Dealer Marketing Magazine | Expert Research, Commentary, Reviews

Commentary & Insights

The Coming Wave of the Electric Vehicles and the Impact on Auto Retail

The State of EV “Oh we gonna rock down to ELECTRIC AVENUE!” We have all read and heard the recent headlines around the auto industry. Electric, electric, electric. It is coming fast and furious! Depending on the source, the forecast for future electric vehicle sales vary, but recently with all the activity the sources and forecasts are starting to align on the growth potential and likelihood as being significant and expansive. It will no longer be a splinter niche customer set, but rather a significant profile and proportion of sales and even trending towards the majority. According to a few sources, the likely truth will probably be somewhere in the following projections and forecasts: Sopheon notes that the additional product offerings coming could push global EV sales to between six million and 11 million by 2025, rising to between 11 million and 19 million units a year by 2030 The real interesting pieces come from IHS Markit's forecast for 2021 and beyond. This year, the firm believes we'll see electric cars take a market share of 3.5%, just about double from 2020's number. Fast forward to 2025 and the company forecasts EVs will make up 10% of all new cars sold. That would be a massive shift in buying trends . According to Edmunds, by the end of 2021 there will be 26 electric vehicles available for sale across the sedan, truck and SUV segments. That is expected to grow significantly over the next 5 years with as many as half the models for sale in 2025 having EV options. So EV is here and coming in an even more substantive way. What does it all mean? How will car buying, owning and servicing change? What does this shift do to retailers? In fact, what will the very retail footprint and experience need to look like to accommodate this market disruption? A few quick questions I have heard? Do I need to treat an EV customer different from my “normal” customers? Will I need a separate showroom or sales process? How will this affect my service business? What other considerations will I need to train my staff for in selling EV’s? The answer to each one of these is that there will be differences and nuances that need to be accounted for with EV customers and products. But the amount of change needed depends on your current dealership’s focus. If you are a retailer focused on customer experience and lifetime value as two key driving forces and metrics of success, then the change may not seem as drastic. If your store is more transactional based and price and profit are the only main drivers of operations, the EV customers and opportunities may be tougher to capitalize on. So What Really Changes for Retail? We Just Sell Cars, Right? Wrong. The bottom line is that the very retail model will have to adapt and shift. Retail will not be about moving product, or transactional based, but it must become first and foremost centered on experiences. Electric vehicles require a different value proposition as part of the sales process. The service experience will also be very unique for these products and owners. The focus needs to be on truly meeting the customer’s needs, value, and overall experience. Retail itself must become synonymous not just with the purchase, and not just the physical in-store engagement, but rather the entire customer engagement process along their entire journey. There was already major transformation coming in the industry due to technology and customer expectations, but the significant uptick in electric vehicle availability, sales and ownership will continue to disrupt retailers to become more of a mobility platform and mobility experience center. Rather than try and detail all the changes that will have to come and the capabilities that retailers will have to develop, consider the following graphic. This is just a high-level framework of some thoughts on how a future auto retailer will have to focus, operate and thrive. We can certainly debate the major function headings, or the specific services and functions themselves, but the fact remains that even if 80% accurate, this is quite a shift from the current operations and focus of today’s retailer. Why will this shift happen? Notice I said “will” not “if” or “might”. There are too many disruptive forces coming to play into the auto industry and the auto retail environment. Major Challenges and Disruptions Growing customer expectations (On Demand Economy / Instant Access) Mobility needs shifting Disruptive technologies (Connected, 5G, Autonomous, Electric, Digital) Electric vehicle growth (global view and movement) Autonomous vehicle technology On Demand services (including vehicle features themselves) Covid after-effects / Urban exiting / Virtual working (commute) Increasing mobility choices (mode, access) All of these factors and many more will demand a new retail model. One that engages customers to meet their mobility needs in any and every way possible. That will need to include micro-leasing, access on demand, fleet / rental options, subscription services, mobile services, downloadable software, pay-by-the-mile, features-on-demand, and much more. Imagine a customer virtually test driving a vehicle, and specific features and accessories via virtual reality from the comfort of their own home. Then having the electric vehicle for the weekend, dropped off at their house. They return the vehicle to the dealer, cash in their energy tokens, and then purchase a mobility monthly subscription pass for the dealer’s mobility platform options. Sound far-fetched? It is happening in pieces through various companies and channels now. It will be up to auto retailers to become the one platform to provide (or at least manage) these services in order to keep customers engaged and to be sustainable and meaningful into the future. Shift Happens So how do retailers get ahead of this rather than trying to chase the opportunity when it is too late? This must happen with adaptive strategy and operations. A few key action plans include: Assess what drives your operation and how can it become more customer experience focused (what you measure is what will matter) Continually develop customer data and insight to always be prepared to meet the customer where they are in their mobility needs Begin to view and structure your operations not as departments, not as inventory and assets, but as seamless and frictionless enablers to capabilities. Define your North Star. What will make your dealership different? What will truly separate your customer experience from the dealership down the street? Enable employees to do what is right, not what is standard and expected. Leverage technology to enable frictionless experiences, not become more cumbersome. Always be customer-focused, agile and adaptive to their shifting needs These capabilities will insure deeper customer connection and engagement. What you sell in the future may change, but it will not matter if the basic customer experience is not there now, tomorrow and along the way; because your customer will go to where they can receive the best experience. Customer experience is the bridge from the present to the future, from the known to the unknown. Our future monthly operating report and operational structure will look much different than today, but the core customer experience fundamentals must exist continuously to survive and thrive in that new world.

