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Tag Archive: Automotive Dealerships

Jessica Kain

Three Tips to Improve Your Digital Marketing

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Are you spending a lot of money each month on your digital marketing and internet operation but not getting the return on investment you want? It’s a common problem.

Without the right plan, marketing investments fail

Every day, dealers spend thousands of dollars to improve their website, do search engine marketing and buy every lead source and product in the market. Sadly, though, most dealers struggle to break even on their investments—their close rate is poor, and morale is broken!

Understand how clients shop to improve your marketing

None of us can argue that 100% of our opportunities come from our marketing; however, all of our results come from having an efficient and fail-safe process. Process and communication tactics are not always the shiny objects that dealers chase or want to talk about, but they are the only way we will meet and surpass our goals for our internet operations.

When creating your tactics, remember that the internet has changed the way we all live and operate. And, especially for auto shoppers, the vast availability of information about products has made customers incredibly smart and selective buyers.

3 ways to immediately improve your digital marketing

Fortunately, you can capitalize off these trends and make an immediate improvement to your digital efforts with the right strategy.

Here’s what I recommend:

  1. Go where they are. There are more than a billion websites, so discovering where your clients spend their time and putting your marketing there is key.
  2. Recognize the wealth of information available to them. Buyers research—a LOT— before making a purchase. Your marketing should speak to them respectfully and give them the information they need.
  3. Be real. Social media plays a significant role in the purchasing decision, with most people relying on their social networks to guide their choices. Don’t be afraid to include social media in your marketing mix, but be critical about choosing the right channels and voice for your dealership.

If you or your team members are looking to improve your internet or BDC operation for the better, then please join NCMi and Kain Automotive for a workshop on Mastering Internet Sales. We will provide you with an understanding of today’s digital-savvy customer and how to read the leads that hit your system. Working together, you’ll learn a proven, fail-safe process to improve digital marketing, and come home with the best communication tactics to engage your customers. The basis of this course is to set your dealership up to better connect, appoint, and sell today’s internet shoppers.

Permanent link to this article: http://blog.ncm20.com/2015/12/three-tips-to-improve-your-digital-marketing/

Jody DeVere

Three Quick Tips for Marketing to Women

In automobile center

One of the basics of marketing to women is that marketing (in the traditional sense), is just one step. You can create a fantastic advertisement or marketing promotion, even incorporate compelling features based on feedback and input from women, but if the experience at the dealership is uncomfortable or stressful, you won’t get the sale.

In their book, Waiting For Your Cat to Bark?, co-authors Brian & Jeffrey Eisenberg help marketers understand how to deal with the reality that the customer is in control. They suggest becoming your own customer and going through your own dealership buy process. Pretend that you’re a prospect just at the beginning of a purchase, searching for information. What search terms would you use? What stores would you visit? What questions would you ask the salesperson? Then, how does your business line up to this?

Dealerships that want to succeed must take every interaction into account and understand that for today’s consumers, it’s action not words that motivate. (Especially when it comes to women, who make 80% of the purchasing decisions.)

“The experience becomes the brand,” say the authors, “…it’s about experience… theirs”, and I couldn’t agree more.

According to the authors, like cats, today’s consumers are independent, unpredictable and finicky but many marketers are still approaching them as if, like Pavlov’s dog, all they have to do is create a compelling message. However delivering an outstanding experience for women is the best marketing of all.

Three Quick Tips:

1. Be Patient:

Women consider how a vehicle is going to fit into their long-term lifestyle before making a purchase. They’re a lot more cautious and careful than men are and usually take longer to make their decision. They’re going to buy a car they’re happy with for years. Refrain from high pressure closing tactics, be patient and don’t rush her process.

2. Listen:

Women buyers like to tell “their whole story” to sales people. Having outstanding listening skills help build a relationship, understand her lifestyle car buying needs and create a friendly, enjoyable experience.

3. Trust:

Women have become nearly every family’s chief purchasing officer. She looks for a salesperson who wants to be a part of her buying process, who shares her values regarding honesty, respect and trust.

According to a study called “Elevated Expectations: The New Female Value Equation,” 97 percent of women expect good customer service everywhere they shop. Eighty-three percent buy more when in a store with good customer service. The study also found that 89 percent of women choose one store over another, with similar merchandise and prices, if it offers better customer service.

When women have bad customer service experiences, 80 percent say they will not go back to that store, even if it was just one bad encounter. And 94 percent say they will tell other people about the bad experience. Women expect “Nordstrom-quality” service everywhere they shop, but they rarely find it.

There is great opportunity for dealerships to raise the bar by focusing on how to improve the experience of women customers and increase their dealership’s positive “brand image,” grow market-share and increase positive word-of-mouth, both on and offline.


Jody DeVere is the CEO of AskPatty.com and a new guest contributor to the Up To Speed blog.  Through AskPatty.com, Jody provides automotive education to women consumers and certification and training for automotive retailers on how to attract, sell, retain and market to women. She is also a featured subject matter expert on NCM OnDemand, NCM Associates’ new virtual training and communications platform.

Permanent link to this article: http://blog.ncm20.com/2015/09/three-quick-tips-for-marketing-to-women/

Robin Cunningham

What Does a General Sales Manager Do Really?

