?@A4B::#C+A@2D=32,-A4E/*/4/04#4F,3>,.G45!&!4:-,?+D+3@4*+,-+.4$,H,I23+4J>--4:,H+4#4(15'K4L4&!17'K4J>--4;-++04#4(1'K4L4&&K

*+,-+.)B2M+@2D+E/*/4,012300444& &56&6!"44459''4:$


being so blatantly passed over…again? This loyal soldier has always been a team player. It’s obvious to me and any observer…there is no team…no vision…only knee-jerk reaction.

Just eight days on the job, Michael Richards had left Ford to become head of GM’s Buick-GMC division; and now, this guy blows out too…he’s also left the building.

Even if Fritz was no ball of fire, he was a decent guy. I get the feeling there’s still more than one career executive in the ranks at GM that dislikes working for Whitacre. I’ll say there will be more rats leaving the ship. And, regardless of popular mythology… Lutz is not actually immortal. They do need to bring in top management from the out-side…and then they (Whitacre) need to get the hell out of their way and allow them to manage.

I’m in complete agreement there needs to be a total restructuring and rethinking of General Motors’ business plan and mar-keting strategy; some new blood with fresh

ideas would be wonderful, But they also need at least a few experienced “car guys” (or gals) to hang around and work with the dealers. Susan’s got her work cut out for her, that’s for sure.

A side note: I was excited to hear that Jill Lajdziak, formerly head of Saturn, has secured a position as vice president of sales and marketing for the Smart Cars divi-sion of the Penske Automotive Group. I believe her leadership will be a strong positive for Smart Cars. I’m happy she landed on her feet.

All of the indicators are positiveSales are coming back, edging up every

month. It’s pretty much the way I predicted. We’re seeing it every day as more and more consumers are venturing back into the showrooms and clicking on the web sites.

In November Nissan showed a 21% increase, although Toyota only crawled up 3% and Honda fell off 3%. Ford came in flat; GM was off 2% while Chrysler fell off 25%... but the real news is that Hyundai

posted a whopping 46% increase year over year.

Hyundai is rapidly becoming the new 800-pound gorilla.

Statistics are great, but I’ve got to tell you, I am actually seeing it and feeling it on the streets. Consumers want to buy…the demand is swelling up and it’s got to break any time now.

It’s the financing …stoopid!The biggest unresolved problem the

entire retail automobile industry is facing right now is that the banking community is not lending. All of the TARP money…billions upon billions… we pumped into the system is not making it to street level where the consumers are. These people are not turning it loose.

As soon as the Washington clown posse pulls their heads out of warm, wet, dark places and puts the proper pressure on the bankers to make consumer loans and floor plan assistance for the dealers, nothing is going to change at the speed we need. The



bankers are still killing the economy.OK, so GMAC is going to get the

money…more money…too much money. Today the U.S. Treasury Secretary, Timothy Geithner, granted GMAC another $5.6 bil-lion in federal support from the Troubled Asset Relief Program, on top of the 13.4 billion they’ve already blown through.

As the supposed captive finance source for Chrysler and General Motors dealers, GMAC makes the noun ‘cluster’ into an adjective.

When one talks about Rick Wagoner’s legacy, other than bankrupting one of the greatest corporations in history through blatantly inept management, the selling off of GMAC was the stupidest decision of all…right up there at the top of pile of bad judgment calls…surpassing his Fiat debacle. He has the distinction of one of the few, if not the only one, corporate CEOs personally fired by the President of the United States (delegated, of course, but we got the picture).

If and when General Motors ever comes out of this tailspin, I believe it should be a priority to secure another, wholly-owned, captive finance source…and certainly not GMAC, which is already corrupt, inept and tainted…and not operating in the best interests of the manufacturers and their customers.

I would suggest the same thing for Sergio Marchionne at Fiat-Chrysler.

