dealer magazine july 2010

HAGENDURANT

Classic Chevroletpage 22

Vol. 17 No. 7July 2010

Jim Ziegler:Business Sucks...Could It Be You?page 12

Leadership:The True Measure of a Leader page 16

Ownership:What is Your Dealership Real Estate Worth? page 17

Pre-owned Vehicles:With History there is No Mysterypage 55

Your Advantage

Proud Sponsor of the July issue of Dealer magazine.

Your Advantage

Proud Sponsor of the June issue of Dealer magazine.

2

autotrader

NEW

EARLY BIRDSPECIAL!Register before July 30, 2010and save up to $200.

ABLE OF CONTENTSTJULY 2010

PRESIDENT AND CEOMICHAEL ROSCOE

VICE PRESIDENT AND EDITORIAL DIRECTOR

CLIFF [email protected]

248-351-2620

PUBLISHERGREG NOONAN

[email protected]

CONTENT COORDINATORMARIA BURKEL

[email protected]

ART DIRECTORJOE BIRCH

PRODUCTION MANAGERELIZABETH BIRCH

PRINT PRODUCTIONNICK THOMAS

COVER DESIGNJOE BIRCH

COVER PHOTOSRANDY ANDERSON

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

C O M M U N I C A T I O N S

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 12 Business Sucks...Could It Be You?

Cover Story 22 Hagen Durant Classic Chevrolet COLUMNS From the Chairman 10 Dealer-Assisted Financing Still at

Risk in House-Senate Conference Ed Tonkin

Cliff’s Notes 11 F&I Profit, Captives and IRS Wealth Squads Cliff Banks

Leadership by Dave Anderson 16 The True Measure of a Leader

Ownership 17 What is Your Dealership Real

Estate Worth? Erin Kerrigan 18 Cut Through the Multiples – Focus

on Real Value Greg Gilmore

Employee Management 20 Life in the Fast Lane! Chuck Barker

Sales 51 Millennial Madness! (or ‘How I Missed the Big Boom!’) Jim Boldebook

Finance 53 Pricing Guidelines for Fun and Profit Gil Van Over Pre-owned Vehicles 55 With History there is No Mystery Tim Deese

56 The New Reality of the Used Car Business Dale Pollak Fixed Operations 58 Wow! A Free Money-Maker Ed Kovalchick

DEPARTMENTS 6 Editor’s Note 8 Dealer Mail 54 Dealer F&I New Products 60 Dealer New Products & Services

SPECIAL SECTION INSERT

DD16 Joe Ellsasser General Manager Golling Chrysler Jeep Dodge

DD8 Take Out the Trash and Keep the CRM from Being a Garbage Dump

DD10 How to Set Yourself Apart in a Competitive Market

DD14 Eight Steps for Real Reputation Management

DD20 Turn Your Site into the Ultimate Closing Tool

DD24 Four Steps to a Super DOC – and More Profit

Full Digital Dealer table of contents on page DD2.

pg. 25

4 Dealer July 2010 Dealer-magazine.com

DITOR’S NOTEE

Just spent a wonderful week in Southern California with my daughters Christina

and AJ. You see, AJ left for her school soccer team’s summer camp in Georgia the Saturday before Father’s Day, so we couldn’t go to Destin for the weekend to celebrate.

I guess that’s why we went when we did...but there’s another reason why we went where we did. AJ thinks she might want to go to college in California. Now, truth be told, I don’t want her to go to college all the way out in California. Christina is attending the University of Texas in Austin, but that’s only half as far. And I went to school there. And TADA’s Bill Wolters told her if she ever needed anything just call him up. California is a four-hour plane ride away!

My first thought, instinctively, was to take her out there and make sure she didn’t like it. But that just didn’t seem right. It’s my job as her father to encourage her to explore, to be unafraid to try new things, to reach for the stars...whatever that is

to her. So I committed to showing her Southern California in its best light. The three of us had a blast.

Probably the best day was when we went out to Catalina Island and took the new Zip-line Eco Tour. It takes about two hours...you put on a harness and a helmet and they hook you onto this cable and zip...off you go down the mountain from one platform to the next. Except when we got to the platform, both of my girls had second thoughts. I suppose reading about zipping over 1,000 feet, 300 feet above the canyon floor at 45 miles per hour on a web site is different from actually doing it. AJ has never been one to go on fast rides or big roller coasters and now she’s about to hang from a cable moving at 45 miles per hour.

The instructor was very encouraging but the more he spoke, the more they stepped back. Three people had already gone, then out of nowhere, AJ says, “I’ll go next”. And she did. I once told her being brave isn’t not being scared. Being brave is when

you’re scared and you do it anyway. She was very brave.

Some say a parent’s job is to raise their child so that they are ready and wanting to leave. And I suppose part of that is get-ting them unafraid to take chances. After we got back, AJ still thinks she wants to go to college in California. She took a chance with that zip-line and apparently she is willing to take a chance to live four hours by plane away from her mother and I for four years, where she knows...nobody. Don’t know if she will or not...still three years away, a lot can happen.

But that’s a pretty good Father’s Day present when your daughter is even con-sidering making a move that big...on her own...at age 15.

Mike Roscoe

Michael Roscoe Editor-in-Chief


Jim Boldebook, Thank you for your articles every month in

Dealer magazine. They always teach me some-thing. I would like to take you up on your offer and request you send me the “Words that Work” abstract. If you ever hold a conference where you share your knowledge on making media more effective, please contact me.

Barry Merrill

Hello Barry,Thanks for the compliments. All of the writers

at Dealer magazine put a lot of time and effort into making the magazine the best it can be.

The ‘Words that Work’ abstract is on its way.

I’ll keep your name in our file for future market-ing conferences.

Sincerely, Jim Boldebook

Dave Anderson,I enjoyed reading your article in the April

2010 issue of Dealer magazine, “What I Should Have Learned in First Grade.” Bravo!

Julie Emberton

Julie,Thanks for the note! Glad you liked the

message!Dave Anderson

Dave Anderson, I just wanted to give you a “well done”

on your article in the June issue of Dealer magazine, “The Calm Before the Storm”. It further helps to clarify a picture that I’ve been seeing also. But what I really appreciate is your encouragement to lay solid foundations so that you’ll be far ahead of your competitors. Our new product we’re developing can be a key asset in doing that. With launch planned for the end of this year, it will be interesting to see how the economy affects us.

Jim HughesPresidentHughes Hunter Automotive MarketingThousand Oaks, CA

Jim, Thank you for the feedback on the article.

It’s great to be prepared and positioned well. Regardless of what the economy does, we’ll win.

Dave Anderson

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: 2000 Town Center • Suite 1900 • Southfield, MI 48075FAX: (248) 351-2699 • e-mail: [email protected]

www.ImpactSummit.comStart your dealership’s team assent at:

A Total In-House Training Solution

DealershipSuccess Guide

The

“The processes and commitment Chuck talks about are even more relevant today than ever before. Chuck’s words of wisdom and the content he teaches will make any store better and more efficient.”

Guy Manasse President, DealerUps A PMDS Automotive CRM Solution

Chuck BarkerDealership Developer

Dealer magazine Author

“My goal is to help you build a stronger dealership by helping you build stronger individuals. This program is focused to do just that.”


WANTEDDEALERS WITH 1,000,000 IN USED CAR INVENTORY

“We Come to You”Total ImplementationDo you have $1,000,000 or more in used car inventory?Do you have an average day in stock of 32 days or less?

Do you have 12% net to gross or higher?

“That’s What We Do”We visit the store every month in person after the

implementation, we set objectives in gross, volume and net.

We don’t get paid if you aren’t happy at the end of each month.

We have no contract. I have always done business on a handshake.

Call me at [email protected]

Tim Deese, CEO

2 Day Class Schedule:July 22-23 Jacksonville Beach, FLOct. 21-22 Jacksonville Beach, FLNov. 9-10 Los Angeles, CA

Limited seating available, call today!

The 60-30 bipartisan Senate vote on the Brownback motion sends a clear message that Main Street

auto dealerships should not be in a Wall Street reform bill, yet the future of dealer-assisted financing is still in jeopardy.

The success of the Brownback motion comes thanks to the immense grassroots engagement by dealers and dealership employees. Continued engagement is even more critical as Representatives and Senators meet in conference to work out details of the legislation. The final bill is expected to be sent to the President before July 4.

The Brownback motion urges Senate conferees to support House language, which protects consumers by keeping auto credit affordable and available. Conferees will have to reconcile the Senate version and its House counter-part, which -- thanks to an amendment offered by Rep. John Campbell (R-Calif.) -- preserves dealer-assisted financing as a competitive option for car buyers.

While the majority of Senators and House members clearly understand that dealers are not banks, there is immense

pressure on conferees by the White House and others to strip out the Brownback/Campbell language. The goal is to pre-vent new, unnecessary and burdensome regulations over auto dealerships that would make it harder and more expensive for consumers to purchase a vehicle at a dealership. The existing regulatory struc-ture has permitted millions of families to make a vehicle purchase at competitive interest rates.

We must remain engaged or this fight could be lost. Dealers and dealership

employees should reach out to the confer-ees to urge them to retain the auto dealer language in the final Wall Street reform bill. More information on the legislation and a list of conferees can be found at: www.NADA.org/KeepCreditAffordable.

Ed TonkinNADA Chairman

Dealer-Assisted Financing Still at Risk in House-Senate Conference

From the ChairmanEd Tonkin, NADA Chairman

Don’t miss the

New Ideas, New Revenues, New Efficiencies, Greater Profits

CONFERENCE & EXPOSITION

9TH9TH

October 12-14, 2010 • Las Vegas, NV


Key Points in Favor of the Brownback/Campbell Language:

• Conferees should support the Brownback/Campbell language because dealer-assisted financing provides convenience, competition and choices for consumers who rely on affordable credit to meet their transportation needs.

• Both the House and Senate have voted on a bipartisan basis to keep in place the sound regulatory structure that has allowed millions of consumers to buy vehicles at competitive interest rates instead of creating an uncertain regulatory regime under a new agency.

• Main Street auto dealerships are not banks and didn’t contribute to the financial meltdown.

• If adopted, the Brownback/Campbell language keeps every auto loan and every auto finance source that underwrites, funds and/or services a loan (including buy-here/pay-here operations) regulated by the new agency.

• Dealers’ retail financing activity would continue to be effectively regulated by the Federal Reserve Board and the Federal Trade Commission. Dealerships would continue to be subject to all Federal and state consumer protection laws and regulations that currently govern dealer-assisted financing today.


F&I Profit, Captives and IRS Wealth Squads

There was a lot of news over the last month that will affect the automotive landscape for the next several years.

The big news is that the U.S. Senate, unlike the House, refused to adopt an amendment that would exclude car dealers from being affected by the finance overhaul bill. But then, a couple of days later, the Senate decided to instruct its negotiators to push for adoption of similar language to what the House version has which does exclude dealers.

The bill is in conference now as of press time, and negotiators from both the House and Senate are putting the final touches on the legislation which will be sent to the President for signing.

Dealers still are not out of the woods on this one. The White House, the Pentagon and several consumer organizations are fighting NADA hard to include dealers.

NADA officials say this is the toughest and most important battle in recent memory. If the bill passes with inclusion of car dealers, F&I revenue likely will dry up.

That’s not being chicken little. A federal agency will determine which financial prod-ucts you can sell, how much you can make and which firms you can do business with. You may have some influence over your con-gressional members, but a federal agency? Not a chance.

This battle has to be won on the legislative side. So keep fighting hard.

In other financial news, GM leaked that it is exploring options to either buy or start a captive finance firm.

Ever since it sold controlling interest of GMAC to Cerberus a few years ago, GM has had little to no control of the financing of its vehicles. It became a real problem in 2008 when Cerberus decided that GMAC would only finance deals for customers with beacon scores in the 700s or higher – in other words, the only people able to buy a GM car through GMAC were those with near perfect credit.

Sales tanked for GM, pushing it into bankruptcy. Cerberus relinquished control of GMAC. It also owned Chrysler Financial, which it has put on the backburner. Since late last summer, GMAC has become Chrysler’s main lender also.

Although the credit scores have come down some, GMAC (although it changed its name to Ally, it’s retaining the GMAC name for its automotive business) still is not financing sub-prime buyers. Overall, GMAC finances at least a third of GM’s customers.

According to the latest numbers, only 1% of GM’s customers in the first quarter were sub-prime. Experian reports that 16% of all car buyers in the fourth quarter of 2009 fell into the sub-prime category. That’s not count-ing deals that weren’t completed because of a customer’s credit score.

To compare with other automakers, the AP reports that 20% of Honda’s business comes from the sub-prime market – 20% vs. 1% -- no wonder GM – and Chrysler – is at a disadvantage.

The problem extends beyond sub-prime, though. GM and Chrysler have little control over the incentives they can offer customers and dealers to push sales. Yes, automakers have said they want to end their reliance on incentives to drive sales, but GM and Chrysler have no flexibility.

Both automakers, obviously, need a finance arm – preferably separate from each other -- they can control. Until that happens, both automakers will continue to be handcuffed as they try to recover.

Chrysler did make a move last month announcing a relationship with the Spanish bank Santander that will enable it to offer its customers cheaper sub-prime loans.

Meanwhile, get ready for the IRS wealth squads.

You’re sitting in your office at your confer-ence table. Your accountant is there along with – not one – but four or five agents from

the Internal Revenue Service who are dig-ging through every nook and cranny of your financial life.

This scenario likely will play out at your dealership in the near future, according to a column last week on Forbes.com written by Donald T. Rocen, a member at Miller & Chevalier Chartered, a firm that helps large corporations and other businesses with federal tax controversies.

Before you think Mr. Rocen simply is trying to drum up business using scare tactics, consider this: he was the deputy chief counsel of operations for the IRS from 2004 to 2007.

His column, IRS ‘Wealth Squads’ On the Way, provides a window into the plans IRS Commissioner Doug Shulman has for a cer-tain level of wealth owners. Rocen says the IRS has not said what type of earnings will generate a visit from an IRS wealth squad, but thinks it is in excess of $10 million.

These so-called squads will be part of a Global High Wealth Exam Group being implemented by Mr. Shulman and likely will be created from the 16,000 new agents the IRS is in the process of hiring.

Rocen believes the auditing process will be a major overhaul of one’s finances and could include a criminal investigation agent.

So if you’re one of the few that can be labeled wealthy, consider yourself warned.

Cliff’s NotesCliff Banks

Cliff BanksVice President and Editorial Director

Dealer-magazine.com July 2010 Dealer 11

The month of May 2010 just might have been the turning point. As many of you are aware, I communicate with

hundreds of dealers every month. Making phone calls, communicating online, and now...talking to dealers, managers and sales professionals daily on Facebook and Twitter; I like to think I am fairly tuned in to what’s happening at the grassroots levels.

Well, speaking with most dealers and man-agers, their mood was ecstatic. Coming out of the Memorial Holiday Weekend, most dealers were telling me they’d had the best sales they’d seen in three or four years. With few exceptions every manufacturer saw huge percentage volume sales increases, most in the double digits over just one year ago.

But, of course, with all of this enthusiasm and infectious optimism, there were still those rare birds whose cup is perpetually three-quarters empty.

I believe some people are, by nature, whin-ers, wimps and complainers.

In the course of talking to all of these deal-ers who were celebrating a great month; here I was listening to complaints and excuses from dealers in towns where their competi-tors had exceptionally good sales in May. Same brand of cars, equally good location, but; one dealer had a recent-memory sales record with highly-motivated employees

while another dealer selling the same cars in the same community had a miserable month. It’s not the market -- create your own market. It’s not the product -- every manufacturer builds good cars and trucks. It’s not your location -- it’s you.

Could it be that if your business sucks, it might just be because you suck at it.

For months I’ve been writing and speaking about this moment -- as in right now. How many times have I said or written that busi-ness is coming back like a runaway freight train -- no stopping it -- and you’re prob-ably not ready for it. This is the best we’ve seen since Cash for Clunkers. And, you know what? It’s going to get better. In light of May sales, most statisticians in the industry pro-jected their seasonally adjusted sales to an 11.2 million unit light vehicle sales based on May 2010.

However bold to say it-- but, I believe we’ll see another 16 million unit year in the not too distant future.

But, if your business still sucks despite the fact others are enjoying near record sales all around you; then, you might strongly con-sider the possibility that something is wrong with the way you’re running your busi-ness. It might be the way you’re marketing. Maybe you’ve got the wrong people in charge. Your processes might be wrong. It’s got to

be something. This is the time to evaluate unemotionally every aspect of your operation.

It’s time to upgrade to first-classFive years ago I ran an ad in Dealer maga-

zine featuring the headline... “If you’ve been doing business with any

other automotive training company, isn’t it time you upgraded to first-class?”

That headline grabbed a lot of attention at the time. My competition certainly wasn’t thrilled.

Recently, I have become increasingly sensi-tive to the negative perception of people in the car business. The overwhelming majority of dealers and dealership employees are decent, hard working people who are historically and emotionally involved in their communities.

Even so, old stereotypes, no matter how untrue continue to be perpetuated and regur-gitated. Companies like CarFax run ads on television portraying car salespeople (dealers) as dishonest with a little cartoon Fox popping up behind the salesperson ratting us out to the consumer insinuating we’re hiding something about the cars we sell. They certainly make it a point to insinuate that only reputable dealers have CarFax.

Edmunds.com publishes an alleged expose from a supposed ‘undercover’ car salesperson.

We are continually portrayed, on purpose,

ADVOCATE

Business Sucks...Could It Be You?Jim Ziegler


13

zurichnew

in the worst possible light, perpetuating con-sumer distrust.

Are there people in our industry who are not up to the quality of character, professional and ethical standards we should be holding ourselves to? Sadly enough, the answer is, yes.

There has never been a better time to upgrade the quality of the people we put in front of the public. If I were a car dealer

in this day and age, I would be continually evaluating the performance, measuring sales and management ability, and increase my overall awareness of the integrity of my dealer-ship employees.

I am continually perplexed that dealerships have no performance standards or measure-ments of the selling effort. Your top produc-ing salesperson probably posted a net profit

of more than $30 - $40,000, while, the same time, another salesperson only put a couple of thousand dollars on the books. Or worse yet, lost money. Sometimes two salespeople selling the same number of units have a differ-ence of tens of thousands of dollars in profit for the company. The same standard applies to managers.

With unemployment at a near all-time high, don’t you think there are some really great potential sales and management people available? Maybe this is the time to take a hard look at your employees and their per-formance. The answer may be additional training, or it may be time to free up their futures. Regardless, the question is, “Are you emotionally attached to non-achievers who are costing you money and sales?”

Death of an American iconA wisp of sadness came over me but for a

moment when I heard the news that Ford Motor Company has officially announced that Mercury division will be phased out in the fourth quarter.

But, you know, it’s like a long-suffering relative that finally passes away. It was inevi-table and, in the larger scheme of things; it was the right thing to do.

Back in 2008, when the last stand-alone Mercury dealer went out of business, I wrote an article titled “The Advantage.” Here is an excerpt of what I wrote then....