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At the NCM Institute we conduct our Principles of General Sales Management I & II classes about every other month. They are often two of our most attended classes, so there’s lots of energy, and we are working with Variable Managers who have had some years of success in order to have claimed the title of General Sales Manager.

Often, even before introductions, I will ask the class something like: So exactly what is a General Sales Manager? Is it someone who has more experience than the other Sales Managers? Or someone who can cover for the Used Vehicle Manager or F&I Manager on their days off?

We get a lot of looks like: Is this a trick question? Or is there something else we are missing? It for sure depends on the size of the store. In some bigger stores the GSM might very well have had success at the New Vehicle, Used Vehicle, and F&I Management levels; and he or she is in a position to oversee the other Variable Managers. In smaller or medium sized stores the GSM may not have had that same breadth of experience. Or in the case of Used Vehicle Department, they may not have had much experience managing the used vehicle challenges in the Internet era, where everything has changed.

We find there is very little commonality in what a General Sales Manager is and exactly what they are responsible for. So we tell our students that the way the NCM Institute approaches this is that they are the “General Managers of Variable Operations.” That sure sounds like a cool title to have, but what exactly does that mean?

As with every class we teach we start with the discussion of Accountability Management & Leadership. This takes most of the first morning, especially since we are now talking about individuals who will be leading, coaching and managing every aspect of Variable Operations.

Within Accountability Management we refer to the Six Primary Elements of Accountability, and they are:

  1. Planning your work and working your plan
  2. Clearly defining and communicating your expectations
  3. Inspecting what you expect
  4. Measuring what you intend to manage
  5. Rewarding positive results and responding to negative results
  6. Developing and implementing a systemic structure

By this point in time, most of these managers realize they are in for a very different experience than they had anticipated. We then dive into their numbers using the NCM 20 Group Composite and Profit Trend Analysis tools. We start looking at New and Used Vehicle retail unit sales, year over year; per vehicle retail gross, year over year; total New and Used gross, year over year; net F&I income, year over year.  Then we look at several expense categories like: Advertising, Selling Expenses, and Employment Expenses, year over year. How are we trending? Do we know? What are our strategies, based on the knowledge we do have?

After the Financial Management discussion (which we often call “A Punch in the Nose”), we circle back to a full discussion of the second Element of Accountability Management: Clearly Defining and Communicating Your Expectations.

We start this discussion by asking if any of the students’ dealerships has a current organizational chart in use; written job descriptions and objectives; and are any of the processes they use, like the Road to a Sale, in writing? We get them to reflect on just what tools they really have in place to lead, coach, train and manage with. By this point they realize we have huge upside opportunity for improvement and we still haven’t actually begun to talk about what they thought they came to us to learn.

Then we move into the discussion of Opportunity Management and Prospecting. We begin breaking down the sources of all of the Opportunities to do Business. We agree there are four sources:

  1. The walk-in customer
  2. The in-bound phone call
  3. The in-bound internet lead
  4. The salesperson self-generated lead (be-backs, repeat/referral, circle of influence, etc.)

We show them how each category has its own closing ratio and per vehicle income opportunity. We spend a couple of hours showing them how they can help their people focus more on the self-generated leads, which close at 50%, so they can start weaning them off the dealership-generated leads that most salespeople (and sale managers) count on for most of their sales.

Then we get into the discussion of Recruiting and Orientation which elicits some really great conversation. Then we spend a lot of time discussing Training Disciplines and Techniques. Because most of the managers in our GSM class have had quite a bit of experience, the level of interactive discussion amongst themselves, is the most we have in any of our NCM Institute classes. And we know from the evaluations from our students that they value the content of these in-class discussions as much as everything we bring to their attention.

We then wrap up the class with the (much-needed by this point) discussion of Time Management. They are wondering how in the world they are going to be able to fit all of these new, critically important ideas and processes into their daily, weekly and monthly schedules. They come away knowing it’s all very doable, if they make the commitment to begin mastering Accountability Management. They have written a number of Guarantee of Action Plans that will be sent back to their GM or Dealer to begin the buy-in and then implementation process. They can clearly see how they and all the other Variable Operations team mates they lead, can become increasingly more productive and profitable.

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Click here for information on all NCM Institute classes.

Permanent link to this article: http://blog.ncm20.com/2015/09/what-does-a-general-sales-manager-do-really/

Steve Hall

Service Managers: How Well Do You Communicate With Sales?

ServiceAdvisor

Processes…even the best processes don’t work if employees don’t understand them. It’s Monday morning in the service department. The day is off and running and a flurry of customer activity abounds.  Things are busy, but running smoothly. Just the way you (the service manager) designed it.

Now it’s about 8:45 and the sales department is just leaving their Monday morning sales meeting. A fairly new salesperson comes into service, walks up to you (the service manager) and says, “I sold a car Saturday, stock number Z1576A. We spot delivered it, but we need to have a spoiler installed that’s not in stock. Can you take care of it for me?”

You look at him, as if he’s a nobody and snipe back, “Where’s the ‘We-Owe?’ Did you already order it, or not? When is the customer scheduled to come back? Do you even know the color code for the spoiler or do you want me to just guess?” The new salesman looks puzzled and slightly embarrassed.