To date, both General Motors and Chrysler have blown through most of the $62 billion in federal TARP money they originally received less than a year ago. In other words, although Chrysler now has the financial backing of parent company Fiat… General Motors is on its own with only $18 billion of the original $50 billion federal assistance they received still in hand. Unless they turn it around quickly, they will be broke again by February if they keep draining reserves at current rate of travel without a profit.

Chrysler has blown through 84% of the federal assistance they received.

The rush to social media has arrivedThree years ago when I was the keynote

speaker at the Digital Conference in Las Vegas, I introduced two radically new con-cepts to the audience…and ultimately to the industry.

I was advocating video walk-arounds

using flip camera technology and social media marketing. At that time literally no one was using self-produced video to sell cars. I started an avalanche. Most dealer-ships were relying on overly slick, overly produced videos on their dealership web sites sold to them by vendors who spe-cialized in overly slick production. It’s the homemade video flaws of the custom walkarounds that resonated with the con-sumers. It gives the customer the feeling… “You did this for me.”

With 350 million people now using Facebook daily, suddenly it becomes pain-fully obvious that’s where your customers are and you’d better get involved.

There are pioneers who are on the cutting edge of this revolution and are actually using Facebook and Twitter and YouTube to sell cars in the real world. We’re building dealership communities of customers who become raving fans and dealership evangelists.

During the last few days when perform-ing the private seminars for the Napleton Group, more than three hours of each eight-hour session was dedicated to using customized video walkarounds e-mailed to customer — how to use social media like Facebook and LinkedIn to build fan pages and get your customers involved with the dealership. I taught them how to use video to answer customer inquiries within min-utes. We talked about Twitter and YouTube and how dealerships need custom blogs, as well as a sophisticated web site and other micro-sites.

Long story short, the young aggressive sales and management team at Napleton took the ball and ran with it. They bought the cameras the first day, starting building the blogs, got the YouTube channels built and populated. Guess what? The very first video they sent to a customer resulted in a customer driving 120 miles to buy two cars. They had multiple deals working with video and the sales were happening immediately.

You know what blows my mind? In spite of the documented success of this type of marketing, there is a huge resistance in deal-erships to go there. I am a 62 year-old man (will be 63 if you read this after January 16) and I am technologically savvy. You’ll never learn everything, it’s moving too fast, but you can stay up with it as it evolves. You cannot hide behind your technophobia as an excuse any longer.


I crack up when I hear that dealerships have actually blocked out Facebook and the Internet media in their dealerships because of employee abuse. You’ve got to let the employees get to these channels because that’s where the customers are. Monitor abuses, but don’t block it out.

I am speaking on social media at the NADA Convention in Orlando. Please come see me. And, if you’re using Facebook, invite me to be your friend. My name on Facebook is James A Ziegler. On Twitter I am JimZiegler — all run together like that.

As I am finishing up this article, it’s Saturday morning and I am back at home in Atlanta. My puppy Sadie is sleeping on the sofa here in my office and my wife, Debbie, is at her desk in the other room working. God, it’s good to be home after the grueling week I just endured. I spoke to a friend in Chicago yesterday who told me the storm passed leaving solid ice and temperatures reaching 20 degrees below zero. Excuse me, you can keep that. I love Chicago a lot, love to go there…in July maybe.

It’s not over but I am home for the dura-tion until January. I’ve got four days of automotive seminars coming up this week, so I’ll be grinding again eight hours a day in front of an audience, but the seminars are in Atlanta and I’ll be home every evening.

As I mentioned, on December 1 I was the keynote speaker for the Massachusetts Annual Dealers Convention. But, while I was in Boston, I had the opportunity of a car guy’s lifetime. I got to meet with Ernie Boch, face-to-face, for several hours. This guy is one of my all-time heroes…a legend…a showman…bigger than life super-achiever. Knowing my personality and my flare for flamboyancy, if you know who Ernie Boch is…then you can readily see why we clicked. This guy is incredible, over-the-top.

