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NCM Institute

NCM Institute

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Name: NCM Institute
Date registered: April 8, 2013


The NCM Institute is an important educational resource for your entire management team. Founded on decades of experience in the ultra-competitive automotive industry, NCMi provides in-depth, real-world dealership training on department fundamentals and advanced management best practices that your team can put into action immediately.

Latest posts

  1. #AskNCM: What’s the connection between low gross profits and aged inventory? — March 29, 2016
  2. #AskNCM: My service advisors can’t meet at the same time. How can I train them? — March 17, 2016
  3. Behind-the-scenes: GMEP Graduates Celebrate their Achievement — February 9, 2016
  4. Profiles in Leadership: Building the Ledezma Legacy — January 19, 2016
  5. Developing the right pay plan for service advisors — January 5, 2016

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NCM Institute

#AskNCM: What’s the connection between low gross profits and aged inventory?

NCM expert, Robin Cunningham, explains the connection between reduced profits and aged inventory and how above-market used vehicle pricing leads to invisibility online.

Internet pricing isn’t a race to the bottom, Robin says, but a tool to help you move inventory faster. See how: 

Can you sell a used vehicle in fewer than 30 days? Discover more solutions for aged used vehicle inventory issues.

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#AskNCM: My service advisors can’t meet at the same time. How can I train them?

This question comes up during every service management class at the NCM® Institute: How can I train my service advisors when we can’t all meet as a group? It’s a challenge that every service department faces, whether you’re a big shop or small.

NCM expert, Steve Hall, gives you his take on the problem and offers his “coaching from the sidelines” technique as a solution.

Have you tried Steve’s technique in your service department? How did it go? Want to #AskNCM a question? Leave a comment below, and we’ll answer it!

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Behind-the-scenes: GMEP Graduates Celebrate their Achievement

NCM recently celebrated with our newest group of General Management Executive Program (GMEP) graduates. Catch a glimpse of all the fun!

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Profiles in Leadership: Building the Ledezma Legacy

We recently caught up with Amanda Ledezma, General Manager at Cable-Dahmer Chevrolet in Kansas City, Mo. The second generation to work with NCM Associates, we asked her to talk about creating a family legacy in the automotive industry and what it takes to be a leader.

How has NCM helped your family build a legacy? Tell us below. 

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Developing the right pay plan for service advisors

Mechanic wrench tool

Last week, George Gowen wrote about the importance of service advisors to retaining your customer base (Miss it? Check it out.) This naturally leads to the question: How much should I be paying them?

Taking Stock of Service Advisor Pay

Before you make any decisions about your dealership’s pay plan, you need to carefully evaluate the current market, as well as your budget constraints. In general, NCM recommends that you consider the following questions:

1.     What’s your philosophy towards advisor compensation?

2.     What’s the right amount to budget for advisor compensation?

3.     Should advisor productivity affect advisor compensation levels?

4.     In addition to monetary compensation, what other elements do you want to include in a well-balanced advisor pay plan?

What’s your philosophy towards advisor compensation?

Most dealerships have begun to view their service department as a “selling” organization, not just a “fix it and smile” division. When you take that philosophy, your compensation plans must focus on sales activities and results. To achieve this, your advisors will need to improve their customer R.O. transactional quality while decreasing their customer R.O. transactional quantity. This could result in the need to add more advisors.

What’s the right amount to budget for advisor compensation?

When it comes to service advisor compensation budget, NCM recommends using 12.0% of department gross (before any parts gross transfer) as the metric for budgeting service advisor compensation. This budget guideline may vary sometimes—a little higher for domestic franchises and a little lower for luxury franchises—but relating compensation to performance is an important step. And, remember: budgeting refers to how much you should pay, while structuring refers to how you could pay.

Should advisor productivity affect advisor compensation levels?

Advisor productivity is a critical component of compensation. You must clearly define this connection, and let your service advisors know that their income will be dependent on it. Set expectations and get their commitment to this approach. After all, it’s advantageous to them: an advisor with high transactional quality and CSI, could earn as much as 14% of the gross he/she generates; meanwhile, an advisor with below average transactional quality and CSI, might earn as little as 10%. When your service directors understand this, they will do what’s necessary to improve their pay.

