Reputation ManagementBest Practices

For this month, something new. I’ve written this article so you can copy it and have each employee at the dealership sign it. Having written employee acknowledgments of your policies is an important part of a robust GRC program at the dealership (Governance, Risk, and Compliance). If a regulator comes to visit, having this signed acknowledgment in every employee file would help you quell any claims of “willful non-compliance.” Here is it: Regulators are those governmental agencies that have oversight of our dealer operations.   When a regulator calls us or comes to visit, it is usually the result of an unhappy customer(s) – which we have not satisfied – who complains to them. Subsequently, the regulators will ask many questions about our business practices and how we operate. They have the authority to fine us and try to impose penalties to ensure our compliance with the myriad of laws we must follow. Here is a partial list of regulators:   The Attorney General The Consumer Financial Protection Bureau (CFPB) The Federal Trade Commission (FTC) A Member of the House of Representatives (Federal and State) A Member of the Senate (Federal and State) The State Police The Internal Revenue Service (IRS) The Treasury Department The United States Secret Service To understand the depth and breadth of what they look at, please see the attached page entitled “ CFPB Supervision and Examination Process .” (Page 12 of 1814.) While this is a specific page from the CFPB operating procedures, it is analogous to any regulatory agency’s daily operating procedures. We discuss this as our training this month to highlight the continuous cycle of supervision each of these agencies performs when it comes to businesses within their purview.  1. Pre-Examination/Scoping The CFPB is looking for “risks, areas of inquiry, and focus.” From their perspective, this means they are trying to examine those areas where businesses may take advantage of customers. Suppose the CFPB has reason to believe your dealership is not acting within the scope of accepted business practices. In that case, they will “Request and review documents and information needed to begin examination.” That means they will ask for your “internal policies, audit reports, training materials, recent data.”   It’s likely that if they come looking, they will find something. At a dealership and any business, for that matter, when a regulator examines a company, they find problems. Ultimately this will cost the dealership both time and money. One former dealer used to advise frequently, “When you shine a light on any one item at a dealership, you will find issues and uncover problems.” He is right.   2. Examination (offsite and onsite) This section talks about who the regulator(s) will interview and which operations they are going to examine. It further states they will “compare policies and procedures to actual practices by reviewing a sample of transactions.” Further, they will “compare the conduct to legal requirements.” No company wants a regulator to interview employees. With further examinations and this type of unwanted scrutiny, additional issues will be brought to the surface.   3. Communicate conclusions and required corrective action This is when the regulator tells you or mandates to you how you must run your company going forward. If you are not cooperative, they will “pursue supervisory agreement or formal enforcement action as needed.”   This means that the company would have to agree to a written understanding of how the company must operate on a go-forward basis. If a company declines to comply, the regulator will pursue “formal enforcement action,” which means costly court or administrative proceedings in which the company will have to spend a lot of money on attorneys to defend itself. Fines can be “nuclear” as recent dealers were tagged for more than $10 million, $3.380 million, and even a dealer in California who were fined $27 million.  4. Monitoring The regulator will periodically come back to the dealership and examine reports, transactions, and corrective actions which the company has performed in order to meet whatever agreement was reached. So, the regulators return to ensure compliance with all rules, laws, and regulations. If the dealership has not complied, they will bring the company back to court. This may subject the business to additional fines and penalties, and suspensions. This cycle may continue until the company is out of business or is compliant.  Compliance with any regulatory process is cumbersome, time-consuming, and costly, even if the inquiry is for one customer. An example of a written employee acknowledgement:   Our company is educating you as to these issues as we do our very best to run things in a professional manner while satisfying each and every customer. This also serves as a reminder that it is the company’s policy to follow the laws, rules, and regulations which have been communicated to you during your employment. If you find anything out of the ordinary, please report this to your supervisor or one of the owners. My signature below indicates that I: 1. Will comply with company policies and procedures 2. Will ensure that the company’s customers are satisfied with our dealership 3. Will communicate with my manager of one of the owners if I see items that are out of compliance with the company’s rules and regulations 4. I will immediately communicate with one of the owners if I receive a regulatory or media inquiry.  These things, I promise. _________________________ ________________________ Employee Print Name Employee Signature   January _____, 2023 *If you’d like a Word copy of this document, please reach out to me at tomk@bettervantagepoint.com, and I will be happy to send it along to you.  Thanks for seeing things from a Better Vantage Point. For more information:  Phone Number: 757-434-7656  Email Address: tomk@bettervantagepoint.com Website:  https://bettervantagepoint.com Website:  https://alwaysdobetter.com/howwehelp YouTube Channel:  https://www.youtube.com/channel/UC-ytHE0-c5lUJbzm0H4drog LinkedIn Profile:  https://www.linkedin.com/in/tompkline/