Commentary & Insights

Have You “Lost Interest” in the Cash Deal?

After a recent F&I Master’s class, I came back to the dealership better, stronger, and faster than before. That class taught me about having a conversation with purpose. So, since we are having a conversation anyway, let’s make it count? This is the biggest opportunity on cash deals to move the needle. Especially if you are working in a high-line store catering to affluent customers with higher credit scores. The One Pay Lease Many business managers forget the least used tool available – The One Pay Lease. To a cash customer, this is a way to purchase the vehicle by writing the dealership a check for the total of payments on a 36-month single payment lease. Nobody talks about this and even fewer people are proficient at this technique. This is what separates the average managers and professional grade F&I pros. Explain the advantages for a customer to consider a single payment lease as opposed to simply writing us a check. It costs far less because there is less interest and lower rates. This makes it less expensive than a traditional lease and paying cash for people who enjoy driving the newest cars. Lastly, the credit approval is easier since they get all the payments upfront. The Cash Deal in Disguise The cash deal has evolved and sometimes is a “finance deal in disguise.” People actually walk in with a shoebox filled with dirty 20’s and 100’s that they have been hoarding during the pandemic. Now that the world isn’t ending, they want to get rid of it and come into our dealerships in droves with cold hard cash. It’s a great reminder, if you collect $10,000 or more in cash, report it by properly filling out the finCen8300 form. If you aren’t sure, my advice has always been, “when in doubt, fill it out!” What is a cash deal in disguise? That’s when you get the cash buyer who is really just using an outside lienholder. You will still need to present your options menu however. Most F&I managers will print up a CASH menu and start their presentations. After reviewing how much each product is in terms of overall total cost, they are forgetting that if the customer is using an outside lender, the customer is ultimately going to be making a payment. In this instance, it’s still important to review with your customer, based on the terms of their own financing, what the base payment will be and then what impact adding these protection items can have on that monthly payment. Ultimately, closing the sale on a payment, even though it’s “cash”. Present these as finance deals with different payments and you’ll be surprised how much more product you will successfully enroll your customer in. Show it to them in terms that make sense to their budget. On true-cash deals, sell the value in the product - that’s all you can really do. When they use outside financing, appeal to their budget and explain how much this will benefit them. How does cash affects pricing? I get asked all the time if customers can get a better price if they pay cash. My answer is always the same. “We give the same great pricing to ALL of our valued customers, regardless of how you choose to pay for the vehicle.” Other than the occasional factory rebate that is connected to financing, the dealership’s selling price is the same whether it’s cash, lease or retail installment sales contract. Having an attitude of gratitude. Appreciate and welcome the cash deal. Best part about a cash deal? Not worrying about funding issues! The only thing you have to do is be a great salesperson. As Jim Rohn once said, “if you stoke the fires of their desires, and you’ll not fail to make the sale!” Remember, if a person can sit down at your desk and stroke a reader for $85,000 - they can certainly add $5,000-$10,000 more for whatever protection options they want. Don’t be afraid of the cash deal or the cash buyer. Those are usually disciplined, persistent, highly intelligent people with four common traits: capacity, ability, stability, and equity. They want to buy; they just can’t be sold. You’ll have to earn it the old-fashioned way, by being genuine and serving them with the heart of a teacher and the right spirit of intent. Remember to try a one pay lease for a great cash conversion, present the outside finance deals like regular finance deals, and on true-cash, put on your selling shoes and tap in! #bing #morewinning