He thought his job was to sell cars, which he did. He thought the service department was supposed to help him when he needed it. Maybe he misunderstood the relationship. He thinks, “They just seem so nice to customers and so grumpy to the sales department. Why?”

What the new salesperson was not privy to was the sordid history, and possibly the proper and much-improved process. The service department knows they can’t order or install the spoiler without proper documentation and basic information from the sales department. That happened before recently, and they got the speech, “Don’t EVER do anything on a vehicle without receiving a sales manager-signed We-Owe.” They also know the salesperson doesn’t get a CSI survey to submit on the service department, so I (the service manager) can “teach him a lesson” on how to interact with service without the repercussions of a negative CSI survey.

Unfortunately, this type of scenario happens way too often. With turnover in the sales department, often times the sales managers are stretched just to train the salespeople on product knowledge and the vehicle sales process…and they never get to train the other necessary dealership processes.

This is where the service managers need to take charge.

We need to realize that if we want the sales department to be a “bell cow” to our customers on how great we are, we need to start treating them great. One way that I have found that improves this relationship quickly, along with strengthening processes, is to attend sales meetings on a regular basis.

When you (the service manager) attend a sales meeting, several positive things happen. Here are a few:

  • You get to know the people, and they get to know you. You are on the same team and this relationship helps everyone. You get to learn who people are. Now they have a name, not just the new salesperson who “knows nothing and wants everything.”
  • You get to answer their questions. Open communication between sales and service…now that’s REALLY a good thing!
  • You can train on a process or two – departmental or inter-departmental – every time you attend. Short, precise instructions to make the processes flow better. Yes, as you have turnover, you will have to re-train the process, but if you don’t, who will? Also, refresher topics can even help long-term people.
  • You will get a better understanding of what they have to deal with and you may become slightly more open to training someone…not just “barking” at them.
  • You may even learn a few sales training tips to help make your advisors more effective.

Whether you attend the whole meeting or just do your part and exit, it will be time well spent with one of your most important clients. The goodwill from this effort pays large dividends. Become a leader, a mentor, and have success the old fashion way: one person at a time.

At the NCM Institute, we believe every department should better understand the dealership as a whole. With that in mind, some of our clients purchase an annual training subscription and cross-train managers in different departments. Sales managers learn about service; service managers learn about used vehicles; parts managers learn about service; and so on. This greatly helps them understand the daily struggles each department has and helps them learn the importance of working together as one unit. Check into a more affordable way to help make your team stronger and ask about our annual NCMi training subscription and bundling options.

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Permanent link to this article: http://blog.ncm20.com/2015/08/service-managers-how-well-do-you-communicate-with-sales/

Mark Shackelford

How Well Do You Understand the Internet Process in Your Dealership?

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As e-Commerce continues to play an ever increasingly-significant role in your dealership’s operations, how well do you understand the tools your potential clients are using in the purchase of and subsequent maintenance for their new or pre-owned vehicles?

More and more information tells us that your customers have already moved towards buying and paying online. Today, and more importantly, tomorrow’s millennial consumers are sourcing their purchases via the Internet where products are now shipped directly to their homes. These transactions are mostly generated as a result of reviews found online or through a Google search where reviews are part of the results.

What if, after doing an Internet survey of more than 200 dealership customers recently, I was to inform you that over 50 percent of the customers shopped on the Internet, the dealership did not ask the online consumers for an appointment, and over 60 percent of the shoppers did not even receive a price! Are you shaking your head in disbelief, or is this what customers are experiencing with your dealership, too?

Simply put, there are high-value customers out there looking on the Internet for products and services and they are willing to use your services, even if you’re not the cheapest price in the marketplace. That’s right…the lowest price doesn’t always get the deal. What these millennial customers are looking for is engagement from your business!

Your presence on the web is vital to that engagement (as well as to your future success in the automotive industry). Your image and reputation are a big part of that engagement strategy; so, too, is your ability to be found by the shoppers you most want to attract.

What is your marketing strategy relative to the markets around you?

Some consumers shop online within a 20-30 mile radius while others are going out as far as 500-1,000 miles out, depending on what they are looking for. Focusing on certain geographical areas for targeting your message and directing your marketing, such as Equity Alerts, have been found by many dealers in NCM 20 Groups to be very successful and quite possibly the key to your continued and future success!

Although buying third party leads may have resulted in delivering a vehicle to a consumer, many of NCM’s 20 Group member dealers are finding that by analyzing Google Analytics and having the right SEO (Search Engine Optimization), SRP (Search Results Page) and VDP (Vehicle Display Page) plan for their websites, they are able to drive more organic searches, thus minimizing or even eliminating the need to buy these types of leads.

Most of you have probably figured out that these leads are in your market already, or in your current database. Doing a better job of mining your own customer database, both in sales and service, will yield many opportunities in those departments, and the Internet can and will play an important role in helping you accomplish just that.

As business owners, we need to fine-tune our people and processes to ensure we are giving the consumers what they’re looking for. Make sure your e-Commerce strategy is incorporating those Internet management best practices that will drive the engagement your online customers want – and your dealership needs!

