Digital Dealer Magazine - May 2009
 

Digital Dealer Magazine - May 2009

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and be sure to visit and join the #1 Automotive Digital Marketing online exchange for the best strategies, tactics and resources at http://www.AutomotiveDigitalMarketing.com/

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    Digital Dealer Magazine - May 2009 Digital Dealer Magazine - May 2009 Document Transcript

    • Welcome to the digital edition of Digital Dealer magazine! Just as you are trying to keep your store(s) on the cutting edge, we are doing the very same thing as we venture into a new frontier in the publishing biz. We can get this digital version in your hands 2-3 weeks faster than the print version, giving you the freshest information possible. You can click on links at the end of each article to email the author of such. And you can click on the ads to link to that advertiser’s website (and you’d REALLY be helping us out by doing just that). It’s quite intuitive…I don’t think that someone who uses the Internet to make a living will have any trouble easily figuring it out. Please let me know what you think about it… mroscoe@Dealer-Communications.com Michael Roscoe Editor-in-Chief
    • May 2009 The Technology Magazine for Dealers & Managers Internet Sales: E-commerce Uses for Old School Tactics page 15 Moving Offline Ad Spend Online page 20 BDC/CRM: You Really do Get What you Inspect, Not What you Expect page 26 DESMOND DMS Workshop Check your Excess LIANOS Computer Baggage! page 30 Internet Sales Manager Toyota and Honda of Seattle CIAL page 22 page 22 FF I O e e ottiiv o v tom alls om a s Autess on ff Auffessiio n no on o Pro org rg o iattiioales P rnlie.e.o a es nlin n oc i so c Sa l N Assernett S.AAISPo Ast erne wA AISPo n t ww . IO IIn w ww PU B L I C AT
    • T ABLE OF CONTENTS CIAL FF I O vee oti v mo ti ls uto m na ls uto io na off A fess io o A ss on Profe .o tion Pro .org rg ciatiSales o line e ociatt Sale sPonnlin N Ass orne .AAISP s Astern e w AIS In te ww .A IO In w w w PU B L I C AT The Technology Magazine for Dealers & Managers MAY 2009 FEATURE MANAGING EDITOR LINDA DI PIETRO Digital Dealer Cover Story ldipietro@Dealer-magazine.com 22 Desmond Lianos PUBLISHER Internet Sales Manager GREG NOONAN 607-264-3359 Toyota and Honda of Seattle gnoonan@Dealer-magazine.com ART DIRECTOR COLUMNS JOE BIRCH AAISP Notes jbirch@Dealer-magazine.com 10 In Case You Missed it... PRODUCTION MANAGER Mike Roscoe ELIZABETH BIRCH PRINT PRODUCTION Internet Sales DAVID MANTHEY 12 Are you Adapting to the New Game? Desmond Lianos Phil Sura DESIGN CONSULTING Toyota and Honda PUBLICATION DESIGN, INC. 13 Stop Haggling…Start ‘Value Closing’ of Seattle COVER DESIGN Pat Ryan, Jr. JOE BIRCH jbirch@Dealer-magazine.com 14 How Reputation Impacts Deliverability, Part 1 COVER PHOTOGRAPHY Peter Martin MARY GRACE LONG CIRCULATION SUBSCRIPTION 15 E-commerce Uses for Old School Tactics RICH JARRETT Joe Webb 314-432-7511 rjarrett@Dealer-magazine.com 16 Three Strong Practices to Increase Dealership Presence NATIONAL ADVERTISING SALES and Profitability adsales@Dealer-magazine.com Stan Sher 607-264-3359 Dealer magazine makes every attempt to 17 Get Ready for some Spring Cleaning! ensure the accuracy of all published works. Paige Presley However it cannot be held responsible for opinions expressed or facts supplied herein. Nothing may be reproduced in whole or in part 18 There’s a Need for More Effective Advertising without written permission from the publisher. All rights reserved. The publisher encourages Daryl Sanders you to submit suggestions. Submitted materials become the property of Horizon Communications, Inc. and will not be returned. Send material for 20 Moving Offline Ad Spend Online publication to 330 Franklin Rd., Suite 135A, Phil DuPree PMB 386, Brentwood, TN 37027. The editor reserves the right to edit material; submission of material constitutes permission to edit and Technology Trends publish that material. This publication is designed to provide accurate and authoritative 21 Spend Less to Make More information in regard to the subject matter Sandi Jerome covered. It is presented with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. BDC/CRM If legal advice or other expert assistance is required, the services of a competent profes- 26 You Really do Get What you Inspect, Not What sional person should be sought. From a Declaration of Principles jointly adopted by a you Expect Committee of the American Bar Association Chuck Barker and a Committee of Publishers. DMS Workshop 28 What is so Advanced about Advanced Reporting? A PUBLICATION OF Jim Skeans 30 Check your Excess Computer Baggage! Paul Gillrie DEPARTMENTS 6 Digital Dealer E-mail 8 Industry & Tech News DD 4 May 2009 DigitalDealer-magazine.com
    • D IGITAL Dealer E-MAIL Digital Dealer welcomes your letters and after verification will run them signed or I’d love to have any other information looking.” Ask yourself why do you like to unsigned. Letters may be edited for space you may have on objections. look around a bit before you make a and clarity. Send letters to puchase? Seeking the best value for the DDmail@DigitalDealer-magazine.com. Thanks, Steven L. Salter dollar? Identifying the various options? Hey Volker Jaeckel, Team Leader Then, take your answer and tell the Great cover story article in the April Victory customer something like, “I realize you 2009 Digital Dealer magazine. Great ssalter@victorygm.com want to look around because I, too, like to exposure for SONS Auto Group and do that in order to identify the best value you. In reading through the article, I Mr. Salter, for the money. You are going about this in particularly liked your take on respond- Thank you for taking the time to write. the right way. Let me ask you this: would ing to new ideas and trends quickly. This can indeed be a daunting task for you be most interested in a car or truck?” That is where so many stores are many individuals primarily due to the fact Upon identifying with the customer's missing the boat...too much delay in that they have the wrong ideas about objection you have created empathy for trying out new ideas. By the time they objections. As I mentioned in my article, your relationship because you do under- get around to it, it isn't new (or unique) objections are a good thing because it stand his position and that is the any longer. means there is still conversation and the beginning of the formula for a good rela- Best regards, deal is heading forward. I have always felt tionship. Hope this helps. Larry Hawkins that one should look at objections with an Chuck Barker Associate Director of Education appreciative eye and deal with them from Metro Atlanta Auto Dealer Association a first person point of view. This essentially Hey Chuck Barker, LHawkins@maada.com means that in order to align with your I read your article in the March issue customers you first have to have empathy of Digital Dealer magazine, “Dealing Chuck Barker, for what they are telling you. If you (and with Objections Properly” and I feel you I just read your March 2009 Digital this is important) ‘feel their position’ you did a nice job summarizing dealing with Dealer magazine article, “Dealing with are better prepared to communicate. Our objections. Please send me the checklist Objections Properly.” I enjoyed it theory here is to take objections and create on handling objections so I can use the because I am entering into the world of a first person empathy for each one. Ask material to direct my sales team. T/Os. I’m a good communicator in the yourself to answer a “why do you” question, Wishing you and all of us a black heat of battle and coming “off the hip” then you will have a much better basis for 2009. with decent information. I still, communicating with your customer. For Terry Schnurr however, have an element of fear and instance, if the customer tells you, “I'm just General Sales Manager Middletown Toyota Middletown, CT tschnurr@middletowntoyota.com Sandi Jerome, I very much enjoyed your article in the April 2009 Digital Dealer magazine, “Counting your Assets with Technology” and would be interested in receiving any formulas or calculations related to the cash flow or ROI. Thank you for your help. Susie Scadden Consultant McKaig Chevrolet-Pontiac-Buick Gladewater, TXMcKaig Chevrolet- Pontiac-Buick scaddenteam@gmail.com Hi Susie, I’m happy that you enjoyed them. I put both spreadsheets on my web site, www.sandijerome.com. Click on the left, free downloads. They are toward the bottom of the list of free spreadsheets. Enjoy! Sandi Jerome DD 6 May 2009 DigitalDealer-magazine.com
    • D IGITAL Dealer INDUSTRY & TECH NEWS (Nasdaq: TRAK) has announced that it has enhanced its InventoryPro inventory management solution with the addition of: • Expanded market reporting and analytic capabilities Parayil & Mann Dealer • The ability to update Internet Services acquires pricing to help dealers maximize profit. Video dealer ads DealerUps business These additions to InventoryPro, maximize brand with coupled with the recently acquired AAX Parayil & Mann Dealer Services and PriceDriver businesses, further local consumers on Inc. (PMDS), a privately held automo- strengthen automotive retail’s most KBB.com tive technology services company, has complete inventory solution. Kelley Blue Book has announced the announced its purchase of the Price forecasting analytics provided ability for dealers to promote them- DealerUps customer relationship by Automotive Lease Guide, Inc., a selves to local, in-market vehicle management (CRM) business from JM DealerTrack company, and AutoCount shoppers via video on the company’s Dealer Services, Inc., a subsidiary of JM market reporting data from Experian top-rated web site, kbb.com. Each 30- Family Enterprises, Inc. Automotive will help dealers identify second, roll-over expanding video DealerUps is a state-of-the-art CRM sales opportunities and stock the most advertisement can be used to generate system that enables automotive dealers profitable, fastest-turning vehicles. local brand awareness, attract more to effectively manage and market to Recent sales data is available for a consumers, drive showroom traffic and current and prospective customers dealer’s market area. Additional sales sell more cars. The all-new video option from one database. Tracked and performance data includes transaction is now available in Kelley Blue Book’s reported in real time is information prices, days-to-turn and gross profit, Dealer Showcase ad package, an exclu- such as Internet leads, sales, service, both at a regional and national level. sive advertising package designed to walk-ins, and incoming telephone calls. Armed with this information, dealers convert some of the more than 12 “Now more than ever dealers need to can take action to proactively price their million shoppers each month on build long-term relationships with their inventory to accelerate inventory turn kbb.com into actual vehicle sales. customers,” said Guy Manasse, presi- and/or increase profitability, and make In addition, the video advertisements dent of PMDS. “DealerUps provides a better wholesale/retail decisions. allow for a customized message with completely dynamic solution to retain Through an expanded partnership targeted links enabling dealers to maxi- and utilize valuable information that with AutoRevo, which already supplies mize brand awareness through the use will boost fixed operation revenue and Internet price updates to AAX and of their dealership’s logo, Web site offset the decline in new vehicle sales.” PriceDriver, users will be able to update address and other timely information. As the majority of the DealerUps a vehicle’s price on their Internet list- The video also can be customized with support team will transition and ings. As dealers decide on appropriate a compelling message from a dealership remain with PMDS, customers will price changes, they can modify their spokesperson. benefit from a seamless continuity vehicle pricing on third-party sites – Dealers have the option of using their of service. such as Cars.com, Autotrader.com, own videos, or having Kelley Blue Book www.dealerups.com eBay Motors and craigslist – with a facilitate the production for them. The single mouse-click. company will produce a high-quality, O DealerTrack’s InventoryPro provides scalable and affordable production on dealers with the tools they need to the dealership lot. With the Dealer monitor and manage their inventory. Showcase ad package, the prominent In addition to the vehicle sales perform- advertisement placement provides ® ance reports, dealers can access metrics dealers with special ‘Showcase Dealer’ from multiple sources to complete recognition, driving more traffic to the appraisals, search real-time auctions for dealer’s Web site and resulting in more sourcing and vehicle stocking, view high-quality leads. pricing recommendations based on For more information about Kelley DealerTrack adds new their own transaction data, and receive Blue Book’s dealer products, services functionality to its real-time retail market pricing data. and solutions, please visit www.dealertrack.com www.800bluebook.com. InventoryPro solution DealerTrack, Inc., a subsidiary of O O DealerTrack Holdings, Inc. DD 8 May 2009 DigitalDealer-magazine.com
