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Research & Analysis

Reputation is Everything. Hispanic Car Buying Preferences Survey Review

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In my first article on Hispanic Car Buying Preferences , I gave a broad overview of our 2020 and 2021 surveys. For this article, I will focus on dealer and brand reputation. As you know, your dealership’s reputation is worth its weight in gold, especially on the Internet where negative reviews can cost you money. But reputation isn’t just about a review that lauds praises or trumpets condemnation; it is also about how customers feel about your business or the vehicles that you sell.   For our last two Hispanic Car Buyer surveys, we asked a series of questions that sought to surface the Hispanic community’s feelings about a range of topics, some of which are laser-focused on brand and dealership reputations, while others look at tangential, but related, issues such as how a respondent would feel if they were marketed to in Spanish. The results are telling… Your Reputation US Hispanics, like everyone else, see a dealer’s reputation as very important to their car buying decision. In 2021, when we asked respondents, “When you buy a car, truck, or SUV, which of these things do you consider?”, we found that dealer reputation was the most important thing to the community, even ahead of the response “Dealer advertised in Spanish”. If you combine these two questions - a strong positive reputation and advertising in Spanish - you will see the roots for a strong argument why you should direct your dealership towards building a good reputation with your local Hispanic community while marketing to them in Spanish (or a mixture of Spanish and English).  Other general market data supports our results. A quick Google search can find a number of surveys that show that a company’s reputation is an important concern in the buying process. For example, according to one survey , 75% of US Hispanics said that they are more likely to think favorably of a brand or purchase their products, if the brand makes an effort to include elements of their culture in their advertisements. And more importantly, 80% stay loyal to a brand when they find one that they like. Although this data doesn’t directly relate to car buying, it’s not intellectually dangerous to assume that this same logic applies to dealerships. Meet Your Next Hispanic Customer Referral Traffic Referral traffic is a powerful thing. A well-developed referral program can be quite profitable as many dealerships know all too well. In our experience, we’ve found that many Hispanics will refer customers when they’ve been treated well.   The data vigorously supports our anecdotal information. According to our 2021 survey, 79% of all respondents said that they are moderately to extremely likely to refer a customer to a dealer who speaks Spanish.  Sales and Service So what happens when we market in Spanish for car sales and service? Pretty much the same thing. When asked if they would visit a car dealer who advertises in Spanish to buy or service a car, just under 75% chose moderately likely or higher.   And, even more interestingly, 43% said that they would travel further if a dealership advertised to them in Spanish. Throw in the “Not Sure” respondents and the number jumps to 69%. This should make you go “Hmmmm.” if you aren’t already marketing to your local Hispanic community. With that said, our 2021 data quite interestingly contrasts with 2020’s results. According to last year’s survey, only 55% of the respondents replied that they prefer to buy a vehicle from a dealership who advertises to them in Spanish. This discrepancy could be due to the nature of the two samples and will require further research. For example, if last year’s study was weighted heavily in favor of multi-generational US Hispanics, rather than foreign born Hispanics, then marketing in a culturally sensitive way makes more sense than just in Spanish. This supposition is born out by other data. Check out this 2013 MSNBC video illustrating this point.  Most Valued Auto Brands for US Hispanics If building a good reputation and selling to U.S. Hispanics in Spanish makes members of the community more likely to buy from your dealership or refer a friend, then what happens when manufacturers spend time marketing and building a reputation with the community? Not surprisingly, what you see is what you would expect. In both last and this year’s survey we found that the brands that had a reputation for reaching out to the community in Spanish are the same brands that are viewed positively by the respondents. Below are the results when respondents were asked to choice rank their favorite brands. Were there any differences between the two years in terms of who is on top? Yes. For 2021, Ford edged into third place pushing Chevrolet into the #4 slot.   What the most significant lesson learned from this data is that Toyota’s Hispanic-focused marketing continues to produce great results. Our data just echoes what other surveys have found before: Toyota holds a solid lead because it has invested in creating a good reputation and relationship with US Hispanics.   Final Comments Your reputation requires investment and good planning. Those dealerships that work hard to create a good reputation with their customers reap the rewards in terms of better sales and better long-term growth prospects. Creating a good reputation with your local Hispanic community is more than just the act of advertising in Spanish and responding to reviews, it is found in understanding your local culture and marketing accordingly. Do you know which holidays are important to your local community? Do you understand how to flavor your Spanish advertising so that it uses words that resonate culturally? It is these things that we have to think about when creating a marketing plan that works with US Hispanics. The investment is worth it with a market that will continue to grow and mature in the coming years.
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Research & Analysis