What other elements do you want to include in a well-balanced advisor pay plan?

This is harder to answer. Here’s the thing: there is no “one size fits all” solution to automotive pay plans. What works brilliantly for one dealerships may be an absolute disaster in your shop. Each dealership has a different business culture that impacts pay plans. And your franchise requirements, personal priorities and state and local laws will all significantly influence the decisions you make on pay plans.

Structuring Service Advisor Pay Plans

While you must keep in mind that every dealership is different, here are the general recommendations that NCM has for any service advisor pay plan:


1.     Service advisor pay plan structure should be 100% incentive based, with a reasonable underlying guaranteed draw against commission.

2.     As billable hours is the force driving service and parts profitability, the main determinant for pay should be Hours Billed per Individual Advisor per Month, with $x.xx paid for each hour billed, in all labor categories. We’ve seen this as a stand-alone compensation metric, as well as combined with either customer effective labor rate or hours per customer R.O., sometimes both. This category might represent 55% – 70% of the plan structure.

3.     CSI Performance is usually the next element. The advisor should be rewarded for achieving world-class service. The payment can be quantified as “an additional $x.xx paid for each hour billed” (see #2, above). Depending on how much manufacturer money is tied to CSI, this category might represent 10% – 20% of the plan structure.

4.     Next up are the Spiffs and Incentives, which cover such things as: (a) Parts Sales per Customer R.O.; (b) Customer Effective Labor Rate; (c) Menu Closing Percentage; (d) Tire Sales; (e) Service Contract Sales; (f) MPI (ASR) Closing Percentage. The payment might be quantified as an additional $x.xx paid for each hour billed (see #2, above), as a flat amount or as a per item amount. This would represent approximately 15% of the plan structure.

5.     The final category is a Team Incentive based on Percent of Total Monthly Shop Hours Objective Achieved. The intent here is to have all service and parts personnel focus on one number—total shop production capacity— throughout the month. Their goal is to achieve or exceed full capacity operations. You may quantify the payment as an additional $x.xx paid for each hour billed (see #2, above) or as a flat amount. This should be about 7% – 10% of the plan structure.

Pay plans are tricky. What successes have you had in creating and implementing pay plan changes? Tell us below.


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NCM® Institute Center for Automotive Retail Excellence Announces Winner of Lifetime of Virtual Training

8827_NADA_DailyAd27_9_8125x7_Jan27_2014_NCM_OnDemandThe anticipation is finally over! Tim Crabtree of Future Ford of Sacramento, won lifetime access to the NCM® OnDemand virtual training platform for his entire dealership from the NCM Institute, the leading provider in automotive management training.

The NCM Institute held this contest throughout January and February, and the rules were simple:  participant’s sign up for a complimentary 5-day test drive of OnDemand, and after taking the brief Orientation Module, were entered for a chance to win.

With over 70 hours of content and access to more than 30 trainers, NCM OnDemand offers a wide variety of courses for any dealership employee. OnDemand provides interactive, virtual training from the best instructors in the industry including the likes of Dave Anderson, Alan Ram, Jeff Cowan, and NCM Institute Instructors. The training provides engaging modules to increase profitability and team performance while addressing a dealership’s various pain points.

NCM is proud to offer Tim Crabtree a valuable tool that he can share with Future Ford of Sacramento. Tim has attended multiple NCM Institute classes and is excited to be a member of OnDemand. “I attended the Service Management Level I and the Service Management Level II classes this year at the NCM Institute in Kansas. Never attending a 20 Group class or discussion before, I did not know what to expect nor what was expected of me,” Tim said. “Steve Hall and Robin Cunningham do an excellent job with the learning format of the class and the overall instruction you receive. NCM definitely offers a wide range of classes that would benefit anyone that is up and coming in the business or the seasoned veteran that is becoming comfortable.”

With NCM OnDemand, you can receive great training without leaving your dealership.

If your dealership is among the many struggling to find the right training solution, try the free 5-day NCM OnDemand test drive. You’ve got nothing to lose, and a world of virtual training to gain. Visit today.