    • D IGITAL Dealer AAISP NOTES Mike Roscoe In Case You Missed it... I n case you missed it, here are three success in stabilizing shaky financial stories we linked to in our e- markets and getting credit to flow more newsletters in the last week. I'm freely again. writing this in mid-April, however, I Specifically, the Fed chief mentioned expect there will be more such head- improvements in recent data on home lines coming between now and the and auto sales, home building and time you read this. But these are very consumer spending as flickering signs positive signs and with all the bad of encouragement. Associated Press news you get from the media within and outside our industry, I just wanted Months ago, I instructed our edito- to remind you that all is not lost. In rial staff to give no coverage at all to fact, all is not even bad. And we may negative stories, anecdotes and statistics be seeing that proverbial light at the in any of our publications. There was end of the tunnel. plenty of “bad news” coverage in the mainstream media and the magazines KeyBanc predicts resurgence in new- Auto sales lifted by late surge; GM and publications in the retail automo- vehicle sales over next several hopeful tive sector, which in my opinion, only months New incentives drove an increase in exacerbated the economic problems. I CLEVELAND — The rising U.S. auto sales in the final week of told the editorial staff to only run “good demand for used vehicles and loosening March, though companies' executives news” articles re: the economy. There of financing will soon translate into remained split over whether the weren't many to run – until now. increased demand for new-vehicle sales, prolonged market slump has So, these three articles in about one according to the latest report from bottomed, Dow Jones reports. The top week are not only very encouraging to KeyBanc. five manufacturers all registered me personally...they allow us to give Driving this expected ramp up of smaller year-over-year declines in sales coverage to the economy. demand are improving retail auto of cars and light vehicles during We will always avoid the “bad news” financing and auto asset-backed securi- March, according to reports and focus on the “good news” at Dealer ties issuance, along with growing Wednesday. The improvement left the Communications. Not to help you used-vehicle sale volumes and prices, seasonally adjusted annualized sales keep your head in the sand...but officials indicated. rate, or SAAR, at 9.86 million for the because there are plenty of traditional “Dealers have been reporting that month, according to Autodata Corp. media outlets that seem to not only retail financing trends have been This was ahead of analysts' estimates revel in bad news, but openly promote improving, which is corroborated by and the 9.12 million reported for it, often fulfilling their own prophecies. CNW Research data showing approval February. Executives from General Dealer magazine will stay true to what rates for automotive loans are improv- Motors Co. (GM) were the most opti- helped us grow to where we are today, ing at all levels (prime, near-prime and mistic about the outlook as the being the Dealer Advocate. That will be sub-prime),” the report found. company registered a month-on- reflected in the content of Digital For instance, KeyBanc pointed to month improvement despite a 45 Dealer magazine as well. GMAC, which has increased the percent decline compared with March And it always will. credit spectrum for auto loan last year. Dow Jones Newswires approvals recently. Moreover, the company said that the Bernanke sees 'tentative signs' of Federal Reserve's Term Asset-Backed improvement Securities Loan Facility, or TALF, is ATLANTA – Federal Reserve Chairman Ben Bernanke said Tuesday Michael Roscoe positive news because “it should provide additional capital for retail there's been “tentative signs” that the Editor-in-Chief automotive loans by ‘unfreezing' the recession may be easing. But he also automotive asset-backed securities warned that any hope for a lasting market.” Sub-Prime Auto Finance News recovery hinges on the government's DD 10 May 2009 DigitalDealer-magazine.com
    • D IGITAL Dealer INTERNET SALES Phil Sura Are you Adapting to the New Game? E very successful person in the retail game is different today and it isn’t ever tools for the dealers interested in transi- automotive game is competitive by going to be what it was five years ago. The tioning into the “new game”. For the nature. Most were successful in successful dealers today are focused on traditional used car manager who wants something in their earlier years. They may different drills, tools and measurements. to place a value on each used unit from have been involved with college athletics An example of this is the used car his “gut” and hold onto those units for as or the top chess player in their school or game. I was invited to speak at a seminar long as it takes to find the right candidate an accomplished singer. Successful people in Detroit ahead of Dale Pollak, founder for the high gross of the day, both of these understand winning. When I recruited of vAuto. I had heard pieces of Dale’s companies are a waste of time. For the finance managers years ago, I would ask presentation but had never taken the time dealer who believes that the Internet has every candidate if they had been success- to sit through the entire session. I had changed the used car game, both vAuto ful in anything. I didn’t care if they had recently visited two very successful dealer- and First Look can help. been the top basket weaver in the state, ships that were full-fledged “Pollakites” so Once you have used the right tools to provided that they had experienced suc- I wanted to better understand his price the inventory, where should you cess. If you have never won at anything, company. The vAuto concept provides promote the inventory? Five years ago the the car game is a hard world. One poten- insight into the following: newspapers, direct mail, TV and radio tial problem with an entire industry with • Within a minute, the vAuto software was the focus. Today, the progressive this type of profile is quick adaptability to can pull up any dealers used car inventory dealers are linking into as many online a totally different type of game. If you to determine if they have the right mix of areas as possible. A list of where to link were part of a winning football team, you units and if they are properly priced com- your inventory should include the follow- most likely never had interest or desire to pared to the other dealers in their market. ing sites: try out for the swim team. Your passion • The vAuto tool allows a used car • Web site and DNA was football. department a chance to take a car in trade • AutoTrader I watched a documentary recently on at the market conditions today. With the • YouTube UCLA basketball teams coached by John market fluctuations, it is not possible to • Cars.com Wooden. Wooden won an impressive 10 keep up using Black Book and Kelley. • Car Soup titles in 12 seasons. Mr. Wooden started • The vAuto tool allows a manager to see • Craig’s List each year with instruction on how to put what every similar unit is being sold for in • Kelley Blue Book your socks on and how to tie your shoes. a market and it calculates everything as a This is just the starting point. You The drills were the same every day so that percentage of that average, as well as the should find ways to list your specials and by game day the players simply outper- market day supply of that specific unit. inventory with every possible online formed the other teams. What made Example: you have a 2007 F150 priced at source. The Internet is where the action Wooden successful was a consistent set of 108 percent of the 55 other 2007 F150s is. If you believe that at least 90 percent rules within a predictable environment. in that market. of the customers use the Internet as a He focused on the little things that taught • You can print out the market sales means of searching for options, why his men how to be winners. sheets to help close deals. Example: Your would you turn away from this opportu- If you have been involved and success- 2006 Honda Accord with 40,000 miles nity? The managers who don’t ful in the retail auto game for a period of is third on the market list of all 2006s understand that the rules of the game are time, you may be frustrated with the with 40,000 miles in your market. The different are at a disadvantage. I visited industry. What made you successful year car on the top of the list is $700 less than with one general manager who is cancel- after year just isn’t working. It may appear your car but you notice that it has a ing his entire online strategy because he that the entire game is different and you branded title. The second car is only believes that the Internet is destroying no longer understand the rules of the $200 and it is an independent dealer. the auto industry. He indicated that a game. If you don’t understand the new Can you see how a sheet with this infor- report showing a decrease in gross aver- rules, how can you win? You are still mation allows a salesperson to close deals ages validated his beliefs. He indicated teaching your team the basics with the without negotiation? that he once stocked 400 pre-owned road to the sale, closing techniques, First Look by Incisent Technologies is units and he is down to 70. He had also proper write ups, follow up with the another company in this space. I had a just cut all of the employees’ incomes by customers for referrals, but the financials chance to review their product at NADA do not reflect a winning season. The and again, they are providing tremendous continued on P-DD32 DD 12 May 2009 DigitalDealer-magazine.com
    • D IGITAL Dealer INTERNET SALES Pat Ryan, Jr. Stop Haggling…Start ‘Value Closing’ Level the playing field with consumer optimized selling I n today’s world, the Internet has and giving away gross profit upfront field but can also be used to gain addi- become a way of life. It entertains us, through underpricing. Internet vehicle tional credibility in selling the value of enlightens us and connects us. But shoppers are likely to click right past over- your vehicle and price. The biggest chal- perhaps the most critical concept in the priced vehicles while underpriced vehicles lenge is that the consumer only needs to Internet Age has been its ability to offer little opportunity for a retailer to run know about the type of car they are inter- empower us. In the automotive world, a profitable business. Consumer opti- ested in buying while the pre-owned this has translated into a radical shift in mized pricing enables you to get all of salesperson needs to know everything consumer behavior. Nearly 90 percent of your online vehicles “in the game” while about every vehicle on his own lot as well consumers search the Internet before not giving away gross profit to get traffic. as comparable competitors’ vehicles. In buying a car, spending an average of six 2. Consumer optimized advertising addition, unlike new cars that are consis- and a half hours online while only visiting focuses on the need for automotive retail- tent in terms of features and pricing, ers to win their customers online first by dealers need to know the unique charac- developing advertising that highlights the teristics of every pre-owned vehicle on differentiating features of your vehicles in their lot relative to features, history, style, “Consumer optimized order to draw buyers into your store, condition, mileage, etc. The good news is rather than simply driving traffic from the that consumer optimization technologies selling empowers Internet by being the lowest price. are now available to make this easy and Whereas consumer optimized pricing efficient. dealers to sell more and consumer optimized advertising are In today’s market, when the super- focused on driving traffic into your store, empowered consumer meets the cars, more profitably now the focus shifts to consumer opti- less-informed retail salesperson, the mized selling, which is all about what you discussion can quickly turn into haggling with higher CSI.” do when they get there: selling more cars, over price, payment, trade-in and cash —Pat Ryan Jr more profitably. down. Unfortunately, history has led many consumers to feel jaded about the one and a half dealerships in person. As a Consumers have an unfair advantage car buying process, often feeling like the result, consumers seem to always know If you have done a good job in negotiation process is set up to confuse more about the market for a car than the consumer optimizing your pricing and the consumer into buying a car at an pros at the dealership. The emergence of your online ads, then the consumers who unfair price. This negative preconception the “super-empowered consumer” is choose to visit your dealership are not sets up a potential lose-lose scenario prompting a wake up call for dealers, who only armed with the information on your where the consumer struggles to under- must change the way they think about vehicles, but also understand what other stand a good deal from a bad one and run their dealerships in the Internet vehicles in you market are available and at resulting in a decreased willingness to Age. A seemingly daunting task, the key what price. They also typically have a close, while the dealer may experience to leveling the playing field can be sense of what a “fair price” is for your lower gross profit from increased “grind- summed up in two words: consumer vehicle based on guidebooks such as ing” on price and often low customer optimization. Kelley Blue Book, Edmunds True Market satisfaction levels. Consumer optimization, a revolution- Value and others. After hours online, ary concept that focuses on “the power of these super-empowered consumers often The Internet is not a one-way selling value,” can be broken down into know more than the professional at your street three main areas: consumer optimized dealership from the moment they walk Although the traditional sales and pricing, consumer optimized advertising through the door, giving them an unfair negotiation process has been “a way of and consumer optimized selling. The first advantage. life” in the automotive world since the two concepts, which we have discussed in In order to catch up, dealers need to first vehicle hit the road, the major past articles, can be summarized as become empowered with the same changes in consumer behavior in the follows: knowledge that consumers have. Used Internet Age have made it obsolete. This 1. Consumer optimized pricing properly, this knowledge, as well as the is where consumer optimized selling manages the fine line between overpricing information that is only available to dealers, will not only level the playing continued on P-DD32 vehicles so you’re not “out of the game” DigitalDealer-magazine.com May 2009 DD 13
    • D IGITAL Dealer INTERNET SALES Peter Martin How Reputation Impacts Deliverability, Part 1 M ost marketers engaged in e- mail marketing do not realize the important role that their reputation plays, not only on their deliverability, but also on the overall return of their marketing investment. Monitoring your com- pany’s e-mail marketing reputation and the reputation of your e-mail service provider (ESP) is vital to your business. There are several things you should do to ensure your company’s reputation remains positive to subscribers. This is the first in a three-part series of articles that will cover how to determine a base- line for measuring your reputation, how to fix potential problems, and what you can do to keep your reputa- tion separate from the reputation of your ESP. Why should I care about my reputation? centered on a “this is spam” reporting unsolicited spam. While the rules vary The amount of unsolicited e-mail device. AOL was the first major e-mail from one provider to the next, there are that ISPs and corporate mail server receiver to implement such a device and a few things that savvy e-mail marketers administrators receive has forced them the virtual overnight success of the can do to ensure that their e-mails get to adopt creative methods to reduce or program prompted others, such as delivered to the inbox and not acciden- halt spam delivery. While content filter- Yahoo, MSN/Hotmail, and Gmail, to tally filtered into the junk mail folder. ing works to block spam, it also falsely follow suit. Many e-mail marketers that use an labels many e-mails as spam and blocks Today, the majority of addresses on e- ESP mistakenly think that reputation them from being delivered to the recip- mail marketers’ lists originate from ISPs and deliverability are the sole responsi- ient. As a way to combat this, users that have active reputation systems in bility of the provider. While the ESP have been forced to abandon content place. Unfortunately, each one of these has a knowledgeable staff and the high blocking in favor of reputation-based ISPs sets its own rules governing e-mail tech systems in place to help manage systems which have a much lower traffic and enforcing policies that propensity to block conversational e- protect its users from the barrage of continued on P-DD34 mail. However, doing so may wreak havoc on e-mail marketing campaigns. Last year, e-mail receivers broadly adopted various reputation-based systems that helped them determine whether the mail they were receiving was coming from a source that they, or more appropriately their e-mail clients, deemed positive or negative. These reputation systems were not built around published protocols such as SPF or DomainKeys. Rather, they were built upon homegrown technology DD 14 May 2009 DigitalDealer-magazine.com
