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DEALERNEWS

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

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

T H E O F F I C I A L M A G A Z I N E O F O R E G O N I A D A D E C E M B E R 2 0 16

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

4 OIADA / December 2016 www.oiada.com

PRESIDENTTommy Wilson, Jr.

EXECUTIVE VICE PRESIDENT Siamak Lotfi

BOARD OF DIRECTORS1ST VICE PRESIDENTJim Weaver

SECRETARYGary Brooks

TREASURERSalvador Alvarez HerreraZamora Auto Sales

CHAIRMAN OF THE BOARDGary Sargent

ACCOUNTING SERVICES Delap, CPAAdam PuckettLake Oswego, OR 97035503-697-4118ADVERTISINGAffiliated Media LLCAaron Jarvis503-683-2574Carsforsale.comAaron Oestretch605-306-3302AutoTrader.comEd Merrick 503-747-9162Cars.comJames Lynch312-601-5052UsedCars.com by DealixTamara Garris847-397-1700AUTO SERVICES & ACCESSORIESAuto Marketing SpecialistGary Palaniuk503-519-7725AUTO DETAILERShow Room NewMike BartheP O Box 822073Vancouver, WA 98682360-882-8162Northwest Auto AccessoriesCraig Lessard503-288-5700SHOWROOM/ BUSINESS JANITORIALShow Room NewMike Barthe 360-882-8162COMMERCIAL CLEANINGJaniKingMorgan Thomas541-868-8080

ASSOCIATE MEMBERSPRIVATE AUCTIONSBrasher’s Northwest Auto AuctionMark Melton541-689-3901Brasher’s Portland Auto AuctionJerry Hinton503-492-9200Crosspoint NW Dealer AuctionBrian Hardy503-594-2800Manheim Portland Auto AuctionRay Priest503-286-3000OUT-OF-STATE AUCTIONSADESA Seattle Auto AuctionJason Arcaro253-735-1600 x 213DAA NorthwestMitzi Vanvoorhis509-244-4500DAA SeattleDave BlakeAuburn, WA 98002253-737-2200 Manheim Seattle Auto AuctionRay Priest206-762-1600

PUBLIC AUCTIONS & AUCTIONEERSCommercial Industrial AuctioneersRay Beal503-760-0499Insurance Auto Auctions, Inc.Ryan Hall503-253-1500Petersen Auction Group of OregonCurt Davis541-689-6824Rick Leathers AuctioneersRick Leathers503-668-5326

Woodburn Auto AuctionSteve Morin503-981-8185DEALER SOFTWAREFrazer ComputingMichael Frazer888-963-5369FINANCINGCredit AcceptanceJohn Bragg360-980-2214Credit ConceptsJason Moon541-342-8545JP Morgan Chase Auto FinanceJeff DeGarmo503-201-4370Lobel FinancialTom McConkey503-653-8000Nationwide InsuranceMark Tischer503-339-4165

Oregon Auto FinanceGary Veum541-868-0472Oregon Community Credit UnionRich Black541-681-6311PacWest LLCJohn Keifer341-868-2595Reliable Credit AssociationDavid Marx503-462-3022Smartway Auto AdvisorsSheldon Harris503-795-7700The Equitable Finance Co.Brandon Fox 503-808-7939United FinanceTodd May503-238-6488

FLOORPLAN FINANCINGLobel FinancialTom McConkey503-653-8000Floorplan XpressJosh Chandler503-621-9260NextGear CapitalRobert Torbet503-358-3911INSURANCE & BONDINGHecht & Hecht Insurance AgencyEvelyn Hecht503-542-1131KMI Agency, Inc.Kelly Martin503-625-2615Shepard & Shepard Business SolutionsTodd Shepard509-396-0488The Summit Group of OregonJohn Petrie503-581-2825LEASINGOregon Roads, Inc.Joseph McKinney541-683-2277SERVICE CONTRACTSA.U.L./D.P.C.Jim Bangert 360-834-3333Automotive Business DevelopersShannon Meany541-944-9186Auto Services CompanySusan Williams800-442-7116DPC, Inc.Jacob Bangert360-834-3333Protective Life InsuranceDylan Doran818-836-1455TRAININGOIADA/NIADA CertifiedPauline Sill503-362-6839

INSIDE 06 ............Strategic Ways to Drive Leads with Social Media08 ...............................................................Selling is Changing09 .........................................................Security Starts Within10 .....................................................The Importance of Value11 ................................................Bank More on the Back End12 .........................................................Compliance Overdrive

WHAT’S NEWNIADA.tvNEW CPO CHANNEL AND USED CAR WEEKNIADA.tv just introduced a new channel devoted to CPO-related programming, including marketing strategies and value perception of CPO. In addition, the site now offers 19 education and training sessions from the recent Used Car Week Conferences. Check out NIADA.tv for these videos and much more!

ADVERTISER’S INDEX ADESA Northwest/Portland ............................................... BCAutoZone ................................................................................ 5DAA Northwest/Seattle ......................................................IFCLobel Financial .........................................................................3Manheim.com .................................................................10, 11NextGear Capital ....................................................................8VAuto ................................................................................... IBC

OFFICEOregon Independent Auto Dealers Association 9150 SW Pioneer Ct Ste. H Wilsonville, OR 97070800-447-0302

NIADA HEADQUARTERSNATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM • WWW.NIADA.TV2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838OIADA Dealer News is published monthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 6006-5203. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of OIADA Insider or NIADA. Likewise, the appearance of advertisers, or their identification as members of NIADA , does not constitute an endorsement of the products or services featured. Copyright © 2016 by NIADA Services, Inc. Inc.STATE MAGAZINE MGR./SALES Troy Graff • [email protected] Jacinda Timmerman • [email protected] Friedlander • [email protected] LAYOUT & GRAPHIC ARTISTChristopher Hanley • [email protected] SENIOR ART DIRECTOR / PRODUCTION MANAGER Christy Haynes • [email protected] Nieman Printing

SAFETY WATCH

FORD RECALLS HATCHBACKSMay Accidentally Unlatch

Ford Motor Co. is recalling 64,038 model year 2013-17 Ford Focus hatchback vehicles manufactured Feb. 14, 2012 to Aug. 26, 2016, and equipped with a manual transmission.