KAIN

Permanent link to this article: http://blog.ncm20.com/2015/08/how-well-do-you-understand-the-internet-process-in-your-dealership/

Jody DeVere

Surprising Facts About Selling Luxury Vehicles to Women

Young Woman on Phone

Luxury car dealers, do you know your audience? If you’re like most that I’ve spoken to, you may be selling cars with the wool over your eyes, assuming that the affluent male is your crème de la crème, and some wealthy widows, female executives, and women entrepreneurs rounds out your market. But a recent study seems to show that just isn’t the case, and as the CEO of AskPatty.com, a website dedicated to providing automotive resources to women and helping auto dealers like yourself attract and retain more women customers, it surprised me, too!

The Shullman Luxury, Affluence and Wealth Pulse, Autumn 2014, has revealed some very intriguing findings on who is actually buying in the luxury market. First of all, it’s not all affluent people. In fact, 61% of buyers with a household income of $250,000 or more don’t own a luxury car! Interestingly, it seems that the Millennial generation of women are driving more luxury vehicles than one might assume. While most of us are targeting the older crowd, it seems that millennials are more interested in a luxury lifestyle than boomers or generation X members!

According to the study:

“The $75,000-249,999 affluent segment is the primary buyer of all the luxuries consumer spending , including luxury vehicles. The second-largest buying segment for all luxuries was mass-market America (those with less than $75,000 in household income). The very high-income buyers (those with $250,000+ incomes), although fewer in number, typically spend the most on average for each luxury bought and tend to buy more luxuries per adult than the other two income segment. … The number one luxury buying generation today, according to this survey, is the Millennial generation (18-34 years of age in 2014) who constitute 45% of luxury buyers.”

So, let’s take a moment to consider our target – the new target: the millennial woman!

Facts About the 18-34 Segment of Women Today

So, if we’re going to be selling to millennial women, we need to understand how they operate. They’re not baby boomers, and they’re not Generation X, so those approaches are going to ring false with this group. It’s also worth noting that in my experience at least, these are women who are actively working in advertising much of the time, so the trite marketing methods are going to fall flat. They know all those tricks!

Today’s millennial women are a technologically connected, diverse, and educated. They prefer the speed and convenience of smart phones and email to telephone conversations or walk-in business. In terms of work, they tend to have more job market equality than previous generations, and are earning four year degrees at a higher rate than male counterparts. This higher income translates to higher overall household income for their families, and it also means a new kind of family – one where the mother is the sole breadwinner.

Millennial women share some things in common with boomers and Gen-X-ers. They are also brand influencers who quick to share their opinions with friends, family and their online communities. A majority of social media outlets are predominantly female users, and they use them to speak their minds! Millennial women want to be included in the conversation, rather than being told what to do or what to purchase. They value inspirational messages, important causes, and most of all, they support brands who support them.

Marketing to the Meme Generation

When it comes to advertising to millennials, remember that this is the generation of the “meme.” That means that iconic, engaging visual marketing plays an important role in what resonates with them. Don’t shy away from humor, and focus on making your messaging instantly accessible and simple. Ever looked at Pinterest? It’s just a wall of photos, but to the millennial women, it’s a wall of ideas, conversations, and opportunities to do something amazing. Consider this: 58% look to Pinterest or Instagram for inspiration for everything from meals to makeup to home décor. Most of all, these women are “social shoppers,” social media users who value the opinions of their social media peers more than anonymous reviews or snappy slogans.

Cause-related marketing also works with millennial women, as long as you take care to ensure that your cause means something. They’re quick to spot practices like “pink-washing” (that is, coloring a product pink for breast cancer awareness month but not actually providing any meaningful support for the cause), so choose your charities wisely and remember that transparency is key! When you commit to a cause, it should embrace your entire company. For example, consider TOMS Shoes. Their message is clear, simple, cause-driven, and instantly accessible: for every pair of TOMS Shoes you buy, they will donate a pair to a child in need. This clear, concise message, coupled with transparency and accountability, has made the company absolutely huge with millennial women. To date, they have provided shoes to over 10 million children.

So let me ask you again, luxury car dealers: do you know your audience? Are you shifting your practices away from the older executives and widows to encompass the generation of Pinterest projects and Tumblr blogs? If you’re not approaching your marketing plans with the goal of making instant accessibility the core of your brand, then you could be missing out on the number one buying segment of luxury vehicles today.

Permanent link to this article: http://blog.ncm20.com/2015/08/marketing-to-the-meme-generation-surprising-facts-about-selling-luxury-vehicles-to-women/

Alan Ram

Is Your Dealership in Conflict?

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Here’s the problem at many dealerships: In our heads, we know what we want our people to be doing on a daily basis, but our actions and processes (or lack thereof) contradict what our heads are thinking, and we end up sending our staff conflicting messages. What do many of you see as you walk through your showroom? You might see five salespeople standing out on the point for three hours, waiting for one customer while discussing their upcoming fantasy football draft. As a dealer, that should make you crazy. What do you want to see? You want to see your people working the phones EFFECTIVELY and driving better quality traffic to the dealership.

Here are a couple issues I see at play at many dealerships:

First and foremost is your open floor. There is absolutely no benefit to you as a dealer in having an open floor. NONE!! All an open floor does is encourage your people to stand around and do nothing while they wait around for a floor up that was coming in anyway.

