AutoSuccess addresses the specific, researched needs of new car and light truck dealerships by providing entrepreneurial, cutting-edge, solution-based editorials to increase dealership profits and reduce expenses AutoSuccess, magazine, sales, new, used, selling, salespeople, vehicle, dealer, dealership, leadership, marketing For Similar content visit http://www.autosuccesssocial.com/

1. Visit us online at www.AutoSuccessOnline.com
October 2008

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5. October 2008
LOW PROFILE SELLING
8 TomHopkins
Isaiah 9:2
The people walking in darkness have seen a great
THE ONE THAT GOT AWAY
10 MattBaker light; on those living in the land of the shadow of
death a light has dawned.
PAUL CUMMINGS: MAKING A DIFFERENCE
HOW HE TURNED A DREAM AND A $75 BROCHURE INTO A GLOBAL
EDUCATIONAL POWERHOUSE
12 An Interview With
PaulCummings
address:
3834 Taylorsville Rd.
Building A, Ste. 1B
Louisville Kentucky 40220
8TH HABIT LEADERSHIP
Unleashing Potential 16 StephenR.Covey phone / fax:
877.818.6620 / 502.588.3170
UNINVITED PARTNERS
17 SteveBrazill web:
AutoSuccessOnline.com
AutoSuccessPodcast.com
TURBULENT TIMES
18 DalePollak team:
Susan Givens
Publisher
WHO SAYS BUSINESS IS BAD?
22 MarcSmith sgivens1@autosuccessonline.com
Thomas Williams
DON’T LET PHONE-UPS SLIP THROUGH THE CRACKS
Recapture Missed Opportunities in Real-Time and Turn Them Into Sales 24 LauraNoonan VP & Creative Director
design@autosuccessonline.com
25
YOUR MOST OVERLOOKED SERVICE BUSINESS BrookeSamples Dave Davis
Editor and Creative Strategist
ddavis@autosuccessonline.com
THE CULTURE OF TEAM
Part 2 - What Every Used Car Manager
Should Know About the Service Department
26 JimAdams Brian Ankney
Sales-Improvement Strategist
super6@autosuccessonline.com
THE RIGHT DIGITAL ADVERTISING STRATEGY
28 SusanBurke
John Warner
Sales-Improvement Strategist
WHAT HAPPENS IF I DON’T COMPLY?
29 JasonBlair jwarner@autosuccessonline.com
general information:
info@autosuccessonline.com
INTERNET SALES 20 GROUP X
30 SeanV.Bradley
eNewsletter:
enews@autosuccessonline.com
REINVENTING THE DEALERSHIP WEB SITE:
More Touch Points With Customers Creates Better Business for the Dealer 32 AmyPeck AutoSuccess Magazine is published monthly at 3834 Taylorsville Rd.,
Building A, Ste. 1B Louisville, KY 40220; 502.588.3155, fax 502.588.3170.
Direct all subscription and customer service inquiries to 877.818.6620 or
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Reproduction in whole or part is prohibited without express written consent
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12
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29 26 helping to support...

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7. STS
sales&trainingsolution
TomHopkins
LOW PROFILE
SELLING
Too many people what you knew about a subject. In fact, at why they want what they want. And, that’s
in the automotive the beginning of every school year, most what you really need to know if you are
business do poorly because they think good teachers will ask a lot of questions to going to serve their needs.
selling requires them to be pushy and determine what level of understanding their
aggressive. They think they have to talk students already have about the subject at In some cases, customers will contact
and talk and talk, wearing clients down hand. You need to do the same with any you seeking Vehicle A because they think
until they buy. new client. that’s what will take care of their needs
— perhaps after reading about it in the
Great selling involves being low key. It If you don’t already have a needs analysis newspaper or doing some online research
involves developing the ability to lead list of questions prepared and ready to use or just talking with friends or relatives.
people with questions, rather than push with potential clients, invest some time However, you’re the professional. If all you
them with facts. When you’re talking, in drafting one up. Be careful to make the do is talk with them about Vehicle A and
you’re only spouting off what you already questions conversational. No one wants try to sell that vehicle, you could be doing
know. Truly successful people in this to be cross-examined or feel they’re being them a disservice. By remaining low key
business understand that what really “grilled” for information. However, most and asking questions about their needs,
matters is getting the clients talking about people do like talking about themselves you could very well determine that Vehicle
what they need, then finding a truly good and sharing details of their situations when B would be so much better for them and
solution to their needs among your product they feel you truly care by how you phrase make them happier, knowing that you
offerings. them and that you’re listening to their really listened to them.
answers.