NCM would like to thank the participants who entered the contest and congratulate Tim Crabtree and Future Ford of Sacramento as winners of the lifetime access to NCM OnDemand.


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Celebrating Independence Day in America

Today we’re taking a break from the traditional automotive retail best practices information we usually share on the Up To Speed blog to celebrate the birth of our great nation.  We thought you would enjoy some interesting facts about the Declaration of Independence we found at Read

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Dealership Successor Gap? How to identify and motivate Key Managers

Today’s article is submitted by David Ciambella CFP®, a partner with The Rawlsmanager Group.So the question is:How to identify, motivate, and retain managers that will be committed to protecting and building business value, mentoring your successor(s), or running the business while you are still looking for a qualified successor to take over your business?

First, it is important to realize that all managers are not created equal!

Because there are different levels of managers–Key Managers, Special Key Managers and Very Special Key Managers—it is imperative you understand that each classification of manager is motivated very differently. Motivating and retaining managers must be done with forethought and care; otherwise, the very objective you are looking to accomplish could crash and burn.

Below are a few hints you may find helpful as you consider individuals who could be cornerstones in your succession bridge:

  • Key Manager is a loyal, dependable manger who is security oriented.

An example of an incentive that would motivate a Key Manager would be a Supplemental Executive Retirement Plan (SERP) which is a non-qualified deferred compensation plan. For example, let’s assume you are a Key Manager who makes $80,000/year. The plan could state that each year you serve in a bridge capacity, 10% of your annual compensation ($8,000) would be set aside for your benefit.

  • Special Kay Manager is an individual who would be more difficult to replace. Special Key Managers are typically performance-driven individuals.

An example of an incentive for a Special Key Manager would be a non-qualified deferred compensation plan that has two components. One component could be a flat percentage (10%) of annual compensation as described above. The second component could be sharing in a percentage (10%) of company profits above the prior year. For example, let’s assume you are a Special Key Manager who makes $150,000. Let’s further assume the profitability of the company last year was $500,000 and this year it is $750,000. In this example you would receive $10,000 for the first component and $25,000 for the second component for a total of $35,000.

  • Very Special Key Manager is more entrepreneurial; a rainmaker who if he/she left, they would impact profitability and would be very difficult to replace. These individuals are typically looking for respect.

One of the ways to respect a Very Special Key Manager is by offering him/her an opportunity to become your partner or an owner in the company. Caution: There are several ways to acknowledge and respect a Very Special Key Manager other than giving him/her actual stock in the company, such as Phantom Stock or becoming a partner in a management company. However, there are some Very Special Key Managers who warrant actual stock ownership.

Remember…aligning the incentive with the type of manager you are dealing with will have a significant impact upon your ability to retain them for the long term.

The Rawls Group specializes in business succession planning by addressing the issues that impact the continued success of a business legacy.  By partnering with their clients and their clients’ other advisors, they work to develop a plan that will perpetuate the leadership, culture, performance, and relationships that are key to business success.  For additional information contact David at 407-718-4587 or Learn more at


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The 3 Dimensions of Mobile Marketing for Auto Dealers

Today’s article is contributed AutoRevo and Carfax.  This topic was covered in a recent Carfax ’PowerUp’ Webinar. The Carfax PowerUp webinar series is designed to help dealers improve their business operations. This educational resource provides attendees with valuable tips and information on the latest industry trends, best practices and emerging technologies that drive used car sales and ultimately increase store profits.   Registration is free and open to anyone at
h--rek-pictures-blogs-mobile phone-thumb_Did you know there are about 300 million mobile phones in the United States active today? That’s practically one for every American. We rely on smartphones to help do our jobs, keep up with current events and shop for things like used cars. Indeed, phones today can do almost anything and are the constant center of attention for many of us.

The prominence of our phones provides greater opportunity for dealers to reach potential customers more efficiently and effectively. However, you need a proven search marketing strategy to successfully capture the attention of this massive audience and sell more vehicles. If you’re a used-car dealer, you need to know the three dimensions of mobile marketing:

1st Dimension – Your Mobile Website

You need a mobile website to stay competitive in today’s used-car marketplace. Why? Customers expect you to have one. In fact, a recent survey showed that 88% of mobile phone users said they’d be more likely to buy a car from a dealer with a mobile website. Having a mobile website can significantly increase your ability to engage potential customers and sell cars. However, not having one can seriously limit your ability to compete with tech-savvy dealers.