I see this happen all the time; a dealership has my training and their people are excited to work the phones. A couple salespeople, who don’t necessarily think it’s part of their job to actually follow up or generate anything, continue to stand out on the lot…and wait. Luckily for them, they don’t have to compete anymore for floor traffic with all the salespeople who are doing what you want them to do on the phones. Let’s just say that one of the salespeople standing around happens to bump into a customer that buys a car. Pretty soon the salespeople who are on the telephone, doing what you want them to do, start realizing that they’re not having a chance to even get an up. Now human nature takes over and they start the migration back to the front door. They indirectly feel that they are being punished by doing what you asked them to do. Your open floor is hurting productivity and needs to go.

Have you ever had to bribe your kids to get them to eat their candy and ice cream? “Now Billy, if you don’t eat your ice cream, you’re not going to get any candy.” I doubt that’s a conversation that happens at anyone’s house. It’s more like, “If you don’t eat your Brussels sprouts, you don’t get dessert”. You don’t need to convince them to eat their candy and ice cream. They were going to eat that anyway. To me, spiffing your salespeople for selling your floor ups is the same thing. They’re going to take your floor ups whether you spiff them or not! If a salesperson that sold 25 cars off strictly floor ups was to leave tomorrow, how many deals would you lose? Probably none. Why? Because those customers would still come in. They would just be distributed differently. What about that salesperson that sells 20 cars a month off primarily their own efforts to repeat and referral clients? If that salesperson was to leave, how many deals would you lose? I would say all of them. Therefore, a salesperson that sells repeat and referral customers is far more valuable to you than one that sells floor ups. If you’re going to have a spiff program, let’s spiff them for what you want them to do versus what they were going to do anyway! A referral spiff for example. If it really is a referral your salesperson generated through their efforts, wouldn’t it make sense to spiff them for it?

We also all want our sales staff doing a better job at working (mining) their sold customer base. What if we spiff them for selling repeat customers or for turning service customers back into sales clients. Now you have your salespeople thinking, “I make more money by selling a repeat or referral client than I do a floor up.” That’s when they’ll start focusing on those things you want them to focus on. That’s when you’re using your spiff money to change their behavior and ultimately change the culture. You will not sell one less car by eliminating a unit bonus, but you’ll sell a lot more cars by instituting a repeat and referral spiff.

The key to this coming together and getting the results you want is obviously training. Your people need to be trained on how to get results on the phone. When they’re trained it gives them confidence. When they have confidence, they’re much more likely to be successful and they gain momentum. It all starts with training and having processes in place that are consistent with, and not in conflict with, what you want to see happening on your showroom floor.

Permanent link to this article: http://blog.ncm20.com/2015/07/dont-let-business-development-kill-your-business/

Robin Cunningham

Unrealized Opportunities in the Used Vehicle Department

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Forgive me for saying this, but from where I now stand, it is quite apparent to me that there is way more opportunity for improving profitability than most dealership managers are aware of. I certainly know looking back on my career (and I thought I was very pro-active) that there was so much more opportunity to be realized than I was able to completely grasp at the time.

Most people agree that there is more upside potential left on the table, they are just not aware how much there is or how to attain it. Today I’d like to share some of the upside potential that we see in relation to the used vehicle department. One of the primary opportunity areas in the used car department is in increasing the average ratio of used to new vehicle sales.

We work with a Nissan dealer, in a single city market, that three years ago was selling close to a 1:1 used to new ratio. They realized there were only so many new Nissans they could sell no matter how aggressive they got with pricing and marketing. So, they got very clear on what does and does not work in today’s used vehicle market. They made steady progress in the quality of their processes and accountability management, and today are selling a 3:1 used to new ratio.

One of their managers was in class a month or so ago made a comment during a discussion. He said that as a variable department, they “freak out if and when any used vehicle hits 21 days in stock.”  They so highly value the processes in place from each vehicle’s first day in stock, that at 21 days, they know something is going terribly wrong. That comment raised a lot of eyes in class, especially from the managers of stores with huge aging issues. To get to that 3:1 ratio took a lot of trial and error, and a high degree of trust in their processes. It was all made easier by beginning to see it adding up in more total used vehicle gross profit.

To realize that opportunity, especially if one is still struggling in the used vehicle department, a pretty systematic overhaul of everything is often needed. That would include such processes as:

  • Acquisition
  • Appraising
  • Stocking
  • Reconditioning
  • Initial Pricing
  • Internet Marketing
  • Re-pricing
  • Desking policy
  • Pay plans
  • Aging

For sure, the change in focus from the amount of gross per vehicle retail to total department gross is required. To clarify, we are not against getting as much gross per vehicle as you can; but you just need to know which market segment each vehicle you are stocking is in, so your pricing policy is not getting you into aging problems.

I have been saying of late that our initial pricing policy is our turn policy. If you are pricing above market average right out of the box, we rarely see the pricing come back in line before the vehicle has aging issues, because the above market price has kept it largely invisible to the shopping public on the Internet… where, of course, most shoppers are today.

I just referred to what “market segment” each vehicle is in. We break those segments into: A, B, C and W categories. CPO, of course, is another category and I am going to come back to that separately.

