Leadership & ManagementBest Practices

Leadership & Management
story of success
Emotional Intelligence: A Good Dealership Habit To Pick Up

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“The purpose of habit is to remove that action from self-negotiation. You no longer expend energy deciding whether to do it. You just do it.” - Kevin Kelly, '68 Bits of Unsolicited Advice' You may have never thought of it this way, but problems at dealerships usually walk through your office door on two (2) legs: Either with customers or with employees. It’s always best to tackle these two-legged issues promptly, as otherwise, they can quickly escalate to regulatory challenges or, worse yet, lawsuits. I’ve seen it happen again and again. There are two main ways to confront problems as the dealer principle: You can personally manage the issue itself, or  You can manage the problems through well-trained employees who are empowered to fix them Your operations will be smoother for you if you choose to embrace your employees’ ability to handle the day-to-day concerns.   One of the most powerful tools you can teach your employees to deploy is effective and strategic emotional intelligence, i.e. the ability to understand, use, and manage emotions through communicating in a positive way. Your managers should understand this skill so they can effectively convey even difficult information to your customers.   The best way to change the communication style within your team is for you, as the leader, to model the use of your own emotional intelligence, whenever possible.  Here’s an example from last week. I was at a dealership group that wants to empower its managers to resolve customer problems through improved emotional intelligence. Together, the owners and I dug in with an action plan and dedicated a day to one-on-one sessions with all key stakeholders. We trained and practiced to ensure the managers understood the concepts and opportunities and could employ emotional intelligence tools effectively.   In this intimate training, we focused on a top-tier issue:  How to De-Escalate Customer Problems and Build Trust (To prevent problems at a dealership, this is step one and is the most important training for employees.) During one memorable session, with just the three of us in the room, one of the managers seemed particularly fidgety, wouldn’t make eye contact with me, despite being only three feet in front of me. He looked at his watch, then looked at the floor, and then looked at his watch again...then, stared at the floor.  Clearly, something was bothering him. (Let’s call him “Anthony.”) Me: Anthony, you look like something’s bothering you. Are you okay? Anthony: Yea, it’s nothing. Don’t worry about it. Me: You look uncomfortable. (When you label the emotion of what someone is feeling, it is disarming.) Anthony: Naw. Sorry, let’s continue. Me: Anthony, I can tell something’s wrong. Please let me what it is so I can help you. Anthony: I apologize (looks at his watch)… let’s keep going. Me: Do you need to be somewhere else? Is that why you keep looking at your watch? Anthony: It’s not about work. Don’t worry about it. Me: Where do you need to be? Anthony, I fix problems; it’s what I do! So please tell me what’s up so I can help. It turns out Anthony had an appointment at the post office to have his passport interview. I asked how long he had been waiting for the meeting (knowing everything is still backed up because of COVID) and he indicated he waited about six (6) to seven (7) weeks for the meeting.  I asked the other manager in the room if Anthony could go to his appointment and I could train him later. And, that’s exactly what ended up happening.  There I was, training about using emotional intelligence, and in that moment, I needed to deploy the very same tool, so Anthony could learn about emotional intelligence! Yes, Anthony should have told his boss about the appointment weeks in advance, days in advance, and the morning of his appointment so we (all) could have avoided the herky-jerky start-stop. When someone is feeling boxed in, they quite often don’t think clearly, as Anthony displayed. (I’m certain he had pressures at home and was told, “you’d better not miss this appointment.” At least, his face indicated that conversation had taken place.)  So the moral of the story is: Use emotional intelligence when managing your employees and deploy these tactics to resolve customer and employee problems. Train on specifics and remind everyone to recognize the emotions at play under all situations. Then, you won’t have to remind yourself of this. Happily, it will be habit. You will just do it!