    • D IGITAL Dealer INTERNET SALES Joe Webb E-commerce Uses for Old School Tactics I believe I am fortunate for having should use the CRMs that allow an of transparency. This is still an unrealis- spent time in dealerships that were automatic transfer of a lead if it hasn’t tic tactic with dangerous implications. littered with “characters” and old been answered within a specific time. There is no way to play “keep away” school, stereotypical car sales folks. It That way, the e-prospect is answered with information regarding an Internet definitely opened my eyes to the full more quickly by someone available customer and come out unscathed. spectrum of sales strategies employed rather than waiting on the ISM they by others and also taught me how neg- were originally assigned to. It is no The evil ‘attaboy ative perceptions of our industry were longer about fairness for the sales crew, Old school: Salespeople used to offer created. That being said, having seen but what is convenient for the prospect. gifts (oil changes, tube of touch-up paint) if their customers would bring The bait and switch their CSI surveys back into the store Old school: Advertise your cheapest, after the sale. This way, the dealer’s staff “Whether right or stripped down, bare-bones new car for could fill it out for them and pump up an amazingly lowball price (or your their numbers. wrong, these old school rattiest beater on your used lot) to lure New school: Since coaching is customers into the dealership, and once forbidden and you cannot directly tell a tactics do have new they see how miserable that particular customer how to fill out their survey, offering is, you switch them into new tactics have been invented. (I applications in today’s another vehicle. invented this, actually, so I don’t believe New school: A similar, but accept- it is widely used by any means.) This online market.” able bait and switch tactic you can occurs after a deal is completed, while —Joe Webb employ online is by offering the the customer is speaking to his/her sales prospect several different options of rep and waiting to enter finance. Have and been taught some of these tricks vehicles, with one being “models start as a manager walk over and speak to the has allowed me to expand my reper- low as”. It may be misrepresenting what salesperson directly. “Hey John, you toire for online tactics. The oldest, the customer actually wants, but since it just got in another survey, all excellent, meanest of car sales tricks have some is just one option you provide out of 100 percent across the board again. useful applications within the Internet many, it is allowed. While they still Great job. Keep it up.” It doesn’t even sales realm, good and bad. have the price of the vehicle they have to be true, but since it is said to the Disclaimer: The views, tricks, obser- inquired about, it is the lower number salesperson and not the customer (but vations, and opinions in this article are that will stick in their head. within earshot), my belief is it passes mine and should not necessarily reflect the “coaching” rules. (I never asked an the official policies and beliefs of this Playing keep away OEM so I am out on a limb here.) The magazine. (I don’t want anyone else to Old school: When a showroom benefit is that a customer sees what a get in trouble but me.) customer wanted to leave before the positive survey can do for a rep and also purchase because they were unhappy likes to be involved with a dealership Up systems with the figures/numbers, the salesper- that promotes positive reinforcement. Old school: Rules of most dealer- son would say they’ve misplaced their ships were set. The first salesperson in keys. This would keep the customer The ‘Columbo’ the dealership every morning took the there and allow for more time to make Old school: Just when a customer was first customer. The order you came in the deal. If the used car manager were walking away because they couldn’t was the order you took your dealership’s approached, they would appear scatter- agree on numbers with management, ups. A simple round robin system was shot and act as if they were looking for the manager would pull a Columbo and employed after that. If you were the the keys (that they had in their pocket.) remember one more trick to try or ques- fourth salesperson to walk in that day New school: In today’s market, ISMs tion to ask. Often, they’d make the and there were only three customers, mistakenly attempt to keep informa- salesperson run out and knock on the you didn’t speak to anyone. tion away from customers, hoping that customer’s window as they were about to New school: Internet leads should be their interest in the vehicle will set round robin as well, but dealers outweigh their displeasure with the lack continued on P-DD31 DigitalDealer-magazine.com May 2009 DD 15
    • D IGITAL Dealer INTERNET SALES Stan Sher Three Strong Practices to Increase Dealership Presence and Profitability I t is 2009 and the automotive busi- end goal here is to help cut advertising mentioned in the other two sections ness is facing many challenges and expenses and generate more leads. Also, about the need to constantly keep our changes. The industry's problems this is a way to let people know they are name out there and monitor our repu- are growing as banks tighten up their dealing with someone just like them- tation. I am a personal success story lending procedures. People across the selves and takes away the negative regarding name-recognition by country are losing their jobs and aspects of dealing with a car dealership. following the principles previously spending less money in order to sur- described. In this economy, buyers are vive. New methods of marketing and Building a positive reputation changing purchasing habits and Internet sales strategies are starting to There are web sites out there that are timetables when they will make a be implemented by the top Internet created to damage the reputation of a deal. It used to be that most dealers, putting many other dealer- business, including automobile dealer- customers would buy within a week ships at a huge disadvantage. How do ships. The effects of this can cost the or so of submitting a lead. Now it can we adjust our practices and continue dealership a loss of sales, parts and drag on for months because just like to be a winner? Here are just a few service business that adds to a loss of the rest of the population, the cost-effective examples of what your gross profit at the end of the day. A customer is worried about where they dealership should be doing. dealership can only take so much will be financially in a few months. abuse like this before they go out of Perhaps they lose their job or not get Social networking presence business. Many dealerships are not the promotion they expected. Chances are that many of the aware of the available products out people reading this are already online there to offset negative critiques, as using web sites like MySpace, this is a newer trend. Facebook, YouTube, and others. If There are web sites created to help you are not using these sites, I am sure dealerships, as well as sales staff, “As the economy that many of your employees are on monitor these reviews in order to keep them every day. According to a positive reputation. A positive reputa- changes, so should Facebook, their web site attracts over tion includes any and all reviews from 150 million active users internation- consumers that may be seen on web the way you ally. These sites allow for sites such as DealerRater.com, advertisements and video links to be Edmunds, and CarFolks.com. These do business.” posted among its many functions. As companies make it easy for dealers to —Stan Sher a sales professional working in a deal- monitor and consolidate activity. It is ership, it is a great way to prospect also important to have a Google Alert utilizing existing contacts as well as account that sends notifications finding new ones to market. Let's face anytime your DBA is found in a search. This is why a standard 60-day it; everyone at some point is in the The bottom line is to make everyone process might not be enough. There market to purchase or lease a vehicle aware that they should not gamble with are dealers doing 90-day (or never so why not market yourself as the "go their reputation and always be alert. A ending) processes as well. As an to" person? I teach how to go out and great reputation will help your dealer- Internet director, you know your store join a social networking club to reach ship sell more cars with more gross and and the demographics better than the potential customers and brand your- keeps business flowing through other customer so you must use your best self as their car contact. departments in the store. judgment when creating an effective You can create a fan page or a group process. If you rely solely on automated on Facebook, advertising your dealer- Tweaking your Internet follow-up processes, it might be time to make ship, and invite people to join. Your process changes and tweak the wording in your sales and Internet staff can make videos As times are changing and business e-mails. It might also be time to get of them doing a vehicle walk-around is getting slimmer, we need to more personal and start taking those and post them on YouTube in minutes. consider some of the other reasons templates and adding a personalized Another thing to do is to add some of why we are not selling cars like we did these links to the dealer web site. The a year ago without making excuses. I continued on P-DD34 DD 16 May 2009 DigitalDealer-magazine.com
    • D IGITAL Dealer INTERNET SALES Paige Presley Get Ready for some Spring Cleaning! B y now, most of you have seen in a “Contact Us” page or, even worse, shoppers to view, but you also need the last of winter and are gearing burying it at the bottom of the home- those that will show your inventory in up for a successful summer. But page. So when shoppers find vehicles a flattering way, highlighting each before you kick off those advertising they like, or if they have a question, vehicle’s features and showcasing it in campaigns for summer specials, you they won’t have to flip back through all the best possible light. should use this time between seasons of the other pages to locate your phone to do a little spring cleaning for your number. Specials web site. It is also a good idea to have a track- Specials are, by far, one of the most The J.D. Power and Associates 2008 ing method for your calls in order to popular links on any dealer’s web site. New Autoshopper.com Study says accurately measure your marketing Yet a whopping 70 percent of dealers about 86 percent of shoppers who pay campaigns. Many online marketing still do not have a specials feature on a visit to dealerships have been online companies offer call-tracking solu- their web sites or keep them current. to search for a vehicle. With that many tions, such as eStara or Who’s Calling, Stand above your competition by people looking to the web for informa- allowing you to assign different phone including updated specials, something tion on their next vehicle purchase, it’s numbers to different ads in order to most people are looking for when crucial to make sure your site is in measure which one(s) are working best shopping for a vehicle. good shape. for your dealership. Having online specials not only gets Here’s a quick checklist of things your older inventory or specialty vehi- you should have on your web site to Images cles sold, but they can also bring ensure it’s performing at its peak while The J.D. Power study indicates that shoppers back to your site, thereby bringing visitors to your door: 74 percent of consumers are more increasing the chances of a shoppers likely to visit a dealership, and 53 submitting a lead or making a visit to Easy navigation percent are more likely to buy a vehicle your store. Make your web site easy to use by from a dealership after seeing actual Now is a great time to sit down, keeping the one-click rule in mind. photos of vehicles. So it only makes comb through your web site and make According to the J.D. Power study, sense that wherever you have vehicle the changes necessary to boost its you lose 23 percent of shoppers per data, you should always include performance so that when the summer click they have to make. Also, when pictures of that vehicle so shoppers months come, you’ll be ready to do customers visit your site, they are have a visual of what you have avail- what you do best: sell cars. generally looking for specific informa- able. tion such as a particular car at a Your inventory listing should Paige Presley is the marketing ana- certain price. include thumbnails, so when a lyst/writer for Dealerskins in Nashville, By keeping all of your pertinent shopper clicks on that particular TN. She enjoys mixing her passions for content, such as inventory, within one vehicle for more information, they’ll all things technology and for following click of any page, shoppers won’t have have plenty of exterior and interior consumer trends by staying involved in to search through several pages to find pictures to look through. market research for the auto industry. the vehicles you have for sale. Also, be sure to include multiple images for each new model listed in Contact information your inventory. One of the number Even though it may seem like one complaints online shoppers have second nature to include contact when browsing through new cars is information on your web site, you not having enough photos. Keep in If you wish to discuss this article with must remember the placement of that mind, too, that vehicles with four or other dealers, or with the author, information is equally as important. more images can get as much as four please go to the “Discussion Forums” Since customers are five to nine times as many leads. at www.DigitalDealer-magazine.com times more likely to pick up the phone While having a variety of images on and enter the “Internet Sales” forum or than send an e-mail, you should your site is extremely important, don’t e-mail her at ppresley@DigitalDealer- display your phone number at the top confuse quantity with quality. You not magazine.com. of every page versus simply placing it only need a variety of pictures for DigitalDealer-magazine.com May 2009 DD 17