Best Practices

8 Management Techniques to Maximize Employee engagement

Is Your Team Engaged? Employee engagement is a critical issue for most dealerships. Engagement is the level of involvement, enthusiasm and commitment and employee feels toward their job and workplace. Today’s atmosphere offers so many distractions that can keep your team from focusing on the works that is before them. There are three types of employees – the engaged, the unengaged, and the discontented. According to our last poll of 130,000 dealership employees, about 24% of employees are engaged in their work, meaning that they’re emotionally committed to getting the job done well and putting in the full effort. That same poll shows that about 38% of employees are unengaged, meaning that they are satisfied with their positions, but aren’t really invested in the dealership’s vision or goals. These employees do just enough to meet the minimum requirements of their job. The remaining 38% of the workforce is discontented and disengaged, meaning they may be sabotaging your success. To ensure that their team is happy and challenged, my best advice is to keep an open mind, an empathetic ear, and clear channels of communication. The level of engagement that an individual exhibits is often tied to how much they feel empowered, trusted, inspired and valued by their leader. Let’s look at eight techniques for maximizing engagement: 1) Set challenging but realistic goals Allowing people to work within their comfort zone leads to complacency that kills engagement. Get creative and inspire them to take on new projects, set new goals, or learn new skills. More importantly, get them to let go of “the way we always did it”. Leaders must challenge individuals and teams to see a new vision and push them whenever possible to do and be better Employees who are challenged with new projects, new goals and new skills need more coaching and cheerleading to make them realize they are truly capable of achieving more! 2) Everyone wants to be recognized for what they bring to the table! Recognize good work and praise people in front of the rest of the team with a shoutout in a team meeting, text, email, or on your dealership Facebook or LinkedIn page. A pat on the back makes individuals feel good about themselves and encourages others to step up if they know they’ll be rewarded with social recognition. BONUS – It also promotes your employment brand, helping recruit new candidates. 3) Track productivity but empower employees and avoid micromanaging Empowering individuals tells them you trust them, which increases engagement and performance. It is a powerful thing when employees believe in their manager, it is even more powerful when a manager believes in their people. Trust is the core of all high-performance cultures. 4) Make it easy and comfortable for your team to communicate Keep lines of communication open and encourage team members to come to you with concerns or roadblocks. When team members don’t feel comfortable speaking openly and honestly with one another, issues don’t get resolved and tension can lead to problematic outcomes. A sobering discussion I have when coaching leaders is when they score poorly on our employee engagement question “Departments in this dealership communicate well and work together as a team”. Avoid all of this by checking in with your employees regularly and giving them an outlet to voice their issues. 5) Prove that employees have a voice It’s one thing to talk the talk, but when claiming that their feedback is important, you have to walk the walk, too! Send out anonymous surveys and polls. To get a better idea of how your team is responding to company culture, workload, and the direction that you’re headed. This allow employees to voice concerns without fear of retribution. I also encourage you to ask for feedback from small groups or one-on-one. I provide my managers with a list of questions that we use for “Coffee and Convos” to start meaningful conversations and uncover new solutions and ideas to improve both culture and processes. 6) Respect that different people have different learning styles Not everyone can sit through online manufacturer training and get the information they need to work with our customers with confidence. Some people need one-on-one instruction; others need visuals; others need to just jump in and get started. Provide a hybrid of learning opportunities and upgrade your skills at coaching and teaching. 7) Take time to really check-in Workdays get hectic in the dealership and everyone has a tight schedule. It’s critical that teams make time to catch up and check-in with one another. Even if it’s just a quick five-minute huddle to share progress, learn a new skill or tip, or review a company value. Communication fuels connectivity and fosters a sense of togetherness, so don’t let it slip! 8) Embrace change If this last year has taught us anything, you must foster a team culture prepared to roll with the punches by being open to change. If someone leaves your team, how will you move forward? If a customer wants to take delivery at home, how will you make that happen? If anyone is too invested in how things should be, you might be missing out on how great things could be! Employee engagement is built on growth, communication, purpose, relationships, integrity, two-way commitment and trust. When done well, it improves the dealership and individual performance, increases the chance of success for managers, drives retention, and dramatically increases productivity.