A Revealing Look At Dealership Homepage Banners

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The emphasis many dealers place on creating homepage banners is a glaring example of the industry’s failure to communicate changing consumer behaviors. It’s no surprise that these have become a staple of websites, not just in automotive retail. They’re a visually compelling way to communicate monthly specials and incentives to car shoppers on a highly visible page where many consumers land.  You may be one of those dealers who compels their agency partner to create — say — a baker’s dozen each month.  The truth is that — even with the high-traffic visibility — homepage banners are not nearly as effective as you may have originally thought. The Numbers Behind the Banners While intuition can serve you well, no decisions regarding your digital marketing should be made without statistically relevant data. One of our (Reunion Marketing) Client Success Specialists intuitively felt that homepage banners were an outdated focus, so we took 24 clients who used the same industry-leading website hosting platform to analyze homepage data over a determined period of time.  Below are the numbers of what we found. Car shoppers clicked on the following:  Navigation: 49.36% Inventory Search Widget: 29.73% Homepage Banners / Videos: 5.99% This means that car shoppers, no matter the source or medium, who landed on our clients’ homepage, approximately 0.05 (or 1 in 20) of them clicked on a homepage banner. While it’s true that one person in twenty does have purchasing power, let’s take a closer look into the numbers. Of the 5.99% of car shoppers who clicked on a homepage banner, here’s what we found: 45.51% of them clicked on the 1st Position Banner 25.27% of them clicked on the 2nd Position Banner 14.37% of them clicked on the 3rd Position Banner 9.42% of them clicked on the 4th Position Banner This means that by the time you’ve created a 4th Position Banner, you’ve allocated time and resources to a homepage item that only receives 0.56% of all homepage clicks.  Our research led to our setting specific recommendations on homepage banners for our Dealer partners.  Homepage Banner Recommendations Based on the data, we concluded that automotive dealerships should create no more than three new homepage banners . Though there is a demonstrated steep decline in car shopper clicks after the First Position Banner, we know, based on our work with hundreds of Dealer partners, that you need to manage more than a single special or event during a given month. This also begs the question for many Dealers: How do I manage this when my OEM requires XX (number of) banners? You can still follow the recommended three new banners for your latest incentives and have a host of stock banners that satisfy the OEM requirement through which you can rotate.  SEO Is Incomplete Without Conversion Rate Optimization (CRO) This understanding of homepage banners is part of an ongoing process called Conversion Rate Optimization (CRO), which should be a part of any internal team or agency partner’s SEO work. Beyond the homepage data analysis, there are dozens of other items that should be regularly checked or strategies that you can implement. Hotjar to monitor consumer behavior on pages. Checking for buttons above the fold. Compare metrics across devices. SRP to VDP Efficiency Audits Ensuring clear and consistent merchandising. Homepage to SRP Efficiency Audits Compare benchmarks for mobile clicks-to-call, form submissions, etc. Understanding what goals are underperforming These are just a handful of items that should be part of your dealership’s Conversion Rate Optimization. You are, after all, spending money to have internal teams or outside partners work to send high-quality traffic to your website. It is incumbent upon them to also help optimize their ability to shop the site and feel further compelled to take action.
Car parts