The hatchback of the affected vehicles may be unlatched with a single press of the interior latch release button. As such, the

vehicles fail to comply with the requirements of Federal Motor Vehicle Safety Standard (FMVSS) number 206, “Door Locks and Door Retention Components.”

With only a single press needed, the driver may accidentally unlatch the hatchback, increasing the risk of injury to any unsecured passengers in the back.

Ford will notify owners, and dealers will reprogram the Body Control Module with updated software, free of charge. Ford’s number for this recall is 16C13.

www.oiada.com December 2016 / OIADA 5 4 OIADA / December 2016 www.oiada.com

AUCTION NEWSBY ALAN RAM

ADESA ANNOUNCES MANAGEMENT CHANGES AT FOUR AUCTION LOCATIONSDan Watt Promoted at ADESA Seattle

ADESA recently announced changes to its auction management teams at ADESA Houston, ADESA Memphis, ADESA Seattle and ADESA Tulsa.

Michael Schenks, previously the general manager at ADESA Memphis, has been named general manager at ADESA Houston. Ron Schritenthal, previously assistant general manager at ADESA Memphis, has been promoted to general manager of that location.

Dan Watt, assistant general manager at ADESA Seattle, has been promoted to general manager of that location. Rod Thompson, dealer sales and service manager at ADESA Tulsa, has been promoted to general manager of that location.

“Michael, Ron and Dan have dedicated themselves to providing outstanding auction management at their previous posts,” said ADESA chief operating officer Paul Lips. “They will continue to ensure excellent customer service and staff engagement at ADESA Houston, ADESA Memphis and ADESA Seattle. Rod’s leadership experience and sales expertise will enable him to work effectively for both the employees and the customers of ADESA Tulsa.”

Schenks had been general manager at ADESA Memphis since 2013. He joined ADESA as dealer sales manager at ADESA Sarasota in 2009. Prior to that, he held various positions for AutoNation, including used vehicle director of North Florida.

Schritenthal had been assistant general manager at ADESA Memphis since 2009. Previously, he served for several years as assistant general manager and as fleet lease manager at ADESA Kansas City. Schritenthal has more than 30 years of experience in the auto auction industry, including various positions for Metro Auto Auction, now ADESA Kansas City, and Southern States Vehicle Auction, now ADESA Atlanta.

Watt has been with ADESA Seattle for more than 25 years and has held a variety of roles at the auction. His range of experience

includes working as the office manager, in operations, as the factory supervisor, factory manager, fleet lease manager and 10 years as commercial account manager. He had been assistant general manager at ADESA Seattle since 2010.

Thompson joined ADESA Tulsa in 2015 as dealer sales and service manager. He has nearly 30 years of experience in the automotive/powersports/auction industry, including 10 years as sales manager for his family’s Chrysler store. He spent five years as a powersports dealer and eight years as regional sales director for a major powersports manufacturer. Thompson entered the auction business eight years ago as a specialty manager and later served as assistant general manager at another auction location.

MICHAEL SCHENKS ROD THOMPSON DAN WATT


I totally understand how the day-to-day activities involved in running a store can make you wish there were more hours in a day. The irony is you can actually save time with a marketing plan because you’re operating more proactively rather than being in reactive mode. Mapping out a plan also means you can more easily hand off the work of implementing it to somebody else.

Better time management is just one perk of a marketing plan and here are six additional ways a marketing plan can benefit your business:

• Reinforces your brand.• Positions your company in

the marketplace.• Nurtures current customers.• Attracts new customers.• Prepares company for

growth.• Helps to analyze what works.2. Publish useful, high-

quality, original content.Content strategy means

getting the right messages to the right customers at the right time. This involves everything from your website content, blog, social media, and social advertising. High-quality content does not happen without a content strategy.

Here are some benefits of developing a content strategy:

• Influences buying decisions.• Improves brand equity and

reputation.• Earns customer loyalty.• Attracts more of the right

buyers.• Competitive advantage.• Increased leads and sales.3. Be social. Always genuinely

engage with your audience.Yes, you really do need to be

social on social media.Instead of broadcasting the

“benefits” of products and services to strangers, add the steps to attract interested buyers

10 STRATEGIC WAYS TO DRIVE LEADS WITH SOCIAL MEDIALeveraging the Power

One of the most overlooked and underutilized practices in digital marketing is leveraging the power of social media to drive leads and sales. There are a lot of obstacles for dealers to overcome, including a true appreciation of the value, a lack of skills, and certain business cultures that don’t lend themselves to being social. However, if a dealer can eliminate the stumbling blocks, there are strategic, lucrative ways to drive leads with social media.

Unfortunately, many dealers and GMs think of social media as an afterthought. Many believe its only value is in creating interest in the dealer’s brand. If this is your mindset then listen up because you’re leaving money on the table.

Social media is a quickly evolving beast. Forty percent of marketers believe social media has become increasingly difficult in the past 12 months. Platforms are constantly changing algorithms, releasing new features and “changing the rules.” This requires dealership marketers to think on their feet and quickly adapt their approach at the drop of a hat.