Research & Analysis

Did You Know This? Latest Hispanic Car Buying Preferences

There are over 60 million Hispanics are living in the United States and their purchasing power hit $1.7 trillion in 2020 , up from $210 billion in 1990! The U.S. Hispanic population continues to grow rapidly, accounting for around half of all U.S. births. Rapidly Changing Demographics Many states are facing rapidly changing Hispanic demographics. Texas ranks #2 and has a Hispanic to white population growth of 9:1 , and that same population is expected to become the largest sub-group in the state this year. North Carolina's population , on the other hand, is much smaller, but is also growing rapidly reaching 1 million in 2019. Next, while New York has the fourth-largest concentration of Hispanics in the U.S., their spending power is $170 billion , around 10% of the national average. Young Buyers are Good for Your Dealership Next, the U.S. Hispanic population is very young with a median age of about 30. Compare this with the national average of 38 years, and you can see long-term value in building with the Hispanic community around your dealership. Thinking more broadly about these stats, it is no wonder that U.S. Hispanics are fueling the growth of several key segments of the economy, including the auto industry. These numbers are no joke. If you are a dealership and you don't know the volume and composition of the Hispanic market around you, then you are making a big mistake. So let's look at the data first, starting with last year's survey and then the highlights of this year's. A Snapshot of Our 2020 Survey We did our first Hispanic Car Buyers survey in early 2020, just before COVID changed everyone's lives. In 2020, 58% of our respondents were women, and 42% were men. Over half the respondents were 18-31 years of age. Add just seven more years, and the number jumped above 75%. Five things stand out from last year: Women play a bigger role in decision-making than most people think. U.S. Hispanics want to touch, feel and test-drive vehicles. Toyota enjoys a dominant role in appealing to the Hispanic market because they have reached out to them for years. Selling in Spanish does matter. Hispanics are online and in force and they respond to digital advertising. 2021 Overview - Who'd We Talk To? In this year's survey, we sought to overlap but not completely mimic last year's survey. Consequently, we dug deeper to understand Hispanic online buying behavior. Our sample composition is very similar to last year's, although we had more who were 45 and older. The distribution breaks down in the following way: 54% of respondents were women; 43% of respondents were men; 3% Preferred not to say 17% fell in the age range of 18-25; 37% fell between 25-31; 23% were between 35-44; 17% were between 45-54; and 6% were 55 or older. As with last year's survey, we hope that this data will encourage executive management at car dealerships and advertising agencies to explore marketing to the community, even if they start with baby steps. The U.S. Hispanic market is growing too fast to ignore and their buying power is exploding. Failing to connect with them will leave any dealership with a large Hispanic population at a disadvantage, especially when competitors act first. 5 Things We Learned in Our 2021 Hispanic Car Buyer's Survey Massive amounts of data show that U.S. Hispanics are becoming a financial juggernaut in America. Still, yet they are often ignored in advertising either culturally or through the use of Spanish language marketing. If the stats in the introduction are not enough proof that U.S. Hispanics are becoming financially powerful, perhaps a current article in the Wall Street Journal will help convince you. According to the WSJ, in 2020, the number of U.S. Hispanic homeowners rose by more than 700,000, the largest 1-year increase in 20 years… and that was during a pandemic! So what are the highlights of this year's survey and what do they tell us? Key Findings in 2020 / 2021 Hispanics are tactile . The data proves over both years that they love to test-drive vehicles. U.S. Hispanics prefer to be marketed to in Spanish . Of course, this number is nuanced depending on where you are in the States. For example, with such a long history in the U.S., Texan Hispanics require different messaging than those that might be new to our country. Brand reputation means a lot - whether it is your dealer brand or the manufacturer's . If you market in Spanish and focus on building a solid reputation with the community, then you will be on a good track. And if you sell vehicles whose brand is well recognized, then all the better. Cell phones are the primary shopping tool for U.S. Hispanics . What does this mean to you as a dealer? Your dealer mobile website best be fast, or you'll lose business. Sadly, dealer websites are often relatively slow. Check out this article I wrote with David Kain and Tom Kline if you are curious. Like last year's data said, U.S. Hispanics are online and in force. They over-index on social media use and are fully engaged on all the major platforms. This gives you, as a dealer, a straightforward direction to go… get a social media strategy in place and start marketing to Hispanics around your dealership in Spanish. Final Comments For this first article, we gave you an overview of our 2021 study and its highlights. Our next article will delve into raw stats, and our interpretations, around search and shopping behavior of U.S. Hispanics. In the meantime, think about what this article series means to you as a dealer. Do you know the size and composition of the Hispanic community around your dealership? Are you marketing to your local Hispanic community? If your answer is negative for either of those questions, then drop us an email, and we'll give you a hand.

Get Tips & Tricks every Week!

Join our newsletter and get news in your inbox every week! We hate spam too, so no worries about this.

DMM Expert Podcast Interviews

Episode 23: Untapped Audience

Connected Cars

Episode 22: We Have Problems...

Commentary & Insights

Introducing Google Analytics 4: New Tracking & a New Way of Thinking

Long the industry standard for measuring digital advertising, Google Analytics launched a significant update recently. More than an update, GA4 provides a whole new paradigm on how to think about and measure web traffic. So whether you're the guy who crunches the numbers, or needs to rely on or manage those that do, here's a quick dive on what you need to know about the new Analytics 4. Google Analytics Pre-Update: Universal Analytics As a starting point, a quick recap pre-update. Google Analytics, a free tracking tool from Google, provides data on your dealership's website traffic. It reports on things like which content or products are driving traffic on your site, from what website your visitors arrived, where and how they are converting or what actions they are taking on your site, as well as information like users' age, gender, country, device, etc. Many vendor dashboards are based on GA4, so whether or not you're viewing it in its native form, you're likely still relying on its data to make decisions. A key point on the previous Google UA is that tracking was accomplished by placing a block of JavaScript code on your website. And while that worked well for your website, tracking mobile devices required a different version of analytics, for example, GA for Apps, or Google Analytics for Firebase , which created a problem. The data from these versions looked quite different from the tracking for your website, often making it difficult to implement consistent tracking. New Device Support and a New Data Model With the new GA 4, you can now track your website, an app, OR BOTH together. But since page views, bounce rate, or time on site are different for mobile, GA introduced a second change - a new data model. To unify the collection methods, GA underwent a complete rethinking of how it works, redefining things like page views, transactions, social interactions, etc., under one concept. These are now referred to as events. With the new GA4, an event can be almost anything you choose; a pageview, screen view, or app view. With each event that gets triggered, you'll also see extra information that describes the event more closely. These are called event parameters. Also, these properties can now occur in other events. So you can query them together and compare them against each other. It also future proofs the system for the different sorts of devices that you may want to track, like the IoT (Internet of Things) devices or Point-of-sale systems. Changing How We Think about Analytics As you can see, Google Analytics 4 is a significant update, offering new tools with an entirely new perspective on data and how it represents the digital world. In addition to providing more flexibility in what we choose to send into the system, it also allows Google to plug your data into their existing machine learning systems and provide predictive insights. There is no longer a need to ask questions; rather, GA 4 gives us insights right away with new predictive metrics already built-in and available. The new GA4 is also more independent regarding the assumptions about what type of business it's looking at. In a nutshell, Google Analytics 4 has moved from being less of a reporting interface where you merely view your data and instead of providing you with D-I-Y tools to build yourself. This means your GA 4 setup doesn't have to look like everyone else's. Of course, this means more advanced planning on your part so the events can be properly interpreted later. In closing, while the current Google Universal Analytics platform will likely stick around for a while, it's pretty clear that GA4 is the next step in the evolution of analytics data. So if you're ready to jump in and see what the new GA4 can do for you, there are three ways to get started (with varying degrees of commitment). 1. If you're ready to fully rely on Google Analytics 4 reporting. Set up a new site on a Google Analytics 4 property. 2. Create a parallel new GA4 property collecting data alongside your existing UA property. This will also establish a connection to migrate configuration settings from your UA property to your new GA4 property when you're ready. 3. Add Google Analytics 4 to a site that already has Analytics. Your UA property is left unchanged and continues to gather data. Note: you'll need Edit permission on your current account. Read more on setup here .