Commentary & Insights

Connected Car Opportunities in Parts and Service

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Connected Car Opportunities in Parts and Service There has been a lot of attention paid to opportunities for Connected Car technologies in Sales and F&I, with ideas like personalized shopping, deliveries, and data-based F&I products. But there are also several opportunities for dealers to use Connected Car technologies to improve quality of service, performance, and efficiency in the delivery of both Parts and Service. Quick Background: This topic is relevant now because Connected Car technologies are finally reaching “critical mass.” Well over 90% of all new cars and trucks sold in the US in 2021 will come with built-in abilities to transmit and receive data, remote software, and vehicle commands. This means that key data about each vehicle’s mechanical condition, driving usage, and precise location can be collected and used to improve operations at the dealership. As always, it is critical to remember that customers must be fully informed and provide their consent for any Connected Car services to be utilized. How Connected Car Data and Commands Can Affect Parts and Service:   Current Operations In the near term, there are several opportunities to improve day-to-day operations of the Service and Parts departments, while also improving the customer experience.   The highest ROI current opportunity is to use data from the vehicle to determine when maintenance and service events need to be scheduled. The vehicle “knows” what its mileage is, when it needs an oil change, and when it has diagnostic codes that indicate different needs for service. Customer outreach using this vehicle data is much more timely and often more effective than outreach based on customer behavior modeling or “estimated” mileages.    A connected car can also facilitate advanced planning. By checking periodically on maintenance needs, dealers can anticipate approximately when a customer will need maintenance. The dealer can then plan ahead to schedule service at a time that is both convenient to the customer and efficient for the dealer, smoothing out service operations as well as monthly top and bottom lines.    Finally, an advanced review of a vehicle’s maintenance and service needs can facilitate advanced ordering and stocking of parts to ensure that they are available when the vehicle is scheduled for service. In short, dealers can more efficiently utilize their personnel and operations, while providing more reliable and convenient services for customers. Several OEMs now include automated maintenance reminders within their Mobile Owner Apps, and similar service reminder programs are offered as well. These types of programs have been shown to increase both customer service satisfaction and retention. The dealer plays a critical role in ensuring that all new vehicle purchasers have their Mobile Owner Apps activated during delivery, along with enrollment in automated maintenance reminders. If your OEM has not yet enabled these services, or for older vehicles, dealers should also look into third-party platforms, which not only offer service reminders, but also theft recovery, emergency assistance, and other services. Advanced Service and Parts Opportunities Connected Car technologies will allow more advanced capabilities, too. We have already seen extensive use of Over-the-Air software updates by Tesla, but Tesla is not alone in adding OTA capabilities. Every major OEM is working to expand their abilities to update major vehicle systems this way, as well as how to share these responsibilities with their dealers. Tesla and others have also shown the potential for additional revenue from software-based “accessories” and feature subscriptions. These are optional software enhancements that allow the vehicle to be customized versus a base factory configuration. OEM Service and Parts departments will soon be able to recommend and deliver these accessories to an increasing number of vehicle owners. OEMs are also increasingly developing more predictive service algorithms. These programs process data from large numbers of vehicles to develop models that can accurately predict service problems before they occur. As confidence in these programs increases, dealers will be encouraged to contact customers to schedule service well before a breakdown occurs. Finally, Connected Car technologies will enable many new remote services. It is easy to locate vehicles and to provide digital keys to give access to an authorized technician. This will facilitate both services at the customer’s location as well as easy pick-ups and exchanges with courtesy transportation vehicles. The Connected Car will bring dramatic changes and opportunities to all parts of the modern dealership, and motormindz’ Connected Car Practice can help guide dealers on the best ways to maximize the advantages of these developments. If you’d like to learn more, please contact motormindz’ Connected Car Practice Lead, Greg Ross.
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Best Practices