Mercury, rest in peaceThe headlines announced that Community Motor Company of Canonsburg, Pennsylvania resigned its stand-alone Mercury franchise. I’ve written repeatedly that there is no viable reason for Mercury to exist. It is a drain on Ford Motor Company to keep it alive. Now that the last remaining stand-alone Mercury dealer has exited the building…why not euthanize the nameplate?

I once again refer to Chrysler Corporation’s retirement of the Plymouth nameplate. There was no earthquake when the transition occurred. They just rebadged everything as “Chrysler.” What’s wrong with the idea of renaming all non-redundant Mercury models as Lincolns? The Lincoln Grand Marquis would still sell…probably better with the prestige name.

I wrote the preceding nearly three years ago and it rings true today.

Of course, Mercury had a rich heritage. Created by Edsel Ford in the 1930s as a ‘step

Dealer Advocate, Ziegler (continued from P-12)

Your Advantage

Visit Manheim.com/YourAdvantage to see the videos and learn why Manheim is Your Advantage.

I’m InvIsIble In a crowd. You won’t see me untIl the

package Is gone. gatherIng IntellIgence onlIne to

work the lanes, I secure what I need quIcklY and

easIlY. then I vanIsh wIth mY profIts. I am a buYer,

wInnIng In the greatest marketplace there Is.

I AM A SECRET AGENT

©20

10 M

anh

eim

, In

c. A

ll ri

gh

ts r

eser

ved

.

5863 4_585x7_5 DlrMag_AgentGreek_v3.indd 1 6/8/10 5:07:07 PM


up’ from the Ford product. Not quite the luxury of a Lincoln; it was positioned against Buick and Oldsmobile as an intermediate carline. That made a lot of sense in that era because there were only domestic manufac-turers with very little product diversity or import choices.

Nameplates like Mercury Comet, Meteor, Marauder, and Cougar were legendary as cross between luxury and performance -- certainly not Granddad’s Lincoln.

As the brand matured, so did its customers and the Mercury Grand Marquis is still iconic with an older demographic.

But, in today’s market arena, as I have writ-ten in articles and delivered in speeches for more than five years I can document now; other than pure nostalgia, there is no sound reason for Mercury to exist. I would sug-gest they look strongly at keeping the Grand Marquis and rebadging it as a Lincoln Grand Marquis -- and maybe even giving the Mountaineer another shot, renamed and rebadged as Lincoln, not “Aviator,” but a step up from Explorer in that genre.

My belief is there is still a strong market in that middle segment. My opinion, they can transition these models for at least another four or five years. The entire market is not going to drift easily into cross-overs.

Regardless, in researching this piece I stum-bled across some old Farrah Fawcett videos on YouTube advertising the 1970’s Mercury Cougar XR-7. My eyes teared up at the loss of both Farrah and the Cougar, and the image of “The Cat” in the commercials, but what we are really mourning is not the passing of the brand -- we are mourning the loss of a less complicated and more innocent era.

Ford’s offer to buy out Mercury dealers...Once again, in my opinion, Ford is taking

the best path to dissolving the 1,700 remain-ing Mercury dealers with cash settlements. For the most part the settlements Ford is offering go beyond state laws, and are more generous than the franchise agreement requires, and more significantly; it appears to be more gen-erous than virtually any manufacturer has ever offered in a similar circumstance. In years past I’ve been particularly brutal with Ford and the way they’ve handled everything concerning the dealers. Wouldn’t say it if I didn’t believe it. My perception here is they’re bending over backwards to make this equitable.

One twist that is absolutely unique to this

deal is that Ford will buy the dealers’ Mercury parts inventory at it’s true value and will allow the dealer to keep the parts. Excuse me, if my math is correct that means they are actually paying the dealer 200% of the parts inven-tory value.

A number of dealers have expressed dissat-isfaction with what they were offered and I’m sure that will be settled on a case-by-case basis

but, most of the Mercury dealers I’ve spoken to were more than happy with the deal.

Of course whether or not that dealer was already combined with Ford products has a lot to do with how the news was received.

Lincoln...a return to true luxury and

Visit Manheim.com/YourAdvantage to see the videos and learn why Manheim is Your Advantage.

©20

10 M

anh

eim

, In

c. A

ll ri

gh

ts r

eser

ved

.

I AM AN EMPEROR

I AM A COWBOY I am a SELLEr,

wInnIng In thE grEatESt markEtpLacE thErE IS.

I am magnIfIcEnt whEn I brIng my goodS to markEt.

hundrEdS arE at my caLL, pErfEctIng my carS.

whEn I’m SatISfIEd, I grant thE maSSES thE InvEntory

thEy dESIrE. LEt thE bIddIng bEgIn.

Your Advantage

5863 4_585x7_5 DlrMag_AgentGreek_v4.indd 2 6/9/10 5:19:57 PM

continued to P-61


The True Measure of a Leader

Pulitzer Prize-winning author Alexander Solzhenitsyn spent eight years of his life in prison for making a few disparaging

remarks about Joseph Stalin. He went into prison an atheist and come out eight years later a Christian. The first words out of his mouth were: “I bless you prison – I bless you for being in my life – for there lying on rotting prison straw, I learned the object of life is not prospering as I had grown up believing, but the maturing of the soul.”

The soul is made up of one’s mind, will and emotions: your thoughts, desires and feelings. A paradox of success states that if you get these factors “right” first, then success will ensue. However, when you chase the material and position “stuff” of life with a bereft or unde-veloped soul you may indeed get more than your share, only to feel empty throughout the process and marginal in the end. While you can certainly have prosperity and a mature soul, your overall fulfillment and happiness as a man or woman is going to largely depend on which you pursue as a priority.

Motivational speaker Jim Rohn was dead-on when he declared that, “To get more than you’ve got you must first become more than you are” Throngs of people in our industry strive hard to get more, but they never become more. They use the same old skills, habits or attitudes, merely stiffening with age but never truly growing. They’re not lazy. They work hard…on their jobs. But they don’t work hard on themselves. They grow old but they don’t grow up. They become so focused on their destination that the journey becomes a hapless death march, a necessary means to an end. They have no joy or power in the present because they are too fixated on their destina-tion. They willingly sacrifice health, family and relationships in exchange for their goals, accepting their diminishment as a necessary tradeoff for that better job, bigger paycheck, larger house and loftier title.

At the end of their days, these misguided “achievers” reflect and reach a horrifying con-clusion: while they have made money, they have made no real difference in the lives of co-workers, in their communities or families. They are haunted by the fact that when they

die it will be as though they never lived. They became successful in the world’s eyes but they never reached a level of true significance. They crossed many finish lines personally, but failed to bring others with them. In fact, the backs of others running the race bear their footprints. Many leaders end up rich and alone; rich and sick; rich and spiritually bankrupt.

I agree with Solzhenitsyn, that the objec-tive of life is not about prosperity, but the maturation of the soul. And that the former without the latter assures an emptiness that shakes many shallow leaders to the core with the question, Is this really all that there is? On the other hand, when maturing your soul becomes a priority, you can have it all. You move from success to significance as you improve yourself, export value to others, and edify humanity at large. You accomplish this by taking the focus off your own selfish ambitions and aspirations and putting others first: God, family, friends, co-workers and customers. It works like the teeter-totters on the playground. By pushing down your own ego you elevate and expand your platform to do well, to have an impact, to leave a legacy.

Maturation of the soul begins with devel-oping a stronger character, purer motives and broader outlook on life. In other words, you stop trying to fix everyone else for a while and work harder to get yourself right.

Here are a few areas to examine. 1. What is your plan for personal growth?

How many serious books do you read each year that help you become a better leader? If you’re not committed to growing yourself, can anyone really expect that you have what it takes to develop others?

2. What is the state and strength of your family relationships? Do those who know you best love and respect you the most? If you can’t run your family with excellence, how eager should someone be to allow you to run their business?

3. How moral are your ethics? Do you keep commitments without excuse and regardless of the cost? Do you tell the

truth—always—or are you prone to white lies and false impressions? On a day-in, day-out basis do you do what is right or what is easy, cheap, popular and convenient?

4. How strong are your relationships with others? Are you a gossip, a purveyor of dis-cord? Are you loyal to those not present? Do you use people for your own benefit or do you add value to them? Are you selfish or selfless, a taker or a giver, a mentor or a moocher?

5. Whom have you impacted? How many people under your leadership have been pro-moted to better positions? Who can point to you and say, “That person made a real difference in my life”? Do you leave people better than you found them, or do you merely maintain them?

6. Do you have the “disease of me”? Are you too protective of your turf? Do you put your own personal comfort zone and agenda ahead of what’s best for the team? Would the other leaders in your organization say that you’ve got their back or stab their back?

7. How do you impact the world outside your business and family? What do you vol-unteer for? How much money do you give to worthy causes? How much time do you give and value do you provide to people who could never possibly repay you?

The questions that made you the most uncomfortable have the most to teach you.

LeadershipDave Anderson

continued to P-62

Maturation of the soul

begins with developing

a stronger character,

purer motives and

broader outlook on life.


continued to P-62

What is Your Dealership Real Estate Worth?

What is your dealership real estate worth today? That is a very good question, and not one that is easily answered. Most dealers and their lenders order an MIA appraisal to deter-mine real estate value.

Unfortunately, during the recent real estate bubble and subsequent crash, appraisals have often proven unreliable in determining what your real estate is worth.

By way of example, I know a dealer whose real estate appraised for $6 million in 2002. The same property appraised for nearly $12 million at the peak of the real estate bubble in 2006, doubling in just 4 years. Since then, according to three different apprais-als, the property’s value has plummeted. It was valued at $8 million last year, $6 million in April and $5 million in May, below its 2002 value.

How can the same property have so many different values in such a short period? We all know that the frothy credit markets are primarily to blame for the boom and bust in commercial real estate. However, part of the blame can also be placed on the way in which real estate is appraised.

Appraisers typically deploy three methods when valuing real estate. They are as follows:

• The cost approach: The cost approach is based on the idea that a buyer would not pay more for a property than the cost to con-struct a substitute property. In this approach, appraisers collect data from comparable land sales to determine the cost of land and then calculate the current cost of constructing the improvements. As part of the process, the appraiser also applies discounts to the build-ing costs to take into account depreciation and market dynamics.

• The sales comparison approach: The sales comparison approach is similar to the cost approach, in that it relies on comparable sales to determine value. In this method, a property is valued by comparing the subject property to similar properties that have sold

in the surrounding areas. The appraiser then applies the comparable pricing metrics to determine value.

• The income capitalization approach: The income capitalization approach is based on a multiplier between the prop-erty’s net operating income and its value. Not unlike blue sky multiples, capitaliza-tion rates are derived from expected risk adjusted returns on real estate investments. These return expectations are then applied to a property’s net operating income to determine the property’s value.

In today’s market, all of these approaches have flaws, particularly when valuing owner-user real estate. The first chal-lenge is that since the Great Recession, we have had few comparable transactions upon which to calculate substitute pric-ing. Instead, the available comparables are often recent distressed sales of abandoned dealerships. In search of non-distressed

sales, appraisers must often look far out-side a subject property’s region, even to another state. Given this situation, the cost and sales comparison approaches vary widely depending on the appraiser. Neither method is dependable as a barom-eter for value today.

Alternatively, appraisers could depend more heavily on the income capitaliza-tion approach. However, this approach is rarely considered. Appraisers reason that because most dealership real estate is owner-occupied, the rental income may not be market and is therefore not a good determiner of value. While accurate, this assumption is unfortunate because the income method is the only one that takes into account what a dealership may be able to support in rent.

In the end, the biggest challenge with all of these valuation methods is that none actually looks at the dealership’s financial performance. The appraiser never con-siders whether the dealership can/will support the value being placed on the property. This is particularly problematic in a market where over 13% of all dealer-ships have closed in the last two years.

To accurately value dealership real estate that is owner-occupied, an appraiser must understand how much the underlying business can support in rent payments. This means (i) reviewing the dealership’s current and projected financials, (ii)

OwnershipErin Kerrigan

Based on 2009 NADA figures, the average dealership paid about

$30,000 per month in rent, before insurance and taxes. At that

level, assuming a 7.3% fixed mortgage interest rate (400 bases

points over the 10-Year U.S. Treasury on 6/2/10) and a 20-year

amortization, the average dealership could support a $4 million

mortgage. Assuming banks and captives are lending 80% loan-

to-value, the average dealership’s real estate is worth $5 million.

Example of alternative real estate valuation methodolgy

Property appraisal

has become much

more of an art than

a science. Let’s return

to the science.


Cut Through the Multiples – Focus on Real Value

Former Speaker of the House Tip O’Neil once remarked, “All politics is local.” I believe the same is true of dealership

valuations. Contrary to a common industry belief that multiples of earnings drive deal-ership transaction prices, dealership value is primarily determined on a very local level by reviewing local variables specific to the selling dealership.

Rarely a week passes where I don’t field a question regarding franchise multiples from a prospective dealership buyer or seller. While multiples provide a general industry frame of reference, they fall short in determining the final dealership transaction price. A few years ago I took on the task of recording and comparing multiples based upon individual historic dealership earnings. I sourced the information from the many sale and purchase agreements that passed through our office over a five-year period. I then compared the information to annual dealership financial statements to determine average franchise multiples. I further broke out the information by geographic region. While the sample size grew to a fairly large number, the fluctuations in individual multiples were significant.

Some of the difficulty in determining an overall franchise multiple was determining what the true goodwill number really was in relation to what was reported in the sales and purchase agreement. I would also find variations in real estate, fixed assets and parts allocations in relation to overall dedicated goodwill. What I found were wide swings in the averages reported by many of the industry publications. In the end, it was apparent that most of the final transaction prices for the deals I reviewed were actually determined by a combination of seller motivation, future facil-ity expenditures, perceived retail upside and the overall potential return on investment.

Finding opportunityOn the local level, everything starts with

the buyer’s perception on how many new

vehicles can be sold in the market compared to historic performance. As we are considering new vehicle franchises, it only makes sense to start with new vehicle planning volume. Once established, all of the remaining department gross and expense projections should fall in line with a thoughtful forecast. The key is finding a legitimate new vehicle planning volume to provide a foundation for the return calculations. In my opinion, the best way to determine an accurate planning volume is for

the potential buyer to independently review the market with a focus on growth demo-graphics and competitive market registrations.

A thorough review of historic registra-tions should give the buyer a starting point in assessing planning volume potential. From there, realistic growth projections based on realistic inventory allocations are necessary to develop a projected five-year return on investment. Inquiries into manufacturer sales efficiency may give the buyer some informa-tion on new vehicle sales volume potential but caution is advised when reviewing sales efficiency or manufacturer provided plan-ning volumes. Sales efficiency is only as accurate as the manufacturer’s market defi-nition. Sales efficiency calculations may also include formula biases based on regional aver-ages or geographic differences. For example, some markets have purchase biases when it comes to domestic or import ownership. Including either the Detroit or Los Angeles metro market averages into a regional sales efficiency calculation with upstate markets

could have a significant impact on whether a dealer achieves sales efficiency for a specific franchise. When attempting to determine a realistic planning volume and ultimately an accurate return on investment, it’s best to do your own homework.

Once the planning volume and overall department gross profit projections are com-plete, its time to prepare a realistic annual expense structure. While compensation expenses should account for the majority of

dealership expense, facility expenses are typi-cally the wildcard when determining return on investment. Today, most manufacturers maintain high expectations when it comes to their signature image programs. Many dealerships on the market today are there as a direct result of the seller’s decision to forego a costly manufacturer mandated remodel. Additionally, those that have completed the required upgrades may have occupancy expenses that have not been supported with additional profit generation.

If the buyer does not address the manu-facturer’s image plans at the beginning of the buy-sell process, the new requirements will surely come up later during the approval process. If the existing dealership is non-com-pliant with respect to image or facility square footage, most manufacturers will provision the buyer’s new dealer agreement with strict timeframes regarding the required upgrade.

Additional issues that I have found which play a key role in determining the final dealership transaction price include seller

OwnershipGreg Gilmore

Most of the final transaction prices for the

deals I reviewed were actually determined by a

combination of seller motivation, future facility

expenditures, perceived retail upside and the

overall potential return on investment.


motivation, the buyer’s overall acquisition strategy, the buyer’s access to credit and finally the manufacturer’s overall business plan. While seller motivation often contributes to the largest fluctuation in multiples on a local level, the buyer’s overall purchase strategy also has a significant impact on final price.

For example, in our study of goodwill multiples and final transaction prices, I have found that local dealers often pay a premium over out of town buyers. The strategy fol-lows that purchasing your competition adds inherent value up and beyond the traditional transaction. Other buyer strategies include the large and public auto group’s franchise shop-ping lists. Of course, once the large groups begin negotiating on a specific segment, trans-action prices increase.

Beyond mega dealer acquisition strategies, tight credit markets have severely limited the

dealership buying pool. There was a time when first time buyers commanded a healthy percentage of new dealership acquisitions. Today, those numbers are negligible. If the buyer does not have firmly established floor-plan relationships, the deal will most likely fall apart. Finally, overall manufacturer busi-ness plans do play a role in determining the final transaction price of a dealership. While factory image and facility initiatives have been addressed earlier, some manufacturers are planning additional representation in markets that they feel can support additional sales penetration.

If a buyer is looking to purchase a franchise that falls into this category, it’s important to review the manufacturer’s last market study of record. If there are monitored or open points located in or near the prospective dealer’s primary market area, the return on

investment may be severely impacted. In the end, there are many factors beyond multiples that determine the final transaction price of a dealership. An educated buyer will review as many of these variables as possible before making a final offer.

Greg Gilmore is president of The Apex Group, Inc., a non-brokerage firm that develops buy-sell and open point packages for its clients. He founded the company in 1997 following his tenure as market representation manager for Toyota Motor Sales, USA.

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

3 Time WinnerDealers’ Choice Awards


Life in the Fast Lane!Get your store to its full potential

Listening to my iPod while mowing the yard this past weekend, the Eagles song “Life in the Fast Lane” began playing.

Hearing it, triggered an experience I had a few years ago and gave way to my thinking about the power of growth potential and the idea for this article.

A few years ago I was riding with a friend in his new Porsche 911 Turbo S on the Autobahn in Germany. He couldn’t wait to show me the potential of his new car. As we migrated over into the fast lane he began to accelerate quickly until he found a comfort-able cruising speed of 135 miles an hour.

“Can you believe the power in this thing?” he asked. Then, glancing in his rear view mirror he said, “Oh, my gosh!” I turned around expecting to see police lights but instead saw a car bearing down on us in our lane a half mile back flashing its lights for us to get out of his way. We pulled over into the next lane to give way to this vehicle and as it flashed past us in a blur I noticed it was the same model Porsche we were driving but most likely doing somewhere in the neighborhood of 175 miles an hour. Just when we thought we were utilizing the potential of this Porsche we were immediately humbled by someone else who was actually fully using the car’s potential much greater than we were.