The landscape to grow your business with social media has never been more fertile:

• 70 percent of the U.S. population has at least one social networking profile. (Statistica)

• 52 percent of online adults now use two or more social media sites. (Pew Research)

• In 2015, Facebook influenced 52 percent of consumers’ online and offline purchases, up from 36 percent in 2014. (The Drum)

Laying the required groundwork is the key to driving leads with social media.

Listening to understand your customers improves marketing success. Leveraging social media to engage people before you try to sell them something keeps customers coming back.

You save big money because you laser-focus on interested buyers instead of blasting unwanted messages to strangers.

Groundwork produces seedlings and the opportunities become plentiful. The next steps are to enact strategies to drive leads with social media. Be open to the possibilities here. Your level of willingness to adapt to the new ways of reaching customers has a direct effect on your results.

10 STRATEGIC WAYS TO DRIVE LEADS WITH SOCIAL MEDIA1. Begin with a good plan.So many dealers admit they don’t have a marketing plan. They

know how valuable marketing is in general, and make some marketing efforts, but inevitably they feel like they need to spend all their time on operations and sales.

by engaging with them on social media.

• 71 percent of those who receive positive social care are likely to recommend your brand to others.

• Only 19 percent of those who don’t get any response are likely to recommend that brand.

When comments show up, respond. When online reviews are posted, respond. Be more accessible and you’ll notice more customers engaging.

4. Incorporate social selling tactics within your sales process.

Social selling is the act of developing referrals, leads and sales using social media. Seventy-nine percent of salespeople who use social media in the sales process outperform those who don’t.

Social selling is just like any other sales process. Salespeople build a network (online or offline) to increase referrals and leverage relationships to create warmer leads.

Talented sales professionals already have an offline network they’ve nurtured for years. Savvy social salespeople have already been working social media to develop leads. But these individuals are your top performers. What will you do to engage the bottom 90 percent of your team?

To attract, engage and sell to today’s hyper-connected buyers, dealers need to build a social selling process within their organization.

5. Leverage the awesome power of Facebook ads.

No matter what your Facebook marketing goals are – grow page likes, boost reach and engagement, drive leads, etc. – Facebook ads will help achieve those goals.

Facebook ads are by far the most powerful way to advertise your business on social media.

SOCIAL MEDIABY KATHI KRUSE

When a shopper is in the final stages of their research and ready to take action, strategic landing pages guide them further down your sales funnel.


6. Use well-designed landing pages to capture leads.

When a shopper is in the final stages of their research and ready to take action, strategic landing pages guide them further down your sales funnel.

Capture their attention through Facebook ads and convert buyers with actionable, urgent offers they can’t resist.

Don’t forget the all-important call-to-action and include a lead form to track and follow up.

7. Re-market to people who visit your website with Facebook ads.

The more advanced Facebook ads strategies are difficult to master but the results are hard to ignore.

Perhaps one of the most powerful tools Facebook has to offer is the ability to serve personalized ads to people who have visited your site.

Use the targeting option “Custom Audience – Website Traffic” to re-market to people who have visited your site within a set time frame. Once you’ve placed a Facebook pixel on your site (a piece of code that

tracks visitors), you can set up specific audiences with filters based on pages they’ve visited.

8. Leverage the power of LinkedIn.

If you’re a salesperson, there is no reason not to use LinkedIn to build your network as one of the ways to drive leads with social media.

Make sure you have a 100 percent complete profile – no “lazy bones jones” on this one. People want to know about you and a well-constructed profile with a nice picture says, “Hey, I’m here to help.”

Don’t waste time trying to connect with “everyone.” Be deliberate and thoughtful about who you’d like to know and who can introduce you or recommend you.

Pro tip: write and publish a weekly article on LinkedIn that displays your knowledge and expertise. It will develop your “personal brand” as a thought leader and trusted resource.

9. Use Twitter for prospecting.

To many companies and their salespeople, it seems like Twitter is a huge waste of time. And sometimes it is – if

you’re just messing around on the social network and pitching folks to get on a demo, it probably won’t be that helpful to you.

Why? Because the goal of using Twitter isn’t to sell something at the very second you tweet.

By using Twitter wisely, you can be part of the most relevant conversations as they happen. Spot opportunities first, build relationships, deepen customer trust and make a name for yourself.

However, just having a presence on Twitter doesn’t lead to conversions. It’s how you use it that makes the difference between tweeting into the void and generating leads. Spend the time and effort to:

• Find prospects.• Discover buying signals.• Gain insight on companies.• Accelerate deals with

conversation.• Build your following.• Build relationships with

influencers.10. Show another side of you

on Instagram.Instagram is a great place

to promote your company’s

personality. Spend 10-15 minutes each day engaging with other users. I know a dealership that has gotten leads via their Instagram content.

Ready to convert leads? Instagram now has more advertisers than Twitter. Facebook (who owns Instagram) allows ad creation and publication through the Facebook Ads Manager platform.

Are you ready?These 10 strategic ways to

drive leads with social media make it possible to eliminate the obstacles to converting your fans into customers. If you’re ready to take it to the next level, Kruse Control helps companies just like yours navigate the social media landscape. Please email me at [email protected].

Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc. Kruse Control coaches, trains & delivers

webinars focused on integrating social media and online reputation management into dealership operations.

AUCTION NEWS

MANHEIM TRIPLES IMAGING OFFERING AVAILABILITY FOR CLIENTSExpansion in Response to Client Demand

In response to client demand, Manheim has nearly tripled the availability of Enhanced Vehicle Imaging, expanding from 25 to 74 auction locations throughout North America.

EVI provides a consistent set of quality high-resolution images that showcase vehicles in an optimal way. Manheim said the service leads to a higher conversion rate for sellers and increased confidence about purchases for online buyers.