    • D IGITAL Dealer INTERNET SALES Daryl Sanders There’s a Need for More Effective Advertising D ollar-wise dealers should con- however, each car dealership must find receive a quick quote. This information sider adjusting where they what works best for them. should carry that vehicle information spend their advertising budget over on the form that arrives at the in 2009. If it’s true that 85 percent of • Vital information up front, the car dealership. This is a glaring shortcom- all car buyers research online prior to dealer’s address with a map and phone ing on so many sites. People click on a making a purchase, it would be practi- number for sales and service needs to be car then click on “get a quote,” and the cal for every dealer to consider easily seen on the home page heading dealer receives the quote-form without spending more than 10 percent or so of and every page’s heading. It is amazing having any idea which vehicle the their advertising funds for an effective how difficult it is to find so many prospect is interested in! online presence. There is an old school dealers’ basic contact information on phrase that goes “penny-wise and their web site. • Trade-in valuation tools need to be pound foolish.” With our economy, framed in and easy to use. every dealer is certainly looking to save money by cutting back, and reducing • Comparative product information enables a prospect to quickly compare expenses. However, sometimes there is “While there is a need dealer’s models with competitive a tendency to focus what is spent on models. the wrong priorities. While there is a to reduce costs, you need to reduce costs, you need to • Product information should show spend money where the prospects are need to spend money things like crash tests, safety standards, found. Consider the facts. Surely 85 and information content on each percent of potential buyers don’t read where the prospects model. newspaper ads, or view expensive tele- vision commercials, nor do as many are found.” • Dealership history and “reasons” to buyers respond to radio ads to make a purchase decision on their next vehicle. —Daryl Sanders buy from the dealer: Amenities, such as Today’s savvy buyers have done their oil changes, and all the other informa- homework long before they waltz into tion that separates the dealer from his a dealership. They know how to dance competition should be displayed. around the numbers to obtain the best deal for the make and model they’re • Dealership community involve- determined to purchase. This determi- • Inventory display of nine pictures ment should be declared and explained nation will cause them to keep dancing for used cars is good. I don’t see the in detail. Potential customers value until the music plays out. Therefore, advantage of the 17 or 22 pictures that integrity and a sound business history. dealers should adjust to the new buy- many are using (I would cut costs here). Most are loyal and seeking to engage ing trends by turning up the volume A video of vehicles can be beneficial as with reputable dealers on a long-term where they spend their advertising dol- long as it’s not expensive. Comments basis. lars in 2009. It’s a new sound wave and for each used car need to be forthright it’s time to keep step with the beat. The and clear, telling the “story.” Don’t • Have sales staff pictures including following keys will help develop an resort to gimmicks or using spam lingo history with the dealership, especially of effective online presence that will max- such as “wow” or “just great.” long-term employment history. imize a dealer’s opportunity to “catch” prospects prior to making a purchase. • Show new, used and service specials • Dealership logo with keywords and Powerful web site design is the most that are up-to-date and with changes Meta tags should encompass the dealer- important place for every automobile made at least monthly; but I would ship name to include models and all dealer to spend the money to produce certainly change special vehicles’ surrounding communities. an effective web site, one that is simple pictures weekly. to navigate and easy to convert visitors Banners on third-party sites have into prospects. There is a legitimate • Make filling out forms effective had mixed results in measuring success. argument against all the flash web sites; whenever someone clicks on a car to There are third-party lead generators DD 18 May 2009 DigitalDealer-magazine.com
    • selling these, however it is difficult to part of the Internet salesperson’s job Daryl Sanders is the owner of Internet verify that sales results are coming from description because there is a 5 (or Dealer Solutions, Ltd. (www.internet- these sources. I would save money here. more) percent reduction in costs for dealersolutions.com). He has installed his Google ad words can be helpful if monitoring leads on this basis. evolving sales system in over 100 dealer- managed daily. But this requires There is a growing opportunity for ships. He has a business degree in educated know-how and someone with cutting edge communications and marketing from Ohio State University. As the ability and time to manage it. I see branding for dealers. That opportunity an offensive tackle at OSU, he was an this more effective in a large dealer is on the community oriented web sites NFL number one draft pick in 1963 for group that directs to the corporate like Facebook, My Space, YouTube and the Detroit Lions. home page. the like. Someone with the time can Third-party leads can still be a wise capture “friends” for your store and investment. Although in the current communicate with this fast-growing If you wish to discuss this article with climate, it is taking longer to convert community on a vast level. While other dealers, or with the author, these third-party leads. To maximize trying to save some marketing costs, in please go to the “Discussion Forums” their value the leads need to be moni- this day of a declining market, it is at www.DigitalDealer-magazine.com tored and measured, but most dealers highly important to discover thrifty and enter the “Internet Sales” forum or don’t have this kind of advanced track- ways to spend dollars in those places e-mail him at dsanders@Digital ing system. Therefore, dealers might that will deliver the dealer legitimate Dealer-magazine.com. regard third-party leads as an unneces- opportunities to sell a car. sary expense because if Internet sales slightly dip, then a dealer is apt to cut the expense without knowing whether or not it’s a good business decision. It is advantageous for example, if you purchase 100 leads and throw out the 10 to 15 leads that do not represent buyers because you still have 85 or so prospects. Industry stats indicate that about 55 of these prospects will buy a vehicle in the next six months or so. I don’t know about you, but I’d figure out a way to capture my share, and someone else’s of these 55 buyers. With lower lead counts, it is time to work every lead to the finish. Now more than ever a dealer needs a documented, fully implemented LIMIT Internet sales process that works and is ED TIM P E followed. It may be wise to invest some COMB RICING ON INED of the dealer’s advertising budget to Next y PACKAG ear th e ES! will be pr outsource professional assistance in $395 e ice ach! order to perfect a process that will lead to a profitable share of these prospects. But I would not over-buy third-party leads. Do a better job digging out those leads that are already in the system. Zip code marketing is another way to save on third-party leads. Most lead Super Controller II Guide generators enable a dealer to select zip Expenses and Employees codes advantageous to the dealer. I would skip my direct competitor’s home zip code, for example, but gobble up • Learn Sandi’s “Item Expense” method of tackling expenses! leads from zips that are in weaker • Job descriptions for every position in the dealership! marketing area. This will enable a dealer • Receive all forms and spreadsheets needed! to have the advantage. This is another • Use your DMS system to detail expenses! step to cut third-party leads. In addi- tion, there are a couple rules that should • Learn to budget and create pay plans! be followed in dealing with third-party • And much more. leads. The first lead in should be the only one paid for. Do not pay for dupli- cate leads from different generators. Also, the obvious bogus leads, that are actually kids playing around, should be Order online at www.sandijerome.com sent back for credit. This needs to be a DigitalDealer-magazine.com May 2009 DD 19
    • D IGITAL Dealer INTERNET SALES Phil DuPree Moving Offline Ad Spend Online I f you have any doubts about where Harold Cochran, the dealership’s percentage of sales still come from to spend your advertising dollars director of business development, esti- online sources. this year, consider this: According a mates that 60 percent of his ad budget Dealers that are still top heavy with new eMarketer report, in 2009 the is now Internet related, with the expensive TV and newspaper ads need U.S. Internet population will grow to remaining 40 percent split between to scrutinize their ad budgets and nearly 200 million users, or 65 percent direct response mail pieces and radio. measure results based on ROI. There’s of the total population. Also, that According to Cochran, a year ago 60 no sense in spending tens of thousands daily Internet usage among all demo- percent of his marketing budget was of dollars a month promoting your graphic groups is climbing, with the newspaper and TV, and only 20 percent brand if it doesn’t result in more track- average time spent online by U.S. Internet advertising. able sales. adults increasing from 11 hours in Cochran also attributes the sales One method of determining how 2007 to 14 hours in 2008. Nearly growth to the implementation of a much to spend on traditional versus two-thirds of adults are claiming they BDC and better in-store lead manage- online advertising is to initially invest go online every day, the majority for money equally on both sides. Then, at more than one hour. the end of each month move 10 What are Internet users doing online percent more ad money to whichever these days? Well, if you ask e-commerce marketing efforts resulted in the best giant Amazon.com, they’re shopping, “Don’t be surprised if cost per sale. despite the current economic down- It may take some work to find the trend. The company recently reported a you discover that right balance between your traditional 2008 4Q revenue jump of 18 percent and online ad spend, but it is well to $6.7 billion, more than a half a you’ve been wasting worth the time. Don’t be surprised if billion dollars higher than Wall Street you discover that you’ve been wasting a predictions. a lot of money on lot of money on TV and newspapers. There may be fewer in-market auto Your customers are online. If you want buyers these days, but the vehicle shop- TV and newspapers.” to get their business, that’s where you pers that are out there are still using the —Phil DuPree need to put your advertising dollars. Internet to make their purchasing deci- sions. As a result, many dealerships Phil DuPree is the president of with aggressive e-commerce strategies AutoUSA, an independent third-party are not only surviving the recession, provider of leads to more than 4,000 they’re setting new sales records. ment processes. “We don’t try and sell a dealerships; and vice president of Extreme Jeep is one example of an customer over the phone anymore,” AutoNation, Inc., where he previously Internet-focused dealership whose says Cochran. “We qualify them and directed e-commerce for the nation’s online investments have paid off. In then get them into the store.” largest network of dealers. 2008, the Illinois-based auto retailer AutoNation, the largest dealership began revamping their entire market- group in the country, is reporting ing program, redlining most of their uptrends in total Internet lead share as traditional advertising, and putting the well. From September through If you wish to discuss this article with money they saved into online promo- December 2008, the auto retailer’s total other dealers, or with the author, tion. The switch in ad spend increased online lead share, including both new please go to the “Discussion Forums” lead volume, and decreased cost per and used vehicle leads, increased over at www.DigitalDealer-magazine.com lead. As of last month, the company’s 13 percent. and enter the “Internet Sales” forum or vehicle sell-through had doubled. It Even dealerships with declining sales e-mail him at pdupree@DigitalDealer- was also the best January in the may find it beneficial to invest heavily magazine.com. company’s history. in the Internet because a major DD 20 May 2009 DigitalDealer-magazine.com