A Vehicles

An “A” vehicle is a one of a kind, mostly irreplaceable vehicle. It is generally easier to replace the customer than it is the car. These almost always come from a trade, either rare in the first place, with very low miles, or both. At most, this makes up 10% of inventory. These vehicles should have a much higher than average gross profit, so the opportunity there is for a higher PVR.

B Vehicles

The “B” car is usually our own brand and is still under factory warranty. These are the most available cars to us, through trade, auction or our service drive. This is the case for all dealers, so the day’s supply is high, relatively speaking. These cars have the highest potential for wholesale loss, largely due to over-pricing on the Internet. Because these are very nice cars with lower miles on them, it can be tempting to try to get “above market” prices for them. Without a doubt, most vehicles with aging issues come from this segment, especially the ones bought at auction.

Because this segment makes up 60+% of inventory dollars, it can have devastating effects when these dollars become aged. The strategy for this segment is to aggressively price them to market immediately, get the F&I turn and the gross profit from reconditioning, and then go get more just like it. These will have slightly less than an average gross profit per vehicle. But again, since this is where the largest dollar amount of inventory is, a faster turn will equate to more total departmental gross. Again, the focus and opportunity for total departmental gross profit has to be primary here.

C Vehicles

The next segment is the “C” car. These are cars that are out of factory warranty, though a warranty could still be sold. They have higher miles and don’t have to be in perfect condition. These are the vehicles everyone seems to be wanting and almost always come from trades. The opportunity is a gross per vehicle that can be at or slightly higher than average. The return on investment is higher because they have a lower average cost of sale. Fortunately, most dealers are keeping more of these vehicles for retail these days, because in the past many got wholesaled and were the key source of inventory for the independent dealers. I know I wholesaled a lot of those in my past, and I now realize how we were missing out on possibly the richest segment of the business.

CPO Vehicles

The other retail segment that gets uneven attention is the certified pre-owned category, or CPO as we all call it. The luxury brands are all strong in this segment, and those manufacturers play a key role in helping make sure it is viable by actively supporting the strategy. For most of the other brands we see a very spotty consistency of dealers taking full advantage of this opportunity. It truly is like a separate franchise and has to be treated that way.

I have seen dealers of almost any brand take full advantage of it and other dealers from those same brands try to play both sides off the middle. Those dealers end up not having many CPO vehicles and that likely leads to less total volume, less gross per vehicle, less reconditioning gross, less future service and parts gross — and ultimately less customer retention. The other thing I see happen with CPO vehicles is when a dealer trades or acquires vehicles other than their own brands that have a strong CPO compliance; it makes it harder for competing dealers to retail those vehicles successfully. One thing we see that can offset this are some of the third-party, certified pre-owned programs that are available in the market place, like the Motor Trend Certified Program.

I would be remiss if I did not mention the very big opportunities that often get untapped in F&I. The public groups, who are under the most scrutiny of all, are at about $1,100 per vehicle retailed net after chargebacks. Many dealers are well above that, but most are way off that number and it really seems to be a focus issue. Selling more financial products and less focus on rate has been the trend, and it really seems to be working. Many of the financial service vendors provide the training as well.

W Vehicles

The last used vehicle segment is the “W” car or wholesale. There are two levels of wholesale: The ones we decide not to keep at the time of acquisition for various reasons (too many miles,  poor mechanical condition, or too expensive to keep). This level of W vehicles is actually a profit center.

Then, there are the vehicles we got for retail and for some reason have not sold. Maybe we have kept them for too long and now believe we have to get rid of them, often at a loss. Our friend Dale Pollak says there are only two reasons that could possibly happen: We somehow could not find the right price that others were selling the same vehicle during that time frame or we were unwilling to put the vehicle on that price. Knowing this is a possible unrealized opportunity can allow you take advantage of this.

This of course was just a very brief discussion of some of the most BASIC OPPORTUNITIES available in the used vehicle department that are very often not taken advantage of.

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Permanent link to this article: http://blog.ncm20.com/2015/07/unrealized-opportunities-in-the-used-vehicle-department/

Tony Alessandra

Customer Service – The DISC Styles Way!

mature salesman showing new car to a couple

Everywhere you turn today, you hear about the importance of customer satisfaction. From the bank to the phone company to the video store, every business seems to proclaim “The Customer Is King,” that “People Are Our Business,” that “Your Satisfaction Is Our No.1 Goal.”

 So, you might think that service is getting better with each passing moment. Surveys, though, suggest otherwise. In fact, one customer in four is said to be thinking about leaving the average business at any given time because of dissatisfaction.

What’s wrong? One answer is that that too many companies and employees view customer support as something that happens once and then is over. But true service focuses not on a one-time event but on building a sustained, positive relationship.

A second reason for poor service is that we often treat customers and clients as if they’re all pretty much the same. But only by honoring their individuality can we hope to build lasting rapport. Firms and people with a positive attitude toward service know that each contact–even a conflict or a complaint–is an opportunity that may never come again. Such encounters typically fall into three categories:

Moments of Magic: Positive experiences that make customers glad to do business there.

Moments of Misery: Negative experiences that irritate, frustrate, or annoy.

Moments of Mediocrity: Routine, uninspired service that leaves neither a strong positive impression nor a strong negative impression.

Moments of Magic might include a hotel clerk who greets you with a warm smile, uses your name, shakes your hand, and sincerely asks that you call her with any problems. You remember such experiences.