“The Enhanced Vehicle Imaging service we use from Manheim Milwaukee has proven to be a big boost to our bottom line and has grown our online attendance,” Napleton Automotive Group remarketing manager Jeff Ricchio said. “And we love the positive feedback we get from buyers about the photos.”

Manheim’s EVI produces photos superior to

those traditionally available via the device used to take standard condition report photos.

Using high-quality, state-of-the-art programmable cameras and software, certified photography staff members shoot the images after vehicles have been reconditioned. They display one car at a time and include a consistent set of views most important to buyers.

High-resolution images, available in-lane and via Simulcast and OVE, enable viewers to pan the vehicle and zoom in and out to areas of interest on the vehicle.

“Dealer interest in improving online sales and their success stories compelled us to broaden our EVI footprint and be an even better business partner,” Manheim senior vice president of inventory services Grace Huang said.

The addition of Enhanced Vehicle Imaging helps consignors move vehicle inventory more efficiently, reaching up to 80 percent more online buyers with increased bids per sale, Manheim said. Manheim data also showed Simulcast listings with EVI images convert 16 percent better than two or three low-resolution photos, and 50 percent better than no photos.

Dealers using EVI sell 27 percent more vehicles online than those who use two or three low-resolution images. EVI supports dealer efforts to sell less desirable, aged vehicles online – vehicles with expected low AutoGrade scores, high mileage or lower prices.


SALES MATTERSJOHN CHAPIN

SELLING IS CHANGING… NOT REALLYFacts That Remain the Same

This past week I’ve received three separate emails from various sales gurus talking about how much sales has changed.

While the Internet, social media and advances in technology have altered some of the peripheral aspects of selling, the foundational principles and keys that lead to sales success have remained the same.

FACT: SALES IS STILL A NUMBERS GAMEFailure in sales is due to a lack of activity

99.9 percent of the time.In other words, not making enough calls.Now that we have the Internet, I know

sales reps who spend hours looking up background information on prospects before they call them. That is a mistake. Look up the information a prospect would reasonably expect you to have, but don’t spend hours being perfect. Just look up some quick information and make the call.

Another way technology can work against us is some people believe they have to be technical experts before they call anyone.

An insurance agent I know spent a full six months in the office studying cyber liability because he had to know everything before he could speak to anyone. The insurance agent is a producer (salesperson) first, not an underwriter (technician).

The reality is you will never know everything and this is usually just an excuse to avoid doing the hard work of making lots of calls.

Just because you have the Internet to look up information doesn’t mean you should be spending hours “preparing” at the expense of making calls. Just get some basics and make the call. Learn what you need to learn so you don’t make any careless or “stupid” mistakes, but focus more on activity than on being technically proficient.

FACT: YOU’RE STILL THE EXPERTWhile it’s true that today’s consumer is,

generally speaking, better informed than in years past, you’re still the expert who has probably forgotten more than they will ever know.

The famous author Malcolm Gladwell once said it takes roughly 10,000 hours of study to master one’s craft. While you might not be at the 10,000-hour mark yet, you are still far better off than someone who has spent five, 10 or even 40 hours on the Internet studying your industry and products.

You live in your business every day – the prospect doesn’t. People still need an honest, straightforward salesperson who understands the subtleties and idiosyncrasies and can educate them on what’s best for them.

FACT: FACE-TO-FACE AND PHONE ARE

STILL THE MOST EFFECTIVE WAYS TO SELL

Have you ever not received an email someone swore they sent you? It just happened to me again two weeks ago.

In addition to the fact you can’t always rely on email, LinkedIn in-mail, or other Internet communication, you also lose the most important parts of communication, such as voice tone and body language. Plus, electronic communication distances you and dehumanizes the experience.

For those reasons, in-person communication is always the most effective, followed by Skype and other face-to-face apps, then by phone communication.

Electronic communication serves its purpose – short-sweet, non-critical communication in which you are simply conveying information.

What kills me is when I see salespeople using email for initial communication or during an important part of the selling process. In that case, they are simply hiding behind technology because they are afraid to make a call.

Also keep in mind that even non-critical electronic communication has to be backed up with a phone call or in-person contact to ensure it was received.

You have much more impact when people can see and/or hear you. Don’t hide behind technology and spam people on the initial and other important communications.

FACT: IT IS STILL ALL ABOUT RELATIONSHIPS AND DOING WHAT’S BEST FOR THE OTHER PERSON

There is no “new relationship selling” or “solution selling.” The best have always focused on the long-term relationship and the best possible solution for the prospect, even if it involved sending someone to the competition. The best have always been seen as a peer and business partner looking out for the best interests of the prospect.

THE BOTTOM LINE: THE ONLY WAY SALES HAS CHANGED IS FOR THOSE DOING IT THE WRONG WAY

Years ago you could pull the wool over someone’s eyes, get away with not knowing as much, have subpar sales and people skills, and not work as hard.

That said, the people who have always done it right have found little has changed over the years. For them, being great at sales still requires you work hard and make the calls, communicate effectively, build the personal relationships, practice professionalism, be knowledgeable, put the other person first and embody the character traits of honesty and integrity.

John Chapin is a sales and motivational speaker and trainer with more than 27 years of sales experience as a No. 1 sales rep. He is author of the 2010 sales book of the year: Sales Encyclopedia. For more information, visit www.completeselling.com or email [email protected].


TECHNICALLY SPEAKINGBY DAN DOMAN

SECURITY STARTS WITHINSix Steps to Protect Your Dealership’s Data

According to data security firm Virtru, even as hackers become more and more sophisticated, much of the threat to your business actually comes from inside.

The company notes that up to 28 percent of enterprise data security incidents come from inside an organization. They’re not saying any of your employees has malicious intent – though that is possible. What they are saying is your staff could be inadequately trained or your data security policies might be incomplete or not enforced.