rain cloud
How Dealers Should Handle COVID (Co-author Kristina Vaquera)

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Another article about COVID-19?  Ugh! Snap! And oh, my! Employers everywhere are tired with having to handle this additional burden to running their business. But, now, more than ever, it’s important to mitigate your risk by being consistent and current in how you handle COVID. Don’t let your guard down now.    In this article, we will limit our discussion to the federal perspective on COVID as each state may have its own rules or requirements.  FACT: The Equal Employment Opportunity Commission (EEOC) says you can mandate employee vaccinations for employees physically entering the workplace based on business necessity subject to reasonable accommodation requirements. In essence, if it is a threat to the safety and well-being of employees and customers, you can require vaccinates. Very few jobs at the dealership may be completed by being isolated by plexiglass or office walls. Most require daily face-to-face customer contact that cannot be eliminated. FACT: If vaccines are required, employees may claim two (2) accommodations: Because of their sincerely held religious beliefs (i.e., Title VII of the Civil Rights Act), or Because of their disability (i.e. the Americans with Disabilities Act) If an employee asserts an accommodation request, call your employment lawyer for more specifics on how to handle the situation. Each case is different based on the facts. FACT:  To protect your employees and customers, ensure you have the latest signage from the Centers for Disease Control (CDC), Occupational Safety and Health Administration (OSHA) and your state safety and health departments. For example, current CDC guidance has different masking requirements depending on whether you are in a low or medium to high-risk transmission area. Click here for more information. FACT:  As the employer, you are still required to provide personal protective equipment (PPE) and sanitizing stations. Outbreaks at the dealership? If you are having frequent positive COVID situations at the store, you may need to revisit your policies and their efficacy. If you make changes, document what you are doing. Are you required to keep a log of positive cases, or report to your state? Make sure you are doing so if required. If OSHA, or any agency, visits you, they want to know what you are doing to protect everyone. Be diligent here.  FACT:  If you sell fleet vehicles to the government, or have a federal contract, then you may be a federal contractor. If so, you must follow federal COVID mandates required by Executive Order. You may also be subject to mandatory vaccine requirements if you have 100 or more employees.  FACT:  On September 9th, President Biden signed an Executive Order requiring employees of contractors doing business with the federal government to be vaccinated which builds off a previously issued Executive Order from July. President Biden also mandated that OSHA is developing a rule requiring all businesses with more than 100 employees to ensure their employees are fully vaccinated or require workers who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work. This mandate also requires employers to provide paid time off for the time it takes workers to get vaccinated or to recover if they are under the weather post-vaccination. It is unknown if employers will have to pay for the cost of testing and/or the time associated with testing.   This situation continues to evolve. Don’t “take on” risk by being lackadaisical when it comes to COVID. Author's note: The above article is for informational purposes only and does not constitute legal advice and does not create an attorney-client relationship.
winning team
Why Your Team Should Be Part of Your Marketing Strategy

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"The leader is one who, out of the clutter, brings simplicity …" - Albert Einstein We humans complicate things, and it’s no surprise in dealerships it manifests in grandiose form, especially noticeable when it comes to how teams, training, and advertising relate to technology. These four areas, when not in harmony, work against each other. I have found the most successful stores don’t have the most cutting-edge technology or the newest tools, the most successful stores are the ones that have mastered the balance between team, training, advertising, and tech. Why these four areas? Each one directly affects the other, when you understand how one can affect another you avoid the chain reaction domino effect preventing you from streamlining and propelling your team forward. Recent technology is often marketed as a trade-off for training, the proverbial easy button, which is attractive when you’re focused on growth. Unfortunately, band-aids like this won’t last and we’re left with a glut of tech solutions that aren’t streamlined and overlap. You know what happens next, a collision course with chaos, with wasted budget, time, and we didn’t improve our customer’s experience. Connecting Training, Advertising and Technology I use the four questions below with my clients to ensure the team, training, advertising and technology don’t become disjointed, bloated and to address weak links. Does it already exist in any of our current products or services? Is this something that solves a problem which can’t be solved with training? Is it simple enough to flow seamlessly, support my team, and our processes? Will it benefit our customers and reduce pain points? Sounds simple, right? These four questions provide great touchpoints for inspecting when and where to add new products and services, they also ensure you’re making the most of products and services you already have in place. It’s also beneficial to make a habit of evaluating your outside services and products every month, considering these questions when you do. Like tools in a mechanic’s box, the tools you use in your dealership need fine tuning, maintenance, and at times replacement. Bloat is not exclusive to overindulging on Thanksgiving; it creeps in when dealerships continue to add the “next new thing” without evaluating what is already in place.  