Commentary & Insights

Dealer Risk Mitigation: Expectations & The Fountain of Youth

My buddy, Tom, recently visited St. Augustine, Florida and he was kind enough to bring us souvenirs. No, my fiancé and I didn’t get t-shirts. We got something a heck of a lot better than that! We were gifted tiny tourist miracles from Ponce de Leon’s THE FOUNTAIN OF YOUTH! In personalized bottles! That’s life-changing, right? Well, I thought it was awesome until I flipped over the bottle and discovered it was “Made in China.” WAIT, WHAT? Then, we were sad. Our hopes and expectations of eternal youth – dashed. This was a kitschy, little reminder that things don’t always turn out as you want them to or as advertised. Sometimes things turn out worse than you thought and sometimes, though not as often, they turn out better. And so, when you get a regulatory letter saying the dealership has made customer or advertising mistakes requiring immediate correction, often your expectations start with dread and large dollar signs. That eventuality could happen. However, with proper care and diligence, you can settle the issue(s) quickly. Most often, these regulatory issues start one of three ways: A customer problem An employee issue Advertising violation(s) Be vigilant on these three (3) issues. They should be front and center in keeping you out of trouble. There are plenty of risk mitigation strategies to prevent problems, covered in a subsequent article. Risk mitigation is an ongoing, everyday practice that requires continuous improvement activity. So, when you receive a letter, administrative action, lawsuit, subpoena, or a formal request for documents, from a regulator, read the paperwork with great care. Sometimes the magic is in the wording of the allegations. Please read it and set it aside for the moment. Building the Story Next, research the problem. Interview the parties involved. Take clear notes as the nuance of the story matters. If the alleged violation is customer or advertising-based, pull the file and review it carefully. Do all of the signatures in the file look consistent? Or may someone have forged a signature? Build the story of what actually happened by reconstructing the detail, step by step, and commit to recording this for yourself to have a chronological record of what happened. Be sure to include direct quotes from the witnesses in your chronology. Now, refer back to the original allegations to determine what holes are left in the story. Try to unearth the details relating to those holes. Re-interview as needed. Taking good notes is critical! Effective Risk Mitigation Contact your risk mitigation expert and determine if the charge could be covered by your insurance policy. Consider this carefully. Depending on the dollars involved and the nature of the complaint, insurance company adjustors can make the matter more complex and time-consuming. This is an expansive question, so this will be a future article, as well. Most “complaints” have deadlines. Just be aware of this and ensure you are responding promptly. At this point, I advocate contacting the regulator directly and having a friendly chat. Find out what he/she is looking for. If the problem was related to a consumer or employee, resolving it may be as simple as satisfying their concerns. If it is advertising-related, I can assure you it won’t be that simple. During that call, be positive, be professional, and assure him/her that you want to resolve the issue. Ask for permission to ask questions. Grab your chronology and ask questions to try to fill in the gaps where the allegations do not make any sense. Go slowly and listen carefully as the regulator may or may not have the correct information. If the regulator has bad information where you can prove the allegation is incorrect, gently offer up one or two incongruous tidbits at that time. Depending on the rapport you have built, you can offer a third, though I would not offer more than that on a first call. The purpose here is to sow doubt about the veracity of the complaint. Don’t overdo it. The most critical question you should ask is if you can reach out to the upset person(s) and try to satisfy their concerns directly. Most of the time, the answer to this question is a resounding “yes.” It’s important to ask the question. It shows respect and deference. Then, agree on a time frame when you will get back with the regulator. Keep him/her posted on your progress. It’s better to over-communicate than under-communicate. Solving the Issue By now, I am sure you are asking yourself, “when is he going to talk about getting the lawyer involved?” The attorney may not be necessary. This is a fact-specific question and I cannot generalize to give guidance on this. Then, satisfy the aggrieved parties’ concerns. However much it costs to fix the problem, I promise it will be less than letting the regulator devise a solution. Ask them to sign a Release of Claims, which should include language like this: “Customer acknowledges that he is COMPLETELY SATISFIED with ____________ (dealership) and with the resolution of his concerns.” Then, call your regulatory contact again and walk him/her through the dynamics of what happened with the upset person(s). Explain how you resolved the concerns. If a lack of proper business practices caused the problem, it’s usually okay to acknowledge it. Thank the regulator, and, if appropriate, let him know you will change your practices, so this doesn’t happen again. (Use a lot of discretion here as this may not be necessary, and you do not want to create a problem where there isn’t one.) Provide the written document to your contact so he can close his file. Phew! Great work! Conclusion Hopefully, your expectations of dread, gloom, and doom did not come to pass. What did you learn? Is it time to change your risk mitigation strategies? If this was stressful for you, consider taking the time to install new policies and procedures to prevent these problems before they occur. You can reduce your anticipated stress level for future problems by hiring someone who can help with these difficult situations. Temper your expectations through continuous improvement activity. Risk mitigation is not a one-time thing but is an ongoing practice. It reduces the chances of regulatory interference and catastrophic losses. Consider changing your business processes to accommodate these loss prevention techniques. Then, I’ll meet you in St. Augustine, where we can sip Chinese water from the Fountain of Youth.