But you probably remember even more clearly Moments of Misery, such as clerks who won’t take responsibility for solving problems–personnel who don’t know what they’re doing-and worse yet, don’t seem to care–or salespeople who first ignore you, then act as if they’re doing you a favor by taking your money. We’ve all had those experiences, but usually not more than once at the same place. Because we don’t go back.

Exceeding Expectations

The key to creating a Moment of Magic is exceeding a customer’s expectations. Sounds simple enough. But because people’s expectations vary according to personality type, what works for one may not work for another.

Handling a complaint is one of the most common, yet difficult, service situations, for customer and employee alike. So we’re going to look at that process and how we can use knowledge of the DISC behavioral styles to create Moments of Magic.

As anyone who’s ever dealt with upset customers can attest, they can be a diverse bunch: some loudly belligerent, some agitated but overloading you with details, others low-key and almost apologetic. But if you respond the same way to the belligerent, the agitated, and the apologetic, you might increase the irritation for some of them. You might even produce a Moment of Misery.

That’s because each style shows different symptoms of stress and reacts in different ways. But if you can recognize and respond to these patterns, you can reduce stress, yours and theirs.

Dealing with High ‘D’ Dominance Styles

As complainants, High D’s can be aggressive and sometimes pushy. And they may become intrusive, perhaps saying something like, “I demand to see the president this instant!” or “If you don’t furnish me every last bit of correspondence in this matter, you’ll hear from my lawyer in the morning.”

High D’s may appear uncooperative, trying to dictate terms and conditions. But ask yourself: what do they need? You can help defuse them by providing:

• Results, or at least tangible signs of progress;

• A fast pace;

• Evidence that they have control of the situation;

• A belief that time is being saved.

The last thing you should do is to assert your authority and argue with the High D’s. They’re not going to be listening, and they’ll probably out-assert you. “Nobody ever won an argument with a customer” is an axiom of service. And that’s doubly true with High D’s.

Dealing with High ‘I’ Influence Styles

High I’s with a complaint may seem overeager and impulsive. “I need this settled right this moment,” they might say, despite your logical explanation of why this complex situation can’t possibly be cleared up for 48 hours. High I’s, usually skilled in verbal attack, may also come across as manipulative, perhaps saying, “I wonder if a letter to your CEO and chairman of the board would improve your attitude?”

Under stress, High I’s’ primary response may be to disregard the facts and anything you say. But you can address their needs by giving them:

• Personal attention;

• Affirmation of their position;

• Lots of verbal give-and-take;

• Assurance that effort is being saved.

You may think the best course is to sit there impassively and let the High I’s harangue you. But, actually, you’d probably be better off to give them a quick-paced, spirited explanation that shows you aren’t just brushing them off.

Dealing with High ‘S’ Steadiness Styles

High S’s are the least likely to be loud and argumentative. When they do come forward, they may appear submissive, hesitant, or even apologetic. Worse yet, they may not even complain openly but just internalize their dissatisfaction and then take their business elsewhere. So if you suspect a problem, you may need to draw them out.

High S’s hate conflict, so they just wish this whole problem would go away, even if it weren’t necessarily settled in their favor. “I’m sorry to make such a big deal out of this,” they often say.

High S’s will be made most comfortable if you:

• Make them feel they’re personally “okay”;

• Promise that the crisis will soon ebb;

• Guarantee that the process will be relaxed and pleasant;

• Show you’re committed to working with them to iron out the problem and save the “relationship.”

You might be tempted to think the diffident RELATER is not to be taken seriously and can be shunted aside with mere lip service. But, remember, they’re just as upset as High D’s are; they just express it in a much more low-key way. And they’ll quietly go elsewhere if their needs aren’t met.

Dealing with High ‘C’ Conscientious Styles

High C’s won’t loudly carp and cajole like High D’s or High I’s, but they won’t be submissive, either. And their complaints may have a sharper edge to them than will the High S’s.

High C’s tend to recite the chronology of events and the litany of errors they’ve had to endure. They’ll provide data and documentation and get quite involved in the details of the snafu.

Here’s how you can lessen tension with complaining High C’s:

• Suggest that they’re right

• Explain the process and details

• Show appreciation for their accuracy and thoroughness

• Help them save face”

You may see them as compulsives more hung up on the process and on showing they’re right than getting the problem resolved. But if you want to retain their loyalty, you’ll deal with them precisely and systematically, emphasizing your firm’s interest in seeing justice done.

An Important Head Start

Knowing and using The Platinum Rule to deal with complaints gives you an important head start toward creating a Moment of Magic. It allows you to collaborate with your customers in solving the problem, reducing the likelihood that they’ll make outrageous demands, become abusive or take their business elsewhere.

In fact, studies show that customers who feel that a business has responded to their complaints are more likely than non-complainers to do business there again. They actually become more loyal than if the problem never happened.

So look at your complaints as opportunities to show much you really care about the customer. Remember: Your customers aren’t just part of your job; your customers are the reason you have a job!

 

Permanent link to this article: http://blog.ncm20.com/2015/07/customer-service-the-disc-styles-way/

David Spisak

Is Your Dealership Ready for an Automated Data Management Solution?