When it comes to the design of your mobile website, simplicity is crucial. It should have minimal words and pictures. Then, visitors will feel comfortable browsing your cars on their phones. Try using touchable text and large buttons. That’ll make it easier for visitors to ‘thumb-surf’ through your site and contact you. Don’t hide critical information like your phone number or email address in a graphic. Remember, visitors are likely to abandon your mobile site if they can’t easily access information they want.

If you have a mobile website but don’t feel like you’re getting enough value yet, it may pay to consider mobile marketing resources like those offered by AutoRevo. Their proven techniques help dealers boost online response rates so they can sell more cars. For example, some dealers use AutoRevo mobile tools to help sell cars on Facebook Marketplace or eBay. Other dealers like to track performance metrics of their mobile website and paid search campaigns to help identify areas of their business that need improvement.

2nd Dimension – Why Local Search is Vital

Now that you know how valuable your mobile website can be, it’s time to start promoting it. Then, Internet search engines and more shoppers can find you online. Focus on local search marketing – it’s your best opportunity to see results fast.

Did you know that researchers saw a 500% increase in mobile searches from 2008-2010? Not surprisingly, they found Google to be the most frequently used search engine. So make sure your dealership and mobile website are visible on Google Places. Then, shoppers can find you faster.

Luckily, claiming your business listing with Google Places is a free, straightforward process – just follow the instructions online at To help shoppers find your mobile site while searching, you’ll want to use keywords on Google Places such as: used cars, your city, your dealership name, and, for franchise dealers, your OEM affiliation. Also, include your local phone number and a link to your mobile website.

You can add up to ten photos and five videos on Google Places. Use these as opportunities to show customers why your dealership is the best place to buy. For example, the logo used by Carfax Advantage Dealers helps them stand out and build confidence with online buyers. It shows shoppers that every car sold comes with a free Carfax Vehicle History Report. The power of a trusted brand can give you an edge over other dealers in your area.

Important: When it comes to search marketing, it’s important to avoid duplicate content between your main and mobile websites. Otherwise, it could have a negative impact on your search rankings. In other words, don’t run your mobile website on the same exact URL as your main website.

Try using variations like:, or to make your mobile URL appear different to the search engines. Without a unique web address, your mobile site runs the risk of penalty for duplicate content by Google.

3rd Dimension – QR Codes and the Future

If you’re ready to try something new, tell your marketing team to include a QR code with your next newspaper or print advertising opportunity. It can instantly turn an offline consumer into an online shopper.

Today, Quick Response (QR) codes are one of the hottest trends in mobile marketing. These black and white barcodes are generally the size of postage stamps, and link users to mobile websites. You simply scan a barcode with your smartphone from a printed piece and are sent to a specific mobile website. It’s great for marketing because it’s a curious way to get consumers to interact with your dealership.

A relatively new technology, QR codes saw a reported 1200% increase in scanning from July to December 2010. This fast and engaging marketing method could be the way you take business to the next level.

Most of us couldn’t get through the day without our smartphones or mobile devices. Yet many used car dealers haven’t even attempted to reach this massive mobile audience. With so much opportunity out there, you need the right mobile marketing strategies in place to engage a greater number of shoppers and sell more cars.

Want to learn more about integrating mobile strategies into your marketing mix?  Attend NCM Institute’s How to Advertise in a Complex Marketplace” workshop next week in San Diego!


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Automotive Dealerships and the Rising Need for Social Media Community Management

In the beginning—of social media, that is—the management of your automotive dealership’s presence on Facebook or Twitter might have been handled by one of your millennial generation team players. They’re young and live online most of the time anyway. Right?

Well, that kind of thinking might have been okay in the year 2007 or even 2008, for that matter. But in 2012, when social media has matured to the extent it has, the responsibility for managing your online presences needs to go to someone who is proficient in social media, marketing, communicates well, and knows your dealership inside and out.

In this post, we’ll take a look at the sample job description of a community manager, roles and responsibilities, and tips to make sure your existing or prospective community manager has what they need to get the job done to represent your dealership on social media platforms.