So here are six training and enforcement policies to help protect your dealership from possible threats:

Strong passwords: While you’ve heard it before and it might seem obvious, enforcing strict password requirements – such as requiring a minimum of eight alphanumeric characters with symbols – and prompting users to change their passwords regularly are easy ways to protect against unauthorized access.

A 2015 survey by TeleSign found 47 percent of people use passwords that are at least

five years old. Don’t let your dealership’s employees be among them.

Authentication: Require multi-factor authentication on every device that accesses your dealership’s data.

The process requires users to register their devices to a particular user ID and password. Registering a device requires employees to select and answer a series of “security” questions not easily guessed by anyone but the employee.

In the event a user name and password was compromised, a hacker would still be unable to access your dealership’s systems unless that device was authenticated to those credentials, adding another layer of security.

IP blocking: Use IP blocking to limit user access from only dealership-approved IP addresses. That helps prevent unauthorized access from remote or mobile locations.

Implementing IP blocking is a great opportunity to review and audit your dealership’s policies regarding remote access to integrated dealer systems and appropriate purposes and use.

Now that you have secured the devices that are coming into your system, focus on your dealership’s employees’ day-to-day use.

Check your user permissions: Not every employee needs access to all of your dealership’s data. Assign employee permissions and access to specific dealership systems that suit your business processes and the employees’ respective responsibilities.

That will help control their ability to access personal and confidential customer data.

Use your systems’ notification or activity alert tools: They can be configured to alert you of potentially suspicious employee activity, such as changes to a user’s “setup” or “preferences.”

Run a report: Regularly run a user report to ensure all who have access truly need it. The reports should provide detailed information on users including dealer ID and dealer name (for dealer groups), user name, last successful login date, no user activity for more than 60 days, and admin.

It is a sound security practice to check your user reports against your active employee list. You should never have an ex-employee authorized to access your systems.

Secure dealerships are successful dealerships, and maintaining a secure dealership begins with fundamental security practices.

By implementing the six practices explained here, your dealership will be well on its way to helping ensure the security of your customers’ information – and a successful future.

Dan Doman is chief legal and privacy officer of RouteOne LLC (www.routeone.com), a joint venture created by Ally Financial, Ford Motor Credit Company, TD Auto Finance and Toyota Financial Services. He is responsible for managing the legal, governmental, privacy, and security affairs of RouteOne LLC.

SALES MATTERSBY ALAN RAM

PHONE UPS THAT SHOW UPThe Goal is Not Simply an Appointment

Every time I ask a group, whether it be dealers or salespeople, what the goal of a sales call is they tell me it’s to “set an appointment.”

No, it’s not! Let me explain with two scenarios.

Scenario A: You take a sales call. Everything goes great: You get a name, you get a number and, yes, the caller sets an appointment. You hear barking in the background, and you start talking to the caller about his dog. Now you’ve got some Golden Doodle-rapport. Unfortunately, that appointment does not show up.

Scenario B: Someone calls and you get her name and number. That’s no problem – you again use the highly effective technique that I call “asking them for it,” which works just about every time. This customer will not set up an appointment no matter how hard you try. She just won’t commit. But later on that evening, she comes in and buys.

Which would you rather have? And that’s

not a trick question.Clearly Scenario B, right? But she didn’t

have an appointment.So what? The goal of a sales call is not to

set an appointment but to have someone actually show up at your dealership.

SHOW-UPS COUNT, NOT APPOINTMENTS.There’s a big difference between setting

up appointments and having people arrive. I’ve had plenty of salespeople come up to me excited because they just used one of my word tracks on a customer on the phone and it worked great.

My question is always, “Did the caller show up yet?” If not, nothing has worked “great” yet. Not until they show.

Now, I’m not telling you not to set up appointments, so relax. Of course you want to set up appointments.

But let’s face it, nobody comes into your dealership because you got their name and phone number. “Hey honey, that salesperson at Friendly Kia just got our phone number! Let’s get down there!”

MESSAGING MATTERSBy the same token, nobody comes into

your dealership simply because you set up an appointment. They come in because of everything else you say.

What reasons are you giving customers to come to your dealership, other than to see

you? If you can’t answer that question, you need to figure it out.

Most telephone training in the automotive industry is simple:

1. Get their name.2. Get their phone number.3. Smile, because a smile can be heard

over the phone – that is true, by the way.4. Then set up an appointment they

probably won’t show up for.You need to step up your game. To get

people to come to the dealership, you must give them solid reasons to show up.

The next time someone asks you what your goal on a sales call is, I want you to say: “It’s to get someone to actually show up.”

Alan Ram is president of Proactive Training Solutions.This article originally appeared on NCM’s Up to Speed blog (blog.ncminstitute.com) and is reprinted with permission.


customer how much they “saved” on every receipt. That builds additional value to the price they paid for groceries. For some reason, dealerships comp services but, unlike the grocery store, never let anyone know about it.

Here’s an example: Almost every dealership I know requires a multi-point inspection (MPI) for each repair order. This check builds trust and helps sell needed services.

But what is the “value” to the customer for that service? None. However, if you show on the repair order that the MPI has a $49-$149 value that we provided at “no charge,” it does means something. After all, the service has actual value, and we should let customers know it.

Here’s another example. Many dealerships charge a diagnostic fee, using the information to explain the nature of the problem and how much the repair will cost. Along with the diagnostic work, you probably do a complete inspection of the entire vehicle and don’t charge for it. You should mention this value to your customer.

Always offer a deal.While we’re looking at other industries for

inspiration, let’s consider restaurants. I’ve been to many establishments that promote a special that includes the appetizer, salad, entrée and dessert. You’re told that you’ll get a special value by ordering the components as a group versus ordering them individually. The reality is that people will take advantage of the “deal” even though they likely would not have ordered all the items separately.