In my travels around the country, I see the same thing occurring in dealerships all the time. Some stores think they are utilizing their fullest potential while there are stores who are blowing right past them by utilizing the new sales development methods. Many are not challenging themselves to become better than they currently are. I have seen stores who essentially have a similar sales team, manage-ment team, product line and desirable loca-tion, yet are different in so many ways. In spite of these similarities being in place, some stores sell more units, double and/or triple the gross profits, as the other stores. They also have created a total team synergy platform from which to build upon and have a low attrition rate. Why is it that some stores drive along at 135 and almost identical profiled stores are

doing 175? Where does the difference reside?Ask 20 people this question, “What are

the first thoughts that come to your mind when I say car salesman”? Their responses are a reflection of negative paradigms built up over the years from experiences they, a relative or friend had in dealing with a car salesman. The dealerships that are driving to new levels of achievement recognize this

perception and are affecting a change in the way they do business with their customers by creating a paradigm shift.

This shift can only be created when the dealership and all the employees are commit-ted to raising the level of professionalism to new heights. When this occurs you will see dramatic productivity increases. Productivity increases occur as a result of leading edge para-digm shifting training and result in increased output (units, gross, CSI) being achieved with the same level of effort currently required. No more work required just a better way of doing the same work.

Examples of productivity increases include:• Professional sales training priorities are

put in place thus reducing the effort and time required to accomplish various tasks required to increase the store’s growth.

• Reaching higher levels of skill set devel-opment leading to elevated work quality and growth in professionalism and profit increases.

• Significantly reaching higher levels of employee satisfaction and motivation which leads to willing increased effort and increased team work and synergy.When you stop learning new strategies

you stop growing. When you stop growing you become a prisoner to high maintenance, problems and irritations. You become stag-nant and complacent. Once you adopt the decision to do things differently, you must consistently be disciplined with your account-ability in seeing it through. It is OK to make adjustments along the way but in no way should you compromise your new approach to doing business.

Fact: Every dealer wants to grow the store. Yet few form the habit of doing the things suc-cessful dealers do on a regular basis. Recognize that there are two types of pain. There’s the short-term pain of disciplined accountabil-ity and the long term pain of regretting to become accountable.

Good decision planning helps us begin the increased potential journey. Being accountable and consistent to new sales techniques and processes encourage and allows us to finish ahead. The pain of disciplined accountability is momentary but the payoff is monetary.

Where does it all begin? At the top.Top down strategy simply means that

everyone in management has to be com-mitted to discovering new business strate-gies, planning, implementation, manag-ing and the leadership of a new sales and management approach. Let everyone know how valuable and essential to the store’s success they are because quite frankly it is

Employee ManagementChuck Barker

When you stop learning new strategies

you stop growing. When you stop

growing you become a prisoner to high

maintenance, problems and irritations. You become stagnant

and complacent. You must consistently be disciplined with your

accountability in seeing it through.


AUTOMOTIVE ADVERTISING SPECIALISTS SINCE 1983

[email protected]

www.cbcads.com

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!

SINCE 1987

AUTOMOTIVE

CHEVROLET

Your Logo Here

ARE YOU READY

TO bE #1?

all about your people.We all need to acknowledge that the land-

scape of the automobile industry has and con-tinues to change and if you want to be a part of the success stories regarding consistent store growth then you will just have to do things with enhanced professionalism and new train-ing methodologies. What got you here will not keep you here. Corporate America, with a few exceptions, has been doing it this way for quite some time with remarkable results. Yet the automobile industry, for some unknown reason, feels this professional approach is not for us. If you’re current thinking is taking you towards a “business as usual” shortcut approach then be prepared for a diminish-ment of everything you have built thus far. We need entrepreneurship to be at its best in this industry right now.

One tremendously important factor in ‘growing to your potential’ is your invest-ment in your employees. If people really are your greatest assets, isn’t it time to look at giving your people an opportunity to reach their full potential? Look at them as invest-ments in your organization’s human capi-tal and not just as an expense. Anyone can be competitive with their capital (such as advertising) but investing in the skill sets of your people develops a stronger store and is priceless. A very small percentage of your advertising budget redirected to growing and training your employees will deliver to you much greater long term benefits than the newspaper in the trash. Don’t wait until you have a flat tire to do something.

Now more than ever are we required to be people of excellence.

In an industry where mediocrity has been the norm for so many dealerships, consumers fed up with this approach are now expecting to develop relationships with professionally acting sales consultants. No half-hearted efforts any more. Full throttle forward in the direction of a well oiled professional machine. Excellence is doing the right things when no one is watching. Earn respect, sharpen skills, whatever you do – get better at it. Develop a spirit of total team excellence in your deal-ership and watch your potential begin to increase speed.

Shed a few paradigms. It has become such a cliché for management to claim that ‘our employees are our greatest asset’. Yet, much to the dismay of most employees, the effort management puts forth into developing

this valuable ‘human capital’ continues to be seen as an expense and not as an invest-ment. It’s time for you to turn this around. Start looking at your training programs as if they were capital investments. Develop your very own ‘in-house’ training solution and deliver it consistently twice a month using new enhanced material. Don’t just settle for the ‘same old stuff ’, make it purposeful and clear. At a time when there are so many exciting new developments in enhanced skill and psychology training and with the market increasing, you’re going to need people at their full potential. Invest in your people and they will invest in themselves, in management and the dealership. You also have to then empower them to make decisions in order to get things done. I like to say if it doesn’t burn the store down, break the law, hurt anyone and we would be proud of it on the front page of our newspaper, then just make the decision. Empowerment, what a great word.

Choose your road wisely and navigate well. We can no more afford to spend major time on minor things than we can to spend minor time on major things. Keep your eyes on the road especially when you are accelerating in the fast lane striving to reach the full potential you are capable of. Need a map for reaching your dealership’s full potential? Send me an e-mail and request ‘The Map’. Keep both hands on the wheel!“Half of knowledge is knowing where to find it.” ~ Ben Franklin

Chuck Barker is CEO of his two companies, Impact Marketing & Consulting Group, LLC and Impact Summit, LLC, both located in Virginia. His experience ranges from an execu-tive with a Fortune 200 corporation to the automobile business where he has performed all management positions. His firms specialize in growing people and dealerships. He delivers leading edge sales training programs, customer relationship strategies, management leadership workshop programs and dealer/principal consult-ing assistance for the automobile industry. He has recently published the first comprehensive ‘in-house’ sales training solution program for dealers entitled Dealership Success Guide.

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


COVER STORY

Classic Chevrolet has a good-natured battle with Paddock Chevrolet in Buffalo for the title of the top selling Chevy store. And you won in 2009. How many years in a row has Classic been number one?

Four years in a row. It looks like it could be five in a row if we stay strong. We are more than 300 hundred units ahead of Paddock right now. That’s been a fun rivalry.

The loser was supposed to take the win-ner’s management team to lunch. Have you collected yet?

Duane Paddock took us out to dinner after our fourth victory, which was this year. He’s a good guy.

How long has Classic been around?Since 1990.

Was it your dad who started it?My father, Tom Durant, started it. It was

actually a business that he purchased in down-town Fort Worth sometime in 1988 or 1989. He moved it here about 20 miles away to Grapevine in 1990. There was nothing here at the time. The area looks much different now because of the growth.

Classic recently acquired some of the old Bill Heard stores.

Yes, one in Florida and one in Sugarland, Texas.

How are those stores doing?The Florida one is doing relatively okay. It

is not thriving right now, but the economy in Florida has some catching up to do. Our Sugarland store right out of the gate is just

doing awesome. We get to share the same front page on the top 250 list.

Are you looking to acquire more?I think we are taking a little bit of a breather

on that one, but we always keep our eyes and ears open. If a good opportunity came up we will look at it.

Do you get to Florida at all? Or are you tied to Texas?

I went to Florida for NADA. I got to drop by Stingray Chevrolet, but that is the only time I have ever been there.

Every store that we buy, we put in a key person who has gone through our flagship store in a management form, we like to call it the Classic Academy. They have proven themselves over here and have absorbed our culture and then we send them off as partners to go run another store.

It typically works pretty well. We don’t do it with a corporate mentality, though. We actually do it as a partnership, meaning we are not going to outline procedures. We don’t do contracts with vendors throughout the whole group either. It is just about as independent as it gets.

You grew up in the business?I have. Of course, I had my time while I was

at college thinking nothing of the business. But I have most certainly grown up with it. Since the age of 10 I started doing the basics. I washed cars, swept the service department. Everything you can think of, I’ve done it.

But I didn’t work in the back end. I grew up a little more front end oriented, which a lot of dealerships are strong in, but I want to balance it out now.

What are some of the things you are doing now to do that?

I spend time visiting with and learning from my service manager. Having a daily visits with him and then wrapping my mind

HAGENDURANT

Classic Chevrolet


In existence for only 20 years, Classic Chevrolet in Grapvine, TX, has been the number one selling Chevy

store four consecutive years and is about to make it five. Much of that is due to the culture Owner Tom

Durant created that his son Hagen, Classic’s general manager is carrying forward. Hagen sits down with

Dealer magazine and shares his thoughts on GM’s new management, being a “dealer kid,” and how

technology is helping Classic continue as an automotive retail leader.

around the back end – including the body shop – is giving me a good perspective.

Texas seems like it has a vibrant body shop business.

Yes, but it depends on the area you are in and the relationships you can develop with the insurance companies.

Where did you go to college?I went to Texas Tech. I went in 1998 and

came back here in 2002.

A Red Raider?Yes sir.

Good football team.Interesting football team.

What did you study?I studied business. I didn’t have any real

general direction, I just wanted an education.

You came back from school and started working at the dealership again, and now you’re the general manager. What is the timeline of that?

I sold cars starting in 2002, mainly Hummers. I looked at vehicles that I was enthusiastic about. I felt it wouldn’t be hard to sell that vehicle. I never wanted to have to talk a vehicle up. I was 22 and wanted something outrageous to sell so I chose that department. Selling those was the most fun I had in the car business.

Now you’re the general manager running the dealership. As a GM, what are some of the challenges that you have running such a big store?

I think one of the challenges — considering the employee count is more than 260 – is just being able to stay on top of communications and procedures. We have six trusted manag-ers running our stores and often procedures can be created and I am not aware of them.

So staying on top of the operational flow is very important. This is a business that has

been around for 20 years and it is huge. It is hard to wrap your mind around how it works. That is an ongoing challenge.

How is it being the son of a dealer princi-pal and having to gain the respect of the staff and not just being seen as another dealer kid?

I have thought that since I was young. I have always tried to approach everyone humbly. I try not to look down on anyone. I look straight at eye level. We are all here to work together. In many cases my elders are people that I manage and they have a lot to teach me.

That is both a good and a tough position to be in.

Yes sir.

What are some things that help make Classic such a success?

I think it’s the culture that’s been created. People around here catch on to the fact that they are compensated well and treated well. They aren’t getting bombarded with policies. It is a very relaxed place to do business and it is evident to the people who come here to do business.

You can’t just spring up a dealership. It has to happen over time. What got us to where we are today is all of the referral traffic that we’ve built over the last 20 years.

What are some things as you look back you would say “Wow, I’m glad we did that, it was a homerun for us.”

That is a good question. I’m glad we started doing an Internet department in 1998. There was sure a lot to take in for that as the technol-ogy started to evolve. At the time, the Internet was barely in existence.

Classic has a strong Internet business and has some good people working there.

Good people who really do understand communication online. That is a whole new skill – being able to communicate online in

nonverbal communication where you can’t always show your expressions or body lan-guage. A lot of our folks have done it so long that they have fine tuned that into an art.

I’m on your web site right now. Do you get a lot of traffic with your chat application?

Actually it is our number one converter. Client ConneXion does that for us.

Logically, how else are you going to engage with someone on your web site, besides what you put out there? Ask yourself, how many dealers are putting stuff up on their web site that is engaging? Chat is another way for us to communicate and engage.

You went with a company called Dealer Trends to build your web site.

We did that as an auxiliary option. Our OEM-provided web site had its obvious limi-tations, so we looked for a different company to do that. This month we are switching to VinSolutions.

Dealer Trends is a good company – espe-cially for web sites. But VinSolutions offers such an encompassing platform that is going to save us a lot of money. We’re going to gain so much in efficiency and awarenenss.

For example, we never used a CRM. I wanted to stay away from computer products even though, I am a computer geek. I love computers and I love what they can do for us.

But I don’t want to turn into the Cheesecake Factory where you have 75 open tables, but it still takes five minutes to get seated because the computer has to do it all.

But I did find that there are many elements of the CRM tool that improve efficiency of transactions. One is not having to fill out three separate buyer orders and take them to the sales manager for a signature. We can type the information in once and have all the information that has been collected populate and be pushed to the different parts of the


dealership, so we never have to do any double or triple entry. It eliminates the redundant tasks we’re doing now.

What is the value with the social network-ing as you see it?

I think the value for social media is being in front of people and having a message that resonates with people. I originally started playing with it in 2009. There wasn’t a lot to do and not much business is rolling in because of the downturn. People are talking about social media being the next best thing, so I thought I would give it a shot.

I’ll be honest with you, the first time I saw it I was wondering what the heck I was sup-posed to do with 140 characters on Twitter. I ended up watching people engage — acting like a mole watching people and how they interact. It has gone really good. I know a lot of people have argued how do you measure your ROI? I don’t think that’s where it is. I think it has other ways to really help your web presence; help the SEO of your web site if you do it right, and again it is relaying your brand and getting in front of people. It is also being human.

Have you brought in any consultants or trainers to help with that or are you doing it on your own?

I did it on my own for the first eight months. I had my Blackberry and iPhone out throughout the day and I don’t wish to go back to that. But I do like to speak on there on a daily basis. And I had a consult-ing company put together a blog for me. It provides valuable information and tips for the ownership experience of a new vehicle.

You mentioned the downturn in 2008-2009, what are some of the things you did as a general manager that helped keep Classic a premier store?

The first thing that happened was being made general manager. In November 2008, I graduated from the NADA’s Academy and after that I just started to dive into things I hadn’t been into before. I was looking at gen-eral ledger accounts and looking at expenses and creating templates for monthly proce-dures to help with workflow.

Dad caught wind of that and put me in the chair even though I didn’t think I was ready for it. You never think you are ready to take on a business of 260-plus employees at the age

of 29, but you could eat an elephant one bite at a time, so I figured I would just roll with it. It has been a blessed learning experience.

As a store you made cuts.We didn’t have to make too many, but we

did make some.

Your sales really didn’t drop a whole lot, right?

They didn’t drop too bad, we were at 4,101 in 2009. In a typical year we usually push 5,000, so we were about 900 to 1,000 cars short by the end of the year.

Was there any point where you were nervous?

There were points every day where I felt nervous. But you always have to go back to being clear and level-headed about it. You always have to think about how people will react. The whole mass can react if there is a huge tragedy, when in fact there is light at the end of the tunnel.

Recently, General Motors sent an internal memo about Chevrolet. What was your guys take on that?

Which memo?

It was leaked to the news last week that GM executives wanted employees to ditch the Chevy nickname and start using Chevrolet only.

I think it is ridiculous really to be honest with you. I don’t mind it, and I’ll roll with it. I think I am referred to as Chevy.

I think they’re backing away from it now. I see on your web site you use Chevy.

The names are synonymous; the name will have negative effect on web traffic because people are going to type in Chevy not Chevrolet. They want to call it Chevy.

What are some other things you are going to be doing over the next year?

I have been very meticulous about my ecommerce with a huge primary focus on the front end when I am not thinking about fixed operations. I’ve got a lot of plans for that, but unfortunately these plans take time to deploy. It is kind of like watching a bean sprout grow.

It’s tough being patient.Yes.

You want to do it all at once, but you just have to tackle one thing at a time.

You want to take the big picture perspective of what I want to do. I think we should be able to offer all of our services in an e-commerce fashion. I’m not talking advertising, I’m talk-ing e-commerce. I think just how you can do it at PayWay; you should be able to pick what you want to have and put your credit card information in there and go to the dealership and say your name and be able to pick it up. I think you should be able to do the same thing with a maintenance plan and have a promise to get the vehicle back at a certain time.

Why do you have to do a parts request by e-mail to the parts representative at the counter, who is going to e-mail you back? Why can’t we do that real time online?

On your service side, are you looking at bringing in a company that is going to let your customers set a real time service appointment?

This would be a software. I would love to do that and I would love for no overlapping between the computing and the viewing. That dynamic has to be perfect. No more Cheesecake Factory.

I have a feeling that if I talk to you in a couple of years, you are going to be so far ahead in your fixed operations services then where you are now.

Well, you know there is so much fun in fixed operations, if you good at turning switches and being patient after you have done that, then remembering to check your results down the road, it can be a lot of fun.

I see there is a lot of efficiency that you can drive in that department if you know what you have; using technology can save you so much money. Money that goes right to your bottom line.

Think about this, you’ve got your sink drain closed and the sink is making one drop per second and you go on vacation and come back and your sink is overflowing. Those are little drops. They don’t seem like much, but in e-commerce we are missing little drops. And if we develop net buckets to collect those drops then we can gather more opportunities.

You have been diving into the fixed opera-tions side. What are some things you’re

continued to P-57


JOEELLSASSERGeneral ManagerGolling Chrysler Jeep Dodgepage 16

July 2010

Internet Sales:How to Set Yourself Apart

in a Competitive Marketpage 10

Digital Process:Eight Steps for Real

Reputation Managementpage 14

Web Sites:Turn Your Site into the Ultimate Closing Tool

page 20

Technology Trends: Four Steps to a Super

DOC – and More Profit page 24

DD 2 July 2010 DigitalDealer-magazine.com

ABLE OF CONTENTSTJULY 2010

PRESIDENT AND CEOMICHAEL ROSCOE

VICE PRESIDENT AND EDITORIAL DIRECTOR

CLIFF [email protected]

248-351-2620

PUBLISHERGREG NOONAN

[email protected]

CONTENT COORDINATORMARIA BURKEL

[email protected]

ART DIRECTORJOE BIRCH

PRODUCTION MANAGERELIZABETH BIRCH

PRINT PRODUCTIONNICK THOMAS

COVER DESIGNJOE BIRCH

COVER PHOTOSWUJCIAK & HESS

CIRCULATION SUBSCRIPTION

RICH 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

C O M M U N I C A T I O N S

FEATURES Digital Dealer Cover Story 16 Joe Ellsasser General Manager Golling Chrysler Jeep Dodge COLUMNS AAISP Notes 6 Get Rid of the Internet Department? It’s Your Call Cliff Banks

Internet Sales 8 Take Out the Trash and Keep the CRM from Being a

Garbage Dump Joe Webb

10 How to Set Yourself Apart in a Competitive Market Angela Martin

12 Moving from Stiff-arm to Hug Tom Mohr

Digital Process 14 Eight Steps for Real Reputation Management Steve Stauning

Web Sites 20 Turn Your Site into the Ultimate Closing Tool Joe High

Technology Trends 24 Four Steps to a Super DOC – and More Profit Sandi Jerome

DEPARTMENTS 4 News


IGITAL DEALER TECH NEWSD

Dealix releases major update to award-winning

hassle free lead return program

Dealix, a division of Cobalt, has announced additional features for its award-winning Hassle Free Lead Return program. Features included in the upgrade, Hassle Free Lead Return 2.0, include enhancements that respond to dealer requests for longer periods in which to submit leads and easier ways to return leads.