3 Pieces of Content Your Car Dealership Needs Today

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Let me ask you this: What content is your dealership creating every day? More often than not when I ask that question I get pulled into conversations about which social media platform is best, which distribution method dealerships should be using to spread the word about themselves, or even whether video, photos, or written content does a better job stopping the scroll. What happens much less often is that I get to have a conversation about the message. What’s the story they want to tell? Facebook & TikTok. Email & YouTube. Radio & TV. Blog posts & matchbook covers.  Nothing wrong with any of them. Use ‘em all, but they’re all just tools to get your message on the inside of your customers’ heads. How the message gets there isn’t anywhere near as important as what that message is. The message is what matters. If you want to create better, more engaging, conversation-starting content, you have to tell a better story. Telling a better story starts with deciding what story you want to tell, then creating more content that spreads that message regardless of format or delivery platform.  A great story can be told in many ways, in many formats, on many platforms. A great story transcends. Community The greatest stories that your dealership can tell,  The stories that will resonate best with your target market, The stories that will bring you the most likes, clicks, shares, smiley face emojis, actual real live conversations with real live people, and yes, more sales, In those stories, you’re not the hero; you’re the sidekick. You’re not Batman; you’re Robin. Look for opportunities to create content that shines a light on other people in your community. “Look for your people, and lift them up,” says business strategist Sherman Mohr. For years, I’ve been encouraging salespeople and managers to attend Toastmasters or Dale Carnegie training to improve their communication skills. In How To Win Friends and Influence People, Carnegie says we can make it easy for other people to like us when we go out of our way to make them feel important. Create more content that does that! Full profiles of your employees , not just the sales department. Spotlights about your customers’ businesses.   Features about local sports teams from sandlot baseball to the major leagues.  Active participation in community events. The next time someone comes in asking you to donate $500 to some local charitable, civic, or sports organization, don’t just write the check. Show up and help. Use your dealership’s digital footprint to help them spread the word. Get your team out in the community belly-to-belly with the people and then Tell That Story. Use Video and pictures to put more faces on Facebook.  Write a blog post for your website to boost your SEO.  Share it on your Google My Business page.   In his book Marketing Revolution , Mark Schaeffer says that in today’s media-saturated market with today’s media-savvy consumers, the businesses that present the most human messages and stories will be the businesses that thrive. Be more human. Commerce Rule #1 is “It Ain’t About You!” It’s about them, and specifically, it’s about how you can help them. The single greatest thing about the car business is that almost every single human being you’ve ever met has, wants, or needs a car. They’ve got 99 problems and their car is definitely one! Create content that tells the story of how you can help solve their car problems. The best way to do that is to show how you’ve solved other people’s car problems. Post Videos of happy customers saying how you went out of your way to find them the perfect car. Post photographs from the service department showing your new Express and after-hours lanes. And get more written reviews from customers, sales customers, service customers, stopped-by-on-my-way-home-to-get-a-free-ice-cream-cone customers. Customer reviews are the gold medal, brass ring, heavyweight champion of the content marketing world. You can tell your story all day long, but when your customers start singing the same song that’s when a story becomes a brand. Ask And You Get; Don’t and You Won’t. It’s the first thing they tell you in Sales 101; you have to ask for the order. Your dealership is in business to generate business. Create revenue. Nothing says commitment like money changing hands. If you’re not even asking for the money, less of it is going to change hands. In the official social media official playbook Jab, Jab, Jab, Right Hook! , Gary Vaynerchuk likens your social media calendar is like a prizefight with friendly, entertaining, community based or other ostensibly non-commercial content serving as the left jabs that lower defenses and leave an opening for the knock out punch. Asking for the order. Making it easy for them to take action. Making them an offer they can’t refuse. Promising them a car buying experience they’ll never forget. Everybody loves a deal. Create more content that gives them a deal. Then look them dead in the eye and ask for the order - call, click or come on down.

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Best Practices

Auto Dealers: What’s Your Total Cost of Risk (TCOR)?