Don’t just tell potential clients about the By making your clients and their needs the
various vehicles you have available. Ask None of this requires aggressiveness of any stars in your communications with them,
them what their goals are. What are their sort. It doesn’t involve talking fast, either. they’ll sense the level of importance you
thoughts about what a new vehicle will do Many consumers have the perception of put on serving them well. When people feel
for them that their current vehicle does not? people who sell as being fast talkers. If they are being taken care of well, they’ll
Not all clients will be easy to work with. they hear that coming from you, they’ll come back to you with repeat business
You’re bound to meet clients who may quickly raise defense barriers. Little alarms and refer their friends and relatives to
have had a bad past experience with will go off in their heads, telling them that you. That’s when you’ve truly made it
another dealership or sales representative. they don’t want to be sold anything. They in this business — when clients think
Their defenses will be high and they’ll be will try to get away from you as fast as “automobiles,” they think of your name.
ready to bolt out the door to shop around if possible and seek out someone who can
you come across like the stereotypical car provide professional service to them, rather Those business people who take center
salesperson. than being controlling. stage for themselves and their products
by being pushy, showy or talkative may
If helping people own the right vehicle The fun part of learning how to appear to outshine the low-key people in
for their needs at an investment they can professionally meet, qualify and present business. But, those who keep their profiles
handle is your professional career choice, products to people is that you are in low and their service levels high are those
you need to see yourself as an expert control, but not in a way that generates fear who will be sought out again and again.
advisor. You want to counsel clients into or alarm. You control your meetings with
the right vehicle for their needs, not just clients by being professional, sincerely
sell them a car or truck. interested in their needs, putting them at
ease and asking a lot of questions. When
World-renowned master sales trainer Tom
Being an educator is an important aspect you get them talking about themselves or Hopkins is the chairman of Tom Hopkins
of the business of selling. Think back to their needs, they’ll relax. When they relax, International. He can be contacted at
your favorite teacher. Most likely that they’ll tell you more about why they came 866.347.6148, or by e-mail at
teacher asked a lot of questions to draw out into your dealership in the first place and thopkins@autosuccessonline.com.
8
www.autosuccessonline.com

9. STS
MattBaker
sales&trainingsolution
THE ONE THAT
GOT AWAY
No matter what area motivated and on-target. By laying out the wholesalers to address a trade-in, or calling
of the automotive issue and questioning the process up front, on banks to solve the customer’s credit
industry you’re coming from, we’ve all each employee is confronted with the concerns, effective communication (both
been plagued by “the one that got away.” importance of timely and true follow-up. internally and externally) is essential when
attempting to positively influence a deal.
So what’s a dealer to do? Start by While motivated facilitators are an While not every deal will work out the
rethinking your daily communication important aspect, don’t overlook meeting way you would like, consider using those
process. Consider implementing morning structure as an indicator of effectiveness. A fully lost sales as topics for upcoming sales
meetings focused on “saving” yesterday’s good first step in any “save a deal” meeting meetings. Situations like these provide
dying deals. “Save a deal” meetings is to address the vehicle in question. perfect case-in-point examples which
are just that — meetings focused on Through further inspection, you may can provide your sales teams with tips on
yesterday’s downs to determine the core realize that the particular vehicle should handling similar situations in the future.
issue and create a course of action to either be written down or let go due to the
redirect the path. inventory age or current market value. In today’s economy, the gas that the
customer consumes just pulling into your
The process is simple. Each morning, a Next consider customer credit rating. dealership should be reason enough to
motivated manager or key decision maker This is often the “make-it or break- follow-up with every one who visits your
from each department sets aside time to it” point, especially given the current store. Yet the reality is that true and timely
discuss the downfalls from the day before. market condition. Ensure that you are follow-up is often a skipped step in the
The goal here is to re-approach the issue fully utilizing all factory incentives and overall process.
with a fresh pair of eyes. By addressing programs, as well as your relationship with
the missed opportunity after a good night’s lenders to help swing the deal in a positive By relying on 100 percent TO (turn over)
sleep, or simply by sharing the problem direction. with no exceptions, dealers can often fool
with others in the dealership, you may themselves into believing that no plausible
be amazed at what you can dig up. From Additionally, take into account the deal ever got away. Wake up and smell the
tips on new bank programs or a niche that customer’s trade-in value. Make sure that coffee; it’s time to re-evaluate how your
was overlooked, all can be key pieces of everyone who knows the market for the teams are handling those deals that didn’t
information to consider when developing a vehicle has had a chance to take a look. seem so possible the day before.
plan to redirect that lost sale. Put feelers out with wholesalers and other
dealers. Remember — one man’s trash Whatever the case may have been,
However, before “save a deal” meetings may be another man’s treasure. reviewing yesterday’s business today with
can be truly effective, one must consider fresh perspective offers an opportunity
whom you have facilitating them. Attitude Finally, think about whether or not all to readdress concerns in a new light.