You have no choice but to care about whether your website is accessible for people with sight impairment because the law tells you that it must be so. If your site is configured well for assistive technology (think website readers that read text out loud or make text larger), then you're good. But say your website is not configured properly, then what happens? Simply put: You are at risk of violating the  Americans with Disabilities Act  (ADA), and that puts your dealership at risk of a lawsuit.  _______________________________________________________________________________________________________________________________________ This article was written by Adam Dennis, Principal at SurgeMetrix and Tom Kline, Lead Consultant and Founder of Better Vantage Point. _______________________________________________________________________________________________________________________________________ The Facts We like facts. Facts aren't opinions. They don't have feelings. They tell you what's up and, when used properly, inform good decisions.   As we've discussed in previous articles, we've analyzed over 35,000 dealer websites for a variety of performance issues as well as demographic and digital market data to set a context for the industry and individual dealers who want to see how they rank relative to their competitors.   In this article, we are reviewing the Accessibility of a website as per Google's algorithms. Now you might look at the data and conclude it means nothing to you, but the reality is that with Google being the dominant force in the search market and recognized authority of website performance, you can't ignore their conclusions. So let's look at the facts. Of the 35,444 dealer websites we analyzed, we could not match 5,930 of them due to a range of issues, from configuration problems to software setups that retard Google's ability to analyze certain data about a website. Consequently, our actual surveyed total was 29,514; a not-too-shabby number all by itself. When Google ranks a site for its technical Accessibility, it does on a three-part colored scale out of 100. The sweet spot you want your website to occupy is the 90-100 bracket. This rating is the best and indicates that your website is technically very well constructed for people with sight limitations to be able to read and for those people who use assistive technology, to be able to understand the website as well.   The other two ranking categories stake out in brilliant clarity those websites that do not perform well in terms of their technical configuration for meeting accessibility requirements. The yellow category covers sites with ratings from 50 to 89/100. This is a nether world where you're meeting some, but not all, of the ADA requirements. The lower you are, the greater the risk. Finally, if you are in the red zone, you are in potential trouble. Simply put, you are broadcasting to enterprising lawyers that you could be sued. The red zone covers ratings from 0 to 49. What did we learn? We found the following results with 1.8% of the websites in the Red, a whopping 76.5% in the yellow, and only 21.7% in the green.    That big yellow area was concerning, so we broke that down even further into 10% chunks giving us 50-59 for the first chunk, 60-69 for the second, and so on. We did this because we still see a risk for dealers in the yellow area, especially if they are in the lower ranges. Here is what we discovered: Would you want to be in those lower ranges with an Accessibility rating of 68 or 72? I wouldn't; I have faith in opportunistic lawyers. If I were a dealer who wanted to mitigate risk, I would ask my website vendor to improve my performance: at the very least, to the high 80s.    The Risks According to the Seyfarth law firm, ADA website accessibility lawsuits filed in federal court were up fourteen (14%) percent from 2020 to 2021. This translates to 2,895 cases, an increase of 372 actions. These numbers do not account for the following: Demand letters that were sent and/or settled; State court actions; or Mobile application lawsuits were accounted for differently Just as there are attorneys specializing in suing dealers in the automotive industry, there are plaintiff lawyers specializing in ADA lawsuits. The  Center for Disease Control (CDC)  cites these statistics: "Approximately 12 million people 40 years and over in the United States have vision impairment, including 1 million who are blind, 3 million who have vision impairment after correction, and 8 million who have vision impairment due to uncorrected refractive error. As of 2012, 4.2 million Americans aged 40 years and older suffer from uncorrectable vision impairment, out of which 1.02 million are blind; this number is predicted to more than double by 2050 to 8.96 million due to the increasing epidemics of diabetes and other chronic diseases and our rapidly aging U.S. population. Approximately 6.8% of children younger than 18 years in the United States have a diagnosed eye and vision condition. Nearly 3% of children younger than 18 years are blind or visually impaired, defined as having trouble seeing even when wearing glasses or contact lenses." These are large numbers. Unless you have addressed website ADA accessibility, you open yourself up for exposure to these enterprising lawyers who make a living from ADA-based lawsuits. As with any compliance topic, "willful non-compliance" opens you to higher settlement numbers and further unknown liabilities, and other unintended consequences.  