Best Practices

The Big Buzz in Digital Retailing: Dealer Ultimate Milestones

Everyone in the car business is talking, writing, and podcasting about digital retailing. The list of related virtual events is exhaustive. The popularity momentum is depicted when planning a Google Ads campaign with keywords such as "automotive digital retailing," "digital retailing," and "modern retailing." Google's Keyword Planner shows a month-over-month increase of these keyword searches for the past 24 months. When forecasting your Google Ads budget, you can expect to pay upwards of $35 per click for an average 1.5 ad position. Automotive digital retailing is absolutely on everyone's mind. Transparency, Trust, & Time Savings As you weed through the mass content, several ideals are dominant: Transparency Building trust A streamlined sales process A seamless online to in-showroom experience First and foremost is giving consumers more control of the car buying experience. The ability to search on a dealer's website for vehicles by year, make, model, and type and to explore different configurations is a given. It's essential to accurately display vehicle pricing, factory rebates and incentives, special offers, dealer fees, financing options, a credit estimator and application, and a tool to formulate payment scenarios. Multi-channel options for requesting information, getting a guaranteed cash offer on a trade, and scheduling a test drive while enabling consumers to complete their entire car purchase online with flexible pick-up and delivery options – are all must-have components of any digital retailing strategy. It makes sense that this level of transparency builds trust with shoppers, leads to significant time savings, reduces friction, and results in a more favorable car buying experience. Why Achieving FULL Transparency Is the Ultimate Milestone for Dealers Let's think about what "transparency" really means... total visibility, crystal clear, open to observation, without concealment. While digital retailing components play a critical role in creating a transparent online shopping environment, full transparency is achieved when dealers openly display ALL vehicle and dealership information within the digital retailing framework , which saves shoppers even more time and builds a greater level of trust. As consumers move through the car buying journey, there are hundreds of digital interactions across social channels, video platforms, search engines, industry portals, manufacturer websites, and online review sites. Digital Air Strike's 8th Annual Automotive Digital Retailing Consumer Trends Study revealed the following about 7,500+ car buyers and service customers: 60%+ selected a dealership based on online reviews alone 54% said that community involvement influenced their decision to buy from a dealership 51% used Google to find dealership reviews Only 5% of dealerships shopped sent videos in response to customer inquiries 27% preferred to select vehicle warranty and add-ons online 93% of car buyers spent a few days or more researching which dealership to buy from When it comes to achieving transparency in automotive digital retailing, there's more to it than simply integrating a digital retailing solution into dealership vehicle details pages (VDPs). Imagine car shoppers landing on VDPs that contain all the information they are looking for – not just vehicle photos and specs, financial tools, contact forms, and pricing. What if shoppers could watch videos introducing the service department and the General Manager, explore Google and DealerRater reviews, read about a VIP program, and learn about the dealership's community involvement. Why are shoppers forced to hunt for reviews on search engines and to browse through website pages to learn about the service department, community work, or special programs that are offered? Since most of a dealer's digital budget is spent driving traffic to VDPs, having car shoppers leave to find the information they need – is the last thing a dealer should want. Start Here Think about the process that you would go through to purchase a used vehicle. Before you get to the point of needing financial tools to build payment scenarios or obtain financing, you would spend time figuring out if a particular vehicle is the right choice by looking at vehicle photos and specifications AND by asking questions: Is the vehicle factory certified? What are the results of the inspection? What repairs or maintenance did the dealership perform? Does it need repairs? Is the history report clean? What info is on the OEM window sticker? What kind of warranty does it have? Is there a return policy? Is there a live video walkaround? How difficult would it be for an online car shopper to get the answers to these questions? How many phone calls would need to be made? How many forms filled out? How long would the consumer have to wait in the dealership for a salesperson to gather this information? A truly transparent website VDP contains ALL the information that shoppers need in one place - not just vehicle photos, specs, and financial tools. A high-impact VDP contains a vehicle's reconditioning records, inspection report, factory window sticker, vehicle history report, dealership reviews, video walkaround, ebrochure, and videos and documents that illustrate the dealership's reputation. Providing online shoppers with a "portfolio" of the dealership, the vehicle, and digital retailing components is the ultimate milestone in transparency and trust. Doing so saves shoppers hours of research, reduces painful price negotiations, streamlines the process, and makes the transition to the dealership seamless. The Value Benefits Full transparency offers enormous benefits for dealers as well, such as building value in a vehicle by openly discussing the dealership's reconditioning investment or an inspection performed by a master certified technician. Value-based conversations with shoppers about vehicle quality and safety, and a lower cost-of-ownership over time helps to justify pricing and demonstrates that the dealer is truly interested in helping the shopper make a smart purchase decision. In the end, it's a win-win situation for both the dealership and the car buyer – by focusing on selling value, the dealership retains its gross profit. At the same time, full transparency earns trust and drives customer loyalty.