is an illustration of success. The better decision makers were present. While Get yesterday’s issues out in the open
the attitude of the manager, the better many might have been wrapped up in the by implementing motivational morning
performance rate of the staff and the more emotion of the sale at the get-go, it doesn’t meetings that focus on finding unique ways
profitable the store. Ideally, you are looking guarantee a signed deal at the end. Lack of to secure that deal that almost got away.
for managers or key decision makers within a key decision maker throughout the sales Who knows — you might be surprised
your dealership who displays unprecedented process can be damaging, unless the issue by what you discover while saving the
persistence. They must be fueled by the is promptly addressed and a plan of action business you thought you had lost.
energy and diligence to call the banks and is set to save the deal.
push the deal, or encourage the sales team
to follow up with the customer in question. Once you’ve covered the essential points, Matt Baker is the vice president of sales
what’s the next step? The answer is of G&A Marketing. He can be contacted
Effective facilitation of these effective communication through true and at 866.618.8248, or by e-mail at
meetings will keep the staff timely follow-up. Whether it’s contacting mbaker@autosuccessonline.com.
10
www.autosuccessonline.com

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11. FS
AS: How does an online learning
featuresolution
An Interview With AS: Taylor mentioned they had
achieved the coveted spot of the
AS: Why are you and others so
passionate about this class? system benefit the dealer when
compared to more traditional
PAUL CUMMINGS:
No. 1 Kia Store in the nation since
their association with your firm (see PC: Because it is our belief that you approaches?
sidebar). What would you attribute should always put your money on your
their success to? coaches first. These individuals have PC: First, it is an example of a “Fast
the most dynamic impact on your team Tool” that can be accessed 24/7/365 from
any computer where Internet service is
MAKING A DIFFERENCE PC: That’s simple. Great people.
Great products. Great practices. Great
philosophy. And, of course, amazing
daily. Dealers make a mistake when
they train players first. This “Sustaining
Excellence” content will raise the capacity
available. We’ve found that it’s a great
learning application that can be used to
leadership. of leadership by 20 to 30 percent and that answer questions as they come up, and
HOW HE TURNED A DREAM AND A will allow the team underneath to flourish. to keep a high-level of motivation. The
segments are short snapshots — three to
AS: In your full 360º circle approach Taylor is sending all their managers
$75 BROCHURE INTO A GLOBAL to training and education, where to “Sustaining Excellence.” This is a four minutes in length, with testing built
does leadership come in, if at all? content- and process-rich class. Everything right in — to ensure comprehension. It
EDUCATIONAL POWERHOUSE you learn is supported with a toolkit for definitely works. (see figure 5)
An interview with PC: Immediately after the need analysis, implementation. The class is intense,
PaulCummings we focus our energy on teaching, coaching powerful and based on teamwork. We teach AS: What type of content should be
and preparing the departmental manager people how to perform more efficiently. featured on such a system?
In a recent interview with AutoSuccess approach. Anything less can possibly Without a comprehensive needs analysis, — the leaders — to implement the (see figure 4)
customized program. We do this at our PC: An outstanding online learning system
Magazine, Paul Cummings set the record leave gaps in your education program, all you are doing is guessing what you need will have something for a dealer’s every
straight about his company, his philosophy which may cause system breakdowns and and hoping the training company offers Level 10 Campus. AS: OK, so now the tough question
that I am certain all dealers ask you: need. Paul TV Live delivers this. There is a
and his unconventional approach to potential failure. These mistakes can easily the right solution. Knowing is better than complete library for all dealership
education. be avoided by doing a dealership-wide guessing — always. AS: Is this program a class focused How do you sustain the program
needs analysis. (see figure 1) specifically on leadership practices back in the dealership? continued on pg. 14
Paul was asked a series of questions AS: Describe how your needs and management principles?
about his 25 years as a teacher. In his AS: Is needs analysis an example analysis program works, and why it PC: This is something I am so excited
usual candid style, Paul gave us a peek of one of the “Fast Tools” for works for dealers. PC: Yes and no. The class is called about because traditionally 4
into the vision and mindset that has made dealerships that you mentioned “Sustaining Excellence” and the name says this is where training
a difference to more than one million earlier? PC: First, everything is Web-based, and for a lot. The program is designed to teach any programs fall apart. We
students since he opened his company. that reason, simple and quick to complete. individual the principles and strategies they have solved this dilemma
Intense, direct, passionate and charismatic PC: Yes, it is one of the “Fast Tools,” The analysis is customized, and provides need to become a better leader in every by using our customized
to those who know him, Paul addresses and a very important one. Let me explain. the dealer with a link and a password for area of their life. It is a mind-bending, online learning system that
important issues to our industry. When a dealership seeks assistance from a every employee. People are busy, so the life-changing experience. The program is continues to deliver our
training company, they need to realize there survey can’t take a long time to complete, filled with the most challenging content unique training approach
AutoSuccess: Paul, how does is no “one size fits all” process out there and each person contributes to their ideas and situational exercises you will ever — Paul TV Live.