Where do my team and training come into this? Let’s hit the hard truth first - if you’re adding tech to overcome lack of training, you're compounding the problem. If you’re working with an outside company to handle your social media because you don’t have someone on your team with the training to manage it, you’re only hurting yourself. Here’s the thing, hiring an outside company to do what should be an inside job is not sustainable, nor is it going to bring healthy growth; you’re selling based on transactional relationships, which do not last. We want your team, tech, and advertising aligned and working together as one; the only way to accomplish this is through training. Adjusting your perspective to view your team’s training as part of your marketing strategy will help you achieve balance. It will also help you to reframe how you view your technology assets, focus on how your tech supports your team, and how to make it easy for your customers to do business with you. Instead of looking at tech as a funnel for leads, try looking for it to support your team in growing relationships that become loyal customers. Your team members are going to be your true sources of long-term, non-transactional business, providing your team training and technology to that end is where your tech investment will be your best investment. Addressing the Elephant in the Room Advertising is always the painful elephant in the room, it doesn’t have to be. When you make your team part of your marketing strategy, incorporating training and goal setting, advertising becomes a daily habit. Now let’s take that one step further. Consider how the diversity in your team represents the diversity in your audience and customers, creating a space and culture where your team members contribute to your advertising allows your message to be presented with a different personality, now reaching everyone in your audience with their preferred “flavor” of marketing. Prioritizing Customer Facing Tech Making it easier for our customers to do business with us where we have the most room for expansion and I believe where we will see the biggest strides in advancement, this is the tech you should be on the lookout for. Customer facing tech has for so long been lacking because we have been focused on driving leads, rather than building relationships - change is coming. How you choose to train your team, and whether you achieve harmony with your team, training, advertising, and technology could mean the difference between growth and exponential growth as that change rolls out.
loyalty culture
Dealership Culture: Make Trust Your North Star

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Bolster your dealership’s culture with clarity, consistency and accountability to succeed in a multi-channel world According to the Guinness Book of World Records, Rory Blackwell, the ultimate one-man band, played 108 different musical instruments simultaneously on May 29, 1989 in Devon, England.  Fortunately, a car dealership is the opposite of a one-man-band. A dealership is full of skilled, well-trained and dedicated professionals, all ready to do their part to help the dealership succeed. That said, I believe the most essential instrument required for them to play in harmony is trust.  Yet building trust in a dealership is a lot easier said than done. It can apply (or not) across the board to ownership, managers, employees and customers.  Trust can be earned, of course, but it also can be easily or quickly lost.  Culture Matters I’ve been thinking a lot about trust after listening to a recent podcast hosted by Troy Scheer with Brian Kramer, the General Manager at Germain Toyota of Naples, in which the two discussed the important role played by culture in a dealership. A running theme throughout the podcast was the importance of a culture built on trust.  A dealership must first define its culture, however, and I believe the touchstone for any dealership culture should be the customer experience. The challenge is to bring sales, finance and service together as a team – whether online or in the store -- to seamlessly provide the desired excellent experience to each customer.  This united effort is complicated by the need to balance in-person and digital contacts with customers. An employee who is busy in the showroom meeting and greeting customers is unavailable, at the same time, to respond to digital leads. Yet both types of communication are essential and must be made. You can’t afford to ignore customers or make them wait too long. That’s why the best dealership cultures inspire everybody up and down the line to do whatever it takes to deliver a positive customer experience.  Getting there with a minimum of friction, however, requires management to take three steps: clarify what’s expected, be consistent in its application and hold everyone accountable.  Clarity Means No Surprises When buying a vehicle, I’m always mystified why the salesperson doesn’t walk me over to their service department and personally introduce me to someone in sales to initiate a more long-term relationship. Those of us in the business know that typically parts and service can generate 49 percent of a dealership’s profits.  My guess is that the salesperson is focused on the short-term and is already thinking of his or her next sale, instead of what’s best for the customer or dealership. This particular salesperson may not fully understand or appreciate or trust the store’s culture.  