Dealix launched the Quality Pledge in September 2009. The Quality Pledge speci-fies that dealers should only receive leads that can result in a car sale, and is backed by a feature set – Hassle Free Lead Return – that allows dealers to return leads that do not meet a criterion of the Quality Pledge. Collectively, the products allow dealers to make sure their lead baskets are optimized during the course of the month, and provide Dealix real-time data with which to manage its lead supply. The popular program was honored with a Market Innovation award by TargusINFO and has seen widespread adoption. Nearly 2,000 dealers are now returning leads each month.

Key enhancements in version 2.0 of Hassle Free Lead Return, which were the result of dealer feedback, include:

- Increased the time frame for returning leads from seven to 14 days. This gives dealers more time to work and close the leads.

- Reduced the amount of documentation required to prove a duplicate return. Dealers no longer need to provide a copy of the origi-nal lead when they submit a lead for return. They just need to provide original lead date, time and source.

- Added ability to enter comments with lead returns, allowing dealers to provide more information about their experience with the lead which enables Dealix to process the lead faster.

“With the Quality Pledge, we sought to place the bar for a qualified lead very high. We knew the program was unprecedented

and that we would learn how to enhance it as our customers used it and told us about their experience,” said Egon Smola, vice president, New & Used Car Leads Business. “It’s really important to us that the program works for our dealers – fits in with their workflow and, in the end, saves them time and allows them to make more money.”

The program is having a positive impact on sales for Dealix customers. In a recent survey of dealers using the Hassle Free Lead Return program 86% reported that they are able to realize a higher ROI with the Hassle Free Lead Return program because they’re able to replace returned leads with new ones without increasing their spend.

“The Quality Pledge represents the best offering in the industry and is why I went with Dealix,” said Michael T. Halloran, e-com-merce director, The Napleton Dealership Group. “I have dropped all other lead pro-viders because of the Dealix Quality Pledge.”

www.cobalt.com/dealix

Reynolds adds real-time vehicle inventory updates for dealership web sites

The Reynolds and Reynolds Company has announced the availability of real-time inventory updates for customers using the Reynolds ERA dealership management system (DMS) and web sites from Reynolds Web Solutions.

Now, with this advancement, when dealers add a vehicle to an ERA vehicle management screen or make changes to existing inven-tory records, the updates will be reflected immediately – and automatically – on their WebMakerX 2.0 web site. As a result of this innovation, consumers who are shopping for a car on the dealer’s web site will be able to view the most accurate information about the dealership’s current offerings, including status, price, and option packages.

“Real-time inventory is one more competi-tive advantage we can offer dealerships as they work to stay top of mind with customers,”

said Trey Hiers, vice president, Corporate Marketing, for Reynolds. “When a dealer’s online inventory is updated in seconds, instead of overnight, consumers see what’s in inventory in that moment, not what cars might have been sold yesterday or even a few minutes ago. That can help give consumers more confidence in the dealership’s products and give dealers one more edge in building a relationship with consumers.”

For dealers using web sites from Reynolds Web Solutions, real-time inventory updates occur automatically with no additional key-strokes or changes to their ERA DMS or web updating processes.

www.reyrey.com

vAuto releases mobile iPhone App

vAuto, Inc. has announced its used car inventory management system is now avail-able as an application for the Apple iPhone and iPod Touch.

“We recognize that our dealers need the ability to access our real-time market infor-mation wherever they are,” says Keith Jezek, president and CEO. “We decided to develop our mobile application initially for the Apple devices because they are the preferred mobile devices for web searching activities.”

Live market appraising is the first vAuto module developed as a mobile application for no additional monthly subscription charge for vAuto users. It is available for download from the App Store on iTunes.

All vAuto customers now have the oppor-tunity to utilize the fully integrated market based appraising functionality from their Apple touch device. In addition to traditional third-party guidebooks and auction values, the application features vAuto’s exclusive rBook, which allows customers to appraise with the mindset of “how to get out of a car before you get in.” The mobile application functionality also includes the proprietary barcode VIN capture method that automati-cally decodes and uploads to vAuto.

www.vAuto.com


Get Rid of the Internet Department? It’s Your Call

Let me state right at the beginning that

I’m going to waffle in this column. And I’m not going to apologize for that.

More and more, I’m editing columns and talking to people that advocate doing away with the Internet department and becoming and Internet dealership. Part of the thinking is that most – if not all -- of your customers are using the Internet to shop for vehicles today, therefore, everyone in your dealership should be able to handle the “Internet customer.”

Instead of having a separate department handle those customers, all of your salespeople should be able to converse using e-mail and handle customers that are using the web to find their vehicle and the dealership they want to buy from.

That’s not wrong. There are dealerships that have moved in that direction and have been very successful with it. But there are still dealerships that are incredibly successful with an Internet department and would be crazy to change their process or the way they manage their customers.

This where I’m going to waffle – should you get rid of your Internet department? Honestly, I don’t have a clue and I don’t care. I’ve been writing about this topic for years – and probably was the first one to start writing

about the Internet department going the way of the Dodo bird (that’s a Chip Perry quote from years ago).

If you think about it, it really is somewhat ironic – the Internet manager is a dinosaur now? I don’t think so – at least not yet.

What I do know is that you should do what works best for your dealership. Do you have the right management team in place that can successfully move your dealership to become an Internet dealership, instead of relying on one department to handle it?

If you want to move in that direction, you also have to make sure you have a business case for doing so, not just because a consultant tells you it’s the way to go.

If your Internet department is selling a lot of cars, why mess with that? If it ain’t broke, don’t fix it, right?

My favorite part of my job is getting to talk to so many dealers, Internet directors and general managers. And one thing I’ve learned is that there is more than one right way to get the job done.

Last month, I interviewed Roy Reutter who is the e-Commerce director for the Sheehy Group. They have no intention or reason to get rid of the Internet department. It’s incred-ibly successful.

This month, Hagen Durant, the general

manager for Classic Chevrolet in Texas, and the top selling Chevrolet dealership in the country, tells me he would like to make the transition to becoming an Internet dealer-ship where everybody is able to handle the Internet customer. Durant is young, tech-nologically savvy and probably represents the new breed of general managers that are going to lead our industry for years to come.

Two different perspectives, but each wildly successful.

In the Digital Dealer cover story this month, we interviewed Joe Ellsasser, the general manager for Golling Chrysler Jeep Dodge in Michigan. It’s the top selling Chrysler store in the country and I love what they have done.

Golling separated the Internet marketing from the sales functions. Think about it -- it’s two different skill sets. In way too many stores, I think we’ve dumped both sales and Internet marketing jobs onto the shoulders of the Internet manager. I suspect it’s a lot for one person to manage. You really want a salesperson handling your online marketing? And you want a marketing person trying to close a deal?

I’ll refrain from being too dogmatic here, but if your Internet manager is handling both selling cars and marketing them online, you might want to evaluate whether you’re getting the most return on your investment.

Being good at building web sites, under-standing search and social networking and knowing how to buy leads properly are com-pletely different skill sets than being able to sell a car – whether you’re doing it online or in the showroom.

You might read things in this magazine that you disagree with. Some things might even make you angry – such as reading that your position should become extinct.

That’s a mark of a good magazine. We try hard to provide you with as many ideas,

IGITAL Dealer AAISP NOTESDCliff Banks

continued to P-DD24

Tweet?Sweet! Loyalty Driver

eNewsletter Articles Now Appearing

on Twitter.

Just another way to spreadthe good news.

Innovative Enewsletter Solutionsloyaltydriver.com | 866-964-6397

IMN-Twitter-Ad-FINAL-8.25x10.75.indd 1 5/13/2010 11:59:54 AM


Take Out the Trash and Keep the CRM from Being a Garbage Dump

Please open up your wallet, pull out a $50 bill, walk over to the nearest trash receptacle, and throw away

your money. What do you mean ‘no?’ Of course, it sounds foolish, but that is what your sales team is doing with your money right now. There is a financial cost associ-ated with bringing every customer into your showroom. Every day (maybe every hour), a member of your sales team works with an in-store customer and doesn’t source them properly, essentially wasting the advertis-ing money you spent to lure them to the dealership in the first place.

Next to a strong web site and DMS, a fully-functional CRM (customer relation-ship management) tool is the most impor-tant piece of technology you can utilize in your dealership. Some Internet experts that use them well might place their CRM’s importance even higher. Most quality CRMs have the ability to keep track of the ROI (return on investment) you are receiving from your advertising budget.

However, this only works if each and every prospect/customer/lead/sale is prop-erly sourced when being logged into the system. There is no quick fix. The only answers are training, dedication, and discipline.

I see it almost every day I visit a dealer-ship. A customer is greeted by a salesper-son and when that salesperson logs them into their respective CRM, they don’t even ask what brought the customer in. They assume. They choose on behalf of their cus-tomers. The most common CRM crimes I witness when logging customers come to source. That is why 80% of all of your logged customers are wrongly sourced as “Lives in Area,” “Drive-by’” “Walk-in’” “Phone-up’” or “Manual Add.”

Let me help explain why these should not be allowed as sources.

“Lives in Area” – Wow. Congratulations, customer. Did you just wake up, realize that we are members of the same town, and decide to pop in and purchase a vehicle with no research? If that is the case, Mr. Dealer, I want your location. More than likely, they studied up ahead of time, sent in a lead prior to in an effort to keep you honest, or has even used your service department in the past. If the latter is the case, then mark them as a “previous customer.” Sure, it isn’t as a previous sales customer, but there is at least some validity to that source.

“Drive-by” – Mr. Customer, did you spot this exact vehicle you are purchasing as it was nestled in amongst 100 other vehicles while driving past our store at 35 mph? If so, your eyesight is that of a fighter pilot. Certainly some outside influence made you drive into the dealership rather than a glimpse out of the corner of your eye or a rare muscle-spasm and jerk of the wheel.

“Walk-in” – Did your dealership have a multi-million dollar mechanical moving sidewalk installed from different corners of the neighborhood to drag unsuspect-ing customers into your store? No? Was someone involved in an accident in front of your dealership and immediately hoofed it over to pick out a replacement vehicle?

If you answer ‘no’ to these two questions, then there is no such thing as a walk-in.

“Phone up” – Where did the customer get the phone number? That is the source. It’s not like you receive calls saying, “Yes, I’m in the bathroom stall at the local KFC and your number is here. Thought I’d call…. Oh, a new car? Yes, that sounds great.” Even if that did happen, the source would be “KFC bathroom stall.”

“Manual Add” – I can only assume you chose this source because you manu-ally entered the customer as opposed to its alternative which is….. what? Telepathically input the customer’s info?

These sources must be removed from your CRMs. Having these fairy-tale sources as options makes your employees lazy and throws your hard-spent advertising dollars in the trash. The saying is “garbage in/garbage out.” If you allow this to con-tinue, then you are paying your CRM to put out junk and that is unacceptable.

Here are two ways to help source:At the meet and greet:

The order of questions you and your sales staff are asking the customers must change. After the customer states their vehicle of interest, have your team respond with “Great. Have you had the opportunity to research this vehicle online?” If they say no, be thankful and tell them you can answer all of their questions, thereby making you the “Internet.” If they say ‘yes,’ say “Great. Which sites? Did you have the opportunity to contact our Internet department?”

The purpose for this is two-fold. First, whatever sites they researched/found the vehicle on, that is your source and you can use that site to your advantage (if it is a resource site) during the negotiation process with the customer. Second, you will learn if they’ve contacted your Internet team ahead of time and get the customer in front of

IGITAL Dealer INTERNET SALESDJoe Webb

There is a financial

cost associated with

bringing every customer

into your showroom.

DigitalDealer-magazine.com July 2010 DD 9

the correct person who has already built rapport with them (and prevent skating). Now, we have heard the phrase “buyers are liars,” but in my experience, if you ask them right away without hesitation if they’ve con-tacted the store already, they will tell the truth. If you don’t ask, they simply won’t tell. Why should they show their hand if you don’t even do your job and ask the right questions?

In the finance office:Have a basic sheet of paper with the

printed logos from all of your true advertis-ing sources – (knowing that KBB/Edmunds can go to different lead providers – research by shopping those sites ahead of time). The finance manager then simply asks the customers to circle the place(s) that they conducted the majority of their research on or which site led them to contacting you. Once the customer acknowledges,

just ensure that the correct information is being filtered back into the CRM.

Now when you run your reports, you will see how much the Internet truly influences your customers and you will learn your actual ROI from your advertis-ing expenditures. It takes training, time, and discipline. Don’t let your salespeople turn your CRM into a garbage dump. You spend too much money on the tech-nology and the advertising to let that happen. Put the right processes in place. You’ll spend your money better find new ways to market to past (properly-sourced) customers. Your mother was right. It’s time to take out the trash.

Joe Webb is the president of DealerKnows Consulting, an automotive Internet sales training firm specializing in assisting deal-ers with the advancement of their online efforts through hands-on/on-site and virtual

consulting. Webb has been called “the funni-est guy in the car business” and has consulted nationwide, showing dealerships success by instilling proven Internet marketing prac-tices. He has been writing for Digital Dealer magazine almost since its inception and is a regular top-rated speaker at the Digital Dealer conferences. In the past, Webb found success in the trenches when he created and managed an award-winning business development center for a Chicago dealer group. His primary goal, as he always states, is “to better the culture of car sales”.

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


How to Set Yourself Apart in a Competitive Market

This is my first article for Digital Dealer magazine and I am so excited to share my daily life in the dealer-

ship with all of you. I feel your pain and your happiness along with the ups and downs of the car business. We are unique. We deal with high pressure on a daily basis; there are not many other businesses that run full force day in and day out. Sometimes it is exhausting, sometimes it’s thrilling. We all get up every day and do it all over again. That is what makes us unique.

With all the competitive shoppers out there, we as dealers have to find a way to set ourselves apart from the rest. How can you set yourself apart? You have to respond faster than the next guy, right? We have all been taught that since our first month in the Internet department. I am here to tell you that being the fastest might not get you the responses it once did. Customers’ expectations have grown over the years. You could have possibly gotten away with a two-sentence response in two minutes years ago and still made an appointment and sold a car.

Not anymore. Customers expect a pro-fessional look and feel to every e-mail you send out – that’s right, every single one. It is incredibly important to show them your dealership’s professionalism. They might even pay you more money for the same car that the guys down the street because of it.

Can you dedicate yourself to making your e-mail and phone messages professional and effective? If so, I can guarantee you great results. I have watched it happen – yes, it takes an enormous amount of dedication to do this every time but I believe that every one of you has the ability to do this. The problem is that most of you do not have the self-discipline to continue to do this every day.

Writing and designing an effective and professional e-mail or template takes is the very first step you need to become an expert

in order to be successful with your clients. This is a must; it is not an option.

It seems so basic, doesn’t it? I challenge you to take a look at the last 20 e-mails you sent out and see how many looked and sounded professional. Did they have your company logo? Did they have your full signature – and by full, I mean name, title, dealership, web address, e-mail address, phone numbers, physical store address and lastly, your picture.

Your picture will create a relationship and help break down the barrier from the beginning. One of the hardest things that I encountered when I began in this business was the perception that my clients had of me. I began hearing, “You don’t seem like a car salesperson,” and I always thought, what does that mean? I am sure many of you have heard this as well. The addition of a picture in your signature line will help your clients see you as a living and breathing individual. And place you a step ahead of your competition.

Next, place a header on every e-mail. A header should include your dealership logo, a manufacturer logo, store phone number, service and parts phone number and web address. I would include images of your store – this will help the customer recognize

your dealership. Include an award that the particular vehi-

cle has received, such as a five-star rating. For our visual customers, include different vehicle images to help build emotion with them.

Lastly, provide the customer options. Include at least one other new vehicle with less equipment and at least one similar used car. The more options you give them, the more likely they are to come in and see those options. In my experience, customers have trouble saying “I can’t afford that,” so show them less expensive vehicles to eliminate the uncomfortable situation of them not being able to afford the fully loaded up version.

To sum it up for you, make your pres-ence professional and your customers will be blown away by this – as little as it seems, it will have a huge impact on your personal success as well as your dealership’s success. If you are reading this, you are more than likely ahead of your current competition, so keep thinking outside the box and keep setting yourself apart.

Angela Martin has been selling cars out of the Internet department for 10 years. She now is the Internet sales director for Feldman Imports in Minneapolis, which averages 80-85 web-based sales. She graduated from the University of North Dakota in 2000 with a communi-cations degree with a focus on graphic design and photography.

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

IGITAL Dealer INTERNET SALESDAngela Martin

I am here to tell you

that being the fastest

might not get you the

responses it once did.

What are Your online ads Missing?

610-738-3313homenetauto.com

[email protected]

Inventory Online (IOL) Marketing Suite is a complete internet merchandising solution.

Call today to see what your ads are missing.


Moving from Stiff-arm to Hug

The entire history of auto sales has been defined by the dealer’s quest to con-trol the selling process. Pre-Internet,

that was straightforward: the customer walked in the door, the music started, and the four- square dance began.

Today, the customer has taken control. As opposed to you pre-qualifying the customer, the tables have turned: the customer is pre-qualifying you. As you’re figuring out her creditworthiness, she’s evaluating your trust-worthiness. As you’re determining her ability to buy now, she’s evaluating your ability to serve her well. She wants to know price, avail-ability and service quality, and she will keep you at arm’s length until she’s satisfied she has the answers and has decided you’re the one.

There are four steps along the trust con-tinuum. Before she will move to the next step with you, she must be convinced you’ve earned it. The savvy dealer understands this trust continuum, and is expert at building confidence at every step.

Step #1: The leadThe submission of an Internet lead is the

first step along the trust continuum. Here, the customer is at the most arm’s length. She has submitted her lead to multiple dealers and is in a position to evaluate the response “from a distance.” That’s especially true if she hasn’t included a valid phone number.

Since there is no real engagement yet, she’s free to ignore an unsatisfactory dealer response. No interpersonal norms have been broken.

I call this stage the “moment of truth.” If a dealer responds with speed, authenticity and transparency at this stage, and does so in a way that competitively advantages him vs. his competitors, he goes a long way towards winning the right to a deeper dialogue with the customer.

Specifically, the customer has asked for

a price quote. Give one! Execute a multi-vehicle price quote in 10 minutes. That’s best practice. Then get on the phone in 10 minutes as well (if the phone number is present), or e-mail a request for the phone number (in 10 minutes) if it’s not. That kind of quick, comprehensive response sets you dramatically apart from your competi-tors, who (on average) don’t even respond to 25% of all leads and whose average response time on those that are responded to is over five hours.

Step #2: The chatIf the submission of a lead is the most dis-

tant stage of customer engagement, chat is next. At this stage of the trust continuum, the customer has decided to engage in a real dialogue, in real time. But it’s the type of dialogue that still enables the customer to easily walk away if she doesn’t like where the dialogue is going. There are no social norms broken if the customer stops chatting.