one stay fresh and relevant in the that truly works. Tons of those programs and opinions with anonymity, allowing encounter. It is extreme education that
education business? are sold, but ultimately the failure leaves a each employee to speak freely and with produces a lifetime of results. (see figure 3)
bitter taste in the dealer’s mouth. No one confidence. Everyone’s opinion carries the
Paul Cummings: I believe our likes to waste their money, especially when same weight, and people love knowing AS: Is it true that some dealers have
willingness to adapt and evolve in these it could have been avoided. This is where their opinions matter. sent all their employees through 2
changing times is one of our greatest spending the time up-front on a thorough the program after they attended
strengths. In fact, in my 25 years in this needs analysis comes in. AS: What happens after the themselves?
3
industry, I would say we are in the most employees finish the survey?
exciting age as it relates to the subject of AS: How does a tool like needs
PC: The beauty of technology is the data PC: Yes. In fact, we have on more than
change, and we have to adapt to that with analysis solve that problem for a
is collected and assimilated in real time. one occasion had dealers send their teenage
new and fresh perspectives. dealer? Is it a real solution that will
As soon as the last survey is completed, and college-age kids and grandkids through
help them avoid the system failure
Clients today are looking for “Fast the needs analysis report is created. This the program. This program will equip any
and potential waste of time and
ToolsTM” they can deploy quickly and with is where the real work comes in. Our individual for greatness and help them
money?
confidence. Their real world environment content managers and teachers analyze the acquire the tools they need to become the
is too fluid and fast paced to implement PC: Our approach is proven. We input then design a customized education best leader they can be.
tools that cause a slow down in operations. have a Web-based needs analysis program that meets the targeted needs of the
We’ve worked to stay on the leading edge product and survey company, called client. That is exactly how we began with AS: How often do you teach the
of responding to this need by designing QuestionForward360, which provides the Taylor Group and one of the reasons class, and who should attend?
tools that can be implemented and executed dealers with a comprehensive gap analysis that they are sitting as the No. 1 Kia store in
quickly. The great news is that our clients of their entire business operation. Dealers the nation (see sidebar on pg. 14). PC: We teach the class eight times per
are responding favorably, and the results will enjoy this process because it is fast, year, and we also schedule private events
have been staggering; in the last 18 months, affordable and accurate. This approach AS: Is having a needs analysis for larger groups and OEMS. As far as
we have added more than 1,000 new clients allows targeted education to be designed performed an expensive process? who should attend, I always ask dealers the
to our customer base. to meet their real needs and close real gaps same question to determine that answer. If
— gaps that, frankly, are costing dealers PC: The truth is, it is one of the best you had to start over tomorrow with only
AS: Can you tell us how to lose valuable assets such as people, investments a dealer will ever make. Not yourself and five other people, who would
you approach your training customers and money. (see figure 2) knowing the source of your gaps is costly. they be and why? Whatever the answer,
relationships? This uncovers all your hidden activity- that is the group I want in attendance.
No two companies are alike, no two based cost that you can’t locate on a This model has produced quantifiable and
13
5
12
PC: Our approach is a 360° full-circle companies have the same issues or people. statement. The ROI is amazing. qualitative results for over a decade.
DTX is a registered trademark of Detroit Trading Company.

12. FS
PC: They love the fact that within our AS: Paul, thanks for the time and
featuresolution
personnel specific to their roles, with
leadership and management training system every education segment that is the information. By the way, did you
featured from “basic” to “advanced” viewed is followed by a test to insure really start the company with a $75
content. Customized content such as people are learning. All the course brochure?