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Financial statements track how you are doing financially every month. Consider measuring and benchmarking TCOR as a part of your ongoing financial statement process.   What is TCOR and why should you care about your dealership’s Total Cost of Risk (TCOR)?  Business is about keeping the money you make. Your sales and gross profits could be at record highs, but your losses might be, as well. Unless you are tracking TCOR, your money may be walking out the back door because of losses or customer problems. Consider changing the way the dealership accounts for losses at the store (TCOR).    The only way to improve in any area is to measure it and benchmark it. TCOR is a metric used to evaluate your dealership’s internal risk process. Here is how it’s calculated: Insurance premiums + self-insured losses + losses associated with lower profits and productivity + risk administrative expenses (internal & external) = Total Cost of Risk (TCOR)  Tracking this metric will help you laser focus on which parts of the dealership cost you money. Consider customizing and defining each aspect of the formula to specify the guidelines for your dealership. These guidelines will be different for every owner-operator. It’s important to be consistent in how you establish and execute the accounting at your dealership based on those guidelines. Consistency will produce accurate data leading to meaningful answers.  Here’s an example: Let’s say you sell vehicles to people who have credit challenges (secondary customers). In my experience, if you “spot” them in their vehicles, and then cannot get them financed for whatever reason, they tend to write more negative online reviews. Hopefully, you have a process at the dealership to bring them back in and try to satisfy them in some way.   (If not, start today. Most lawsuits and regulatory problems start with upset customers. In fact, a dealership in Tennessee recently had its license revoked after multiple claims of deceptive acts. Now, the owner has been convicted of twenty-one (21) felony counts. His problems all started with customer complaints. Pro Tip: After you have satisfied the customers’ concerns, ask them to “update” their review. If you ask them to “change” their review, the customers will feel manipulated, Then, it will look like the only reason you helped them was to have them update the online review.) If you tracked the personnel time and all other expenses associated with these types of issues, you would be able to determine the actual cost of taking care of these customers. This is only one aspect of TCOR. (Please refer to the formula above.) If the dealership accounts for these costs accurately, it means you can no longer hide these losses in “Other Income.” In many dealerships, “Other Income” becomes the “garbage pail” of accounts, where you charge expenses, so the managers who are paid on gross won’t complain about chargebacks.    Using the secondary customer example above - whether or not TCOR is being tracked - we can discuss which policies and procedures can be put into place to stop these types of losses. There are plenty! We will not know the effectiveness of the procedures unless the numbers are tracked accurately. Recently, I have been hearing dealers espouse a case of the “yets.”   “I haven’t been sued yet.” “I have not heard from a regulator, yet” “We haven’t had any major problems, yet.” So, I don’t need to track TCOR…  Depending on the accounting controls at the store, the losses may be bigger than you realize. Unless you are measuring these costs, it is unknowable how much money is being poured into issues at your dealership. Do you really know your risk costs? Reputational losses? Customer satisfaction charges? Please consider tracking and measuring these numbers moving forward.  I’ll bet you’ll be glad you did. 
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Commentary & Insights

Is it Time to Make the Entrepreneurial Leap?

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The last year and a half has been one of the immense transitions and has left many of us asking if we’re in the right place and if what we’re doing is worthy of our time and energy. For those of you who may be asking yourself if there is more you can do or additional ways you can help, I encourage you to consider whether it’s time to make the leap to consulting. I’ve had the privilege of owning my own agency for more than two decades and have been asked several times how to make the transition from employee to agency owner. Below are a few of the tips I’ve gleaned from my own experience and the successful entrepreneurs from which I’ve been able to work and learn.  How do you begin?  I get this question often. Many people want to know when I knew it was time to go out on my own and how I began. I was fortunate enough to have a mentor who helped get me started but will say that there is an inner calling in most consultants I know. Some speak of it as an intense desire to help the industry, some speak of it as outgrowing their current circumstance and needing a challenge, and others say it was born out of a need for the next step. But every single story has one thing in common – successful entrepreneurs have something burning within them – gnawing at them – that won’t go away. Whether it’s an idea, a new way of handling a current situation, or for me, a desire to control your own destiny and be the person in charge of your interactions. Do you have an idea that won’t go away? A feeling that propels you to act, even if it’s scary? If so, it may be time to go out on your own.  Networking is Key Once you decide to make the leap, it is time to network, network, network. Reach out to current and past colleagues, let previous business partners know that you have begun your own company and post as often as possible on LinkedIn. When reaching out on social media, ensure you are giving value through advice and offering to connect people, versus just asking if the people in your network need your services. As Sandy Zannino, Founder of Innovative Auto HR has wisely stated about starting, “I should have started networking sooner. Begin before you’re ready.” Time Box like a Pro  I have long been a huge fan of the idea of time boxing. Time boxing is setting aside chunks of time to accomplish specific goals. When I first began my PR firm, I would literally sit at my desk during the time I had set aside for working, even if I didn’t have the client work. Instead, I would focus on my website or branding. Anything to set me in the mindset that the time I had set aside was for building my business. Today I am fortunate enough to say I no longer have that problem, but I do keep the time boxing methods to ensure I stay productive and don’t lose my momentum to meetings, phone calls and social media.  Keep Going!  Owning your own agency is not for the faint of heart. It takes patience, joy in risk and a strong amount of grit. Many of the most successful firm owners I know have fallen in some way. But more importantly, they’ve gotten themselves up and found a new way to go after what they want and continue their calling.  Is this the year you heed the call and make the leap to owning your own consultancy? Is an idea or concept calling to you at a louder and louder pitch? Do you have the grit to keep it front and center? I’m betting on you and hoping that the answer will be yes! 
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Commentary & Insights