Finally, when I was keynote speaker for the Oklahoma and the Massachusetts Dealers Conventions in November and December, I told the dealers at both events, “You’ve got to get behind the NADA and your state associations if our industry is to survive.”

Most notably I’ve noticed that the younger generation dealers are not

participating in the numbers we need. The manufacturers are putting more pressure on dealers than ever before. The new franchise agreements are unconscionable and unrea-sonable… and they are probably illegal if ever challenged. You need the NADA; you need your state associations at full strength. Please, I’m asking you to please come to the NADA Convention and participate.

Make some phone calls and let’s make an effort to get non-participating dealers to get involved. I know some of the big public companies do not participate in the associa-tions and I believe that’s bad citizenship too.

If you fail to support your national organization, be prepared, NADA is your best line of defense. We’ve all seen what the manufacturers will do if they have the opening. There’s no amount of suck-up or butt kissing that will make you immune if you’re in their crosshairs.

There have been many horror stories and we’ve all cried tears to see old friends mercilessly put out of business for no jus-tifiable reason. Now we’re hearing about arbitration and appeals. Sorry, I don’t trust it. I think legislation is the only salvation and the Washington clown posse in charge is apparently turning a blind eye and a deaf ear.

Now, it appears the movement may be growing as more decent legislators are sup-porting the disenfranchised dealers’ cause.

So, if you were not planning on being at the NADA Convention, I’m appealing to you to rethink that and show up with an attitude and bring your people too. We’re all in this together and it can’t work if we don’t participate.

Keep those e-mails coming and find me on Twitter and Facebook.

Jim Ziegler is the president of Ziegler Supersystems, Inc.

If you wish to discuss this article with other dealers, or with the author, please go to the “Discussion Forums” at www.Dealer-magazine.com and enter the “Dealer Advocate” forum or e-mail him at jziegler@Dealer-magazine.

Advertiser .............................pg #

Alloy Wheel Repair Spec .........56

Austin Consulting .....................17

Auto/Mate ..................................5

@utoRevenue ............................12

BG Products ...............................55

CBC Advertising ........................11

Dealer.com ..................................2

DME ...........................................19

Mobile Productivity ....................7

Progressive Basics .......................9

Rob Waldman ...........................15

Thrifty Car Sales ........................57

vAuto ................................... 53,60

Ziegler SuperSystems ...............59


!"!#$%&#'()*+$&(#

,$-(%('%$.!%$(/%)+$!0%

#1+10+12/!+3!)24

!"#$%&'(#)$)*%%#!$+,-.)&$.)$&'/$',-$0#%,-

-.!)!5

-#+!.&)$12$3,)*,45$16$7$8,9$7$:;9-#+!.&)$<2$3,)*,45$1=$7$8,9$7$:;9

-.!#5

)!6&2$!)%(#7&#!%+$5>>>?(#,'#4@,!!'#;',)?+&9

()%8+7717ABB761=7<B1A

See for yourself. Sign up for a demo of the vAuto suite at vAuto.com/turn or call 888-365-1032.

Don’t improve your approach. Get a new one. Dealerships that use vAuto don’t measure their success one car at a time. They successfully

turn their entire used inventory in record speed. And they don’t do it the way it was done in the

past. They do it the way that works. High-velocity turn is the new standard for success in today’s

used car marketplace. And vAuto — the software, the people and the vision — empowers you to

achieve new standards.

#%

#%

with vAuto

before vAuto

Toyota Sunnyvale used vehicles sold

22% increase

— Adam Simms, General Manager Toyota Sunnyvale Sunnyvale, California

I’ve always known how to turn my inventory fast, but with vAuto my turn is

even fasterthan I ever imagined possible.

Visit vAuto at NADA 2010 — Booth #1631

dealer magazine - january 2010

Automotive

digital version

digital dealer cover

chairman fixed operations

print version

topersonal growth

jim ziegler

michael roscoe editor

sales director