telephone skills training is available, along materials, workbooks and toolkits
with F&I best practices, prospecting and are included as PDF files that can be PC: Absolutely I did, and the truth be told
follow-up strategies, recruiting processes, downloaded at no extra charge. Our system I also started the company with a brochure
coaching strategies, assessments of course even allows for internal communication that had a few misspelled words in it. I
an exhaustive curriculum for sales and and promotes social networking between was in such a hurry to get started I didn’t
service and so much more. In fact, we even team members. The most important feature, proof the document. The good news is we
host 52 “Morning Meetings” for the sales though, is that the value and the results turned that into a lesson and kept our eyes
department that can be viewed weekly should far outweigh the associated cost on the big prize. All we ever wanted to do
as a set-up for internal dealership sales - with Paul TV Live it does. was to make a difference. We have been
department meetings. uncompromising in our approach. We have
AS: Paul, your mission statement is remained unyielding in our commitment to
AS: What about accountability and “Changing Lives Through Dynamic our core values. I have stayed a relentless
measurement within the online Instruction.” What does that mean student and a passionate teacher. We have
education system? to you? built a company that cares past the customers
check. Our future is bright because our
PC: Our advanced online learning system customer’s futures are even brighter. Thanks
has enhanced reporting features where, PC: I have always considered teaching a
for your interest and questions.
at the push of a button, managers can privilege. When I started this company,
view individual, department or dealership I promised myself I would never bore
progress within the platform. It makes a a student with a dull teaching style. I
manager’s job easier. wanted to be a real difference maker and I
believe that goal has been accomplished. Paul Cummings is president and CEO of
AS: What other features do dealers Comments like the one from Taylor are Paul Cummings Enterprises. He can be
look for in an online learning humbling and remindful of why I do what I contacted at 866.618.8365, or by e-mail
system? do the way I do it. at pcummings@autosuccessonline.com.
AutoSuccess spoke with one of Paul’s clients, the Taylor Organization in Toledo, Ohio, to get their
view on the value of training. Taylor has three name plates — Cadillac, Kia and they recently
launched a new point with Hyundai. General Manager Stephen Taylor II and New Car Manager
and Trainer Ed McNeal shared some comments with us.
Taylor: “Taylor Kia had the opportunity to join forces with Paul Cummings and his team
at the beginning of 2008. In our short relationship, Paul and his team have helped thrust
our dealership into the coveted spot as the No. 1 Kia dealership in the country! With an
inexhaustible source of cutting-edge information, Paul and his team focus on strengthening
individuals while advancing strategies that enhance the overall team performance.
McNeal: “If we were to say that Paul Cummings is an extremely gifted communicator and
teacher and that he possesses a rare ability to connect to his audience in a way like none
other, we would be selling his unique gifts short. He is deeply passionate about impacting
lives and does so every time he speaks. To have Paul and his staff on your team is to equip
your team with all the tools to win at the highest level. Paul Cummings and his team have
made a tremendous difference in the lives of our team members and in our bottom line.
What more could you ask?”
We also spoke to the Tim Shults, owner and president of the Shults Auto Group, Shults Auto Group represents 19 new vehicle franchises with stores
located in New York state and Pennsylvania.
Tim Shults: “The Shults Auto Group is more motivated and energized than we were just six months ago when we asked Paul Cummings
and his ‘Level 10’ team to become our training partner. Paul’s organization has inspired our nine-store operation on personal, professional
and business fundamentals resulting in measurable successes at every level. His genuine interest and enthusiasm touches lives and
business practices throughout the operation, not just the senior management. Our dealership teams are focusing on shared goals and
14
improved practices that continue to increase our efficiency in all aspects of customer service…and, yes, bottom line results.”

13. LS
StephenR.Covey
leadershipsolution
8TH HABIT LEADERSHIP
Unleashing Potential
The business culture In 1979, the U.S. Olympic Committee but we’ll be the best conditioned.” He
in which we live and hired a college coach named Herb Brooks emphasized mental conditioning, requiring
work has “softwared” us for mediocrity. to lead the U.S. hockey team to Lake quick and accurate playmaking from the
Placid for the 1980 Winter Olympics. For team.
To be mediocre is to fall far short of our 20 years, the Soviet Union had dominated
potential. The startlingly gifted “hardware” Olympic hockey with a high-powered, But most of all, he connected to the spirit
we each have — a body, mind, heart and highly cohesive team that simply bulldozed and the heart of each player. “Ten, 20, 30
spirit unique in the universe — is rarely any competition. The Soviets were the best years from now, you don’t want to have left
called upon to do much more than fulfill a hockey team in the world, but Herb Brooks anything on the table,” he told them. He
job description — the “software” handed to was determined to beat them. asked for everything they could give.
us by the organization. The vast untapped
capabilities within us too often atrophy and Brooks taught each member of his team
The team he assembled had little promise
waste away. how to pay the price of excellence. Over
of doing it. They were young college boys
the course of several grueling months,
who had never played together. College
Superb leaders know this, and that’s why these college boys from all over America
rivalries simmered among them. Few of
they seek to unleash the potential of every caught his vision. Instead of a disparate
them had professional ambitions — they
team member. The “command-and- group of players from different universities
just liked playing hockey. And Brooks had
control” Industrial Age software deceives with different life goals, they became a
only seven months to mold them into a
many organizations into believing that lean, powerful team defined by one wildly
world-class team.
