Commentary & Insights

Car parts
Connected Car Opportunities in Parts and Service

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

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The last year and a half has been one of the immense transitions and has left many of us asking if we’re in the right place and if what we’re doing is worthy of our time and energy. For those of you who may be asking yourself if there is more you can do or additional ways you can help, I encourage you to consider whether it’s time to make the leap to consulting. I’ve had the privilege of owning my own agency for more than two decades and have been asked several times how to make the transition from employee to agency owner. Below are a few of the tips I’ve gleaned from my own experience and the successful entrepreneurs from which I’ve been able to work and learn.  How do you begin?  I get this question often. Many people want to know when I knew it was time to go out on my own and how I began. I was fortunate enough to have a mentor who helped get me started but will say that there is an inner calling in most consultants I know. Some speak of it as an intense desire to help the industry, some speak of it as outgrowing their current circumstance and needing a challenge, and others say it was born out of a need for the next step. But every single story has one thing in common – successful entrepreneurs have something burning within them – gnawing at them – that won’t go away. Whether it’s an idea, a new way of handling a current situation, or for me, a desire to control your own destiny and be the person in charge of your interactions. Do you have an idea that won’t go away? A feeling that propels you to act, even if it’s scary? If so, it may be time to go out on your own.  Networking is Key Once you decide to make the leap, it is time to network, network, network. Reach out to current and past colleagues, let previous business partners know that you have begun your own company and post as often as possible on LinkedIn. When reaching out on social media, ensure you are giving value through advice and offering to connect people, versus just asking if the people in your network need your services. As Sandy Zannino, Founder of Innovative Auto HR has wisely stated about starting, “I should have started networking sooner. Begin before you’re ready.” Time Box like a Pro  I have long been a huge fan of the idea of time boxing. Time boxing is setting aside chunks of time to accomplish specific goals. When I first began my PR firm, I would literally sit at my desk during the time I had set aside for working, even if I didn’t have the client work. Instead, I would focus on my website or branding. Anything to set me in the mindset that the time I had set aside was for building my business. Today I am fortunate enough to say I no longer have that problem, but I do keep the time boxing methods to ensure I stay productive and don’t lose my momentum to meetings, phone calls and social media.  Keep Going!  Owning your own agency is not for the faint of heart. It takes patience, joy in risk and a strong amount of grit. Many of the most successful firm owners I know have fallen in some way. But more importantly, they’ve gotten themselves up and found a new way to go after what they want and continue their calling.  Is this the year you heed the call and make the leap to owning your own consultancy? Is an idea or concept calling to you at a louder and louder pitch? Do you have the grit to keep it front and center? I’m betting on you and hoping that the answer will be yes! 
hammer on car
2021: Will Your Car Dealership Go From Success to Hot Mess?

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

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

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

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