Here again, the dealer builds trust by speed, authenticity and transparency. The ante to any chat session, of course, is that you have to be available when the customer starts chat-ting. Too often, no one’s home when the cus-tomer knocks.

Once you find yourself in a chat session with a customer, be responsive to her informa-tion requests. Did she ask for a price quote? Send one right away! In fact, best practice is to send the quote while your chat is in session. You can even embed a link to the quote in the chat itself, if you possess the right tools. Use the chat session to cover the key issues (vehicle preferences, purchase timeframe, financing requirements, trade-in status, etc.), get the phone number, and propose an appointment.

Step #3: The phone callWhen the customer accepts a phone call

from you, or makes a call to you, she has

signaled that she’s built enough trust in you to give you a full hearing. She is ready for you to prove to her that you can best serve her needs. If you’re the one calling her, make that call right after you’ve sent your quote—best practice is within 10 minutes of lead arrival. Then you can use the quote as the focus of your conversation—“I sent you three new vehicles and four pre-owned vehicles sur-rounding your trim-level request—which of those do you find the most interesting?” The first call is your opportunity to dem-onstrate your product knowledge, to cover the “key issues” (noted above), and to set the appointment.

Step #4: The in-store visitThe moment the customer walks through

the showroom door, she is communicating, “This is your deal to lose.” She has done her research, she has pre-qualified you and she is ready to buy -- if you treat her as she has come to expect from you. Now you must follow through with an in-store experience that reinforces the reputation you have begun to establish -- authenticity, transparency, ser-vice, product knowledge, fairness, efficiency. Now the four-square dance can indeed begin. And when the dance is over, more times than not, you will be handing her the keys.

Tom Mohr is CEO of ResponseLogix, and has worked closely with auto dealers for 25 years. Prior to ResponseLogix, Mohr was president of Knight Ridder Digital, where he was on the board of Cars.com.


IGITAL Dealer INTERNET SALESDTom Mohr


Eight Steps for Real Reputation Management

It doesn’t matter if your name is on the building or if you’re “just drawing a pay-check,” your dealership’s online reputa-

tion is quickly becoming the most impor-tant attribute of your long- and short-term marketing strategy. Even if you’re located in a small town and currently have no online reviews, as an automotive dealer, your future will literally depend on the user-generated content (UGC) that makes up your online persona. We call this your “online reputation.”

Everything I’ve read about managing one’s online reputation has been centered on ways dealers can game the system. Short cuts, if you will, on how to turn a plethora of negative consumer reviews into a stellar report card in just days. Generally, these tactics center around a single ratings web site or the cre-ation of phony blogs that sing the dealer’s praises. Gaming the system with the help of dealer ratings sites or random blog posts provided by someone who also happens to be on the receiving end of a check from you every month is not really reputation man-agement – it’s damage control. Moreover, it’s dangerous, as consumers are not stupid, and their opinions do not exist in a vacuum. There are simply too many angry customers and too many places for them to vent for you to “manage” your online reputation via a single web site.

Eight steps from bad to greatOver the years, I’ve worked with more

than a hundred dealers to help them cultivate and create exceptional online reputations, and none of these efforts were quick or easy. Throughout all of these endeavors, I have been able to isolate an eight-step plan that can take any dealer from the bottom to the top with their online reputation (provided they don’t try to short-change the process).

Step 1: Gauge the online buzz about your dealership.

Start with Google. It’s simple: just Google your name or your make (plus your city) and you should quickly see a multitude of consumer ratings and reviews about your dealership. Google, besides being the most visited web site in the world, also aggregates user reviews for their local search product. (You may have noticed the map results that appear when you complete certain business searches.)

Once you drill down into the local search results and also review some of the free (organic) results, you will likely want to pull out your hair. If you still have a few strands remaining and you didn’t get your fill about what the world really thinks of you, you can also Google your name with modifiers like “rip off” or (excuse my French) “sucks.” After that, you may want to see what you look like on Bing, Yahoo! and some of the dealer-specific ratings sites like Edmunds and DealerRater.

Step 2: Determine the veracity of the nega-tive comments.

Are the online complaints recent? Are they true? Moreover, do these conditions still exist? It is vitally important that you take all com-plaints seriously. As dealers, it is sometimes common to discount the occasional bad CSI review as a one-time event or just an over-demanding customer. While that might be okay for a report that only you and the OEM see, a bad online review can potentially reach millions. (Don’t believe me? Go to YouTube.com and search for “United Breaks Guitars” to see how people have viewed one consumer’s creative complaint about United Airlines.)

By the way, if you answered yes to any of the questions above, then it doesn’t matter

what you do online, you have to take the drastic offline measures in Step Three before you will be able to positively affect your online reputation for the long term. (If you get noth-ing else from this article, please know this: you cannot be a rat-bastard offline and be a saint online… consumers just won’t let that happen.)

Step 3: Retrain, repair, retool, replace or rehire.

In order to truly eliminate the issues that led to the negative reviews in the first place, you might be required to take drastic mea-sures. If you are in a senior leadership position in your dealership, you need to be prepared to replace or rehire certain positions in order to solve the legitimate concerns. While this should be your last resort, if your efforts to repair, retrain or retool fail, then this becomes the most important step.

As I wrote much less eloquently in step two: no matter what you do online, you cannot escape who you are offline. There are too many consumers, with too many places to tell their story; and you cannot control the conversation forever. The dealers who will win in the end are those whose great online persona matches their great offline persona.

Step 4: Verify the three or four most influ-ential review sites in your market.

While every market is a little different, Google is the most influential review site in every DMA, bar none. Besides being the biggest web site used for in-market consum-ers researching auto dealerships, Google also aggregates reviews from various sources – making it (sorry JD Power) the most impor-tant web site for your dealership to monitor and affect.

Besides Google, you’ll want to pick two or

IGITAL Dealer DIGITAL PROCESSDSteve Stauning


three other web sites that provide reviews and are influential in your market. You’ll leverage these in Step Six to drive positive mentions for your store. For some markets, the other review sites might be generic like Yelp or Angie’s List, while for others they could be dealer-specific sites like Edmonds, KBB or DealerRater.

Step 5: Identify your truly satisfied sold and serviced customers.

Why do you want to identify those who are truly satisfied? Why not just ask every customer to review you? The reason you cannot ask every customer to tell the world about their experiences is that even if you truly satisfy ninety percent of your clientele (a large number) your negative reviews will outnumber your positive reviews by at least a 2:1 margin. You see, those who dislike you are more likely to review you than those who like you.

The easiest way for most dealers to deter-mine who is truly satisfied and also segregate these customers for a thank you e-mail seems to be by using those furthest downstream in the sales and service process. For exam-ple, your cashier should know (if he or she cares about your customers) which service customers are truly satisfied and which are not. Asking this person to place a happy face sticker or some other designation on the RO will ensure you can easily queue up the satis-fied customers for step six.

Step 6: Send these customers a ‘thank you’ e-mail with links to the web sites identified in Step 4.

This isn’t a complicated step, and it shouldn’t take you more than 30 minutes a day provided you create a genuine, humble-sounding template for these messages. Give this task to a clerk – someone who receives lists of satisfied customers from your service and sales teams, and who can send emails on your behalf – and you are more likely to see results than if you assign it to an overworked service or sales manager.

Be sure the links to the targeted review sites work and also that they direct satisfied consumers to your page on these sites. You do not want to frustrate a satisfied customer

by dumping them on a confusing homep-age and asking them to find a way to leave a review on your behalf. (Quick tip: Using words like “thank you” and “please” in this e-mail go a long way toward driving posi-tive online mentions.) Done correctly–and targeted only to the “truly satisfied” and you should expect reviews from between 5 and 10% of these customers.

Step 7: Monitor (at least monthly) for new comments.

The easiest way to monitor the web for what others say about you is to set up Google Alerts. These are free and can be created to automatically send you updates whenever your dealership’s name appears on the web. Unfortunately, Google Alerts fail to capture every new review, so it is equally important to set up a schedule to evaluate new com-ments about your dealership on the top ten or so review sites in your market. (You should already have the top four identified from Step Four, so you’ll only need to come up with six other places where people might speak negatively about you that you will have to monitor.)

Step 8: Address all negative comments.Many review sites will allow you to rebut

or comment on an online review, while others will not. Whether or not you can directly tie your explanation of a negative situation to the specific review is irrelevant – if you do not post something (perhaps even as a review that immediately follows the negative review) that explains the situation from your point of view, the consumer’s words will be taken as fact by many of the future prospects you will never see.

Once you read a negative review online, it is time to spring into action. However, before you post a quick rebuttal, you need to take a deep breath and gather all the facts (includ-ing speaking with the customer, if possible).

If the option is available, attempt to resolve the issue amicably. If this happens, then you have every right to ask the customer to remove or amend their review. If you cannot resolve the issue or get the negative words removed, you need to rebut – in writing.

To eliminate typos and bad grammar, write your rebuttal in Microsoft Word; then let it sit. You need to let your words stew a little so that you don’t come off sounding like an idiot. There is plenty of time to post a rebuttal – it doesn’t have to occur within minutes of the original review.

After at least a few hours (but, preferably overnight), edit what you wrote and don’t sound angry – just explain the situation. Be sure you never accuse the customer of anything and never point fingers – and take the blame if warranted. (Some dealers choose to take the blame even if unwar-ranted – it makes them sound humble and sincere.) Be factual in your response, and keep personalities out of it. If appli-cable, offer to rectify the situation to the customer’s satisfaction.

Now, before you post this literary mas-terpiece for the world to see, let some-one else proofread it just to be sure. It is important to remember that whatever you write could be online forever – just like the original comments.

Can you really go from bad to great?Depending on the number of truly satisfied

customers they are able to identify and con-tact, most dealers can expect to add between 10 and 30 positive reviews in the first 30 days. It doesn’t take stellar math skills to realize that you can very quickly go from bad to great… if you just follow these eight.

Good selling!

Steve Stauning is the founder of pladoogle.com and a principal in the marketing services con-sulting firm Kain-Stauning. He is the former ecommerce director of the Asbury Automotive Group, and prior to that he spent several years overseeing the development of web-based prod-ucts for automotive dealers at Dealer Specialties and Reynolds & Reynolds.


Joe Ellsasser General ManagerGolling Chrysler Jeep Dodge


COVER STORY


Golling Chrysler Jeep Dodge finished May as the top selling store in the country, right?

Yes, with 308 units sold.

Nationally, where are you ranked usually? The top 10?

Nationally, we are usually number one. We’ve had that ranking for three years now.

Personally, how does it feel when you think about it you are the general manager of the top selling Chrysler/Dodge/Jeep store in the country three years running? That has to feel good.

Yes it does. I am very proud of all of our people and how hard they work each and every day to keep us on top. And I’m more proud that we are right at the top on cus-tomer satisfaction too. Not only do we deal with tremendous volume, but each and every customer is very satisfied.

How have you used technology on the sales and marketing side? Also, how have you used it for training? How has it helped you become more efficient as a dealership?

I think it all started with the affordability of high speed Internet access. That’s when technology really started to take off. We can see how CRM software has evolved the last several years.

As I look back, I think we were one of the pioneers using CRM software. We were doing it before “CRM” became the buzzword.

Our strategy has been to take all the mun-dane things a salesperson had to do and use some type of technology to help them per-form those duties. We know that they should keep in contact with their customers. But for good salespeople to build a portfolio there just is not enough time in the day, so we use CRM technology to print and distribute e-mails, letters and to help us contact customers in the way they want to be contacted.

We also use the CRM tool to act as the salesperson’s personal assistant. It keeps them right on top of keeping in contact with their customers. Also, it is a great management tool. Every single manager can manage their sales staff and each individual person.

The call recording ability we have enhances our training of our veterans but also helps us to bring on new salespeople.

A lot of dealerships buy the technology and it ends up sitting on the shelf. How do you combat that from happening?

It starts at the top with Mr. Golling and myself, if we see something we can improve,

and it is not burdensome on our people’s time, you can sell it to your staff.

It is critical that you sell it to your team, because people resist change. We have to show them if they get into the habit of using the technology how they can create revenue for themselves. It creates revenue for the dealership.

It starts at the top management then it has to go down to mid-level managers and then right down to the sales staff and service advi-sors. It’s really about follow-up and making sure that the concept is going to work.

We used to pilot a lot of new software and tools that I thought were good, but our think-ing has changed on that. You take a lot of time from people doing that, so in the last five or six years, we’ve done it less and less. If we are going to pilot something, we try to make sure the concept is going to work. You can’t just pilot things; it wears out your people. We made the decision a few years ago, and I think our people respect us for doing that.

What CRM software do you use?Today we are using Cobalt Prospector,

which had been created by a Toronto firm called Cowboy, before Cobalt acquired it.

Golling Chrysler Jeep Dodge in Bloomfield Hills, MI, was one of automotive retail’s early technology pioneers piloting some of the Internet’s first CRM solutions. Owner Bill Golling and

General Manager Joe Ellsasser used technology to help create Chrysler’s top selling store while maintaining a strong focus on customer satisfaction.

Ellsasser shares how the store early on saw the need to separate Internet marketing from Internet sales and weave CRM throughout the service and sales departments.


When we were trying to implement CRM, we flew up to Toronto and looked at it.

We also went to a couple of dealers who were using it, and at the time it was the most dynamic CRM software and the easiest to use. We ended up bringing Cowboy on board and were pretty happy when Cobalt bought it. But Cobalt’s plans for it never really panned out and they are supporting it less and less.

We are going to install Reynolds and Reynolds contact management in the next couple of months. We are looking forward to it.

Let’s talk some about the Internet depart-ment and how you approach Internet sales.

Traditionally you have an Internet manager that would manage your web site, contact all the leads coming in through, either through pay-leads or leads from the manufacturer.

We kind of segmented the Internet into two areas – marketing and sales. We consider the web site as a marketing function at our store and we consider Internet leads as a lead, the same way we do walk-in and phone leads. We created a team to manage the Internet and phone leads.

Our marketing team manages the corpo-rate web site and now is starting to experiment with Facebook and YouTube.

Not many dealerships understand clearly that you can’t just throw someone into the Internet and say, “Manage our web site, our Internet marketing and manage all the leads.” Those are two completely dif-ferent skill sets. It is marketing and then there is selling.

You are absolutely right on that. It took us a number of years to figure that out. Traditionally we would take a person that -- forgive me -- is a little geeky or a computer “nerd,” and expect them to be able to com-municate and get customers into the store. That surely does not work.

How many people do you have working in the Internet department?

We have five salespeople and a dedicated manager for both marketing and sales.

Does the Internet manage report directly to you, or a sales manager?

The Internet manager reports to the general

sales manager. Frankly, five salespeople aren’t always enough. So the Internet manager has partnered with a couple of the traditional sales-people, and will generate leads for them also.

How do you determine whom you send the leads to on the showroom floor?

We’ll send those leads to whomever is doing a good job on the floor. Our closing rate is 18-20%. That is basically double Chrysler’s national closing rate, when you count every lead, and with those you need to. So the tra-ditional salesperson that wants to do it, is willing to learn how to do it and is able to at a 20% rate will continue to get the leads.

On the marketing side, do you make it an effort to integrate your traditional market-ing with the online marketing?

We do. We use the manufacturer’s web site that is provided to us by Dealer.com. It

is a pretty dynamic site. It has some nice lead management features on it for dealers that might not have a CRM solution.

We put our entire inventory on the site, including all of our used-car inventory, with photos on there. We also have the video pro-gram where they take 15 to 20 still photos and make a video-ad. It’s pretty slick on the used car side.

We continue to market traditionally in newsprint, radio and television. We still think there is at least 60% of your budget should be in traditional. We’ll push people to the web site, though, because they use the site to get locations and phone numbers, much like they used to use the phone book.

Are you doing anything on the mobile side – such as a mobile site or text messaging?

At this point we don’t. But the mobile and texting seems like it might be the way to go a couple of years from now. My kids are teenag-ers and a little older, and they don’t talk on the phone anymore. Instead, they text back and forth between their friends.

That’s going to be the generation we are going to have to be in contact with. I think that’s a few years away. But, you take the iPhone and you look at how they have inte-grated YouTube, I think that’s going to be a good marketing tool.

We’re currently taking a look at how to respond to e-mails with video. If you look

Owner Bill Golling and General Manager Joe Ellsasser used technology to help create Chrysler’s top selling store while maintaining a

strong focus on customer satisfaction.

Mr. Golling is my mentor.

One of the first things

he said when he brought

me on board was,

“Make the decisions

based on how it would

look on the front page of

the Detroit Free Press.”


Our Users Ranked US #1-

•

•

•

•

AutoSoft,the Most LikelyRecommendedDMS Delivers –Not Simply Software asa Service, But SoftwareWith The Service!When asked in the recent NADA 2009 Bi-Annual Survey of Dealership Satisfaction with DealerSystem Providers’ Products and Services

Speed in Getting Changesand Modifications Made

Maintenance of YourDaily Business with Minimal Interruptions

Problem and Concernsbeing Fixed Correctly the First Time You Call

Prompt Follow-up to Handle the Needs of You and Your Staff

877-427-4367

at it from a process perspective, you still have a traditional salesperson that does a great walk around, but if you put a camera in front of them, they freeze up. Also, you have to have the camera person. So we are looking through that process now, but I think that will be big. You get an e-mail inquiry on a used car from a consumer 50-60 miles away. Wouldn’t it be nice to walk around the inside and outside of the car and send the video back to them? I think that would help out the closing ratios dramatically.

The technology should enhance your pro-cesses, and that’s what we try to figure out on a daily basis.

How do you implement technology in the service department?

We have computers for every two techni-cians. That was put in five or six years ago. We also do an MPi inspection. That’s a multi-facet inspection we do on every vehicle. When the customer picks up their vehicle they get the information sheet so they know the status of the wear items on their vehicle and any safety issues the technicians discover. Also, the technicians use the technology to repair the cars all the time.

Do you use online marketing for the ser-vice department?

We use our CRM solutions, starting with when the customer picks up their car. We’re scheduling future service appointments and calling people back prior to that appointment

as a reminder – much like a dentist office does. It sounds very simplistic, but we’re servicing 120-140 customers a day, so if you think about it, you have to have that technology appointment system and the personnel to call those people back to remind them.

The results are, if you call someone today and say you have an oil change scheduled for tomorrow, they show up and get their service done. Whereas five years ago, we just hoped they came in. We might have seen 50% of our customers come back for service. Now with the technology and appointment system we have, more people coming back. And everyone knows that if customers return for service they are more likely to come back and purchase a car there too.

We also implemented a Call Command function that is sponsored by Chrysler Corp. They are doing a number of automated phone calls for service reminders.

With this, you have probably been able to build your return business significantly.

Most of our business is repeat and referral business – I think it’s 65%. We have built that over 25 years.

Let’s go back to the Internet department, how do you determine which companies you want to buy leads from?