wealth lies in capital and equipment, not in important goal.
people. Great leaders realize that they have No one expected Herb Brooks to compete On February 22, 1980, hockey team USA
the power to rewrite that software. with the powerful hockey teams of the faced the “Mighty Red Machine” from
Eastern Bloc, the Soviet Union. Although unmatched
least of all his in skill and experience, the Soviets were
players. Most beaten that night 4-3 by sheer heart and
of them were determination. USA went on to win the
happy just to Olympic gold medal in what has been
be going to the called a “miracle on ice.”
Olympics. But
Brooks intended The miracle that Herb Brooks produced
to win. To do that night unleashed nothing less than
that, he resolved the full potential of his team members.
to unleash the He conjured up the best they could give
great potential in all four key dimensions of their being
of each team — physically, mentally, emotionally and,
THE FORECAST member. perhaps most important of all, spiritually.
CALLS FOR How was it
done? First,
Do the leaders of your dealership call up
that kind of energy? Are they coasting
A DOWNPOUR OF he chose his
team carefully,
with no particular end in mind, taking
little interest in the workers? Or are they
NEW BUSINESS.
looking not for scurrying from one crisis to another,
superstars but staying busy but unfocused? Or are they
for people who leading lean, vigorous teams totally
could work well focused on the mission-critical goals? Are
IMN Loyalty Driver floods your dealership
together. He set they tapping the full powers of mind, body,
with interested customers and prospects. heart and spirit of every team member?
a very clear goal
— beating the
world’s best. Originally ran in CLO Magazine.
He emphasized
Stephen R. Covey, Ph.D., is co-founder
physical
Innovative e-newsletter solutions. of FranklinCovey, and is the author of
conditioning: the best-selling The 7 Habits of Highly
866-964-6397 imnLoyaltyDriver.com “We may not be Effective People. He can be contacted at
the best team at 866.892.6363, or by e-mail at
16
the Olympics, scovey@autosuccessonline.com.
www.autosuccessonline.com

14. STS
SteveBrazill
sales&trainingsolution
UNINVITED
PARTNERS
Car dealers deserve they were in place for months (or years)
praise for their before discovery.
charity and philanthropy. Dealers have
always been quick to share the fruits of It’s helpful to look at the ways employee
their labor with those who are needy. fraud tends to be discovered, in descending
Unfortunately, many are sharing their order of importance.
resources with people who are simply • Tip from whistleblower (company
greedy. Every few months I encounter insider)
another story in the industry press about a • Accidental discovery
dealership forced to close due to employee • Internal audit
fraud or embezzlement — and the stories • Tip from someone outside company
that appear in the news are only the tip of (customer, vendor or anonymous)
the iceberg. • External audit
It’s easy to rationalize why employee fraud So what can you do?
and embezzlement are more likely to hit
the other person’s dealership than yours. Whistleblowers provide the No. 1
You have some things going for you. method of discovery and that makes your
Right? employees an important element in the
defense against fraud. You can make it
We Screen and Investigate People easier for them to help by subscribing to a
Before We Hire Them service that provides a 24/7 toll-free hotline
Fact: Employee fraud and embezzlement and anonymity. Companies that subscribe
are crimes of opportunity, and the to such services report that most calls come
overwhelming majority are committed in the evening, when the employee is at
by first-time offenders who saw an home.
opportunity and acted upon it.
Old-fashioned luck is the second most
My Store (Department) is Small successful “method” of discovering
Enough That I Know My People. employee fraud. Sometimes we simply
We’re Like a Family stumble across something that doesn’t look
Fact: Multiple studies show that smaller right and start investigating. This works
organizations are more vulnerable to best when you are alert to what is going
employee fraud and embezzlement than on in your business and take the time to
larger organizations. Re-read the preceding dig into things that don’t look right. If
paragraph. If you still believe that having you can promote an attitude of healthy
a small, tightly knit organization is an attentiveness among your people without
effective defense, watch for those news building a culture of suspicion, you will
reports about dealerships that have been have even more eyes and ears working on
forced to close. Keep track of how many the dealership’s behalf.
are family dealerships, often multi-
generational. Count how many times the Work with your CPA. Internal controls and
story involves a long-term employee who audits cannot build a force field around
was trusted like family — or was family. your assets, but they are useful tools.