2021: Will Your Car Dealership Go From Success to Hot Mess?

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I’m not one to sugarcoat a crisis, but the pandemic has created at least one happy consequence for car dealers — vehicle shortages. With people everywhere urged to avoid public transport and chip shortage, car sales have hit a record high and demand continues to outpace supply.  So after years of making very little selling new cars, dealers are finally laughing all the way to the bank. No matter the franchise, no matter the location. Car dealers everywhere are having their day in the sun.  Do you know what that means? Some will get burnt.  Whether it’s in 6 months or 12 months, manufacturers will catch up and flood the market just like pre-pandemic days. And the car dealers who did nothing but bask in the glow of their success? They’ll start to feel the heat.  The best car dealerships know that success has a nasty habit of breeding complacency. So while the foolish rest on their laurels, the wise are working to future-proof their businesses.  The best are using this opportunity to examine what’s working (and what’s not working) in their business; their strengths, and their weaknesses.  They know that it won’t be long until competition for buyers is back on, and they’re taking proactive steps to finesse their operations; now, not later.  They’re getting ahead quite simply by getting ahead.  Make sure you’re one of those dealerships. Otherwise, instead of laughing all the way to the bank, you’ll be crying all the way to the bankruptcy court.  Now is the time to ask yourself this: What is your dealership doing to improve and prepare your operations for the future? Remember that when demand exceeds supply, sales training and excellence take the backstage. If you’ve got the cars, the customers will come. But when things reset, will you be out of practice? Out of shape? Out of step with the car dealers that took the time to get organized and stay ahead of the game?  If you’re not sure how to answer that, consider how much time your dealership spends fine-tuning these all-important aspects:  Sales Processes How regularly are you reviewing? When you review your sales, are you considering not just quantity of sales, but quality ? Are you confident in your staff’s product knowledge? Are they confident in their product knowledge?  F&I Product Lineup  When was the last time you took a good hard look at your finance and insurance product lineup? Are you sure it’s up to date and working hard for your business? How about your reinsurance structure? It all adds up. Readiness to Buy  No well-meaning car dealership would wish failure on another, but the hard truth is that not all dealers will survive the downturn. Are you ready to mobilize cash quickly when the opportunity comes to buy a dealership?  Advertising and Marketing  Sure, you don’t need it right now. But when supply outweighs the demand, dealers will be competing to turn customers' heads. Will you be placed to shout the loudest? Plan out your advertising and make sure you’re ready to make that investment when the time comes.  These are just some of the strategies that will separate the winners from the losers. The good news is that there’s still time to decide which side of the line your dealership will be on.  These good times are well deserved. But don’t expect them to last. Even more importantly, don’t get caught out when the tide starts to turn. Use today’s flush to build a better, more resilient business for tomorrow. 
car retail idea