Automotive retail can be a pressure cooker, but clarity actually diffuses the pressure because everyone knows what’s expected.  Consistency Means Everyone Contributes Whether your customer-first motto is in your mission statement, your store, or on your website, you must consistently practice what you preach.  As an owner or manager, you should encourage your employees to take risks and try things without fear of repercussion.  If you tell customers that you want them to be customers for life, you need to prove that by standing behind that statement with products like Lifetime Powertrain Warranties. Many of the dealerships we work with offer lifetime maintenance and customer loyalty programs in the finance office and train their service technicians on how to create a first-rate experience to keep service customers coming back time after time.  Consistency means backing your mission statement up in every department across every experience.  Communication Means Accountability This is the attribute where the rubber hits the road, hard choices are made and, ultimately, trust is built. Make your people accountable for their actions, and allow them the privilege of learning from their mistakes. Nobody wants to be second-guessed or blindsided, of course, especially during the course of a busy day.  Likewise, you don’t want employees running to management to make a decision they could and should make. If they know you have their back, they’ll have yours.  Above all, keep it transparent. Nothing undermines a culture of trust more than a manager who allows a closed-door meeting to talk privately about somebody else. A Culture Where Customers Win Making trust the centerpiece of your dealership’s culture turns former roadblocks into speed lanes.  More importantly, it enables customers to believe in your brand, because they know your entire team is looking out for what’s best for them. Customers are listened to, calls are followed-up, questions are answered. And you can reward their trust by offering them extra benefits for doing business with you, such as lifetime powertrain warranties.  I’d like to finish up with one of my all-time favorite quotes from legendary coach Vince Lombardi, who says, “Winning is not a sometime thing; it’s an all the time thing. You don’t win once in a while, you don’t do things right once in a while, you do them right all of the time.”  There’s no better way I can think of to describe building a lifetime value culture across your dealership that will last the test of time – do it right all of the time. 
man drawing umbrella over car
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. 
winning team
Cultivating a Winning Sales Team

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When your dealership hits its sales goals, profitability and morale run high. Life at your dealership is energized, employees are engaged and looking forward for the future. Success like this doesn’t just happen by accident. It occurs through intentionally hiring and developing a top-notch sales team. It happens when you have the right salespeople in the right roles with the aptitude and propensity to perform in the fast-paced retail environment in a thriving culture that supports their success. Let’s explore how to cultivate the sales team you need for your store to enjoy lasting prosperity. The Cost of an Ineffective Sales Team Before we dive into the strategy to assemble a winning sales team, we need to face a hard truth. An ineffective sales team will keep you from reaching revenue targets and could ultimately devastate the dealership financially. Failing to sell enough vehicles or RO’s obviously hurts the bottom line - and is, sadly, more common than you may think. According to HubSpot, two-thirds of sales associates miss the mark. But did you also know that your company will spend an average of $65,000 and six months on replacing each sales consultants or advisors that leaves the dealership? In general, most sales representatives wash out of your dealership because they lacked one (or more) of several things: motivation, connection, sales skills, training, recognition, guidance, or product knowledge. Here’s what you can do about it. Establish a Sales Culture There’s a lot of literature out there that supports the benefits of a good dealership culture. Your sales team should have its own. It doesn’t have to be fancy. A short statement of the values your team shares works just fine. Be sure it’s not just words on the training room wall. Engage your sales team in identifying and agreeing upon which values matter most to them and what behaviors support them. You’ll want to all agree and uphold the values with standards and expectations that differentiate your dealership’s brand, the client experience and ultimately support the vision of your future success. Your sales culture will help align everyone on the team and keep members motivated. The shared values and defined standards will ensure a more consistent experience for your customers. You and your team should do everything in accordance with the sales culture you establish, and members of the sales team should share openly and hold each other accountable to your established values. When stress piles up, and numbers are hard to hit, values are often pushed aside; especially if they’re viewed as just words on paper. As the leader, set the tone to make it OK for all to hold each other accountable for upholding these values and speaking up when things go off track. Hire Intentionally Using your sales culture, think about the ideal sales representative. Write your job description and advertisement based on that ideal. Of course, you may need to be flexible so that you’re not endlessly chasing unicorns, (you know the one – that twenty-car guy that is miraculously available). Hire with intention and with a plan, so there’s a greater chance of culture fit and sales success. As you consider what your next hires need to look like, take a close look at your existing sales team and your customers to determine what gaps you need to fill. What personality traits or specific skills will take your team to the next level? I encourage all my dealerships to use a hiring assessment to accurately gauge fit and get a look under the hood. I recommend The Omnia Group’s hiring assessment. They have a suite of automotive job profiles that assess candidate fit and help you avoid bad hires.  