Consistent execution is critical. Controls
We Have Internal Controls won’t work if your people are allowed to
Fact: Internal controls that are not circumvent them. Do you have locks on
diligently enforced provide a false sense your doors? Do you expect your people
of security. How many of your controls to lock every door every night, or do you
are “flexible” the moment they become allow flexibility?
inconvenient? And never underestimate
the level of creativity that is possible when
Steve Brazill is the chair of automotive
someone is determined to circumvent your marketing at Northwood University,
controls, no matter how tight you might Texas Campus. He can be contacted at
think they are. In cases where employee 866.861.1515, or by e-mail at
17
frauds are discovered, we generally learn sbrazill@autosuccessonline.com.
the #1 sales-improvement magazine for the automotive professional

15. STS
DalePollak
sales&trainingsolution
TURBULENT TIMES
The last few months I say in the spirit of Lloyd Bentsen, “I have The second key real-time metric is “price
in the automobile friends who are hedge fund traders, and to market” (PTM). Dealers should keep
business have been turbulent. We’ve seen we are not hedge fund traders.” If any of their vehicle prices at around 100 percent
radical shifts in consumer preferences due us really believe we can predict the future for the first 30 days. In other words, their
to a variety of economic conditions, most markets, we need to get over it. Hedge fund vehicles should be priced, on average, right
notably oil price fluctuations. There’s been traders work with a wealth of information smack in the middle of the competitive
massive restructuring in the manufacturing and mathematical models that not only pack of identically equipped vehicles in
sector in favor of fuel-efficient vehicles. predict outcomes with proven certainty, their market. In the critical age category of
Unprecedented investments are being but limit the amount of risk and exposure. 31 – 60 days, dealerships should price their
made in new alternative fuel technologies. Moreover, by law, hedge funds are for inventory at approximately five percent
Automobile dealers have been stunned and “qualified investors,” which means those below the market average, at 95 percent
confused about what to stock and how to individuals who are prepared to lose their of the identically equipped vehicles in the
value their inventories. These conditions money and can afford to do so. I firmly market. This allows dealers to retail out
have brought forth a variety of opinions believe that we in the automobile business of a maximum number of inventory units
and theories about how to conduct business are neither sophisticated futures traders, before they either have to accept an aged
operations. nor are we dealing with investors who are condition or a wholesale loss.
prepared to lose it all.
For some time now I’ve advocated that The third key real-time metric is the
past history is no longer a reliable method Anyone who is going to stock up on certain market day’s supply of their vehicles.
for determining proper inventory mix or models in anticipation of a future market Dealers should make every effort possible
valuations. In fact, I don’t think that there or retain existing units for the same reason to maintain inventory with as low of a
could ever be market conditions that more should be prepared to also accurately day’s supply as possible. Just ask yourself
clearly validate this stance. Simply stated, predict future oil prices, interest rates, fleet whether or not you would purposely stock
if you’re still making inventory decisions and lease returns and a myriad of other new vehicles if they had a high market
based on your past performance, you are, variables, any one of which may affect the day’s supply. The answer is obviously
without a doubt, going to be caught off- shape of their future market predictions. “no.” Yet, this is exactly what most
guard and ill-equipped to address what Honestly, let’s be sensible and realize that dealers are doing with their used vehicles.
will certainly continue to be a rapidly while our guesses about future markets Maintaining an inventory with low day’s
changing market environment. I am aghast may turn out to be correct, we really supply generally means stocking vehicles
by solution providers who continue to toot shouldn’t be in the business of trading whose supply in the market (given
their horn for the need to stock based on futures. We have a significant enough identical equipment configurations) is less
core (code word for “past”) sales history. challenge in dealing with the present — we than 50 days.
These solutions only serve to reinforce should not get hung up with managing
the outdated notion that past performance from the past or too far in the future. The three real-time metrics of CTM, PTM
somehow guarantees future success. and market day’s supply are available
The only sensible alternative as managers with new technology. The technology
I’m also distressed by those who are of multi-million dollar inventories is to is so efficient that it will even notify
attempting to predict the future of stay focused on the immediate market you proactively through e-mail when
the automobile market. These are and as be nimble and responsive to the or if thresholds are crossed unit by unit.
the individuals who say that they are inevitable changes as possible. This This is what I call real-time market
“stocking up” on certain models because approach requires real-time market management and it is the only proper
they perceive that the market will “come data about current wholesale and retail way to navigate in times of turbulent
back.” Another expression of this equally values, as well as market day’s supplies markets and uncertain conditions. Again,
ill-fated notion is “I can’t replace them for of vehicles in their varied configurations. in the spirit of Lloyd Bentsen, “I know
what I paid.” Specifically, dealers should focus on real-time market management. Real-time
three real-time metrics that, if managed market management is a friend of mine.