We buy all of our leads from Chrysler. We

“There is no more dropping the car off and picking the car up the next day. We have a nice fluid organization and it works out very, very well,” says Ellsasser.

continued to P-DD22


Turn Your Site into the Ultimate Closing Tool

It’s noon and Ray Parker finally sits down at his com-

puter to eat his lunch and finish his research. Ray hasn’t purchased a new car in seven long years, but he’s been thinking about it since January and is ready to take the next step. He has spent countless hours online researching and building the car of his dreams. Now he wants to take his baby for a test drive. The anticipation of slipping behind the wheel and feeling the power as he takes to the open road causes Ray to put down his lunch, grab his keys, and head to the dealership.

Are you ready for Ray? Do you know what Ray really needs? If you do, Ray will purchase a car today. If not, you run the risk of Ray delaying his purchase for another time – or worse, make a purchase from your competitor.

You hire closers on your sales floor. Why not turn your web site into the ultimate closing tool? An effective web site can be an intuitive online gateway that will help you properly observe and respond to customer behavior -- so that you can convert shoppers into buyers.

Observe customer behavior on your web site

If you understand the behavior of your online car shoppers, you can be more successful in completing the sale when they finally visit your showroom. Consumer behavior patterns online can indicate a shopper’s interest level in the purchasing process. You can observe and use that information to predict their future buying behavior and secure the sale.

At times, the reason for someone’s behavior is not always clear. There are many factors that can play into a buying decision. Some factors may be obvious and others not as much. Most likely Ray’s buying behavior is motivated by many things including: advertis-ing, seeing other drivers, economics, friends, family, social media discussions and other communication outlets.

The impact of the Internet and other tech-nology has changed the playing field for dealer-ships. Consumers are doing their homework

and are armed with an abundance of informa-tion before they even step foot on your lot. Many, like Ray, have spent months collecting information, talking with peers and comparing options. Leveraging web site technology and advanced tools can help you better understand your customers, close more deals and give you the edge over your competition.

Respond to customer behavior on your web site

Dealers need powerful and pragmatic web site tools to understand the buying behavior of potential customers before they enter their dealership. The information you get from your web site is critical and can be used to proac-tively provide your customers with their top vehicle choices.

It makes sense that the more you know about your shoppers the more likely you will make a sale. By paying attention to a few things, you can optimize the experience that people like Ray Parker will have:

-Length of time on your web site-Number of times on your web site-Specific vehicles of interest-Number of times specific vehicles were viewed-Which vehicles were configured

Ray Parker wants a sporty, high-end con-vertible. In reality, he will buy a mid-priced sedan to accommodate his budget and family. Although Ray wants to test drive the sports car, with the proper web site tools, you know he has spent more time on your web site looking at the mid-priced sedan. Obviously, there is a big gap between these two vehicles and it is a perfect case of idealism verses reality.

After Ray test drives the convertible, he’s ready to go and isn’t ready to make a purchase. Are you going to let him leave your lot and run the risk of going to another dealership? By spending a few minutes reviewing Ray’s behavior from your web site statistics, you have the inside knowledge on the vehicle Ray really needs and will buy.

Before Ray leaves your lot, show him the

mid-priced sedan he has spent the major-ity of his time looking at on your web site. Encourage him to take it for a test drive. Your chance of closing a sale with Ray today just improved considerably. This is one example of how the right web site technology can give you the insight necessary to accelerate the buying process.

Leverage web site technology to complete the sale

The world has changed significantly in the past few years due to the economic climate, technological advancements and the wide-spread use of social media. Now more than ever, it’s important for dealers to become con-sumer savvy and build a lifetime relationship with their customers using advanced web site technology and tools.

By properly observing and responding to consumer behavior, and providing the right vehicle choices at the right time, your deal-ership can begin building that relationship. Use your web site to gain valuable insight into your customers’ behavior. By leveraging proper web site technology, you will imple-ment a win-win sales strategy for both your customers and your dealership.

Did Ray Parker buy the mid-priced sedan? You bet he did.

Joe High is a group general manager with Dominion Dealer Solutions, managing the Dealerskins and XIGroup businesses. High started at XIGroup in 2001, working his way up from the customer service department to proj-ect/operations manager. In November 2007 he became XIGroup’s general manager and in March 2010 was promoted to his current role overseeing Dealerskins and XIGroup.

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

IGITAL Dealer WEB SITESDJoe High

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.

WWP_DealerMag_Full_final.indd 1 12/18/09 10:15:35 AM


are not buying any outside leads. We tried that in the past and it is hard to tell what a real lead is and what isn’t. So, at least doing it through the corporation, they want us to sell a car and make sure we are profiting. Chrysler works it so multiple stores aren’t getting multiple leads. They’ve done a great job with that.

Your web site provider Dealer.com man-ages your search engine marketing?

Yes they do.

Are you doing any pay-per-click also?We currently are not doing any

pay-per-click.

There is not one right way, it depends on the dealership.

That’s right. We’ve tried the pay-per-click, but I find it unique when you have to give the vendor what your budget is, and they cut you off in the middle of the month before it’s done. I want to see specific results. I want to see the old fashioned tail lights over the curve.

How’d you get started in this business?I went to Ferris State College in the auto-

motive management curriculum and came out selling cars. I did a little bit of manage-ment for a few years and then began working for Bill Golling. I’ve helped him build a few stores, and we’ve consolidated. We were one of the original Genesis dealers and then an Alpha dealer.

We’ve built facilities and consolidated and it has been a lot of fun. We have dealt with changes every day. How do you stay ahead of the competition and how do you keep your customers happy? And how do you

wrap technology through it whether it is the number of cars you sell or it is the labor dollars for a technicians?

You’ve always had a love of cars? Oh yes, I’ve got my fun cars. I have my

1929 Ford Model A Cabriolet convertible. I have had that for three to four years now. I also have a 2001 Plymouth Prowler with a super charger. It is everything the Prowler should have been. It has the look, the power and the sound.

Last year, I picked up a 1971 Dodge Challenger – one of the Indy pace cars. They made 50 pace cars, two were on the track and the rest were dignitaries. I have one of the dignitary cars. Good looking car, it is a small block – a 318.

As a general manager what is one of your toughest challenges today?

I think the toughest challenge is behind us. We came out of the Chrysler and GM bankruptcies. It was keeping our people and team members focused every single day. You read in the newspapers about the bankruptcies and the places going out of business. We’re going to do our best each and every day to make sure we satisfy each and every one of those customers. It was just refocusing each day that each employee knew we were in control of what we had. I think that was the toughest thing.

What is the thing you love about the busi-ness the most?

I love the people. I live up in Clarkston, MI and am a Detroiter through and through. There is no place I don’t go on the weekends

that I don’t run into an old customer or an old friend. It is funny, my wife always says can’t believe it if we go out and I don’t run into someone I know. It is kind of funny in the restaurants and the local grocery stores. It is nice to have a reputation and work for a dealer that you are proud of. I am never afraid to bump in to anybody.

I was able to talk to Mr. Golling last week. It’s clear where the culture in the store comes from.

Absolutely. Mr. Golling is my mentor. One of the first things he said when he brought me on board was, “Make the decisions based on how it would look on the front page of the Detroit Free Press.” It is just a simple way to do it. If it is the right thing to do, and you would be proud to read it in the paper, it is the right decision.

What are some other things you are look-ing to implement as you move forward in the next couple of years?

I can tell you immediately we are going to have the new CRM tool installed. We will be one of the first Reynolds customers that has the CRM tool installed in our service department. So that will be kind of a first.

We are waiting for that, because we think CRM should go throughout the whole store, not just the sales department. In a couple of weeks we are installing a com-puterized phone (VOIP) system, we will be connecting Mr. Golling’s other stores through a T-1 line. That is my next six months worth of projects. A couple of years, who knows? We are hoping that, not only will Chrysler/Jeep/Dodge/Ram grow, I am praying we obtain a couple other franchises, but that is in the future. We are going to do things day to day and keep our customers happy.

A CRM tool through your service depart-ment? Not a lot of dealers are doing that.

It is great to be able to come in every day and by 10 or 11 in the morning we’ve had 60 or 70 customers through our service depart-ment. They are efficiently processed, they are happy. There is no more dropping the car off and picking the car up the next day. We have a nice fluid organization and it works out very, very well.

[email protected]

Digital Dealer Cover Story, Joe Ellsasser, continued from P-DD19


I find that most disappointments in the monthly

financial statement come from a lack of daily reporting. In fact, I’ve been a long-time hater of our whole month-end process. We basically shut down all accounting operations for three to five days while we “close the books” and as far as I’m concerned, “close our minds.”

I’ll admit now, that I was one of the biggest abusers of the month-end process when I was a controller. If someone tried to interrupt me while I was closing the books, I’d sharply remind them that it was the “close” and whatever they wanted from me “better be good!” Years later, I discovered that if I changed my focus from monthly reporting to daily reporting in the form of a Super DOC, then I’d have more productive managers, easier month-end closes and most importantly – fewer surprises on the financial statement for my dealer and general manager. By combining the technology that you already have in your DMS system with a slight change in your processes, you can provide the type of daily reporting that will get your managers more focused on daily profit retention. Here are four steps to great daily reporting in the form of a Super DOC for your managers.

Step 1 – It must have pay plan numbers on

it. If you pay managers on adjusted selling gross then that line needs to be on the DOC so they can see throughout the month how much they will earn. It is a great motivator to increase profit.

Step 2 – It must have your dealership’s “met-rics” or budget. What are metrics? Let’s say that your customer labor gross profit rate is 75%. That percentage needs to be on the DOC. It’s easy – just divide your gross profit line by the sales line. By watching these metrics daily instead of monthly – you can spot problems. For example, I know a controller that saw a drop in parts retail from 32% to 12% from one day to the next. When she detailed this data, she found a large parts ticket sold at cost to a technician. Digging deeper, this part went onto another employee’s car and the labor was cash under the table. This variation would have been lost in the end of month in financial statement but sticks out in a daily report. Metrics can be entered into your forecast or budget columns. Just do the same calculation in the forecast (dividing your fore-casted gross by your forecasted sales) and you’ll have the benchmark guide for each metric for your dealership.

Step 3 – It must be an accurate daily finan-cial statement. Somewhere on your DOC there needs to be a summary section that has, total dealership gross profit, total expenses, total other income, and net profit. These four lines must match your financial statement. I’ve never been a fan of the DMS system’s DOC since it is easy to get it out of balance with the financial statement – so I prefer a download of the true trial balance into an Excel DOC. For more information on how to do this, visit my web site, www.sandije-rome.com and click on the Super DOC link.

Step 4 – Include controllable expenses. How can you ask a manager to watch advertising and commission expenses if those lines are not on the DOC? In addition, they must be posted daily. Yes, I know a lot of expenses don’t happen until the end of the month, but many can be entered daily.

Make sure you accrue your commissions on each car deal as it is posted. Require managers to issue purchase orders on the DMS system for advertising when they create their budget – or

order the advertising. Don’t wait for a bill from the newspaper. Require other advertisers to send daily or weekly invoices so you can get them posted. I know of one controller that posts the floorplan charges weekly – but that might be asking a little too much (although the amount is pretty easy to calculate.) What about spiffs? Every time you issue a spiff check, debit the expense account. I know you like to debit the employees’ AR account, but debit the expense account and also the employee’s AR account and credit a controlled accrued payroll account. Change your payroll distribution to hit this accrued payroll account for spiffs and you won’t have a big chunk of spiff expense at the end of the month.

Sandi Jerome is a former controller, CFO, system administrator, F&I, assistant GM, and fixed opera-tions manager with over 20 years experience 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.Dealer-communications.com and enter the “Technology” forum or e-mail her at [email protected].

Four Steps to a Super DOC – and More Profit

IGITAL Dealer TECHNOLOGY TRENDSDSandi Jerome

Advertiser ............................. pg #ActivEngage ..............................23AutoRevo ..................................22 AutoSoft ....................................19AutoUSA....................................26Car Research ...............................9Dealer.com ..................................5DealerPeak (Widestorm) ...........6Dealerskins ..................................3Homenet ...................................11IMN Loyalty Driver .....................7Wounded Warrior ....................21

examples and solutions as possible that will help you sell and service more vehicles – and make more money doing so. That means, there will be diversity of opinion, and that is good.

One thing I do know – there are many ways for a dealership to operate. Some are better than others, but it’s up to the dealer principal to decide what way is best for the dealership.

Cliff Banks

Vice President and Editorial Director

AAISP Notes, Banks, continued from P-DD6

AutoUSA listsyour dealership onover 100 automotive websites.

AutoUSA puts your dealership on the local dealer selection list on over 100 popular automotive websites. With AutoUSA your

dealership is there when online shoppers are ready to buy. You’ll get consistent exposure in your market area and pay only when a lead

is delivered*. To get listed right away at no cost and be everywhere your customers are, call AutoUSA 1-888-212-3063.

You’ll be there when your customers are ready to buy.

Increase your sales today!

www.autousa.com/signup1-888-212-3063

*Where allowed by law

AUTAD061617_D.indd 1 2/3/10 12:14 PM

Millennial Madness! (or ‘How I Missed the Big Boom!’)

The eternal infatuation with market-ing to the young is driving many dealers down the wrong marketing

highway. I counted nearly 35 articles related to Millennial Marketing in my inbox this past week. Only one article regarding today’s highest potential profit age segment, the baby boomer!

Of course you have to ‘think young’ and prepare for the future. Yes, it’s great to build brand relevance with the 18-29 age segment to perpetuate a lifelong transportation rela-tionship. But spending a disproportionate share of your ad budget on texting, social media, green marketing, etc., is not going to put the bread on this weekend’s dinner table if you don’t spend an equitable por-tion of your budget on the folks who can, and will buy the cars you have to sell today, even allowing you a reasonable profit in the process.

First, let me lay some ‘heavy’ news on Millennial Marketing Mayhem. According to Jack Neff, in an article for the May 31st Advertising Age titled: “Is Digital Revolution Driving Decline in U.S. Car Culture?” Jeff shares data that suggests substantially fewer 18-30 year olds are excited about driving than their counterparts of just 10 years ago. The article, riddled with various surveys and data from the U.S. Department of Transportation, says young folks just aren’t that excited about driving a car as the folks in my age group were in our younger days. In fact, in the past 10 years, the millenni-als have not only shown less passion for automobiles, they are driving fewer miles.

Now of course all the various gurus want to jump in with their explanations. Such as the title of Neff ’s article suggests: “Is Digital Revolution Driving Decline?”

Hey, these young folks are totally virtual! They’re wired! They don’t have to drive all over the place for their kicks like us young folks did back in the days of sock hops, car hops and hula hoops. Besides, driving

is just so ‘uncool’…like it’s destroying the environment, you know! My take on this: Young people are driving less because the entry cars are uglier, slower, smaller, gas is expensive, so is car insurance and you can’t text while driving.

Okay, so here is another nifty article by Nick Zulovich, titled, “Millennials Apprehensive of Dealers!” In this review Nick explains that in the survey conducted

by Wakefield Research for Microsoft, young folks just don’t think most car deal-ers are very cool. I mean, after all, they don’t show you everything they have on their computer terminals. You don’t make them part of the conversation between the salesperson and the sales manager. And for goodness sakes, you don’t have online terminals where they can shop other dealers and search inventory all over the country while in your showroom.

Very uncool. Hey man, the majority of these young responders preferred a visit to have their teeth checked rather than talk with a dealer about a vehicle purchase. That makes you feel good about your job doesn’t it? The survey indicated Millennials are looking to establish a “real relationship with the dealer.” A vast majority of partici-pants – 84%, in fact – believe this task can be accomplished by Internet access being readily available at all times throughout the buying process. And of course, the ability to buy a vehicle for $1,400 less than you

pay the factory for it.Oh, by the way, the majority of

Milleninals say they want vehicles to be equipped with technological features such as a GPS system, a port to plug in a digital music player, software to track fuel con-sumption and Bluetooth capability. And, they’ll be happy to return to a dealership often to have the software and hardware associated with these technologies upgraded for free…if, that’s if the perks are in the vehicles at the time of purchase. They don’t want much do they?

Don’t get me wrong. We have to figure out a way to sell vehicles to young folks that they want, in a way they want to buy them, with the perks and features and freebies they want. But we’ve got to make money while we figure out that process. And the easiest way to do that is… ‘ta-dah!’ Sell vehicles to the folks in my age group (and older) who actually like a lot of the vehicles we still have on the lot, are reasonable about product and service expectations and can actually afford to pay for the vehicle.

Which brings me to the question posed by Chad White in his article of May 25, titled “The Boomer Generation is a Critical Audience for Marketers!” Thank you, Chad.

Mr. White points out that by 2015, those 50 and older will represent 45% of the U.S. population. Currently us boomers control over 80% of personal financial assets and more than 50% of discretionary spending power. So why is it we don’t get no respect?

Why, why, why do you allow eight-point type on your web site, in your e-mails and other marketing materials? When I have to pull out the magnifiers to read those tiny letters I wonder aloud why the marketing folks created unnecessary legibility issues for their most valuable customers. When a financial executive recently spoke to a Forrester’s Marketing forum, he asked how

SalesJim Boldebook

Why, why, why do you

allow eight-point type

on your web site, in

your e-mails and other

marketing materials?

continued to P-52


his company’s web site could be improved. The number one response: bigger font! The fact is, you small font guys irritate the hell out of us squinters. Wise up, will you?

I have a personal gripe with the Star Ledger in New Jersey, a paper read by a lot of older folks in Northern Jersey. The paper’s 800 number is just one digit away from my own. And because they print it in such tiny font,

I get numerous calls asking why the paper wasn’t delivered this morning. And they just love to call around 7:00 am. Please Star Ledger — just a font or two larger! I’m tired of telling your callers that you’ve gone out of business.

Jitterbug has the right idea. That’s a cell phone designed for the ‘oldest’ of us boom-ers (and beyond.) Great big numbers. Great big letters. Want to call? Just press the big

YES button. Want to hang up? Just press the big NO button.

In his article on Boomer Marketing Abuse, Mr. White also pointed out that us boomers don’t like reverse type or low contrast text or text over background images with lots of bright and dark areas. We don’t like full caps either. Hard to read. (And it’s impolite…sort of like shouting in print.)

How about radio and television? Yes, we boomers still use those. Speak clearly. Annunciate. Don’t drown the voices out with sound effects and music. By the way, if you’re marketing a vehicle specifically for the boomer crowd, how about a great big 800 number on the screen for the entire 30 seconds with key selling points bullet pointed on screen to match the audio.

One very successful term life insur-ance company discovered a dramatic 30% increase in calls when the announcer spoke as if he were talking to someone hard of hearing with a full face video so even a novice could read his lips. Less copy. More emphasis. No quick cuts. No music equals 30% increase in calls to the great big 800 number on the bottom of the screen. Amazing, huh?

Oh, by the way, us boomers don’t like a lot of junk mail but we still do read well written letters, especially those addressed personally to us and printed in font of at least 12 points or better. And we like follow-up calls for both sales and services if the caller is sincere and the message is relevant.

One dealer has really got us figured out. Seems his staff is calling to remind owners when their vehicle is due for service, for annual inspection, and even 30 days before the registration expires. Could it be some-one actually wants our business?