Commentary & Insights

The Automotive Retail Shift

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The automotive industry on the retail side has been seeing some nice profitable shifts in recent months. Here we are in the hottest-selling part of the year and we are dealing with supply and demand issues. While it is a beautiful thing to watch dealers be profitable and command the market for a change I am worried about what will happen to our selling skills for the future. Right now anyone can be a superstar and gross $4,000 per unit just by showing a vehicle and going through a few steps to the sale. But what happens when supply levels come back to normal? How will we be able to maintain the same level of profitability while selling three times more units? I make it a point to look at inventory at some of the biggest dealerships in the nation to truly understand what our fellow partners are going through. I see Facebook groups that include retail automotive professionals from all walks of life posting pictures of empty lots and explaining how they cannot even put cars into showrooms since they are selling fast. These are scary times because dealers cannot afford to slow down. This is such an expense-driven business that we must continue to progress forward. I even saw a few posts where salespeople complained that their dealership is cutting pay plans because they are paying out way too much money for people that do not deserve it.  The big question is how do we move forward? We must remember that historically our industry has been resilient through the toughest times and came back better than ever. It will happen again very soon. We are in a business that forces “survival of the fittest” and things will normalize again. Now is the time to think about how we are going to sharpen our skills. Let’s get back to focusing on customer service. Let’s get back to focusing on building our sales and marketing skills. It is time that we take matters into our own hands and take control of our own personal development. Ralph Waldo Emerson once said, “The only person you are destined to become is the person you decide to be.” We must refuse to be stuck in continuing to do everything the way that we always have done it. The automotive retail shift has incorporated new ways for us to sell and acquire vehicles. Technology has given consumers the power to shop and be more knowledgeable than ever before about vehicles and the shopping process. It is time to train, self-develop, and improve how we handle our business. I recommend fifteen minutes of personal development daily every morning by reading a good book and watching some wonderful inspirational YouTube videos.  Additionally, we need to invest in training our people at dealerships. We need to empower our people to use our tools better. It is time to master the CRM and finally use it the right way. It is also time to create a process to use digital retailing tools to improve how we negotiate and talk to our customers. If customers will not start to embrace digital retailing the way that we as an industry planned then we need to once again take matters into our own hands and use these tools to improve our own salesmanship. Opportunities to improve are all around us. Let’s grow!
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Commentary & Insights

Embracing Change As a Leader - Get Comfortable With Being Uncomfortable

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Leaders who embrace change have a dynamic team with a stronger and healthier culture, whereas dealerships that aren’t open to change tend to BE stagnant and vulnerable to failure. In other words, if you’re not willing to change, you’re not ready to lead. One of the biggest reasons that embracing change leads to success is because when we try new things, we learn from the new experiences, and we innovate new improved ideas. Whether the outcome is good or bad, every time we navigate through the unfamiliar, we undergo processes that will allow us to grow.    “The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.” ― Albert Einstein When leaders frame change in the right way and take action to support that change, team members are way more likely to embrace it. And guess what? The need for change exists everywhere, no matter how successful the company or dealership, and yours is no different. As a leader, you should constantly be asking yourself how to improve and be willing to test the waters when needed. Once you do identify the need for change, reflect with your team about how to address that change. How does your team feel about the change? How can you support them? Do they have any questions? Next, you must understand that people will be naturally resistant to change, and even if everyone appears to be on the same page at first, it’s going to be your job to usher people past the disruption and create a new status quo. Effective leaders are able to communicate change in a way that takes into account their team’s perspective, including their emotional well-being. In times of change make it a point to check in with emotions and concerns whenever possible.  . Strong leaders are able to see the change through the lens of their team, always consider how will this change impact the service technician, the valent or the new sales consultants and understand how to best connect value to each individual. There is always a question of value when we make significant change. This is when it is time to tune in to my favorite radio station, WIIFM (What’s In It For Me?) Remember, you are asking people to change from the comfortable, “the way we have always done it around here”, to a new way in how we do business so always understand the shift you may be excited about, can feel overwhelming to some Most people won’t buy-in 100% until the either recognize the individual positive consequence it entails. The more you can communicate and cast a vision that connects with their individual “Why”, the more they feel trust you, the more you commit to helping them, the more they will invest their hearts and their time.  Make sure everyone has a clear role they feel good about. The whole team should be crystal clear about what everyone’s role is so that things can run as smoothly as possible, with minimal confusion about who is responsible for what. Understanding where they fit into the new change initiative will help them feel less anxious about the change.  We know that dealerships must change in order to thrive in an always-changing market. In order to help your team (and yourself) stomach change in a manageable way, break down each step of that change into small steps. Do your best to map out any major hurdles and plan solutions for dealing with them. This eliminates an enormous amount of stress, burnout, or disengagement.   The more that you map out your path, the easier the road will be! “Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.” ― Rob Siltanen
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Scarcity is The Best Thing to Happen