Willful non-compliance  is a term we use to describe a situation where a business lacks a robust Governance, Risk, and Compliance (GRC) program. In short, a GRC program follows the outline of what a "prudent business person" would do in a similar situation. This entails having written (and acknowledged) policies and procedures with your employees, which are then checked by someone performing an audit function. Remember, you manage what you monitor.   Importantly, depending on how the allegations are crafted in the lawsuit, your garage insurance may not cover any of the allegations. If that is the case, settlement indemnities will come from your dealership's bank account.   What To Do This is a simple one, folks, with just three steps to get you compliant.   Step 1, have the website reviewed for accessibility compliance using a tool such as Google's  PageSpeed Insights  tool. The tool has an "Accessibility" section that, when selected, will give you the issues that will need to be addressed.   Step 2, once you understand what needs to be fixed, buy a tool to install on your website to help make it ADA compliant very quickly. We really like Userway ( www.userway.org ) as the interface is simple and clean. Its pricing starts at $490 per year for up to 100,000 website page views per month, to $3,290 per year for up to 10 million page views per month. Finally, for Step 3, test your website again with PageSpeed Insights to see if you have improved. Our experience is that most dealer websites will quickly go into the green. If not, then ask your web provider to use the PageSpeed Insights data as a guide to improving performance. It's that simple. Test, buy Userway, install it, test again to validate (and fix anything that remains), and then eliminate this risk. Don't make it easy for the attorneys.

Answers these questions honestly: Do you have a Compliance Management System (CMS) and whose responsibility is it? When was the last enterprise risk assessment to ensure all personal and dealership assets are protected? (Who has looked at the “big picture?”) Who trains the staff about compliance and how often? Has anyone ever done an analysis of your insurance policies to determine if there are any holes in your coverage?   Do you have a process at the dealership to find and fix online consumer complaints? Do employees have a channel and mechanism to bring their complaints to the attention of management?  When was the last update to the Employee Guidebook? Do employees sign a Legal Rights Agreement? Are you using arbitration to settle disputes with consumers? (In practice, do you understand why this strategy is highly ineffective?) Are you prepared for a local media story? Do your employees know what to do, what to say, or who to direct the reporter to? Who audits your websites on a monthly basis to ensure compliance with advertising laws? Who inspects your other advertising?    Does your dealership have work to do?  Any one of these issues could cost you a lot of money.   Remember, it’s not how much money you make that’s important.  What’s critical is how much money you keep! Consider the “what if.”  What if…this were to happen or that were to happen?  How would you handle it? If those ten (10) didn’t stimulate you enough, here are another ten (10): What would you do if a regulator walked into your dealership? Do you have a plan as to how you would handle that situation One very large dealership group with more than eighty (80) stores allowed the Federal Trade Commission (FTC) to survey its customers to ask them about potential dealership wrongdoing.  What would be your thinking here? How would you handle that?  Have you started your work on the new Gramm Leach Bliley regulations?  The deadline is December 9. Unfortunately, the new regulations are complicated enough that you cannot simply write a check for an “app” to be compliant.  Some of your work will require good ol’ fashioned shoe leather.  Is anyone tracking how your waste (oil, batteries, tires etc.) is being disposed of and have you ensured your vendors have the adequate insurance to protect the dealership if it’s not handled properly?  Do you have a recall policy for your used vehicles?  Whether or not the used car is “your brand,” did you know the dealership would likely be liable if a customer were in an accident as the result of an unfixed recall? Have you ever checked to see how your IRS 8300 processes are working?  Are your cashiers receipting in monies with enough detail for you to track the transactions?  (Did you know the fines for non-compliance are up to $3 million and potential jail time?)  Did you recently inspect your Red Flag compliance?  Are your F&I managers just “blowing past” that screen and selling vehicles without paying attention?  This is a critical issue which will help in your defense if you are ever taken to court for selling a vehicle to someone with a stolen identity. As a dealership, are you sending out Adverse Action Notices in compliance with the Fair Credit Reporting Act (FCRA)?  Failure to send these could result in a class action lawsuit to include punitive damages for “willful non-compliance.” Are you selling repossessed vehicles or salvage vehicles without disclosing this status? Does your staff know how to handle an Office of Foreign Asset Control (OFAC) “hit” on a potential buyer’s credit application?  Do you have a procedure in place?   These questions are but a few of the concerns for your dealership when you are thinking about your daily risk.  As one dealer friend of mine advises, “Button up!”. Another says, “Stop everyone from reaching into your pocket!” Practice your “what ifs” and prepare!   In my experience, it’s not necessarily “if,” but “when!” Watch the YouTube video here . Check out Tom Kline's YouTube Channel for relevant information which is at the forefront of sharing preventative measures and insightful actions that you can take today to protect your dealership.