In the 1988 vice presidential debate, Lloyd properly, will ensure success. The first of Working from your past or trying to
Bentsen said to Dan Quayle, “Senator, I these is called “cost to market” (CTM). predict the future is not real-time market
served with Jack Kennedy, I knew Jack CTM measures the cost of inventory as management.”
Kennedy. Jack Kennedy was a friend of a percentage of its retail market value.
mine. Senator, you’re no Jack Kennedy.” A dealer’s CTM percentage should
To those who attempt to predict the market be approximately 80 percent for new
Dale Pollak is an author and the chairman
by the means of overstocking or refusing inventory up to about 30 days old. This and founder of vAuto. He can be
to sell stocked units in spite of their age in benchmark assures dealers an adequate contacted at 866.867.9620, or by e-mail
18
the hopes of making greater future returns, return on their investment. at dpollak@autosuccessonline.com.
www.autosuccessonline.com

18. MS
MarcSmith
marketingsolution
WHO SAYS BUSINESS
IS BAD?
Recently, I was into the meeting that morning without been busy. I’m just glad it slowed down a
conducting a a smile on my face and had announced little and I can get a little break before the
private workshop in a dealership outside to everyone in the room that I wasn’t next crowd comes in.” How he responded
of Houston. As I looked into the audience, feeling my best but tried to get through the changed my perception of the place from
I could tell by their body language that no meeting anyway, how would it have made bad to good.
one had much of an interest in being there, the audience feel? Not very good about our
and much less of an interest in listening to time together, would it? People like to feel So how can you counter the fact that your
what I had to say. It was as if some sort of good about what they are doing and where showroom is not full all the time? How
disease had come over them — what I call they are doing it. can you make that one customer feel better
LOE (Lack of Enthusiasm). and want to do business at your dealership
By telling the customer that business is and do it today? You can start by telling
“How is business?” I asked, with a smile bad, you also immediately set the tone for everyone in your organization, including
on my face. Normally, I would never start a big discount in the negotiations process, all departments, how important it is to
a meeting with this opening, but this time if you are even lucky enough to get that tell prospective buyers that business is
I felt I needed to. There was only silence. far. You should always be in a position great. Explain how it affects a customer’s
After a few minutes, someone spoke up. of strength, and telling the customer that attitude.
“Not good,” he said. business is down reverses the roles. Not
“What do you mean?” I replied. only will the customer not look forward Managers, your front line needs to portray
“It’s slow,” another responded. “No to the car-buying experience, but they’ll a healthy retail environment to everyone
traffic.” also sense that you are hungry and would that comes into your dealership. Every
“Why do you think that is?” I said. probably do anything for a sale. Good luck customer should sense that your dealership
“The economy. Advertising. No more on holding a little gross profit. People are is doing better than ever before. If you
leasing. Financing. People just aren’t not likely to buy from you if they feel sorry or one of your staff tells a customer that
buying cars….” And on and on they went. for you. business is down, you can rest assured
that they will tell everyone else in your
It has been said that 10 percent of life is Simply put, people like to do business with marketplace about it, including your
what happens to you and 90 percent is how people who are successful. When you walk competition.
you respond to it. So, what are you going to into a virtually empty restaurant, bar or any
do about it? other retail establishment, what is your first I told the crowd at the Texas meeting that
thought? It’s probably “either this place the next time business is slow and the
In all of my travels across the country is dead or it must not be any good.” Now, customer ask how business is, they should
— and not limited to the car business have you ever noticed when you pass by try responding this way: “Business is great.
— the story is always the same. The most an Apple computer store how it is buzzing We were so slammed over the weekend
successful people stay focused on what with business? It makes you want to go in, that it is nice I’m getting the opportunity to
they can do and not on the things they whether you need to or not. provide you with the time you deserve.”
can’t, and they tend to remain successful
regardless of the market because of it. Why Understandably, not all businesses are No one is going to know that business is
is it we focus on what we can’t do because that fortunate, but the strategy still works. down unless you tell them. So who says
of the circumstances, and not on what we I shared a story in my meeting at the business is bad?
can do? The state of your business is like a Texas dealership about how I stopped in
good car deal in the mind of the consumer a restaurant one night to pick up dinner,
— it is a state of mind. as I often do. As I sat waiting at the bar,
I commented on how slow business was. Marc Smith is the senior vice president
The last thing you want to do is tell or even Now, the bartender could have responded for The Cardone Group. He can be
let the customer sense that business is bad. with, “Yeah, I know, it’s terrible. Business contacted at 866.665.4479, or by e-mail
Enthusiasm is transferable. If I had come is really down.” Instead, he said, “It’s really at msmith@autosuccessonline.com.
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www.autosuccessonline.com