You can apply the same principle to service menu items. The best performers on menu sale penetration show the value of the combined services versus doing those services individually. But if you offer a “30k Service” for $400 without explaining the value of the individual services, all they will see is the $400.

Imagine the penetration level if you showed that all the services in the “30K Service” would separately cost $530! If the menu item is “only $400,” the customer just saved $130 by purchasing it.

The same advice goes if you provide a car wash, loaner cars, or any other services: Always make sure the customer knows the value. And, no matter what, make sure the value you provide exceeds the price.

This article originally appeared on NCM’s Up to Speed blog (blog.ncminstitute.com) and is reprinted with permission.

MANAGEMENT MATTERS BY GEORGE GOWEN

THE IMPORTANCE OF VALUE Unveil the Value of Service and Parts

We all know a customer will buy a product or service when the value exceeds price. Unfortunately, automotive dealerships hide the value that the service and parts departments bring.

Here’s how you can change that.Recognize the value of “free.”

Grocery stores commonly show the

And, no matter what, make sure the value you provide exceeds the price.


ACCELERATEBY GWC WARRANTY

BANK MORE ON THE BACK ENDThe Ultimate Customer Satisfaction Experience

So much of what you do on a day-to-day basis is to preserve your front-end gross. You act with discipline when acquiring inventory, you carefully

manage reconditioning costs, you price your cars based on demand and market and you work to sell them in a timely fashion.

But what are you doing to make more profit on the back end of your deals?

Statistics show very few dealers offer service contracts on every sale. But why? Beyond the fact you can better protect your customers after the sale, there are countless benefits that put more profit in your pockets.

Think about the extra commas in your bottom line if you apply the same effort to your back-end profits as you do to protecting your front-end gross. Nice mental image, isn’t it?

It starts with having a process: Think 300 percent. That means you offer 100 percent of your service contract menu to 100 percent of your customers 100 percent of the time.

That doesn’t mean you’ll end up getting every single customer to purchase a service contract. But if you can bump your penetration from 25 percent to 50 percent, you’ve just doubled your profits from the back end of deals.

Not to mention the more service contracts you sell, the more you stand to get back in return.

You get out what you put in: A portion of every service contract you sell is set aside in the event a claim is paid on that particular vehicle. Check with your service contract provider to see what portion of that reserve, if any, you can get back when the contract expires.

GWC Warranty dealers who qualify for our Elite Dealer Program begin earning a portion of those reserves back when they reach certain service contract volume milestones. Create enough service contract volume and WealthBuilder dealers can qualify for up to 100 percent of their underwriting profits.

Service contract volume isn’t the only driver of that profit center. Selling quality vehicles and focusing on reconditioning will help keep reserve accounts full, as fewer claims are paid from them.

Up your game with upsells: When it comes to immediate profits, upsells to richer coverage levels with longer terms will help build up reserve account balances.

term with richer component coverage. Now think about how he’ll feel when two, three, four or even five years down the road, the service contract you sold is still saving him money on unexpected repairs.

It’s the ultimate customer satisfaction experience, and one customers will tell family and friends about.

So when their cousin, friend or colleague needs a quality vehicle, where will they go? You guessed it – they’re coming to you. And when they’re in the market for another vehicle, you can be sure they’ll start their search where their last one ended – on your doorstep.

If you’ve followed the first two steps of this process and you work in upsell opportunities, you’ll be offering better contracts more often, making more underwriting profits available and, perhaps most important, improving post-sale satisfaction, setting you up for long-term profitable benefits as well.

Repeat, refer, rejoice: Where you stand to benefit the most from a standardized back-end profit approach is when it comes back to you on the front end.

How does that work? Imagine the customer you protected for a longer


COMPLIANCE OVERDRIVEBY CHIP ZYVOLOSKI

AVOID THE “ONE SIZE FITS ALL” RETAIL SALES CONTRACT MINDSETAddress Your Specific Terms

Avoid compliance violations and potential fines by setting aside time to review your retail sales contracts. Wait, aren’t all forms “one size fits all?”

Your credit documents need to address the specific terms of credit you offer – matched with state and federal disclosures and provisions. Mismatching your credit terms and contract provisions could cost you thousands of dollars in fines, damages and legal fees as well as harm your business reputation.

Here are a few features you should review to make sure your retail sales contracts match the credit terms you offer.

Type of Property SoldMotorcycles, autocycles, off-road vehicles,

RV’s and other motorized vehicles may not be “motor vehicles” under your state’s retail sales laws. Required contract and disclosure terms can vary depending on whether you are selling a “motor vehicle” as defined in your state’s retail sales laws.

With the variety of motorized vehicle types available, make sure the contract you are using is designed for the type of personal property you sell. The same is true of your license to sell motor vehicles. Make sure your dealer’s license covers the property you sell.

Cash Down PaymentsUsually, the cash down payment is

received at closing, but dealers sometimes allow buyers to make one or more down payments after closing. Under the Truth-in-Lending Act and Regulation Z of the act, these “deferred down payments” or “pickup payments” must be made no later than the due date of the second regularly scheduled payment. They also cannot be subject to a finance charge.

It’s helpful to have a contract provision with buyer’s promise to make deferred down payments. It must also be a line item in the Itemization of Amount Financed, which treats it as a credit even though it hasn’t been received yet.

Although it’s not required, dealers should include the date and amount of a deferred down payment in the Fed Box Payment Schedule. If you allow deferred down payments, be sure your contracts support them or are flexible enough to handle them. Note: some states do not allow deferred down payments or require them to be paid sooner than under Reg. Z.

Negative Equity Trade-Ins Under Reg. Z, a down payment in the

itemization can never be less than zero. As a result, negative equity trade-ins require special handling.