    • D IGITAL Dealer TECHNOLOGY TRENDS Sandi Jerome Spend Less to Make More D uring my years as a controller, I account and enable drill down. My Super and often semi-fixed expenses got lost would create a budget for all Controller II Guide has instructions for through the cracks: uniforms, credit card expense accounts at the beginning this and a worksheet to use for your budg- processing, etc. PMG has assisted our of each month. When I closed the books, I eting. After you have your budget and the dealership in achieving measurable cost would take my budgeted amount to deter- month is over, it is time to start attacking reductions of 21 percent and in reducing mine if expenses were in line. Having a those expenses. According to the folks at our supplier base by nearly 40 percent. budget enabled me to close the books the purchasing services firm of PMG’s focus on process simplification has faster, since if the total expenses matched Performance Management Group (PMG), led to increased employee productivity my adjusted budget amount, then there “Reigning in purchasing costs is one way and tightened controls as well. Executive was no need to detail, trend or analyze in which dealers can clamp down on Tools allows Saturn of St. Paul to simplify expenses as part of the month-end process. expenses and immediately impact bottom- its relationship with vendors and provides Instead, I spent the 3rd -10th day doing line profits. Technology and purchasing pricing and terms control. The applica- my analysis of the expenses to make sure services can assist dealers in moving swiftly tion is password protected which limits everything was right before I let the and strategically to reduce expenses, user access and provides an easy to use accounts payable clerk pay the expenses. tighten purchasing controls and ultimately intuitive interface.” The time to analyze expenses is before the increase profitability. “ The key to spending less is increasing money is spent and again before the The technology behind PMG’s offer- control. Whether you use technology like invoice is paid. ings, Executive Tools is a tool to manage Executive Tools, restrict DMS purchase How do you create a budget? First you purchasing policies, agreements, supplier order access, or merely round up the need to determine, account by account, contact information and much more. purchase order books and put them in what type of expense the amount repre- Executive Tools, a web-based file cabinet your office - the process must start before sents. For example, we might think of helps mitigate risk, while improving dealer- the spending happens. Creating budgets advertising as a variable expense. That is ship efficiency and effectiveness. Executive and metrics is your first step in getting wrong; it doesn’t have anything to do with Tools is offered exclusively by PMG to control over your expenses. Typical dealer- how many vehicles you sell for the month; clients. Clients benefit from the ease of use ships have thousands of expense entries; so in fact it can be the opposite. Although we and point and click functionality to view detailing expenses ends up being “data might measure advertising as a per unit supplier contact information, contracts, overload” for your managers and a huge metric or percent of gross profit, that pricing agreements and more. Executive waste of paper. A budget can help you metric goes up and down based on how Tools is used to house all purchasing zoom into the accounts that need a new many you sold. If you sell fewer vehicles, related information for an organization expense control process and then you’ll advertising doesn’t go down. In fact many and is password controlled, has different start retaining more profit! times the sales managers panic and end up levels of security and is available 24/7 from running one more big advertisement and any place. Executive Tools provides users Sandi Jerome is a former controller, CFO, sys- make it worse. The amount you spend with an easy navigation system and point tem administrator, F&I, assistant GM, and should be a budgeted amount. Floorplan is and click functionality to eliminate the fixed operations manager with over 20 years a variable, but based on your inventory need for training. Users may access experience in the automotive industry. She is the balance, not on how many you sold. Going template documents to assist in developing owner of Sandi Jerome Computer Consulting. through each account and setting it’s meas- supplier correspondence, supplier letters urement, and then budgeting is a chore, and PDF copies of contracts, agreements but once it is done you can easily do a and more. “Executive Tools is a tool to budget versus actual and know that your enable dealerships to manage and perform If you wish to discuss this article with financial statement is right. purchasing tasks every day without fail other dealers, or with the author, Where do you start in creating this across a broad range of expense categories,” please go to the “Discussion Forums” budget? Your DMS system is the first says Douglas Austin, president of at www.DigitalDealer-magazine.com place. Many of you have advanced expense Performance Management Group. and enter the “Technology” forum or analysis tools and for others, you need to According to Dave Roen, general e-mail her at sjerome@DigitalDealer- grab your GL detail for last month and use manager of Saturn of St. Paul, “In the past magazine.com. a Pivot table in Excel to summarize each we could never do this in an efficient way DigitalDealer-magazine.com May 2009 DD 21
    • D IGITAL Dealer COVER STORY Desmond Lianos Internet Sales Manager Toyota and Honda of Seattle Twenty-eight year old Desmond Lianos Tell us about your background. is really required for customers with has a full plate these days. He’s running a I started in the car business a little credit challenges, and eventually four of successful Internet sales department that’s over four years ago. Previously, I us who had been at that dealership adapting to the industry downturn by managed a private health club. I had went over to Toyota and Honda of restructuring into a BDC, and he’s over- friends who worked in the car business, Seattle to start a special finance group. seeing the combination of two Internet but for years I just couldn’t see beyond That was a little over four years ago. sales departments that had been run out the “sleazy car salesman” image or of stores five blocks apart in downtown picture myself in this industry. Then I How did you go from that job to learned about the uniqueness of this Internet manager? Seattle, Washington. The Internet sales dealership, which doesn’t work on indi- Well, as I said, special finance manager for Toyota and Honda of Seattle, vidual commission basis, and that sort customers are very unique, and while Lianos says there’s an upside to the current of team approach is what I was used to working with people one on one over market induced decline in leads: the and what I liked about the atmosphere the years I kind of fell in love with it, so ability to give each potential customer the at the private health club. After about I just worked my way up. I’m kind of a kind of focus that was only a dream when five years there, I decided to try some- techy guy and I’d done some work on a three-person unit was handling more thing new. For three months I worked my own learning to create web sites. than 1,000 new ones each month. at a Honda, Kia dealership that also There was a wonderful general manager We talked with Lianos recently about worked under a no individual commis- here who took an interest and who how he’s adapting to a challenging market sion basis and focused solely on special helped me see that I could do some- and why he’s so comfortable working in finance, working with people who had thing like this for the dealership. So I the ‘team approach’ that’s in place at troubled credit. There I learned great went to a couple of Internet boot Toyota and Honda of Seattle. deal about follow up skills, because that camps to learn more and ended up DD 22 May 2009 DigitalDealer-magazine.com
    • becoming an Internet manager. The department at that time was really scat- tered with a couple of people who would work on it who were also in sales. If you’re moving back and forth helping customers for several hours and a lead comes in, then there’s several hours when the lead is untouched, and that’s not good. So you changed that structure? We are in the process of restructuring the Internet department again. We are redesigning this department to be the hub for both Toyota and Honda phone and Internet requests, in an effort to get more appointments. The whole goal is to make the appointment, and have the customer come into the stores so we “The whole goal is to make the appointment, and have the customer can show them fantastic customer come into the stores so we can show them fantastic customer service service once they are here. once they are here,” says Lianos. With this combined Internet depart- ment, our thought is to have more specialists in one location who handle Most sales are within our primary contact our customers. We are looking the entire transaction, with the possible market area (PMA), but we do also ship into joining efforts with the big busi- exception of going on a test drive with some cars, mainly to Alaska. We gener- nesses that surround us, literally, in them. We want to create a relationship ate about 15-20 percent of our sales downtown. How can we benefit them, with our Internet customers. In part from Internet. and vice versa? we’re making this change because we’re When someone is looking at a constantly looking at different resources Camry, for example, we’ve found they So how is it affecting your marketing? for generating more leads. We may have more often than not are comparing it We spend less with third-party to increase the number of people in the to an Accord, so our automatic providers and focus more online, devel- department, but for now we will keep a response can tell them, “Hey, we have oping more ways to drive traffic to our three-person rotation. Toyota and Honda, so you can web site. We know with the majority of compare them side by side.” We hope the leads that come into our web site, How many cars does your store by combining the Toyota and Honda the closing rates are a lot higher than sell per month? How are your new Internet departments, we will have an those from a third-party provider. We car sales versus pre-owned sales increase in cross-shopping the brands take photos of all our cars and put them doing? Are they up or down from and thereby generating more sales. on the web site so people can see it’s a last year? Last year we were generating over real car and not just a stock photo from Because of the economic downturn, 1,000 leads per store a month and Honda.com or Toyota.com. We can we have experienced our slowdown. now we’re probably at 1,000 scrub our leads and it’s free, so we’re The business has definitely changed in combined. We’re down about 50 saving on our ad budget. last six months. Overall, for the dealer- percent in leads. The good part is that ship, we’re probably down 40 percent we have more time now to focus on What tools or lead generators from last year. We have two locations these leads. have really worked on your site to about five blocks away from each other. pull in leads? We were probably averaging about 200 Describe your local market. SEO on our web site, at the Toyota store and 150 at the We have the biggest population in Autotrader.com and Craigslist are effec- Honda store, new and used a month on our PMA, 1.5 million people. We have tive, as well as blogs. average a year ago, versus 100 and 75 about seven other Toyota dealers within new and used today. We probably sell a 20-mile radius. We’re right in the When do you stop, or finally 60 percent new to 40 percent used. heart of downtown Seattle, so that retire a lead? number keeps going up year after year. Any Internet customer is set up on What is the percent of your deal- Are you doing anything else to an 11-week schedule. When those 11 ership’s overall sales generated respond to the current market woes? weeks are up, we’ll have a reminder from the Internet? Do you ship We are focusing more on grassroots that pops up saying this is the end of vehicles? efforts to build relationships and the follow up. We are constantly in DigitalDealer-magazine.com May 2009 DD 23
    • Dealership partners in profit: contact with any customer that comes What trends are you noticing, and Dealership name: into our store or through the Internet. how are you adapting to what the We cater our follow up to their specific customer wants these days? Toyota and Honda of needs and wants. We see a lot of “give me your best Seattle price.” We try to set that aside and get Take me through the process from to what they want and that is trust and Web site URLs: when an Internet lead is received, loyalty in the salesperson and the store. www.toyotaofseattle.com to how it is closed. We try to do a great presentation via e- /www.hondaofseattle.com When the lead comes in, an auto mail to sell our dealership and our responder goes out thanking them for unique sales approach. Web site provider/hosting: contacting us and telling them an MotorWebs Internet consultant will be with them What challenges do you face in in a moment. This response has link to maintaining strong gross profits Web site vehicle photos our web site as a reminder for them to from Internet sales? You noted taken by: visit. We always try to contact them by that you try to get around it Diamond Lot phone unless there’s no number. If we when customers ask for price get to them, we verify the information first. Why? DMS provider: they were asking about and aim to The biggest challenge is customers UCS develop the rapport over the phone cross-shopping us with competing and, of course schedule an appoint- dealers. On new cars, we have lost a ment. If there’s no phone number, we deal over $50. Price is a definite driver CRM program: do the same thing through e-mail. with Internet buyers, but not the only DealerUps Further, we will tell them, or send aspect. We try to capture these buyers them the information they asked for in with our unique sales approach. Vehicle valuation tools: their request. We’ll also send along info from Consumer Reports on the vehicle What metrics do you track? Black Book they mentioned in addition to an We track all leads through our CRM Kelley Blue Book Internet brochure on that vehicle. tool. Further, we constantly look to see Again, we’re trying to develop a rela- how much traffic comes in, versus Online lead generators tionship to create that appointment. contact with customers, versus not including the OEM sources: That’s really all it is, appointment, appointments made, versus appoint- AutoUSA appointment, appointment. ments showed, and finally, sales from the Internet. cars.com How important is follow up in Costco closing Internet leads? In addition to your own site, Edmunds.com Vital! The average Internet customer where else do you post inventory? Kelley Blue Book buys within 45 to 55 days. A lot of Craigslist, AutoTrader and Ebay. Vehix people start the process long before their purchase to establish exactly what What sets your dealership apart they want. If we follow up, and from others in the market? Vehicle history reports: constantly provide our customers with The fact that our sales and service Carfax excellent customer service, along with departments do not work on an indi- Experian Auto Check all the information they request, we vidual commission basis is what sets us have a much better chance at selling apart and allows us to focus on meeting Vehicle valuation tools: them a car. our customers’ needs. We take a team approach so our customers can benefit Black Book There are a lot of new tools in the from excellent customer service Kelley Blue Book space getting attention: blogs, provided by a great group of people. social networks, SEO and SEM. Further, even in light of the Third-party sites where Do you use any of them? economic downturn, our dealerships inventory is posted: We focus primarily on SEO. We have contributed more than 20 percent Cars.com have a talented webmaster who focuses of their net profit to charitable organi- CarsDirect.com solely on SEO and blogs for Toyota and zations, such as Harborview Medical Kelley Blue Book Honda of Seattle. He uses Google blogs Center. That kind of involvement with Vehix and Yelp.com networking. I’ve joined the community as well as the team online networking groups as well. Our rather than individual approach we use dealership is an active participant in the in building sales is what I enjoy most Seattle Chamber of Commerce. We are about our dealership. always looking for ways to meet new people and create connections. dlianos@DigitalDealer-magazine.com DD 24 May 2009 DigitalDealer-magazine.com