Commentary & Insights

Beyond the Shopping Cart: The New Era of Going Digital

The automotive retail industry is changing at the most significant pace in its hundred-year history. COVID-19 has accelerated retail trends in the automotive industry, so the 21st-century car buyer is no longer limited to dealerships but is now an "anywhere" buyer. Slow-to-adapt dealerships have been faced with the harsh reality that to succeed "”not merely exist"” they must move the buying experience from the showroom into the living room. An end-to-end digitally delivered experience, from first look to purchase, has been the only option for customers wary of public places. The next generation of automotive retail will be defined by convenient financial options, backend logistics, and rapid home delivery. Dealers must bring the showroom, F&I, and white-glove delivery to their customers regardless of physical location "” whether a showroom, a living room, a back yard, or a tent. Meanwhile, customer expectations for seamless remote purchasing experiences have been raised dramatically, thanks to the influence of Amazon, Apple, Facebook, and Netflix. A McKinsey report predicts millennials will represent the largest new-car-purchasing demographic by 2025, making it critical to address the preferences of these digital natives who expect smooth, "contactless" experiences. Breaking the Retail Mindset The old mindset was that "going digital" meant updating the dealership website with a catalog and a shopping cart. But going digital encompasses a lot more than online inventory. It means enabling a "buy anywhere" approach. It means adopting a flexible, process-focused mindset based on operational speed and dependability to address customer pain points. It means mastering the logistics of contactless product delivery, customer service, and remote sales. The key to successful remote sales is breaking this outdated retail mindset and moving to a modern approach based on operational speed and dependability. Once merely an online bookstore, look at how Amazon evolved to become a logistical juggernaut capable of delivering goods to any doorstep the next day with stunning dependability. What Your Customers Really Want A business exists to make its customers' lives better. If the customers' most significant pain points are around time, complexity and trust, every new feature or service rolled out should be designed to address those pain points. And the dealership needs to make that clear in its "brand promise," the experience customers should receive every time they interact with the dealer. The traditional brand promise is that the dealership is the biggest, cheapest, largest, friendliest, most award-winning, etc. But today, a brand promise must relate to solving the biggest pain points through speed, convenience, and transparency while being consistent across all customer touchpoints. These can include: Connected online visits so customers can continue their journey right where they left off Transparent and upfront pricing 100% online purchase with available home delivery or curbside pickup Online cash offers for trades Service pickup and delivery 7-day exchange program Lifetime engine/powertrain warranty Dealerships need the right technology foundation for becoming a customer-centric and digitally efficient dealership. They have to take advantage of emerging retail technology to grow their market share, increase F&I profitability and exceed customer expectations. The Silver Lining Because of COVID-19, the shopping experience that used to be a matter of convenience has become a matter of necessity. Dealers are now transforming their operations and connecting more effectively with buyers in any location. By focusing on proven digital strategies, dealerships can make a great leap forward in their ability to promote, sell, finance, and schedule delivery of cars remotely. They will not only survive in this new era, but thrive.

Best Practices

The Chip Shortage Is Coming! Is Your Used Inventory Ready?