Reg. Z allows two methods of calculating the down payment. One way is to net all the cash and other credits against the negative equity in the trade-in (“netting”). Another way is to add all credits but not subtract any negative equity in the trade-in (“non-netting”).

The method used will affect the calculated down payment and the amount of a separate line financing the balance owed on the negative equity trade-in. You may not have much choice in selecting a contract with your preferred netting or non-netting method, but it’s important to understand which method your contract uses so you can explain it to buyers.

Equal Installments. Balloon Payments.Equal monthly payments are a common

payment frequency. Changing to more or less frequent equal payments can sometimes require changes to contract terminology and disclosures. Be sure to review your documentation and completion tools carefully if you require equal periodic payments other than monthly.

Balloon payments are generally structured as a final payment that is more than twice as large as the average periodic payment. A balloon payment schedule can lower periodic payments, but the buyer might have problems paying the balloon.

Dealers and lenders sometimes provide options for buyers who can’t pay the balloon amount. Those options may be included in the contract, especially if they are required by law. For example, one option is to allow a buyer to pay the balloon amount plus interest in installments, usually in an amount no greater than the prior installments.

States sometimes require additional disclosures to warn the consumer of the final payment amount. Be sure to review your documentation if you offer balloon payment features.

Arbitration Not all contracts include an arbitration

provision. You should review your contract to confirm it has one if you want it.

The CFPB has proposed a regulation that would preserve the buyer’s ability to join a class action lawsuit even if the dealer/creditor has a contract right to require arbitration. If the CFPB’s proposal becomes final, you will want to review your decision to include an arbitration provision and either update or remove it.

Conditional Delivery – Spot Delivery Is your retail sales contract conditioned on

your ability to sell the completed contract to an assignee? If so, your retail sales contract should include a provision telling the buyer about it.

If you do conditional deliveries, it can be risky to use a retail contract that doesn’t include a spot delivery provision

or specifically cross-reference a separate spot delivery agreement. In that case, someone reading the retail contract alone will not know it’s subject to another agreement. (The same concept also applies to arbitration provisions.) If spot delivery is an important element of your credit programs, make sure your contract addresses it in some way.

Note: some states do not allow conditional delivery provisions.

Fees and Charges Your retail sales contract probably has

blank lines in the itemization and in other places. That does not mean you can put anything you want in the blank lines, especially fees.

In many states, only specific fees with specific names are allowed. You should review your retail contracts to determine if they have any required disclosures or contract provisions for the specific fees you charge.

What if there isn’t a contract provision or disclosure for your fee and it only appears on a blank line in the itemization? That may be okay for some fees in some states. The point is that you should research your state to determine what fee information is required and to confirm your retail contract has it.

Like the seasons, your credit programs and terms can change over time. Now is a good time to review your credit documentation to make sure it is up to date.

Chip Zyvoloski is a senior attorney for Indirect Lending at Wolters Kluwer. For more information, please visit www.wolterskluwerfs.com/indirect.


WASHINGTON UPDATE

NIADA GOVERNMENT REPORTLatest Governmental Issues and Activity

Here’s a rundown of some of the latest governmental issues and activity affecting the used car industry from NIADA senior vice president of legal and government affairs Shaun Petersen and NIADA lobbyist Sante Esposito of Key Advocates.

REGULATORY REPORT By Shaun Petersen

FEDERAL TRADE COMMISSIONA federal court judge approved the FTC’s

$10 billion settlement agreement with Volkswagen over the company’s deliberate cheating on government emissions tests.

The approval formally starts the process for owners of certain Volkswagen and Audi 2.0 liter diesel vehicles – including independent dealers with those vehicles in their inventory – to get compensation.

In most cases, the owners of VW and Audi diesel cars fitted with the emissions defeat devices will receive between $12,500 and $44,000 each, depending on the model, year, mileage and trim of the car, as well as where the owner lives.

A post on the FTC’s consumer blog, www.consumer.ftc.gov/blog/vw-buybacks-and-lease-terminations-begin, provides additional background information on the settlement order, along with detailed instructions for affected owners about how and where to file a claim and the claim-processing timetable.

It also tells consumers how and where they can pick up buyback checks and noting those funds do not have to be used to buy a new Volkswagen.

CONSUMER FINANCIAL PROTECTION BUREAU

Supervisory highlights: The CFPB released its latest supervisory highlights report, which showed recent supervisory actions returned more than $11 million to more than 225,000 harmed consumers.

The report outlined violations found in auto loan origination and servicing, including a claim that servicers refused to return personal belongings from a borrower’s repossessed car until the borrower paid a storage fee.

If borrowers did not pay the fee in the allotted time, usually 30-45 days, depending on the state, the companies would dispose of the property instead of returning it to the borrower.

The CFPB said it is an illegal and unfair practice to refuse to return a consumer’s

personal property until a fee is paid.Service providers bulletin: The CFPB

reissued its compliance bulletin on service providers, saying the amendment was needed to clarify that entities have flexibility, allowing for appropriate risk management of service providers.

The new bulletin includes the same list of expectations for managing service provider relationships, such as verifying that service providers understand and are capable of complying with federal laws; requesting and reviewing service providers’ policies, procedures and training materials; and including in contracts clear expectations about compliance.

The revised bulletin gives entities some flexibility and discretion when determining the level of oversight needed, based on the circumstances of the relationship and the particular activities of the service provider, as well as the potential for harm to consumers.

Comments on payday lending rule: NIADA joined with NADA and the RV Dealers Association to submit comments to the CFPB regarding its proposed payday lending rule.

Our comments raised concerns that the CFPB’s proposed rule needs greater clarity to ensure retail installment contracts for the purchase of personal property, such as automobiles, are not covered by the proposal.