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Dealership data management systems collect and maintain mountains of data about your operation, your customers and your market. There is no doubt about the value of the information contained in those systems in enabling you to make the best possible decisions for improving your sales, retaining your customers, and increasing your dealership’s profitability. But what confounds many dealers today isn’t an issue of having data… it’s how to ensure the data is accessible, accurate, and is presented in such a way that it allows you to focus on the areas of your operation that need your attention. No dealer would willingly give up the data his dealership holds, because he knows it is absolutely vital to knowing what’s going on in the dealership and how effectively that activity is driving the sales it needs to sustain the operation.

But if you can’t get to the information you need, when and how you need it, it’s not going to help you drive maximum sales, efficiencies and profitability in your dealership. When you consider the implications of this across multiple locations with multiple systems, the problem seems almost insurmountable without hours and days spent compiling all this data into useful reports.

So you’re hearing about automated dealership data management and think this may be the solution to a big chunk of your problems. And just so you know, I’m a huge proponent of using smart systems to get a handle on all this information, especially when it gives me an out-of-the-box reporting solution that will help me spend my time managing intelligently, rather than creating spreadsheets and seeking out and inserting the data I need to put into them. But how do you know if you’re ready to take that leap? Here are a few thought-starters to help you determine if you’re ready… and to consider the risks if you don’t.

Does your data give you complete transparency to your operation?

If you’re one of the few dealers who feels very confident that the information you are using to keep your finger on the pulse of your operation is as timely and accurate and gives you the information you need to make immediate adjustments in the daily operation, you’re one of the lucky ones. However, most dealers do not have the confidence that they are seeing everything that’s happening in the dealership. What’s more, many worry that the information they do use is not accurate, either because it’s been filtered or because the data in the DMS or other systems from which they are being pulled isn’t as “clean” as it should be. The risks? The worse scenario is that you’re dealing with manipulated data and the possibility that someone is intentionally trying to misdirect you. At best, you don’t have a complete picture because you or your managers haven’t thought to bring some of the most critical pieces of information into consideration.

How easy is it to access the information you rely on?

Even more troubling is that while dealers and general managers do not have formal training in information systems or database management, they take it upon themselves to acquire, maintain and utilize their systems resources to the best of their ability. In their defense, for many years, the basic functionality of most DMS platforms hasn’t changed that much. And thoughtful dealers will study reviews, talk with their peers, and sit through hours of features and benefits presentations where they are shown all the bells and whistles of this system or that, with the expectation that the vendor knows what they need and will deliver on its promises. What do dealers need from their systems? They want easy-to-use systems that will collect the data they need and present that data in useful reports that will help them make great decisions. It’s a simple, straightforward objective, but what we’ve found to be consistently problematic among all DMS platforms is the part about getting the data out of the systems in usable formats for making great decisions. It’s your data, but there is a risk that the vendor does not offer you complete access to the information you need. And decisions made on incomplete information can be worse than making decisions with no information at all.

How confident are you in the accuracy of your data?

“Garbage in, garbage out” is another common problem business owners and their managers deal with continuously…the information you get out of your systems is only as good as the data that’s going into them. I’m sure there have been many times when you found yourself questioning whether the information in your reports was correct. It’s frustrating, but essential that the information you’re using is “bullet proof,” so you find yourself going back and forth with a manager questioning, discussing, and reviewing the data until you’re eventually satisfied that the information is accurate enough that you can make a good decision. That could take several hours or several days for each report you question.It’s a real drain on your time and energy, and the kicker is that you probably still don’t have complete confidence in the information you’re using! In terms of your time and attention, your manual reporting processes could be costing you much more than you realize.

Can you get updated information quickly and as often as you need it?

Even if the data going into the dealership’s systems is as accurate as it can possibly be, there is yet another problem that some dealers may not admit they have: They simply don’t have an effective data analysis discipline. Relying on standard reports and what’s always been done, some don’t know that other information will give them better insights to make the critical adjustments that can result in the most net profit by month end. And they don’t know how often they should be watching that information. And even if they wanted to keep their finger on the pulse of the dealership’s daily operations, they quite likely wouldn’t (or couldn’t) be able to get to the most up-to-date, reliable information as quickly as they’d need it. In fact, our data suggests that the average dealership report usage is 800 report views a month. When you consider the average time managers spend preparing and updating a report is about 15 minutes, that’s a lot of manager productivity lost to manual reporting. A more efficient and effective discipline would be to have all the updated information you need in a matter of seconds…not hours or days. The risk associated with the reporting lag-time described here is that you aren’t effectively making the adjustments you need to be making to have the greatest impact on the month-end net profit of the dealership.

Does any of this resonate with you? Are you feeling called-out a bit?

You are not alone. In fact, you’re in the majority. As I said, most dealers we talk with about data management best practices are experiencing one or more of these problems, and most are feeling the pain of all of them. Want to do a quick gut-check on the wasted productivity your dealership may be experiencing for lack of an automated solution?  Check out the Productivity Calculator to see what manual reporting may be costing you. Then schedule some time for a demo with a data management solution provider like NCM axcessa today.


Learn more in this upcoming course, taught by David Spisak:

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Permanent link to this article: http://blog.ncm20.com/2015/07/is-your-dealership-ready-for-an-automated-data-management-solution/

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