    • D IGITALBarker Chuck Dealer BDC/CRM You Really do Get What you Inspect, Not What you Expect These words have never been more important than now! This is a follow-up to last month’s article are all missing. If the recipe provided suggestion to get you started: “You Cannot have Faith and Fear at the these measurements alone without listing 1. Pick something important: incoming Same Time”. the ingredients assigned to the measure- phone inquires. This area should be called It appeared fitting to again challenge ment, do you think the cake would turn gross profit enhancer because it is. leadership with another step in conquer- out ok? Nope, it would be a mess if we ing obstacles placing themselves in the guessed. What would happen if we over- 2. Involve your people. Find out who in way of personal and dealership growth. looked a couple of ingredients and left your organization does the best job with The above title has been around for them out? Again, the end product would solid phone skills and put them on some time; and at the same time has been suffer. So my wife followed precise meas- phone coverage shifts. You could make ignored by most when it comes to consis- urements with the recommended this a promotable position to grow and tency. The phrase was coined by the ingredients and it came out awesome. rise into. German physicist Werner Heisenberg whose name will always be associated 3. Establish measurable requirements like with his theory of quantum mechanics, “Put some ‘bam’ 70 percent appointment show ratio. Yes, published in 1925, when he was only 23 this is and has been achievable with the years old. Heisenberg was awarded the in your store correct training. Better have your team Nobel Prize for Physics for 1932. ready. Heisenberg’s principle tells us that we and watch things must continually be heightening the 4. Make it visible. Post appointments on importance of measurement toward any improve quickly.” a white board including names, appoint- experiment or project in order to have —Chuck Barker ment time, and vehicle interest along success. This speaks to the concept that with results (sold). you cannot improve what you cannot This concept is very simple to grasp but measure, so standards must be devel- very difficult to implement and sustain. 5. Set up an audit frequency. Leadership oped based on the priorities of the Inspection requires not only the creation checks on progress three to four times a strategic plan and then do something of a standard but also the discipline to day and makes immediate appointment about it. Loosely translated, he tells us observe and audit on a regular basis. If confirmation calls to prospects. that the success of any experiment is done correctly, it will help to create directly dependent upon the precise constancy of purpose, the development of 6. Have the discipline to stay the course. measurement of the parts that are added a work culture and will lift your team to Inspect the process several times every to the equation. an all-time high in the income and day and make adjustments as needed. In attempting to make this a simpler morale category. Then, profess to all that this is our new concept, it came to me this past weekend How many times have you or your store culture. while observing my wife preparing to dealership started a new initiative (some- make a cake for a gathering of friends that times with great fanfare), only to see it slip Put some ‘bam’ in your store and watch evening. She had the following items out away over time. This generally occurs things improve quickly. on the kitchen counter: All purpose flour, because the expectation was created, but Another part of this is remembering salt, baking powder, baking soda, sugar, no follow up was established. This that the enemy of great is good. So many cocoa, water, canola oil, eggs, vanilla, confuses your workforce, lowers morale, dealerships tell me, “We are doing good” powdered sugar, unsweetened cocoa, and makes people skeptical of any future or “holding our own”. I visited a few stores liquid flavoring, vanilla, chocolate chips changes. Before any new initiatives are in the Northeast recently and heard and butter. Now outside of just a few of started, you, as the leader, must decide exactly that. Remember the “You don’t these items, most would taste terrible if what is important and be prepared to stay know what you don’t know”? Well all eaten alone. However if managed prop- the course. The goal is to set a standard these stores had salesmen hanging out in erly with precise measurement it could and change behavior. the smoking, joking and spitting circle. produce a terrific cake (and it did). But The following are a couple of key lead- All were grumbling about something: what is missing? The proper measure- ership steps (as Chef Emeril Lagasse says, weather, inventory, pants didn’t fit, lack of ment of these ingredients, oven “Bam!”) and how you can apply them to temperature, cooking time and pan size processes. I have provided a template continued on P-DD33 DD 26 May 2009 DigitalDealer-magazine.com
    • D IGITAL Dealer DMS WORKSHOP Jim Skeans What is so Advanced about Advanced Reporting? When you hear ‘advanced reporting’ do you get that ‘deja moo’ feeling; like you've heard this bull before? D id you notice how your DMS’ databases you have to admire the the information jigsaw puzzle you need to new advanced reporting module programming expertise that produced the complete the comprehension picture; is finally what you have been “Advanced Reporting” modules for these well, that is when the Smith and Wesson asking for all these years? Neither did I. systems. solution comes to mind. But, before you open that window and Second, on the plus side ADP’s and And that’s why we need advanced “throw out the baby with the bath water” Reynolds’ user interface with its familiar reporting. let’s take a closer look. Most of you use look and feel that you and your employ- ADP or Reynolds + Reynolds DMS and ees have known for years (some for their Ad hoc queries in my opinion, what you are getting is whole careers) eliminates the need for Ad hoc is a Latin phrase which means not so much state of the art advanced extensive training and there is practically “for this [purpose]”. More to the point: reporting as an evolution of the advanced no learning curve involved. This has value this type of reporting tool that is the reporting products that you have been and is a large reason many of you stay answer to one of my favorite songs “I using for some time now. There are good with these systems. So, introducing a Want It All.” That is, “ad hoc” reporting reasons for this. product that advances from the evolution tools allow you to get what you want, how First, the underlying “flat file” database neighborhood into the revolution you want it and when you want it. This is is probably based on one of the earliest universe, with its accompanying training in extreme contrast to the built in reports database management systems. The idea expense and learning curve could be a as this reporting tool allows you, the users, behind “flat file” is a very simple, single, problem for you and a support problem to create specific, customized reports that mostly unstructured data file, which for them. satisfy needs that are hard to foresee and mirrors pre-computer data storage Now I know many of you are frustrated you design it on the fly. This means that systems such as notebooks, accounts with the wasting-away of the plethora of each report could be different (specialized) ledger pads, and so on. You could wonderful information stored in your in every way. Kind of like the structure of compare it to a desk drawer that holds systems underlying databases. And some, those deals coming into accounting at the virtually everything; just toss it in along you know who you are, have voiced a end of the month but of course these with your small change. While requiring desire to go “Elvis” and use the ultimate reports are more happily received. little effort to put information in, this point and click technology, “Smith and design becomes a nightmare to get the Wesson” to express your disappoint- Executive dashboards information out. That is you would have ments. This user interface that is similar to an to scroll through each and every record But, hold on, before you do that, let’s automobile's dashboard is designed to be searching for the right one. Now to be take a closer look at the problem by first easy to understand. The Dashboard clear, they have put relevant data into discussing some advanced reporting cate- displays graphs and data projecting the separate files and even organized them gories; and then some solutions. current month-end Profit & Loss status. into tables similar to a filling cabinet, It also shows important indicators which does alleviate a bit of the problems Not advanced reporting concerning the data. Based on the but does not remove major obstacles such All DMS vendors provide a limited metaphor of the instrument panel in a as data redundancy (the same informa- (although they may seem unlimited) car, the computer or digital dashboard tion might be stored numerous times in number of built in reports, which are provides a manager with the input neces- different files), slow processing speed primarily available via a menu. For the sary to "drive" the business. Highlights (where is that item stored?) and error- most part they have been carefully with colors similar to traffic lights, alerts, prone storage and retrieval. What is more, designed with specific staff needs, pre- drill-downs, summaries, and graphics it requires intimate knowledge of the programmed and optimized for such as bar charts, pie charts, bullet database structure to work at all as it performance by expert programmers. graphs, sparklines and gauges are usually would be utterly useless to search for, say, These are solutions for specific problems set in a portal-like environment that is sales information in the expenses file. So, or tasks. This makes them quick and easy often role-driven and customizable. Most when you consider how difficult it is to to use. But, when your favorite report allow users to view the high-level results pull data from these “flat file” structured doesn’t provide you with all the pieces of and then drill down into low level, trans- DD 28 May 2009 DigitalDealer-magazine.com
    • action detail. This tool is often referred to Advanced analytics lighting results is a great way to make sure as designed for the few, the proud, the These reporting tools are usually your presentations speak you message and data challenged. referred to as sophisticated analytic speak it loudly. engines. They can access both text and For examples of some of these tools OLAP 'cubes' numeric data and interrogate complex work in the typical dealership environ- An OLAP (Online analytical process- historical data to look for trends, outliers, ment check the “free tools” page on my ing) cube is a data structure that allows and patterns, all through a visual inter- web site www.jimskeans.com. fast analysis of data. The arrangement of face. Using predictive analysis, the idea is data into cubes overcomes a limitation of to mine your database to turn insight into For most dealership management relational databases. You think “flat file” action. Example’ if you have the feeling systems that sit atop flat-file databases, type databases have problems? Relational that you’re Jerry Garcia ties produce the your options are pretty limited. Choose databases are not well suited for near best sales days this is the perfect tool for the vendors’ solutions or contract with instantaneous analysis and displays of determining which design produces the one of the handful of companies such as large amounts of data. Instead, they are best sales and even which days of the Dealer Intelligence and Phoenix better suited for creating records from a week or month have the best potential for Information Management Services. Also series of transactions known as OLTP Jerry’s effectiveness. your CPA firm may offer specialized online transaction processing. There are a In a nutshell these are the main cate- reporting tools, especially if they are an ton of report-writing tools that exist for gories of tools available to use in ATA member firm. Other solutions that relational databases; but slow as molasses retrieving information from your hard- also work with all types of databases are when performing tasks such as summariz- earned database of information and for the “data warehouse” or “information ing the whole database. I think of OLAP applying advanced methods and tech- warehouse” and the “data mart”. These cubes as extensions to the two-dimen- niques in analyzing the data to identify solutions involve extracting data from the sional array of a spreadsheet. For example opportunities, solve problems or main, transaction-based database into a you might want to analyze sales data by "predict" future outcomes. separate server where the data can be make, model, model year, by time-period, easily accessed by analysis or advanced by city, by type of deal, gross and salesper- Alternative solutions reporting programs. But just to be clear son, and compare the actual data with a Available advanced reporting tools vary this type of approach is suitable for all budget. These additional methods of amount DMS providers. But, all have database designs. For example AutoSoft analyzing the data are known as dimen- one thing in common. That is they facil- does this automatically and in a way that sions. Because there can be more than itate a transfer of information from the is transparent to the users. In any case three dimensions in an OLAP system the DMS database into an MS-Excel spread- once you have moved to a relational data- term hypercube is sometimes used. While sheet. Why use Excel? First, it is universal. base be it a warehouse or the DMS there an extremely useful tool for a dealer to Lots of people use Excel so the user a large number of reporting tools that analyze large amounts of data, in my knowledge base is huge and for those cover the gamut of advanced reporting opinion for the typical user this tool is who are not knowledgeable training is and for most systems these can be great for analyzing, say your e-harmony easy to come by. Also once you master the purchased and implemented, independ- power dating schema. built in reporting functions such as filter, ent of the DMS provider. advance filter, pivot-table, etc.; There are Dynamic drill-down a host of advanced reporting modules It’s an expectation thing OK, just a quick clarification here. For available for purchase that provide Of course no one expects you or your advanced reporting purposes, to drill enhancements and automation to those staff to be conversant in all aspects of down means to move from summary built in reporting tools which for the DMS database design. And why should information to detailed data by focusing most part make it easier for the casual you be? You and your staff are retail auto- in on something that could explain that user to get results. motive experts, not experts in database “unexpected result” that caught your eye Now for me content is king and when design theory and implementation. But on the summary portion of the report. it comes to pulling information from the you should know enough about the data- ADP and Reynolds have done a great job transaction database more is better. This base that is the foundation of the DMS building this functionally into their means the more information you can you use or are investigating to purchase in advanced reporting. The power here is the include in your download the greater order to frame your expectations for its ability to investigate information in number of analysis options available. I utilization. That is how the different data- increasing detail. That is, find not only like to download large selections of data base designs affect the way the DMS fits total sales, but also sales by zip code, by and use Excels built-in tools to select data into your business plan; for both usability product, or by salesperson. In other words from the various worksheets of extracted and for the cost to deploy and use. it is more effective to arm yourself with the data; join and reformat the information Now that you have come this far with information gained from the drill-down into a professional, extremely useful, easy before performing the grilling-down. to digest report. Reformatting and high- continued on P-DD33 DigitalDealer-magazine.com May 2009 DD 29