We also told the bureau the purchase money exemption must include all components of the transaction, including the purchase of voluntary protection products such as GAP, as well as negative equity.

LEGISLATIVE REPORT By Sante Esposito

S.2663, REFORMING CFPB INDIRECT AUTO FINANCING GUIDANCE ACT

Advocacy efforts heading into the lame duck session, which begins in mid-November, have been focused on urging Sens. Joe Donnelly (D-Ind.) and Heidi Heitkamp (D-N.D.) to cosponsor the bill, which rescinds the controversial auto financing guidance action taken by the CFPB in March 2013 and provides for a more transparent and accountable process for addressing the issue of indirect auto lending.

The effort is the result of a recent meeting with Sen. Richard Shelby (R-Ala.), chairman of the Senate Banking Committee, which has jurisdiction over the bill.

In that meeting, Shelby committed to marking up the bill in committee during the lame duck session if two Democrats would cosponsor it.

Donnelly is a small business advocate who was a featured speaker at NIADA’s 2016 National Leadership Conference and Legislative Summit.

NIADA will also keep pushing its request for the Senate to convene a series of meetings with the CFPB and stakeholders to explore the possibility of an administrative solution to the issue.

The CFPB’s guidance claimed dealer discretion on interest rates in indirect auto financing creates a “significant risk” of unintentional disparate impact discrimination.

S.2609, MARKETPLACE AND INTERNET TAX FAIRNESS ACT

This bill would allow states to charge sales tax on so-called “remote transactions,” such as Internet sales, but thanks to NIADA’s efforts it now specifically exempts vehicles, aircraft, vessels and business purchases – all cases in which states currently collect a use tax either when the vehicle is registered or because businesses pay their use tax. A summary of the text refers to the exemption as preventing “double taxation.”

The Senate Judiciary Committee has received comments back from a wide range of stakeholders and is still deciding its legislative strategy.

Rep. Bob Goodlatte (R-Va.), chairman of the House Judiciary Committee, and Rep. Anna Eshoo (D-Calif.) have developed a discussion draft bill on the remote sales tax issue.

H.R. 6094, THE REGULATORY RELIEF FOR SMALL BUSINESSES, SCHOOLS, AND NONPROFITS ACT

The bill, introduced on Sept. 21 by Rep. Tim Walberg (R-Mich.) with 76 cosponsors, would postpone the effective date of the Department of Labor’s rule revising income thresholds for determining overtime pay for executive, administrative, professional, outside sales and computer employees exempt from regular minimum wage and overtime pay requirements from Dec. 1 until June 1.

The bill passed the House on Sept. 28 by a vote of 246-177. Seven Democrats, including National Leadership Conference speaker Rep. Henry Cuellar (D-Texas), voted in favor.


My Name ____________________________________________________________

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Dealership # __________________________________________________________

Dealer License Expiration Date: (Month)_____________________________________

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Date _________________________________________________________________

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

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

OI A DA C O N T INU IN G E DUC AT IO N P RO G R A M

READ & RESPOND AND CERTIFY BELOW

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

“10 STRATEGIC WAYS TO DRIVE LEADS WITH SOCIAL MEDIA”True/False: The only value of social media is in creating interest in the dealer’s brand.True/False: 70 percent of the U.S. population has at least one social networking profile.Which of the following is a strategic way to drive leads?a) Publish useful, high-quality, original content.b) Incorporate social selling tactics within your sales process.c) Use well-designed landing pages to capture leads.d) All of the above.

“SECURITY STARTS WITHIN”True/False: You should require multi-factor authentication on every device that accesses your dealership’s data.How can you protect your dealership from possible threats when it comes to data?a) Enforce strict password requirements.b) Check your user permissions.c) Regularly run a user report.d) All of the above.

“THE IMPORTANCE OF VALUE”True/False: Automotive dealerships often hide the value that the service and parts departments bring.True/False: Make sure that the customer knows the value of your services, and that the value exceeds the price.

OIADA CONT INUING EDUCAT ION PROGR AM

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

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

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

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

OIADA FORMS STOREYOU CAN EASILY ATTAIN FORMS NEEDED FOR EVERYDAY BUSINESS

You can order forms any time of the day online at OIADA.com. All you need is an email address.1.You can stop by one of three locations within the Oregon auction houses during auction day.2.You can pick up forms at the OIADA office, located at 1475 Capitol Street NE in Salem.3.OIADA members receive a discount on most forms, a savings of up to $100 or more annually. You can order forms any time online at OIADA.com. All you need is an email address.

4.

WE DON’T DOBALLPARKSThe vAuto way is simple: Every used car decision is made with data-driven precision. This year, the 7,500+ Provision® dealers who rely on our industry-leading insights and exclusive Live Market View will continue to soar above the national averages in inventory turns and profitability. Thriving despite ever-thinner margins and more cars on the market.

Starting with your pricing, you’ll see how precision pulls shoppers into your inventory, moves it faster and makes more total gross. You’ll see how precision results in better decisions, less guesswork and fewer aged cars. And you’ll see why Provision has proven time and again to be the only way the best dealers want to work.

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WE DON’T DOBALLPARKSThe vAuto way is simple: Every used car decision is made with data-driven precision. This year, the 7,500+ Provision® dealers who rely on our industry-leading insights and exclusive Live Market View will continue to soar above the national averages in inventory turns and profitability. Thriving despite ever-thinner margins and more cars on the market.

Starting with your pricing, you’ll see how precision pulls shoppers into your inventory, moves it faster and makes more total gross. You’ll see how precision results in better decisions, less guesswork and fewer aged cars. And you’ll see why Provision has proven time and again to be the only way the best dealers want to work.

vAuto.com/noballparks | 888-362-5783

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