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-communications.com and enter the “Advertising” forum or e-mail him at [email protected].

52

austin

consulting

pu may

“only dealer in

town”

Sales, Boldebook, continued from P-51

Austin Consulting Group, [email protected]

www.austincg.com720-528-8900 Ext. 11

What if you were theonly dealer in town?

That’s right—no competitors—wouldn’t that be great? How much more would you make if you had no competition?

When you renew your dealership’s property and liability insurance without taking competitive bids, you’re giving

your insurance company all the benefits of being the

“only dealer in town.”

LET ACG DO THE INSURANCE WORK(While you focus on your dealership)

• We work for you...not an insurance company

• Just getting quotes isn’t enough

• A professionally managed bid process results in:• An objective apples to apples analysis• Lowest Premiums available• Best Coverage available

• You’ll have a risk manager looking out for you

Let us help you create real insurance competition that results in real Cost Control.

IF YOU WAIT...IT’S TOO LATE. GET STARTED NOW!

IF YOU WAIT...IT’S TOO LATE. GET STARTED NOW!


Pricing Guidelines for Fun and Profit

A friend of mine bought a vacuum cleaner and was proudly touting the features and benefits over a beverage

the other night. To hear him talk, it was the mac daddy of all vacuum cleaners. I think it even discards the junk it collects by itself.

His enthusiasm was quickly squelched when a stranger who had been eavesdrop-ping on our conversation asked how much he paid for this. It seems the price he paid was ten times what the wholesale cost of the cleaner was to the store. The stranger knew because he was a manufacturer’s rep and was familiar with the wholesale pricing.

Now my friend felt betrayed by the store and the salesperson. The vacuum cleaner lost most of its luster. Even though he gladly paid the price he did, and was ecstatic about its performance, now he was seriously thinking about how he could return the cleaner and get his money back. He couldn’t get past the perceived betrayal.

You could be facing the same perceived betrayal by your customers based on the pric-ing of your F&I products.

BackgroundDealers have a variety of product offerings

in the F&I office, including vehicle service contracts, gap insurance, window etching, maintenance, chemicals, GPS devices, tire coverage, credit life and accident and health – just to name a few.

Few dealers offer all of these products; many dealers offer a combination of four to six products. Some of these products have filed rates with the state, such as credit life and accident and health everywhere to gap in Michigan, Texas and Nevada, vehicle service contracts and etch in Florida. The product must be sold for the filed or regulated price.

Most product pricing in most states are self-regulated. Someone at the dealer-ship sets the price at which the products are sold. Sometimes that someone is the owner, sometimes it is the F&I manager. Depending upon who is making the pric-ing decision may determine the dealer’s

potential liability for price gouging or dis-criminatory pricing claims.

Best practicesMany dealers have F&I per vehicle retail

numbers in the four figure range, ranging from $1,000 to around $1,500. These are healthy numbers.

I am aware of many dealers who carry this type of F&I PVR who do so in a transparent, compliant fashion. Because of the processes, discipline and procedures in place, these deal-ers sell a lot of products and experience a lower than normal chargeback amount.

All of these dealers have realistic pricing caps in place for all of the self-regulated prod-ucts they sell.

Pricing capsYou should consider including pricing

guidelines and maximum selling prices on all of the products that are sold in your F&I office. Be aggressive, but realistic so it is defensible.

For example, having a guideline for gap pricing that suggests that your F&I man-ager can price gap at the lender’s guideline is aggressive, realistic and defensible. The basis for your guideline has been established by a third party and is applied to all dealers that do business with that lender. It is defensible because it has been established by a third party and is applied to all dealers that do business with that lender.

Your guideline on self-regulated products can either be a retail price maximum, such as etch for $xxx. This approach works well when the cost is constant.

The other approach is to establish a

maximum profit for each product, such as $xxx over cost or two times cost. This works best

when the cost varies depending on coverage, such as maintenance or tire and wheel policies.

Establishing guidelinesBe careful not to enter into potentially

collusive discussions. Rather, ask your com-pliance consultant or F&I product provider for guidance on pricing that is aggressive, realistic and defensible. Once you’ve estab-lished your guidelines, communicate them to the F&I managers and the accounting office staff who will be monitoring pricing for compliance. Finally, review your menu offering so that none of the products are being presented to the customer at prices that exceed your guidelines.

Then adhere to the guidelines.It might just help to keep those pesky

price gouging or discriminatory pricing claims at bay.

Call me if I can help. 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-communications.com and enter the “F&I” forum or e-mail him at [email protected].

FinanceGil Van Over

Depending upon who is making the

pricing decision may determine the dealer’s

potential liability for price gouging or

discriminatory pricing claims.


Insurance Auto Auctions launches Mobile

CSATodayInsurance Auto Auctions, Inc., a hybrid

model salvage auto auction company and a wholly owned subsidiary of KAR Auction Services, Inc., announces the launch of Mobile CSAToday, a tailored web site that offers access to key tools and features via any web-capable phone.

“We have been excited about Mobile CSAToday from the very start. It was a collab-orative effort with our customers who wanted mobile access at their fingertips – literally,” said Tom O’Brien, CEO. “There is no slow-ing them down now since there is nothing to download. They simply log into the site and get the information they need quickly. We are pleased that this first phase offers our customers the unique ability to be mobile, on-the-go, and on the road.”‖

Customers can expect the following with the mobile access and the power of informa-tion IAA Mobile CSAToday features:

- Perform vehicle searches and inquiries for a vehicle located at any of IAA’s more than 150 branch locations throughout North America using a stock, claim, or policy number, as well as VIN or owner’s name.

- Provide real-time information, which enhances communication amongst all parties by offering visibility to vehicle status, notes, storage and inventory location, photos, and more.

- Search a vehicle’s Average Salvage Value (ASV) from IAA’s comprehensive warehouse of salvage auction data.

- Set or update minimum bids.- Manage I-Buy Fast vehicles enabling IAA’s

buyers to purchase vehicles between auction dates.

The launching of Mobile CSAToday is the first step in the company’s ongoing mobile strategy. The next phase of this strategy will include buyer-related functionality. IAA’s pro-vider customers can access Mobile CSAToday at no additional cost.

www.iaai.com

F&I Administration Solutions signs Classic onto SCS Auto GAP

F&I Administration Solutions, LLC, provider of software for the administration of automotive F&I products, is pleased to announce the signing of an agreement with Norman & Co, Inc. to F&I Admin’s SCS Auto platform. Norman & Co, Inc is a Florida-based provider of GAP and other products, all of which are sold under the Classic brand. The SCS Auto platform will be used for the administration of all of Classic’s products, including GAP.

“F&I Admin’s SCS Auto GAP solution presents many opportunities and efficiencies for us,” said Larry Graves, COO of Norman & Co, Inc., “We are particularly pleased that SCS Auto connects us to eight menu systems. In addition, we have the ability to electroni-cally store all documents within contracts and claims. These, together with many other features, will help us grow efficiently whilst managing our administration costs.”

“We are very pleased to sign Classic onto our SCS Auto GAP solution,” said David Trinder, CEO of F&I Administration Solutions. “The GAP module has been used by our customers for over a year now and in that time it has shown irrefutably to create efficiencies and save administration costs.”

The SCS Auto GAP platform is the only commercially available system that is spe-cifically designed to support GAP. Built for automotive aftermarket product and service providers, it is a fully integrated, web-based solution that automates and streamlines the F&I product administration process. In addition to GAP, the SCS Auto suite is also designed to support the administration of vehicle service contracts, prepaid main-tenance, appearance protection and more. SCS Auto is also broadly connected to other service providers in the industry including eight menu systems, parts databases, account-ing systems and a state-of-the-art credit card solution for the efficient payment of claims

www.fiadmin.com

Fiserv unveils ‘future-proof ’ technology in its

next generationFiserv, Inc., global provider of financial

services technology solutions, announced enhanced efficiency and informa-tion exchange in its Automotive Loan Origination System (LOS). The system’s component-based/web-based open archi-tecture, business rules management and integration with existing technology pro-vide automotive lenders with the flexibility to meet variable technology and market requirements.

The Automotive LOS incorporates busi-ness rules giving automotive lenders greater control of information needed to run their businesses more effectively. All of the data required to automate decision-making, streamline workflows, and assure policy enforcement is located entirely within the system, rather than on multiple serv-ers. This structure provides significantly enhanced configurability to support auto-motive lenders’ unique business and system “personalization” needs.

The system facilitates efficient pro-cessing of LOS data both within the Automotive LOS and in transactions to external business systems and services. By utilizing a service-oriented architecture, function-specific components can be cre-ated and implemented without impact to other areas of the system. This approach reduces business risk and simplifies devel-opment and release management.

Some of the best-practice technologies now incorporated in the new version include:

• Exceptional configurability to meet automotive lenders unique business and system personalization needs

• New work-list and workflow configu-rability for staff efficiency allows auto lenders to grow and adapt their opera-tions to market changes

• Easy integration with best-in-class solu-tions from Fiserv business partners offers enhanced compliance tools and e-contracting.

www.fiserv.com

EALER F&I NEW PRODUCTSD


With History there is No Mystery

As all of you are aware for 28 years I have been teaching you in class that “every used car has a story, but if you

can’t tell it, you can’t sell it.” The importance of having a customer involved in their trade-in is vitally important to the sale of that vehicle once you have it reconditioned. You need to involve them in the discussion of when and where they bought it, how long they have had it, obtaining service records, etc. The reason for this is, in building your “storybook” it will give you the ammunition paired with a copy of the internal RO (blanking the figures off, no one needs to see the amount you spent).

At the time of sale you can show these items in your “storybook” and build the confidence and creditability in your store that your com-petitors absolutely do not have. CarFax was a great innovation. It has helped tremendously, not only in the public sector but also the private sector.

The one thing you need to always remem-ber about selling pre-owned vehicles is your two biggest competitors are the individual and the independent. The credibility you have with an online buyer or walk in buyer is the history of that vehicle.

A new company that we have recently seen, “Auto-Bio,” is probably the best hand and

glove “storybook” combination ever. At a local level you can build a premier vehicle with those items at your fingertips, if you take the time to involve the customer in their trade and point of sale of the new car.

One other thing that we strongly rec-ommend you do is, put in the window of your trade-ins a “pedigree” that says simply “My Pedigree” on the top. Below that the vehicle will be talking to the customer on the printed out sheet. Example – “Hello, I was sold new at XYZ Ford in 2004, I lived on the Southside with a family of four, I was traded in on a new Suburban, I was serviced well by my family and I would really like to become part of yours” (whatever you want to put on there that tells the vehicle’s story). The bottom line is, with a “pedigree” you’re putting a personality in that vehicle coupled with your “storybook” or program that you purchase outside, what ever the case may be. The vehicle has a personality.

Remember, if there’s a history there is no mystery.

Tim Deese is the CEO and founder of Progressive Basics, Inc. He is a former franchise car dealer who has designed and implemented used car training and marketing for 15 manufacturers in 28 countries. Progressive Basics has trained over 50,000 dealers and managers. He has been a speaker at numerous NADA conventions, and was one of the top rated speakers in 2001 and 2008 at the Australian Automobile Dealers Associations Convention. He spoke at FADA conventions in Quebec and Hong Kong, along with Ford and BMW of the Middle East. Tim Deese is also one of the key speakers at Fenabrave in Brazil 2009.

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

Pre-owned Vehicles Tim Deese

‘Hello, I was sold new at

XYZ Ford in 2004, and I

lived on the Southside

with a family of four. I

was traded in for a new

Suburban. I was serviced

well by my family and

would really like to

become part of yours.’

© 2010 Thrifty Car Sales, Inc. Thrifty Car Sales is a trademark of Thrifty, Inc. All rightsreserved. 5310 E. 31st Street, Tulsa, OK 74135. This advertisement is not an offerto sell in any registration state until the offering has been exempted from therequirements of registration or declared effective by such state. NEW YORK: Thisadvertisement is not an offering. An offering can only be made by a prospectus filedfirst with the Department of Law of the State of New York. Such filing does notconstitute approval by the Department of Law. MNREG#F-5378. © 2010 ThriftyRent-A-Car System, Inc. Thrifty Car Sales is a trademark of Thrifty, Inc. 5310 E. 31stStreet, PO Box 35250, Tulsa, OK 74135. Phone 918.665.3930. All rights reserved.Thrifty features quality products of Chrysler, Dodge, Jeep® and other fine cars. Thisadvertisement is not an offering. An offering can only be made by a prospectus filedwith the Department of Law of the State of New York. This information is in no wayintended to encourage the breach of any contractual obligations you my have. MNREP. NO. F-1308

F .ACTORYTHE®

THEFRANCHISE ...WI THOUT

Thrifty Car Sales is standing beside you tohelp grow your business. With locationsnationwide, Thrifty Car Sales and ThriftyCar Rental are standing tall.Call today and take your businessto the Next Level!

Take Your Business To A New Level.

To learn more, call toll free:

1-877-289-2583www.ThriftyCarSales.com/franchise

• A Recognized Brand Name and Image• Advertising, Sales and Marketing Support• A Business Development Center• A Website Solution and Promotion• Nationally Branded Products and Services

Thrifty Car Rental• Advertising, Sales & Marketing Support• Financial Analysis & Review Services• Worldwide Reservation Services• Volume Purchasing Programs• Nationally Recognized Brand

Why...Thrifty Car Sales

Stand Tall


The New Reality of the Used Car Business

Every day I’m more convinced that dealers’ strategy for making money in used car operations is outdated and

wrong. Have a conversation with any dealer or manager about used car operations and the words “gross profit” will be mentioned in short order. The problem is what they mean by gross profit is actually the average retail gross profit -- not the total gross of the used car department. Average retail gross profit should not be the gold standard measure-ment although it has been and continues to be the proxy for the efficiency and produc-tivity of both the department and manager.

It is now time for the industry to come to terms with the reality of today’s used car market. It’s not rational to expect a used car operation to generate as much lucky profit on the sale of their vehicles as it once did. As a result, the metric of average retail gross profit is not as relevant as it once was. This realization is very difficult for the retail automotive industry.

In the past, the used car operation was a different business from what it is today. If a dealer was skilled at selecting the right units to buy, smart about their recondi-tioning, clever about their advertising and a great negotiator, they routinely extracted large profits from their shoppers. The game changer in this industry is the smart con-sumer empowered by technology.

Today, what a vehicle will sell for is 99% determined by the competition as seen through the eyes of the Internet shopper, not by the dealership’s management staff. Moreover, banks will not loan as liberally as they once did on used vehicle transactions. This means it is not reasonable to expect used car average gross profits to be as large as they once were.

This realization is the key to addressing the challenge of the existing market in a new and more effective way. Quite simply, if you’re not going to get as lucky on the used car lot as you used to and you want to make as much gross profit as you once did,

then you are left with just one inevitable conclusion. The only solution is that you have to go from money to metal, money to metal more times in a given period of time. Every day that the price of a vehicle exceeds its market transaction price, it is likely to sit while others are being sold. This makes the clock the enemy because it robs the dealer-ship of an opportunity to turn the dollars. So, instead of worrying about average front end gross profit, the number of inventory turns should be the leading indicator of used vehicle department success and profitability.

Success today means embracing the reali-ties of today’s market in the realization of velocity management. At first this recogni-

tion creates a lot of pain and consternation for the industry because it challenges a whole generation of managers that still believe large average retail gross profit is the hallmark of management effectiveness and the basis of their self esteem as well as the expectation placed upon them. Letting loose of that notion is difficult. In addition, traditional compensation programs incentivize behav-ior that is actually contrary to productivity and profitability that comes with velocity management.

The dealers, however, who have embraced that it’s now a business of total gross profit through accelerated inventory turns rather than average profit represent the new leaders

in today’s market. Today, the dealerships that are consistently selling the most used cars and generating the greatest profits are often operations of little distinction in terms of their market, brand or size. These are often stores in rural and remote locations with small facilities and previously unknown operators. They are in fact the new order of used car leaders in the 21st century; fre-quently selling hundreds of used retail units per month.

This new breed of velocity dealer embraces the realities of the new market but also uses new tools of management. Their operations focus on conditions that favor great market results. These condi-tions are numerous and varied from “paint” to “pixels.” The paint conditions mean having the right vehicles, priced correctly and owned for the right money. What is “right” is based on new metrics such as market days supply, price to market and cost to market. The pixel conditions that must exist are having a sufficient number of search result pages (SRPs) and vehicle detail pages (VDPs) in their virtual realm. These conditions also require a new series of met-rics which need to be understood, tracked and managed. With a respectable sales process working in between the bookends of paint and pixel conditions, the profit results of any dealership are transformed into an unprecedented high level.

Dale Pollak is an authority on maximizing dealership profits from pre-owned vehicle opera-tions. Pollak is the founder and chairman of the board of vAuto, Inc. a pre-owned inventory management solutions company.

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

The problem is what

they mean by gross

profit is actually the

average retail gross

profit – not the total

gross of the used car

department.

Pre-owned Vehicles Dale Pollak


seeing as a dealer now that you’re saying, “Wow, this really could help us move the ball forward.”

Well as a GM dealer, I am really excited about this CSSR Program. It is in its early stages and they have had a few hiccups which should be expected. But they had to put mas-sive amounts of data together while merging it. They do have a strong vision to communi-cate to our customers like we never did, like most dealers never have, to try to get them back in the service drive.

There is a huge perspective out there that a dealer’s service drive is going to try to rip you off and we have to overcome that.

That is a great point. Do you think moving to more of an e-commerce setting will change how you hire and how you pay employees?

No. Our Internet folks are still on the same pay plan as the floor people. But I don’t really see having an Internet department for much longer. Down the road I don’t want to have one. I think we’ll have an Internet store. I want to have everyone certified with certain requirements. That is important to me.

There are some conflicts of interest between the floor and the Internet. I’m sure they exist in every store.

I was talking to Chrysler store in Michigan, and they have been farming a lot of Internet leads to some of their showroom staff that have met certain performance levels.

And I bet those people really take care of those leads. If someone on the floor gets it, they take better care of it than my kid does with a peanut butter and jelly sandwich. There is some value there.

What is the craziest thing you’ve seen in this business?

You know, I’ve seen it for so long, and have seen some crazy things, but I don’t know which one I want to bring to the surface. Full moons are my favorite time to be at work, that’s for sure.

What is your take on General Motors these days, just in terms of comparing previous management with today’s?

I like the new GM a lot. We used to go to dealer conference in Las Vegas every year

where they said they were going to do this and this and this. Everybody is shaking their heads and go back to work. For a year, you don’t see any of what management said come to fruition or ever get mentioned.

And then the next year, they would say they are really going to do it. They never did.

Now I’m noticing all the things they have mentioned in the last five years and all of things that they recently mentioned they are executing. I feel like they had so much dead weight, like a canoe trying to pull a 100-pound fish net through the lake. It was hard to move and change direction or execute anything new.

And now they have stripped themselves of all that dead weight and are moving forward. I’m seeing more execution. That is number one thing that I like about it. The rest of it, there is a bunch of leadership changes that are making me a little bit dizzy.