    • D IGITAL Dealer DMS WORKSHOP Paul Gillrie Check your Excess Computer Baggage! I t is very likely that your business has factory without a DMS interface and it vendor? No dealer should be expecting changed appreciably since you last will affect your cash flow. In these cases, an increase. The only question is, “How contracted for computer services. If you will find that your staff will need to much less?” In almost every case, your you take some time now to assess your “double-input” to accomplish even cost for the same services should be less, current technology situation, you can simple tasks. When tasks that are even with your current vendor. Any addi- make the right decisions for the future. routinely automated become more labor- tional cuts in services should result in an As your current commitments wind intensive, you increase your costs and the additional reduction. Vendors are fight- down, you should ask yourself the fol- chance of errors. You should also ing hard to maintain their revenue lowing questions before you assume any consider the deleterious effect on your streams and will employ a plethora of new obligations. cash flow of any delays or errors in DCS tactics to hang on to your monthly inputs. Rebates and warranty claims are check. You need to fight back harder and 1. Do your current discounts and just two of the receivables that could be smarter than ever before. concessions reflect these global reduc- delayed. Between holdback, rebates, tions? Beginning in 2005, the emergence floorplan incentives, warranty claims, 5. Do I have a copy of all the rele- of the second tier vendors was finally new car prep costs and paid commis- vant computer contracts? Nearly every acknowledged by the giants that domi- sions; it is not unusual for a dealer to vendor has made crucial changes to their nated the DMS world for decades. As the experience initial negative cash flow contract provisions recently. They are new players began to erode this de facto when a new vehicle is sold. Full DCS trying to find ways to hang on to oligopoly, there was significant down- integration helps to alleviate this customers they have in a period of fierce ward pressure on computer prices. problem. competition. If you don’t read, under- Dealers sometimes compare their tech- Additional factors that must be assidu- stand and seek modifications to these nology costs to other dealers they know. ously evaluated with a smaller vendor are more perilous contracts, you will find This method is seldom effective. Do you fixed operations offerings (especially if yourself in an uncomfortable, possibly know in detail what actual solutions you have a large wholesale parts opera- untenable position down the road. these other dealers are using? How do tion), front-end (CRM and BDC) Check your current contracts now for you know what kind of deal they were solutions, third-party integration and possible problems (automatic renewals, able to negotiate? This is one area where data management and archiving. non-cancelable maintenance, etc.). Be some professional help may be in order. sure your rights are not abridged. Five 3. Did I build extra capacity into years ago, desirable contract addenda 2. If you choose a second tier my computer system that I never actu- were mostly centered on extra price vendor, will you be able to efficiently ally used? As recently as a year ago, protections and future costs. Current operate your business? There is a lot of dealers were routinely adding extra conditions require you to push for much misinformation out there and it’s hard to capacity as they configured a new DMS. more fundamental changes. Be assured know what to believe. One of the major Dealers were acquiring new points and that these changes are massive and you considerations, although certainly not adding franchises as their core business proceed with peril if you choose to ignore the only one, is the integration each continued to grow. To put it gently, this advice. Before you sign any DMS system provides with the manufacturers things have changed for many dealers contract, it’s smart to have it reviewed by you represent. Don’t accept verbal assur- and there are opportunities for savings if someone who is familiar with these ances; contact your manufacturer for they can eliminate excess resources. If contracts and how they can go wrong. verification. Many DMS providers you have closed or sold a point, seen a cannot provide integration with DCS reduction in sales, staff and fixed opera- 6. Does my computer have the and some bend the truth when they tions, you should explore your options capacity and power to serve my needs claim to be “approved”. Some say they and slash some costs. You must deter- until the end of my current contract? are right on the cusp of approval. A mine precisely where to get the most Be careful if your vendor rep says you vendor may say they have integration savings and how deep to cut. Scalability don’t need a new computer. He may tell and then offer it only through a patch- is the new watchword. you that he just wants to “renew your work of third parties. contract” at the same price you are Why is this so important? It is almost 4. How much lower will my bill be if impossible to communicate with the I choose to renew with my current continued next page DD 30 May 2009 DigitalDealer-magazine.com
    • DMS, Gillrie (continued from P-DD30) Internet Sales, Webb (continued from P-DD15) paying. In normal times, this sounds like drive away to give it their one last shot. do you want to come up with the a perfectly reasonable offer. But by now New school: The Columbo can be destination fee/Internet negotiation you know that the price is too high and used effectively in two different ways fee, etc?” They’ve spent time with the terms are, indeed, not the same. Still, within the Internet lead process. The you and are invested in the sale and some dealers will think this is an attrac- first way, and most simple to create, is the car. They will usually pay a tive alternative. It is not. Buy into this the use of a pop-under coupon/certifi- portion of the fee, bringing in more suggestion and you could expose yourself cate. After a customer has visited your profit on the deal. Either of these to the “mandatory upgrade”. Remember site and they are closing out of their tactics will give your dealership a bad that the actual computer (server) is the browsers, there is just one more little reputation in my opinion. least expensive part of the DMS equa- attempt for you to lure them back. tion. A state-of-the-art server for a large Whether it is an additional discount The time bomb dealership (or group) should probably toward a vehicle or a promotion to Old school: When a customer is cost no more than $6,000 in the real receive something free for inputting about to leave before purchasing a world. But, if you buy it from a vendor in their information, it is one more way to specific car, the salesperson tells them it the middle of a contract, it can cost up to grab them. will not be available if they walk out. $300,000! Anytime you sign a new The second way a Columbo is effec- Whether it is a ‘today only price’, or that service agreement with your vendor, you tively deployed is by having an e-mail another customer is coming to pick it should insist that it include the latest message (preferably a video message) up, or that it is being transferred to a hardware technology. This prevents the from the owner/GM with a personal ‘sister store’, it won’t be here when they vendor from discovering a “computer touch. It should let the customer know get back. It attempts to force a decision. insufficiency” halfway through your that the primary decision-maker in the New school: When e-mailing a contract and compelling you to exercise place understands they submitted a prospect an Internet price, ISMs can one of these excruciating options: lead a little while back. Not only does attach a statement saying that the • Upgrade it at a huge premium. (You the message offer to answer any newly Internet pricing changes every month have no leverage at this point and there discovered questions, but also it should and offers the prospect a ‘good until are no real market forces in place to hold offer a specific value just for mention- date’. Then, toward month’s end, it down the cost.) Or, ing that particular video. It makes the gives the ISM the ability to call/e-mail • Sign another contract extension to get customer feel that they have a connec- and ask if they haven’t yet purchased, the enormously inflated cost of the hard- tion directly to the top. would they like a new, updated quote ware reduced to just seriously excessive. when the pricing changes. The same The ladder can be done for incentives. This is a By keeping the old hardware, you Old school: As a customer agrees to tactic to have a specific reason for the didn’t save much money but you gave up a deal, the salesperson is told by the dealer’s follow up with the e-lead. your strong negotiating position without manager to put them on the ladder. Even with the industry turning getting anything in return. The only The salesperson then has to go back online, there are still lessons to be winner was the DMS vendor. and apologize that they forgot about an learned from our predecessors. Ultimately, dealers have never had as extra feature/accessory on the car and it Whether right or wrong, these old many choices or as much leverage as they will cost the customer a couple school tactics do have new applica- have today. Don’t squander this potent hundred more. The customers usually tions in today’s online market. The advantage. Heed these suggestions, get relent. Then, later, they say they’ve newest performers in our dealerships some help and finally take control of reviewed their credit and it won’t be the can still benefit by having a few tricks your DMS costs. payment they expected because the up their sleeves. higher rate raises the monthly expense Paul Gillrie is North America’s leading another $20 or so a month. Each time Joe Webb is the president of consultant and advocate for automobile you speak to them, you put them on DealerKnows, LLC, specializing in auto- dealers in their quest to reduce technology the proverbial “ladder” taking them motive e-commerce consulting and expense in their dealerships. He founded higher and higher. assisting dealers and vendors with the The Paul Gillrie Institute in 1992 and this New school: This also is used two advancement of their online efforts, solu- scrupulously independent research “think ways in Internet sales, but I don’t tion successes, and processes through tank” now provides dealers and their advi- approve of either. One way to put an hands-on training. He has worked in the sors with the most current, accurate analysis Internet customer on the ladder is by dealership trenches and now shares his and consumer reports on the technology sending them a quote on the vehicle knowledge of e-commerce, online advertis- issues facing them daily. they desired, minus one option; or ing, and Internet initiatives nationwide. telling them their vehicle is in stock, but not telling them your in-stock If you wish to discuss this article with model also has a sunroof for If you wish to discuss this article with other dealers, or with the author, instance. You get them in and hope other dealers, or with the author, please go to the “Discussion Forums” to sell them on the feature, putting please go to the “Discussion Forums” at www.DigitalDealer-magazine.com them on the ladder. The other way to at www.DigitalDealer-magazine.com and enter the “DMS” forum or put a customer on the ladder is by and enter the “Internet Sales” forum or e-mail him at pgillrie@DigitalDealer- saying “plus fees”. The customer e-mail him at jwebb@DigitalDealer- magazine.com. expects the fees to just be taxes, but magazine.com. is asked just prior to signing, “How DigitalDealer-magazine.com May 2009 DD 31