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Right now vehicles are selling at all-time record profits, salespeople are able to make a good living, and store net profitability is more than most ever thought possible. So much money is being made that the days of having to give away units seem like a thing of the past. It has been a great twelve months for most dealerships across the US. The current situation feels like a musical chair game, it is fun while the music is playing, but dealerships need to face the reality that the music is going to stop soon and there will be fewer cars to sell. Higher gross is making up for some of the issues that lack of inventory has created, but the time is approaching when the stores will have zero new vehicles to sell and nothing in the pipeline. The situation leaves dealers asking, “What do we do now?”  Here are some practical things that I believe dealers need to be focusing on over the next few months and areas that they can have a positive impact on their store to keep the money flowing. It will be a tough couple of months for stores on the variable operations side but things will get better.   First, every store needs to evaluate new car marketing spends. Stores that are spending thousands of dollars on search engine marketing (SEM), pre-roll and display advertising need to determine if the current budget lines up with current inventory levels. In fact, most of the dealers that I am speaking with are talking about some model lines being pre-sold prior to hitting the ground. In this case, it is wasteful to allocate portions of the budget to those pre-sold model lines. For SEM I suggest looking at reducing the SEM budgets and instruct them to focus the new car budget on high converting keywords like “Chevrolet Dealer” and move away or stop all model searches that the store does not have adequate inventory for. I would also suggest that dealers use this time as an opportunity to negotiate a discount with third-party lead providers, TV and radio stations based on the fact that inventory is significantly reduced.   Secondly, the acquisition of more used vehicles has to become a top priority for dealership sales departments. Dealers that lived off trade-ins are really going to feel the pressure.  Some of the most successful stores prior to the pandemic already had a strong used car purchasing division. They implemented vehicle buying teams that purchased vehicles all over the county from the various auctions. However, even these stores are struggling to acquire inventory at prices that make sense to resell.  Today’s auctions are overinflated with numerous dealers all over the country bidding for a small pot of units. In some factory sales across the country, more than 2000 bidders are online for just 50 units. It doesn’t take long for a dealer to get frustrated and realize that buying units this way is not going to be easy.  Here are some areas that dealers can use outside of typical auction lanes to land more used cars: Online Auctions – DealersLink, OVE, SmartAuction, ACV, BackloCars OEM Lease Returns Websites Craigslist, Facebook Marketplace, Local Classifieds Private Party – Drive by Units Dealership Database Mining – Email and Phone Campaigns Dealership Service Lane Automotive Classified Websites – Private Party Listings – Cars.com, AutoTrader, CarGurus.com AutoTrader/ Kelly Blue Book Instant Trade-In-Offer eBay Listings Lastly, the entire sales process should be re-imagined around acquiring the customer trade-in. Asking questions to new customers to find out what they are doing with their current vehicle. If they are selling it privately, are they open to getting a bid from the dealership as well? The average customer does not fully understand the complexity of the used car market right now, and they might have underpriced their vehicle. Customers will appreciate the dealer paying them additional money for their trade and in most states, customers can receive a tax discount from trading a vehicle in on the same transaction. In addition, consider offering additional dealer discounts on the vehicle that the customer is purchasing if they are trading a vehicle. Dealers can go as far as adding additional line item discounts on the dealer website that shows the trade-in discount. The effort that a store puts into getting both the customer's trade and financing in the next couple of months, will pay off big dividends as inventory draws down.  The first part of 2021 has been a wonderful ride for most dealers, now is the time to start making adjustments to stay profitable as the inventory continues to dwindle. Hopefully by October dealers will start seeing an increase of allocations and products but even that will take time to hit the dealer lots with the current backlog of customer orders. It is a crazy time in the business, but remember that every dealer is facing the same issues and this too shall pass.