By now, the entire industry and many consumers have heard about the chip shortage ready to hit automotive showrooms about the time our summer kicks off. A shortage of semi-conductor chips due to COVID slowdowns with production hit auto makers in the early part of 2021, and dealers are now bracing for impact. Popular vehicles like Ford F-150 trucks and other models are harder to come by right at a time when vaccinations and a lessening of restrictions are bringing car buyers nationwide back to dealership lots in droves. While there are a lot of ideas on how dealerships can work around the shortage and continue to turn a profit, one theme that continues to resonate throughout the industry is to have dealers look to their used car inventory to shore up sales before the event. As we look to the summer buying season, what are some things you can work on now to ensure you're ready? 1. Build Trust A recent Marchex report shows more than 91% of people surveyed said they rate trust just as, if not more, important than the price of a vehicle. This becomes even more crucial when it's time to look across your used car inventory. What products can you use to your advantage to help build that trust with the customer? One of our favorite ways to show dealerships how to do this is with a Lifetime Powertrain Warranty. By offering a Lifetime Powertrain Warranty as an additional safeguard for the used vehicles in your inventory, you're adding another layer of trust to your guest's purchase. 2. Use Extras Just like our example with the Lifetime Powertrain Warranty suggestion above, throwing in extras to entice customers to move forward with a used vehicle has shown to be an effective way to move the needle toward a sale. Some of the add-ins we've seen that work well are: Warranties Free oil changes Complimentary tickets to a local sporting or arts event Even a contribution to the buyer's local charitable organization of choice 3. Do a Complete F&I Audit Now is the time to look through and audit your current F&I offerings. Used vehicle buyers tend to purchase more ancillary products like dent and ding protection and paint repair. Some things to look at as you go through your audit – look over your disclosures to ensure you are up to date with compliance. Important terms to check include stating the purchase of products is not required to obtain financing, and the agreement or declining of products will not affect APR. Lastly, ensure every F&I product you offer is properly displayed on your presentation page with benefit statements for each. 4. Increase Promotion of Popular Used Vehicles Several models, like Ford F Series pick-ups, will continue to drive demand. The longer the chip shortage lasts, the harder these popular used models will be to find on dealer lots. Ensure you are identifying the most popular models on each of your lots and promoting them heavily as we move into the summer months. While the chip shortage is not ideal, you can act now to shore up your used inventory and build trust to push buyers toward the used vehicles on your lot. A combination of promoting high-demand vehicles, auditing your F&I products, and offering incentives like Lifetime Powertrain Warranties can go a long way when building the buyer confidence needed to push you to the finish line this summer.

Best Practices

With Connectivity, Dealers Can Get More from Courtesy Transportation Programs

Most dealers have Courtesy Transportation, or CTP programs in place, with the support of their respective manufacturers. What dealers may not be aware of though, is that these programs are increasingly using Connected Car technology to track and manage the vehicles enrolled in them. Not only does this new technology create opportunities for better fleet management, but it also has the potential to create some exciting new revenue opportunities for dealers in the very near future. The same platform used to operate CTP can be used by dealers to operate Rental programs, Alternative Financing programs, or Demonstrations. Connected CTP Programs Manufacturers are increasingly equipping new vehicles with built-in telematics equipment. In 2021, over 90% of all new vehicles will be equipped this way. Fleet owners have long recognized the value of built-in connections for fleet management applications. Fleets can more accurately track vehicle location, maintenance needs, mileage, and driver behavior data using a built-in connection and centralized fleet management. Vehicle manufacturers are increasingly bringing connected fleet management tools to their CTP to let dealers more closely manage these fleets as well. These programs, operated by companies like TSD Loaner , Connexion Telematics , Bluebird Auto Rental Systems , and ARSLoaner , all enable Dealers to more closely manage CTP vehicles. Dealers can easily enroll vehicles from their inventory into these systems and then track which ones are rented out, how many miles have been driven, how much fuel is being used, and whether any of the vehicles need maintenance. In the event that one of the vehicles goes missing, it can also be located. To get the most out of Connected CTP, dealers should take full advantage of available reporting, such as: Mileage alerts to prevent vehicles from being used past OEM program mileage limits Fuel Usage, to recoup fuel costs Rental History, to identify which vehicles are over-and under-used Over-Time alerts, to identify vehicles that have been kept longer than planned Tolling Alerts, to recoup toll costs Some programs also include remote lock/unlock commands, giving the dealer the ability to easily help if a CTP customer gets locked out. Taken together, dealers can use these tools to significantly improve the efficiency of their CTP. New Revenue Opportunities While Connected CTP can be useful in managing costs today, they can also create a platform for dealers to easily try out new revenue models. Technically, any connected vehicle on the dealer's lot – new or used – can be activated and managed from the same platform that is used to manage CTP. That creates some interesting possibilities, such as: Short-Term Rentals Any connected vehicle on the dealer's lot could be enrolled and offered as a short-term rental. The CTP platform could easily bill the rental customer for time, mileage, fuel used, tolls, etc., at a rate negotiated by the dealer. Rentals could be for use by individuals or businesses or could be offered to Uber or Lyft drivers. Dealers should seek information & guidance from their providers & OEM partners. Some of the providers mentioned above already offer integrations that can result in immediate revenue opportunities. Alternative Financing Models The same CTP platform could also allow the dealer to experiment with alternative financing models, such as subscriptions or "loan to own." The platform can easily track vehicle usage, apply a metered price by day, month, or by mileage, and can apply additional charges for fuel, tolls, and maintenance. In the event vehicles need to be recovered, they can also be located. The platform built to enable a Connected CTP can easily be adapted to operate these programs, as well. Demonstration Programs The dealer's CTP platform can also be used to offer vehicles for demonstration. With the roll-out of Electric Vehicles, for example, many customers may want to have a trial of an EV before committing to an all-new method of propulsion. Any other vehicle on the dealer's lot can also be offered this way, with mileage and usage easily monitored for follow-up with the customer. These new applications are not yet widely deployed to dealers, but dealers should be aware of the potential of Connected CTP and press their manufacturer sponsors and platform providers to bring these capabilities forward.

Expert Automotive Knowledge at Your Fingertips

Get Tips & Tricks every Week!

DMM Expert Podcast Interviews

Episode 23: Untapped Audience

Connected Cars

Episode 22: We Have Problems...