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. 

In Part 1 , you will recall that we had the goals of discovering the truth, building trust, and de-escalating the customer's anger (a.k.a. extracting the venom). We learned how to set expectations, communicate during the first meeting, and how not to irritate the customer. Here's how to build on your initial success and capitalize on the customer trust you have earned.   The Second Meeting: Gather Final Information and Achieve Mutual Understanding If mistakes happened, acknowledge them. It builds trust and continues to make you human and trustworthy in the eyes of the customer. If the dealership made a mistake during the sales process, it's okay to say, "I'm sorry." Disarm by telling the truth. Continue to acknowledge the customer's emotions (i.e. angry, upset, anxious, etc.) Try to extract the remaining venom here. Let the customer vent as necessary. When you find that the customer is repeating the same thing over and over it's time to say, "Let's focus on how to make you happy." You do not want to have the customer repeat their bad feelings over and over as it begins to wear a groove that is hard to overcome. If you don't take care of the problem now, it is going to get worse, and it's going to cost more money and you are going to create a problem for someone else at the dealership. Be creative and ask lots of questions.  Ask multiple questions, "If I could do this (xx), would that make you happy?" During these conversations ask things like: If I could buy the unit back at $xxx (including a profit for you as the dealer) would that interest you? What if I provided you with a service credit for $xx? (This option will only cost you fifty cents for every dollar that you offer to the customer.) What if I could sell you a different unit and take yours as a trade-in? How would you feel if I were your personal concierge during your ownership experience so you could call me with any issues that you had and I would take care of them? Some solutions are non-monetary. Explore these options. Customers want to be pampered and feel important. How can you accomplish those things? Offer to put the solution in writing "to make you more comfortable so that you are assured of getting exactly what we are discussing." The Third Meeting: Buy-in Present at least two (2) potential solutions for the customer. When you present a singular solution, a customer feels like you are shoving an answer down their throat. If you proceed that way, then a lot of the trust building efforts you've earned will evaporate. Be creative and don't be afraid to try something different.   It's okay to offer options where the economies are different. For example, maybe you offer to make three (3) payments of $xx or a service and parts credit of $yy and those numbers have $500 difference between them. You may be surprised which option the customer chooses. In any event, offering options shows you care and that you are trying really hard to help the customer. Words can be perceived as "cheap," and here you are showing the customer that you care by not just serving up one option.  Wrapping Up With The Customer Put your agreement in writing. Consider having the customer sign a release of any further dealership obligations. Follow Up! Follow through! Follow Up! Execute on your promises. Make sure you personally see that things are done. There is no shame in asking for help or advice or a "TO." Sometimes, other personalities may help you re-close the customer on a solution. This is just like selling in many ways. Consider documentation changes to your customer facing paperwork to guide how this process may look (i.e. an alternative dispute resolution structure.) Be creative here, too. Arbitration is not the only way to handle this. I think arbitration is overrated and ineffective and does not solve problems. It prolongs problems but does not help you, in my opinion. That is a future topic that I will cover. In short, there are all kinds of creative structuring which may work for your dealership. So, you did it! Be proud of yourself and allow yourself to have a quiet moment of success. Success comes in many forms and a job well-done is the result of your good attitude. Well done. Please contact me if you have any further questions. I've handled well over 1000 customer complaints of all shapes and sizes in my 30+ years in the business. Check out these 3 videos with quick steps for resolving a dealership customer dispute, complaint, & problem.