I guess my focus is a little bit more on the showroom, so I haven’t kept up with everything but I like the way it is. The only thing they need to get going is the inven-tory balance. It is beginning to hurt. We are beginning to feel trying to sell out of an empty bucket.

Do you think the production cuts have gone too far?

I‘m thinking this is something that hurts before it balances out.

I’ve heard a lot of dealers complaining that they can’t get inventory.

I’ve got three Suburbans, you want one?

What is the hot seller right now?The Traverse is pretty hot, so is the

Equinox. The Camaro has had its obvious glorious for 12 months. Trucks have always been our primary best seller, three to one.

What is your ratio new to used?We will usually do 150 in used and 500

new.

Has the used car business changed for you guys?

It has been volatile. What we have needed to keep in inventory has changed very quickly.

What we previously thought of as good deci-sions at the time actually turned out to be bad decisions in the end. But we’ve been able to balance it out pretty well now. Good tools, like vAuto has helped.

vAuto, whether you use this or any of the other tools such as FirstLook or DealerTrack’s AAX, do you have to work them pretty hard? And that is not criti-cism, because these tools it make you a better operator doesn’t it? You can’t expect the software to do all of the work for you.

No, it is not going to run your job or run your inventory. It is a tool and for a tool to work, you have to use it. You have to use it whenever you are evaluating where you price your vehicle and it is going to help you know where you sit. If you have a case where you show the price of the vehicle to the customer, you have something to stand on. For the first time ever we have a market priced comparison to stand on top of, because someone can’t claim another dealership’s pric-ing. That used to be a variable that was tricky because we want to stay on good terms with the customer.

What about gross margins on the used car side?

Gross margins have been pretty good.

Are you seeing them leveling out with less volatility?

The market is getting a lot more efficient, but if we buy your vehicles right, and we don’t have to buy them all, we have a way of man-aging them. We can afford to make a profit without letting our inventory suffer. And we can do that with new cars as well. You really have to train the salespeople to sell the value.

What is the best product you have seen across the board in any area of the dealership?

To be honest, I think VinSolutions.

That is huge. They would love to hear that.Also vAuto or any other marketing analysis

tools as number two.

[email protected]

Dealer Cover Story, Hagen Durant, continued from P-24


Wow! A Free Money-MakerI discovered a well-written, easy to read,

instructional paperback written by Gary Vann, the VP of Sales and Marketing for Mighty Auto Parts, a nationwide aftermarket mainte-nance parts distribution company located in the Atlanta area. Mr. Vann is obviously a sharp cookie, and the points in his tutorial are excellent.

Mighty developed a unique program for stocking and maintaining commonly used parts, so that parts employees do not have to order, stock, clean, or return these items – a weekly visit from a Mighty rep takes care of those requirements. Besides independent shops and quick service centers, new and used car dealers utilize Mighty’s tier-one parts on the non-franchise “other makes and models” they service from the used car list as well as service customers.

Mighty’s relationship with new car dealers extends to several dealer groups, which signed up to become Mighty distributors as well as users, and the company currently services over 300 new car dealers. I have visited dealers using the program and they were very satisfied with the service and prices (i.e. well less than $2 for an OE equivalent oil filter).

Git ‘er doneThe gist of The Vehicle Inspection Playbook is a study of the what,

why, and how of creating additional sales through a thorough vehicle

inspection process. While this technique is not a ground-breaking strategy, Mr. Vann’s approach makes an appealing case by address-ing many myths surrounding this sometimes frustrating procedure.

Most dealer service managers have instituted some type of tech inspection program, but frankly I don’t see many yielding near the results the aftermarket quick service centers are enjoying.

I had quite a few readers request my recent Quick Service Study (a comparison of your performance versus the aftermarket), and this succinct instruction identifies what it takes to attain those profitable sales figures.

Fix me, fix meThe booklet points out that the Car Care Council – www.carcare.

org – discovered that out of every 100 vehicles, 38 needed an oil service, 54 had low tire pressure, 28 had cooling issues, 16 required an air filter change, 10 needed a brake fluid service, and 15 employed bad wiper blades. This same group inspected over 700 vehicles in 12 states, and 80% failed at least one part of the inspection they stated.

The real meat of this presentation is 15 important “plays,” which outline the planning, installation, and follow-up necessary to create an on-going effective inspection process. Mr. Vann lists a well-written, common sense approach which is right on target. As a professional management consultant for over 30 years, I was impressed with the pertinent suggestions and straightforward arrangement the informa-tion presents – the boy can explain stuff.

Like meChapter five features types and styles of inspection formats, as well

as suggestions for wording, designed to influence customer thinking. An example is the proposal to consider “Service Alert” and “Courtesy Inspection” versus something like “Vehicle Condition Check,” which neither conveys urgency or level of service. There are some excellent examples of forms used in the aftermarket, providing some stimulating approaches to mining for money.

Now for the really good news, simply enter www.MightyAutoParts.com/Playbook into your browser and tell the Mighty folks where to send this little marvel – free, nada, no charge, nothing, gratis. But wait! They won’t even ask for your credit card number.

What else have ya’ gotten free lately?

Ed Kovalchick is the CEO and founder of Net Profit Inc., Alabaster, AL, an international fixed operations consulting and training firm. Kovalchick and his firm have assisted hundreds of dealers and manufacturers, 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-communications.com and enter the “Fixed Operations” forum or e-mail him at [email protected].

Fixed OperationsEd Kovalchick


EALER NEW PRODUCTS & SERVICESD

Manheim partners with Avis Budget Group

to launch ‘Early Access’ program

Manheim and Avis Budget Group have joined forces to pilot Avis Early Access, a new program designed to significantly increase the speed and efficiency of rental vehicle remar-keting on units at select Avis airport locations in Atlanta, Chicago, Las Vegas, Los Angeles, Orlando and Pittsburgh. Additional locations are scheduled to open in the near future. Avis locations now have the ability to quickly turn out-of-service vehicles into cash by wholesal-ing inventory directly off facility lots, reaching buyers from around the country through daily Manheim Online Event Sales.

“Avis Early Access not only offers significant inventory management and cost benefits to our operations, but it also provides prospec-tive dealers and wholesale buyers with the earliest possible opportunity to purchase the premium vehicles of the Avis rental fleet,” said Greg Thibault, vice president, fleet disposal, Avis. “That’s a winning program for everyone, especially with the ongoing demand for qual-ity used vehicles.”

The new program reduces days-to-sell for Avis by virtually eliminating the need to trans-port vehicles from a rental location, such as an airport Avis rental lot, for inspection and sub-sequent sale. Instead, Early Access puts online selling tools at Avis’ fingertips by delivering a Manheim-approved listing service directly to Avis locations that positions inventory for selling success by capturing all the condition information that online buyers demand.

“We strive to help our customers gain better results for their remarketing initiatives,” said Nick Peluso, senior vice president, customer management, Manheim. “While Avis Early Access is in the beginning stages, we are confi-dent of this program’s ability to help Avis drive improved operational efficiencies.”

www.Manheim.com www.avisbudgetgroup.com/

EveryCarListed.com partners with Oodle to provide dealers enhanced exposure

SuperMedia announced EveryCarListed.com and Oodle have reached an agreement to feature auto-dealer-provided listings on the Oodle Network. The Oodle Network includes marketplaces on social media sites such as Facebook and MySpace, as well as hundreds of other local media sites like Walmart.com and Military.com.

This new relationship provides EveryCarListed.com’s advertising clients with priority placement. Consumers looking for cars will now benefit from high-quality auto listings from more than 12,000 dealerships on SuperMedia’s EveryCarListed.com and Superpages.com sites.

The agreement builds on the already large network of consumer sites found in the Superpages.com network that attract millions of unique visitors each month. The Oodle Network, which draws more than 15 million unique users each month, provides a “social” experience for its users, enabling them to share and get trusted recommendations with their network of friends.

“This alliance with Oodle brings consumers throughout the country added convenience in finding used and new vehicles, and brings our clients expanded reach for their in-market automobile sales, services and parts,” said Scott W. Klein, CEO of SuperMedia. “With it, we continue fueling commerce through connecting buyers with sellers, especially those who use social networking sites as their pre-ferred marketplace.”

EveryCarListed.com, the nation’s larg-est all-video automotive sales web site, has more than two million dealership and “For Sale by Owner” listings. Superpages.com features a “Cars” destination tab at the top of the home page, allowing con-sumers to shop for EveryCarListed.com vehicles within the site. EveryCarListed.com recently announced that it is the only national automotive sales site to offer con-sumers a free vehicle warranty through the SuperGuarantee Autos program, which is an extension of the popular SuperGuarantee program from SuperMedia.

“We’re excited to feature EveryCarListed’s high quality auto listings in our network,” said Craig Donato, CEO of Oodle. “Our users turn to Oodle to easily browse all the used car listings in their local areas -- both listings posted by other consumers and those available by local car dealers.”

www.everycarlisted.comwww.supermedia.com

Autobase, Inc. delivers Equity Alerts for auto

dealers Autobase, Inc., the premier provider in

automotive CRM for auto dealers nationwide and a division of Dominion Dealer Solutions, has announced the release of Equity Alerts.

Equity Alerts provides auto dealers with the ability to mine their data for quali-fied customers who, with no money down, could lower their payment and get into a newer vehicle today. The automated pro-cess considers the current value of each vehicle, calculates payoff (while considering refundable items), identifies term and rate based on buyer preference and history, and factors in all current rebates and incentives against the dealership’s current inventory. The result is an intelligent reporting of which customers are in potential equity situations within the dealer’s acceptable profit structure.

Beyond mining sales data, Equity Alerts leverages service information to flag users when new service appointments are set and new repair orders are opened for equity cus-tomers. This provides the timely notification needed when equity customers and potential buyers may be sitting in the dealership.

www.autobase.net www.DominionDealerSolutions.com www.DominionEnterprises.com

Your Advantage


innovationYou know there was a time when I owned

seven, maybe eight, Lincoln Town Cars back-to-back. Every two years like clockwork, I was on the plan.

Somewhere along the line, Lincoln lost the true luxury persona and perception. I would say probably not because it began building worse vehicles, but more so because the com-petition outdistanced Lincoln as it remained more of the same.

Now, with the euthanasia of the Mercury brand, Ford has to scramble to introduce new and viable product to fill the gap. Mercury represents nearly 100,000 annual sales, most of which will be absorbed by Ford car sales. Lincoln needs to be totally renewed and rees-tablished as a true luxury brand. To achieve the transition, it is necessary to take market share away from import competitors instead of totally concentrating on Cadillac as it has always done.

Alan Mulally has done a masterful job of reestablishing “Ford” as a brand free of all of the distractions of the Jacques Nasser acquisi-tions of a stable of import nameplates back in the late nineties. Now, can he pull off the same magic resurrection of the dead (dying) with the Lincoln nameplate? My guess is, “This is going to be fun to watch.”

Mulally and I are both featured speakers in June at the Virginia-Maryland annual Dealer Association Convention at the Greenbrier in West Virginia. I hold him in high regard.

CRM -- the most misused ‘buzz-words’ in our industry

How many times a day, how many times an hour, is there some new, unheard of vendor knocking on your door selling you the newest, best, most incredible CRM (customer rela-tionship management) plug-in application?

After you strip away a couple of the bells and whistles you find that what they are really selling is technology-enhanced follow-up police that rats out your salespeople who don’t call their customers.

Customer relationship management is about the people and the way your people relate to them.

So do you really get CRM or do you get a sales department inventing ways to get around the oppressive tattletale system? I think the people that invented these programs were the hall monitors reporting the other kids when they were kids in school.

Don’t get these CRM people confused

with the new wave of social media market-ing companies.

One phenomenon we’ve witnessed in recent years is the fact that every “Jack” in the world, every non-performer, every has-been, and every never-was in our industry, every failure in the business who was ever unceremoniously kicked to the curb by the car business...they’ve all become “consultants and trainers.”

I am amazed there are so many of them, they’re like rats, they’re everywhere, and they’re all inbred.

No track record in the business -- or worse yet a poor track record -- they throw up a little piss ant web site, get themselves a tax number and business license, buy a post office box at the UPS Store, set up office in Mom’s spare bedroom, and proclaim they are social media experts. Maybe they have a great grasp of the technology part of it, but can they sell?

And, most of them are going to tell you it’s wrong to hold a profit on the cars and trucks you sell (‘cause they don’t know how to do that).

Toyota will continue to throw big money at the market

I said it last month, and the month before. I said it last November before the recalls were public.

Don’t look for Toyota to back off of huge incentives any time soon. In light of every-thing that’s happened, Toyota is actually bouncing back stronger than many would have predicted.

After paying record fines for withholding information about the defects, in spite of the fact they are facing hundreds of consumer lawsuits, and wave after wave of negative sto-ries in the media concerning multiple recalls and defects, while facing all of those chal-lenges and obstacles, they’ve still only lost minimal market share.

As I have said repeatedly, Toyota loyalists, previous customers will probably stick with the brand with only a small percentage aban-doning the brand. It’s the conquest business they’ve lost. I said it early, probably said it first, and now the industry is agreeing with me that many potential buyers that never owned a Toyota have scratched it off of their shopping list -- for the time being anyway.

Amazingly enough, it appears Toyota-Scion-Lexus is only down about 2.5% in market share loss. Which says to me, in spite

of tangible problems they have fierce owner loyalty and great brand equity.

According to recent studies as reported by the Detroit Free Press, Ford, and Honda appear to be the immediate future recipi-ents of reshuffled market share. Both brands expected to pick up more than two points each in the next few years.

This same research is looking for Chrysler to lose share while General Motors remains flat.

Maybe that sort of explains Whitacre’s con-stant reshuffling the deck at General Motors?

You see, all research going into the next few years is indicating that the winners are going to be those companies that can bring a product from concept to production in a short amount of time.

This has always been one of General Motors’ signature absurdities. Think about it. How many years did we see pictures of the new Camaro before one of the son-of-a-bitches actually showed up in a showroom? The car was getting stale before the first one was sold.

The General Motors product development division is severely broken. Not in the sense they can’t develop great product. The line up right now is the best in their history. The problem is they can’t bring product out in a competitive timeframe. Streamlining pro-cesses is Whitacre’s total challenge. The Old General is constipated.

Not warm and fuzzyI’m not sure anybody actually likes

Whitacre -- maybe his family. But, he sure knows what he wants and he has no patience with bumblers or incompetents and excuses or delays.

When I am a manager in a dealership, liking me is 100% optional. Respecting me is part of their job description. I am in charge. That’s the way I see Whitacre -- no nonsense, get the job done, and get it done now.

And, I sort of get that he has no problem stepping up and accepting responsibility. Nothing wrong with the current team -- Tom Stephens is a good and competent manager. Yet, earlier in June, Whitacre bumped him down and sideways and took control of Global Product Planning.

Before the dust settled, Ed Whitacre had reshuffled a dozen other executives and moved their areas of responsibility.

continued to P-62

Dealer Advocate, Ziegler, continued from P-15


Summarizing Ed Whitacre’s business plan ‘Ziegler Style’ goes something like this -- I think Ed looked at the way things were being done and said, “Hmmmm, it appears to me like this son-of-a-bitch is broken. Okay, let’s just smash the hell out of it and start from scratch.”

Of course, Whitacre has Mark Reuss in the key position holding it all together. I have communicated with Mr. Reuss frequently, on Facebook, believe it or not. Once again, personable, straight forward, and I believe this team is developing culture and vision.

With the addition of Joel Ewanick as head of marketing, I’m expecting a radical shift and modernization of the company’s entire marketing strategy, including media selection. look for a drift to social media, YouTube, Facebook, Twitter and LinkedIn. If Facebook is the third largest country on the planet, we need to advertise where the people are -- makes sense to me. You can find me on Facebook at http://www.FaceBook.com/JimZieglerCarGuy.

And, I read Ewanick is returning GM to Super Bowl advertising and other big events. Once again, right moves. Of course if he screws up we can always ship his ass off to China or something.

I really like this guy immensely, followed his career for some time -- I equate him to Farley at Ford (another of my marketing heroes).

Well, that wraps it for another month. An empty snifter that used to contain 100 year-old premium Remy-Martin Louis XIII Cognac sits next to the keyboard here. You know, I only drink the cognac when I write the articles, wouldn’t want to do it all of the time unless I’m traveling with Mike Roscoe.

This article took a little thought and research but the message is clear. If you think your business sucks, you’re right. Please keep those e-mails and phone calls coming.

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-communications.com and enter the “Dealer Advocate” forum or e-mail him at [email protected].

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

Alloy Wheel Repair Spec ........... 58

Austin Consulting ....................... 52

AutoMate .......................................5

@utoRevenue ......................... .....19

AutoTrader.com .............................2

BG Products ................................. 59

CBC Advertising .......................... 21

Impact Marketing & Consulting ..8

Manheim ................................ 14,15

MPi ..................................................7

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

Thrifty Car Sales .......................... 55

vAuto ........................................... 64

Ziegler SuperSystems ................. 63

Zurich ........................................... 13

Don’t slip into denial and think that your current level of success rationalizes away the need to carefully address the seven areas I’ve presented or others like them. The true measure of a leader is not found in what he possesses, but in what possesses him. If you’ve searched yourself and have been found want-ing, it’s time to stop chasing money and start chasing the ability to make a difference. Once you learn to make a difference, prosperity will chase you.

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-communications.com and enter the “Leadership” forum or e-mail him at [email protected].

Leadership, Anderson, continued from P-16

Dealer Advocate, Ziegler, continued from P-61

applying traditional metrics to determine the appropriate rent level (usually about 1.5% of sales and 10% of gross) and (iii) researching available mortgage financing terms. Numerous dealership brokers now deploy this method, in lieu of relying on an appraisal. An example of the applica-tion of this method can be seen in the box below.

If dealership sellers and buyers valued real estate in this fashion, more transac-tions might close. Charles Oglesby, CEO of Asbury Automotive, recently com-mented to Automotive News that, “The seller still believes the real estate to have the values that existed in the past.” Today, sell-ers need to accept lower real estate values, while buyers need to do their own analysis to determine how much real estate a deal-ership can afford. Neither sellers nor buyer should rely on real estate appraisals (new or old) that do not take into account the dealership’s current and future financial performance.

In closing, property appraisal has become much more of an art than a sci-ence. Let’s return to the science and leave the art to the artists. When it comes to owner-occupied, single-purpose real estate, appraisers need to look through the real estate to the underlying business when determining value. If the business cannot support the appraised value, guess what? The value is probably wrong.

Erin Kerrigan is senior vice president of AutoStar, a leading provider of growth capital for auto dealers. AutoStar counts among its clients North America’s largest public consolidators and privately-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-communications.com and enter the “Ownership” forum or e-mail her at [email protected].

Ownership, Kerrigan, continued from P-17


dealer magazine july 2010

Business

issue of dealer magazine

features dealer advocate

t i o n sdealer magazine

jim ziegler

publication ofc o

advantageproud sponsor

business sucks

leader page