Social Media Community Manager: A Look at the Job Description

Businesses may define the specific job responsibilities differently to meet their particular needs. One job description we came across that covers the essentials very well states:

The Social Media Community Manager is responsible for all of the company’s communications across social media platforms.  This person will develop all social media strategies, editorial calendars, and tactical plans, ensuring consistency in messaging, and that all messages, measurement and content are relevant to target audiences and the company’s objectives.  

The Community Manager both defines content needs and leads the development and production of new content.

In another case, this company outlined the responsibilities of the job this way: 

Develop a comprehensive social media and community management strategy leveraging your background, experience and knowledge of social media trends and emerging technologies
-Partner with individuals across the company to strategize and educate the team on relevant social media techniques to drive adoption and increase thought leadership
-Manage the day-to-day activities for Facebook, Twitter, Company Blog, LinkedIn and other social media sites
-Research and write content for social media channels
-Track and analyze performance of social media programs and activities to drive continuous improvement
-Manage web and Facebook advertisements
-Interact with our PR team
-Monitor trends in social media tools and applications and appropriately apply that knowledge to increasing the use of social media at the company

In Deborah Ng’s recent book, Online Community Management for Dummies, she writes: “The community manager is the mouthpiece of the organization. You ensure that both members and management are learning as much as they can about each other. In some cases, you need to add updates on the community’s discussion page. It also means sending out newsletters, writing blog posts, articles and press releases, and making announcements on Twitter and Facebook. You then report the resulting comments, both positive and negative to the proper channels.”

By now, you can probably get the gist of the expected roles and responsibilities of the social community manager. Let’s dive in a little deeper to what can be considered, the art and science of community management.

Pamela Vaughan of HubSpot provides these seven helpful tips:

  1. Exercise the 80/20 rule: Share non-promotional content 80% of the time. The other 20% of the time promote your brand.

  2. Encourage internal involvement: Enlist help from multiple contributors on your team. Consider creating a blog topic/ideas pools, assigning content topics, and allowing teammates to focus on topics that play to their strengths as much as possible.

  3. Balance time appropriately: let your analytics be your guide. Focus more attention on the platforms that are generating more visits and leads. Ensure that you’re spending your time efficiently rather than stretching it across multiple social networks.

  4. Share remarkable, targeted content based on needs/interests of individual communities.

  5. Schedule social media content: Monitor your social media presence daily so you can participate in discussion, respond to your communities’ conversations, and track their reactions to the content you share.

  6. Optimize for lead generation: Mix in links to downloadable content, crafting clear and enticing calls-to-action, and using social media real estate to drive community members back to targeted landing pages on your website where you can capture them as leads.

  7. Implement goals and track success metrics: Use marketing analytics to conduct weekly and monthly audits to measure often and accurately.

Recommended Resource: HubSpots free ebook, “How to Monitor Your Social Media Presence in 10 Minutes a Day” covers the basics for how to monitor social platforms with help, too, from the tool Hootsuite and includes with a helpful 10 minute schedule for checking Twitter chatter, how to scan Google news and blogs, filter and flag relevant industry-related questions on LinkedIn and Quora, and scanning Facebook and Google+ for wall comments.

Final Thoughts:
Most businesses would probably agree that you wouldn’t randomly put content up on your website without thinking through the goals and purpose of the what you would like to communicate. The same thinking pertains to social media community management.

The community manager for your dealership needs to be able to monitor social media activity so they can have a handle on the best messages to communicate, optimal days/times for posting and updating. And in addition to being the mouthpiece of the organization—they also need to be the ears and eyes, reporting back to management what they are hearing on the social networking platforms.

But here’s the catch: to be effective, the community manager also needs to be in a direct line of communication with senior management. They need to receive the support and respect of the organization and not have social media relegated to a nice-but-not-so-important-role for the organization.

If you’re going to create presences for your dealership on social networking platforms, you’ll need to put your best face forward 365 days a year. To do that, you’ll need to have a social media community manager who you’ve empowered to work for you to get the job done.

How has community management being working at your dealership? What steps can you take to make it a more effective and successful process?



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