"The only difference between an ordeal and an adventure is your attitude," states the recent, popular internet meme I encountered, and I agree. Customer disputes often begin when you hear from a third party. The customer may not complain because of their feelings: shame, embarrassment, or self-doubt, to name a few. You may instead hear it from a lawyer or regulator (i.e. a Motor Vehicle Dealer Board, Consumer Financial Protection Bureau (CFPB), State Attorney General, State Consumer Affairs Division, Better Business Bureau etc.) There are some customers who will find something wrong with the vehicle and use that as a wedge to try and leverage you into some bigger action. This type of customer will not usually come right out and tell you they want out of the unit, but rather will go "on campaign" and send you emails and letters and phone calls demanding you fix the problem. This campaign may start with an internet posting complaining about the vehicle and the dealership. Ultimately, the customer will get frustrated and finally ask you to buy back the unit. Customer problems often begin with internet complaints and how you address those early on may determine your ability to successfully conclude the problem. So, this is where opportunity begins. Treat the customer using the Golden Rule. "Do unto others as you would have done onto you." Always proceed as you would want to be treated in the same situation. Being nice and being kind is always appropriate.  Over my 30 years, I have crafted a three (3) step model to manage these situations. I will detail the first step here as well as what not to do. My next article will address steps 2 and 3. Schedule a meeting. Make it formal. Do not have these conversations on the telephone. The customer should have to "invest" in this mutually shared experience, which will require effort on the part of the customer. Invite the customer to come see you in the store.   The First Meeting Listen to the customers' story first. Take notes, writing down everything the customer tells you. (I do mean everything.) Sometimes this can take more than an hour. Invest the time. At the end, show the customer your pages and pages of notes. Then tell the buyer you are going to read them back and you want them to let you know if you missed anything. Then read the notes and paraphrase what you have been told. This should take as long as it takes. (I've had these meetings last all day.) The net result is the customer will feel heard, which is part of the "disarming process." These steps are meant to show you were listening and the customer was heard. Do not skip any of this or try to do it quickly. While you are taking notes, nod and say things like "I understand." Label the customer's feelings. If they have a terrible tale of woe, use phrases like: "That must have been frustrating." "That must have been hard." "That sounds really aggravating." "I wouldn't want to go through that either." Do not feel the need to create a solution during the first meeting. In fact, even though you can often solve the problem by snapping your fingers, if you choose this shortcut, the customer will often decline the solution as he is not yet emotionally invested in the process. It's frustrating, but it's true.  At the first meeting, set a time for the second meeting and let the customer know that you are going to do some homework in between meetings. Setting multiple meetings and being "gameday" shows you care and you want to help.   Set expectations before the end of the first meeting and let the customer know that you may not have any solutions by the end of the second meeting and you are going to work on their issues. Reassure the customer that he is valuable and important to you. Do not be defensive as it will turn out negatively and the customer will feel you are trying to defend the dealership. Be truthful. Half-truths will get you nowhere. When you add half-truths and caginess to this situation, you are going to get yourself and the dealership into trouble. Quickly correct any errors (or omissions) that another employee may have said, or a false perception that a customer has. If you set the customer straight and tell them the real deal, they (almost always) can deal with the circumstances. Be realistic. Assure the customer that you are going to work toward a satisfactory resolution. Be true to your word. Do not over-promise. Emphasize that you want the customer comfortable and happy. Follow-up properly and call back when you said you would. It builds trust.  How To Listen Be quiet and let them talk. Try to find common interests. Use the same bonding methods you use when selling. Be relaxed. Nod, as appropriate.  Body language–do not cross your arms or your legs. "Be open" with your body language. The customer is going to tell you how to run your business. Do not take the bait here. Be patient and stay calm as "everyone else is an expert."   Tell the customer that their problem is "Important." Repeat: "I want to help you," multiple times. Try practicing these items with team members. It may be hard to eliminate bad habits.  Here's How To Irritate A Customer–Guaranteed Not listening Failure to set expectations Bragging about your lifestyle, how much money you have, your personal experiences Be inefficient Be insensitive Break promises Pretend it's not your fault Ignore the customer's issues Use the words, "I'm sorry you feel that way." Check out these 3 videos with quick steps for resolving a dealership customer dispute, complaint, & problem . In Part 2, I will show you how to conclude the complaint.