    • Internet Sales, Sura (continued from P-DD12) 10 percent. This operation is now aggres- • Work with web companies that effectively for Lexus but it certainly is with General sively going after the sub-prime optimize your site. Use the following analyt- Motors. The problem with the customers through print. One comment ics tool: www.compete.com to determine approach that one web site size fits all, is that summed up the entire conversation the number of unique visitors that you the dealer loses the opportunity to was, “I didn’t need the Internet five years are getting compared to the other dealers brand himself in the market and the real ago and I don’t need it today.” in your area. relationship is not between the dealer What about the social sites? I hit this • Determine how well the site is and the web company even though the aggressively last month. I received feed- indexed by the web site. Example: the dealer is paying the invoices. back from a General Motors dealer who site is www.johnbrownchevy.com. Enter I encourage each of you to adapt to the sold a pre-owned Porsche Cayenne sport johnbrown.com into the Google search rule of the new market. It is more power- utility vehicle to a “friend” in the dealer- and look at the numeric count in the ful than you. Recognize that the Internet ship Facebook site. The customer had top right hand corner. Compare that is here to stay. It isn’t a fad. Learn to play become frustrated with the trade value of count with the other dealers in your the game with the new rules. the GM product at the Porsche opera- area. I have looked at a total count of tion. The Internet director from the GM indexed sites as low as five. The number Phil Sura is a VP of the Automotive operation exchanged some e-mails and should be in the thousands for a large Division of UnityWorks Media. delivered the Cayenne within 72 hours metro operation. and kept the customer’s business. • Demand customer service or fire the What about web sites? The dealer who web company. I understand that some If you wish to discuss this article with has a cookie cutter approach with his web OEMs force their dealers to work with other dealers, or with the author, site will get cookie cutter results. The one specific web company. I don’t please go to the “Discussion Forums” average customer visits seven dealer web believe that this is a good practice. Most at www.DigitalDealer-magazine.com sites during the sales process. How can of the larger dealers are complying with and enter the “Internet Sales” forum or you leverage that reality? the wishes of the OEM, but creating e-mail him at psura@DigitalDealer- • Work with web companies that allow multiple sites to promote their opera- magazine.com. flexibility. tions when possible. This isn’t an option Internet Sales, Ryan (continued from P-DD13) comes in. The key lies in shifting the sales benefits of Certified programs that consumer optimization technology as focus from haggling over price and currently have low consumer awareness well as by training them in the techniques payment to focusing on a technique such as ‘seven-year, 100,000-mile of consumer optimized selling. In doing called “value closing.” Like consumer extended warranty’ and ‘24-hour road- so, you should be in a position to work optimized advertising, in this more trans- side assistance’. out a straightforward deal relative to parent approach to selling, retailers 4. Sell the value of your pricing – If you price, payment, trade-in value and cash harness the power of the Internet to sell have done a good job in the above down. This scenario will better enable the value of their vehicle and price by emphasis points, selling your price should you to close more deals more profitably emphasizing: be easy. In addition, if you are already while gaining a higher level of customer 1. Vehicle highlights – Focus the priced to be “in the game,” you should satisfaction. And your customer will drive customer on the high value equipment also be in a position to sell the value of home in a car that meets his needs while that differentiates your vehicle from the price you are offering as it compares feeling good about the value for the price similar vehicles on the market. This to trusted sources such as Kelley Blue that was paid. Everyone wins. includes equipment and options such as Book, Edmunds TMV and J.D. Power ‘heated seats’, ’rear entertainment’, and Information Network as well as the Pat Ryan Jr. is the co-founder and chief ‘built-in navigation’, as well as lifestyle vehicle’s own pricing history (i.e. original executive officer of First Look by features such as ‘family car’, ‘sporty’ or sticker price, your original list price, INCISENT Technologies. ‘tough utility’. average selling price). 2. Quality and risk profile – Highlight By unleashing the power of selling vehicle attributes that have the potential value or consumer optimized selling, to reduce risk and reinforce vehicle retailers can achieve the following bene- quality. This may include ‘Carfax one- fits: If you wish to discuss this article with owner’, ‘still in original warranty’ or ‘low • Drive more sales other dealers, or with the author, mileage’. • Set up stronger gross profit please go to the “Discussion Forums” 3. Certified pre-owned – Highlight • Improve CSI at www.DigitalDealer-magazine.com vehicle certifications, which provide a Bottom line: Consumers don’t have to and enter the “Internet Sales” forum or general sense of quality (better inspected, be the only ones who are Internet e-mail him at pryan@DigitalDealer- reconditioned, etc.). It is critically impor- empowered. Now is the time for dealers magazine.com. tant to emphasize some of the powerful to empower their own teams with DD 32 May 2009 DigitalDealer-magazine.com
    • BDC/CRM, Barker (continued from P-DD26) lot traffic, etc. Nothing better to do? No one week in those stores with the owner’s CRM/BDC processes. If you wish to strategy or plan or most importantly lead- blessing and I could set the stage for great- receive a copy, e-mail me and I will get it ership? And, no one greeted me much less ness and then watch the difference. We, out to you. Bam. said, “Boo”. Wow, here I am the only non- not the economy are our greatest enemy. employee human being on the entire lot It is time for a little corporate process lead- Chuck Barker’s experience ranges from an and I am ignored? I also called each of ership training in this business. Survival of executive with a Fortune 200 computer cor- these stores before visiting and performed the fittest means those who recognize they poration to the automobile business. He has a mystery call to see how they handled the need to know how to become the fittest. held positions as business development man- big money phone inquiry. On a scale of Bust through those old school paradigm ager, sales manager, acting GM, ADP one to 10, 10 being the best call perform- anchors and refresh your store to become executive regional manager specializing in ance, they all scored two to four. Same old great and bring newness to the way you CRM and his own current company, Impact thing, “Sure, we got one, come on down do business. Marketing & Consulting Group, LLC, and ask for me”. I would have eliminated Lastly, as the leader, you must develop located in Virginia. His firm delivers CRM all of these stores from my potential “deal- the discipline to stay the course. process strategies, 21st century CRM sales ership buy from list” due to poor call Whatever you audit not only needs to be training, CRM e-business deployment and performances. All of the GSMs or GMs done on a consistent basis but also over a CRM management leadership workshops. however told me they were doing good. long period of time. If you picked an More information can be located at his web Help me define what the word good important activity (follow up, Internet, site: www.impactgroupcrm.com. means because I am still struggling with floor up, owner base, etc), this commit- their comments. Unfortunately, these are ment should be easy. People need and the guys who will never deliver their deal- want the stability that this type of inspec- If you wish to discuss this article with ership to the promise land of “doing great” tion brings. Remember, the best days in a other dealers, or with the author, because they simply do not get the big successful dealership are like the movie please go to the “Discussion Forums” picture required to see the little pictures. Groundhog Day: predictable and repeat- at www.DigitalDealer-magazine.com Just another car dealership. How many able. Your ability to sustain what you start and enter the “BDC/CRM” forum or have you sold today, Jimmy? Where has is the essence of inspection. I have put e-mail him at cbarker@DigitalDealer- the leadership gone to anyway? Did they together a responsibilities list for various magazine.com. never get it or just stop trying? Give me positions in the dealership as it relates to DMS, Skeans (continued from P-DD29) me down the “DMS design theory database design allows for use of the drill-down functionality. Once you yellow brick road” let me share with “expert” reporting tools to do the job get past the familiar look and feel I think you the most important aspect of this for you. They have certified a nice list of you will be surprised at the advances they whole discussion. The real events that companies who’s reporting and analysis have made. create the differences between DMSs tools work seamlessly with their data- take place after the shrink-wrap comes base. These are well known and Jim Skeans is the president of Jim Skeans off the database software package. For respected names such as Chrystal Consulting Group LLC and has been in the example; ACS’s implementation of Reports, Sequel and Star Query. I really automobile business for more than 25 years. “Visual Fox Pro” is very different from admire the ACS approach. Not only Jim is a former senior consultant for an Adam Systems implementation of does their database design allow for international automotive consulting group “Visual Fox Pro”. This is why, when I connectivity to the report program of and has served in all of the traditional deal- am performing a CompuSelect service your choice they have also made the ership management and staff positions as for a dealer or dealer group considering information voyage from database to well as director position with a large an alternative DMS I pay particular to excel as seamless as it gets. Another national dealership group. this issue. The thing is CompuSelect favorite, AutoMate has a spreadsheet does not so much choose the system built-in with functionality such as “for you” as much as it provides the key providing a pivot table wizard that they information that allow and your staff to start for you well into the pivot table match expectation with the DMS process making it easier for the “non- provider’s reality. The twenty plus alter- Excelpert” to use. native dealership management systems OK, I feel like this only scratches the If you wish to discuss this article with provide solutions that run the gamut of surface, but it is a good scratch. I hope I other dealers, or with the author, database design. It is extremely impor- have piqued your interest a bit and have please go to the “Discussion Forums” tant that their strengths and weakness inspired you to “look under the hood” of at www.DigitalDealer-magazine.com are fully illuminated before making the DMS you are using or investigating. and enter the “DMS” forum or your decision. Also, please take another look at ADP e-mail him at jskeans@DigitalDealer- For example Arkona’s does not and Reynolds’ reporting tools that have magazine.com. provide advanced reporting. But, their just been recently introduced, especially DigitalDealer-magazine.com May 2009 DD 33
    • Internet Sales, Sher (continued from P-DD16) tation of the sender prior to opening the message or video. As the economy message. changes, so should the way you do E-mail receivers use four specific business. You need to be able to update components to measure the reputation e-mail templates and come up with of the sender. These include number of new buying motives for the customers Advertiser ......................pg # complaints, number of bounces, to get interested enough to respond. It number of messages sent, and the size of should be a habit to tweak the process the messages (see Figure 1, page DD14). once a month, even if it includes ActivEngage ......................11 If your reputation reaches a specific changing a sentence in an e-mail threshold, e-mail receivers will begin to template. After all, change is a beautiful AutoListener......................27 block messages from you. The thresh- thing and it does not keep you boring. olds are usually based on an algorithm There is a lot more downtime in the of reputation measurement device per showrooms right now, which means Auto Point ..........................3 message component over time, and, as that a follow-up process should start to such, the reputation might be have more phone calls scheduled and AutoTrader.com ..................2 computed using an algorithm of these calls need to have a purpose. If bounces from a particular sender IP you are a manager and business is slow, AutoUSA............................36 address per hour or complaints from get on the phone and do some follow messages containing a certain link per up to help drum up business. You will minute (see Figure 2, page DD14). gain more appreciation from your staff BZ Results/ADP ....................5 It is important to keep in mind that by working together and your voice each e-mail receiver has different rules can be instrumental in getting a cars.com ............................35 for determining reputation so the customer in the showroom. When I threshold for blocking messages will was an Internet director, my processes DealerPeak (Widestorm) ....6 differ amongst them. included a phone call from a manager E-mail receivers score reputation on on a certain day and, believe me; two areas of the e-mail itself, the enve- customers were impressed and came in DealerUps ..........................25 lope and the body of the message. The to buy cars. If you do not hide behind envelope contains the message’s header the desk and get active, you will have Homenet..............................7 and the source server’s IP address, host more energy and excitement, more name, ‘from’ address field, ‘reply to’ business, and almost no turnover in IMN Loyalty Driver..............9 address field, etc. The body of the your department. message contains the e-mail text, In a nutshell, it is important to have images, and links to external web sites the right people employed at the dealer- Sandi Jerome Consulting..19 in either plain text or HTML format. ship who will be responsible for Both the envelope and body must marketing the dealership to the online warrant the attention of e-mail community and maintaining the online Internet Sales, Martin (continued from P-DD14) marketers, as each part needs to be reputation of the dealership. In addi- transparent to the extent that no traces tion, it is important to update follow-up deliverability issues, there are many of the ESP appear in either area. processes in order to make the Internet things that the sender must do to sale process more effective. Practice protect the reputation of his or her Peter Martin is the CEO of Cactus Sky these three important routines and company. E-mail marketers must make Communications, Inc., one of the premier watch your results grow. the investment in their own deliverabil- e-mail marketing agencies in the country. ity by understanding and properly He is considered an e-Marketing expert Stan Sher is currently working on consult- managing their reputation in order to and regularly speaks and trains for NADA ing dealerships on best Internet sales have the best deliverability possible.. and NIADA on both e-Marketing and practices with his company, Dealer special finance marketing. He is also the Internet Sales Solutions (DISS). He is also The components of a good reputation founder of AskPatty.com, a popular auto- an account manager for RedNumbat, a E-mail reputation is not determined motive advice site and is the foremost pricing software that generates a price by one single thing; it is the sum of authority on how to sell cars to women. quote in seconds. many data points gathered over time. While various methods for reputation scoring are used today, the “report If you wish to discuss this article with If you wish to discuss this article with spam” mechanism has given e-mail other dealers, or with the author, other dealers, or with the author, receivers the greatest amount of data by please go to the “Discussion Forums” please go to the “Discussion Forums” which to gauge the sender’s reputation. at www.DigitalDealer-magazine.com at www.DigitalDealer-magazine.com The same foundation of “user-gener- and enter the “Internet Sales” forum and enter the “Internet Sales” forum or ated content” that fuels Web 2.0 sites or e-mail him at pmartin@Digital e-mail him at ssher@DigitalDealer- like MySpace, Flickr, and Digg.com Dealer-magazine.com. magazine.com. helps e-mail users determine the repu- DD 34 May 2009 DigitalDealer-magazine.com