John F. Kennedy once said a rising tide lifts all boats. He was speaking about the economy. I believe this applies to sales teams too. Every person you hire should bring something new to your mix that takes the whole team up a notch, this may mean giving up on what I affectionately call the “Retreads” and the crazy flooding of the floor. Let’s all recall the famous Albert Einstein quote about the definition of insanity and stop doing it the way you’ve always done—it’s time for some innovative hiring strategies. Onboard Thoroughly Your new sales consultants will need lots of personal attention early on to set them up for success, especially in today’s market. Customers are coming to the dealership wielding a ton of knowledge, so don’t send your sales rep to the gunfight with a just butter knife. Equip them with the skills and confidence to best represent your store. Besides the typical HR steps, your onboarding should include: A review of the sales culture, values, and standards and how it impacts the sales process In-depth training on the brand, vehicles, CRM, DMS and processes A discussion about their individual goals and clarity around the proactive daily activities that will help them achieve results Introductions and personal connections to ensure they feel comfortable and part of the team A cadence of scheduled check-ins with their manager to provide on-going support once they are active on the floor A thorough onboarding helps new sales associates feel welcome and engaged. It also gets them familiar with what they’re selling and how they’re expected to sell it. Provide Ongoing Training and Mentorship All that time you spend onboarding your new hires can quickly go out the door if you don’t provide an on-going method for training, skill development and coaching.  84% of sales training is forgotten in the first 3 months . Robust onboarding lays a solid foundation, but it’s not enough. You must provide ongoing training and mentorship to keep your sales team growing. Your training and development plan should include: Group training to reiterate basic but essential sales skills - and introduce new ones.   Improve learning with DAILY simulation practice of inbound and outbound calls and sales situations to ensure the word tracks are natural and you are not losing any opportunities. (Bonus: Drastically increase conversions!) Private 1:1 coaching to work on specific sales situations and issues and provide feedback.  Mentorship opportunities for seasoned players to share best practices with new members of the team, make this a part of the career path to management.  Encouragement to seek development opportunities outside of the dealership, either through your manufacturer, vendor partners, workshops, or many of the online courses available. Establish a cadence of daily sales huddles to share wins, discuss challenges, and set short term goals and focus points. Also, take the time to hold regular cross-functional meetings with sales, BDC and service advisors to discuss upcoming customer appointments, how to optimize the experience and acquired more trade-ins to support inventory deficits. Providing an environment of on-going communication and cross development gives everyone an opportunity to grow in their role, while building a team climate of shared goals and focus and eliminate our infamous department silos. Give Regular, Detailed Feedback Your sales associates need to know what they’re doing right so they can do more of it - and what they’re doing wrong so they change it. That insight comes from your regular, detailed feedback. Make it a point to speak to each sales representative on a set schedule of one-on-one's and build plenty of opportunity for sales call observation and review. Build out time in one-on-one's that goes beyond reviewing deals and pipeline health. Use these meetings to also establish and review development goals – both personal and professional. This is your time to get to know what inspires and motivates every sales rep and can also help uncover what’s getting in their way whether it be a skill or mindset gap. Recognize Accomplishments When an individual sales associate or the entire team does well, celebrate it. Show them that you're proud of them and appreciate their contribution. Recognition will make them feel good and motivate them to replicate that feeling by achieving more success. Be sure to understand what type of recognition motivates each individual. Some reps are motivated by group praise and all-company recognition while others would rather shrink under a rug if that happened to them. Sending a personal handwritten note can go just as far with one individual as a shout out during the morning meeting Final Thoughts Your sales team drives the financial success of your dealership. To have an effective selling machine, you must identify the right talent, put it where it will thrive, continue to develop it and engage their very best performance. The leader is the thermostat that sets the climate for the sales team, cultivates the growth of the team and the inspires the success of each sales rep. Commitment to establishing these practices creates the soil and foundation for your team to hit goals and thrive together now and far into the future.