Reputation ManagementCommentary & Insights

Reputation Management
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Dealer Risk Mitigation: Expectations & The Fountain of Youth

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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. 
4 Reasons Why Industry Awards Are Marketing Gold — and How to Leverage Them

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As a business leader , you understand the importance of recognition. It's not just that it feels good to be celebrated for your hard work and dedication: it can be a powerful marketing tool when leveraged properly.  The most effective way to gain impactful recognition for your dealership is to win or be nominated for industry awards, such as  CarGurus Top Rated Dealer . That honor is for exceptional customer service and top review scores, but there are plenty of other types of awards your dealership can win and put to work: community involvement, leadership, and more. Winning and promoting awards is something every dealership can incorporate into their marketing strategy . Here are four reasons why awards are worth your time and investment, plus some tips for leveraging them.   1. Awards boost your credibility  Industry awards provide the objective, third-party validation that many shoppers crave. Ultimately, they help differentiate your dealership from the competition. Depending on the award, it can even serve as an instant seal of approval, inspiring trust and credibility in your business for consumers. Not every dealership wins awards and consumers know that which is why many feel more confident purchasing from a business with an independent endorsement.  Tip:  Don't keep your award to yourself! Promote your award win by adding a digital badge to your dealership website , displaying the plaque front and center in your showroom, and including the honor in your marketing materials. The more visible your award is, the more impact you'll get out of it.  2. Your business gains brand awareness It's no secret that today's shoppers use the internet to research their purchases, but with so many online resources available, it can be difficult for dealerships to stand out. That's another area where awards can help. Your dealership automatically gets a free promotion and increased brand awareness when the organization giving the award announces the winners. Not only will this help you build your reputation, but it will also give you the chance to win new business.  Tip:   To maximize your dealership's exposure, don't leave the promotion up to the awards organization. Put up a blog post on your website, issue a press release, and announce your award on social media — an especially  influential channel among Gen Z and younger Millennial shoppers . There are countless benefits to a well-publicized award.  3. It's a reason to connect with past customers While winning an award can put you on the radar of shoppers who weren't already familiar with your dealership, it also gives you a valid reason to reach out to past customers. Shout your news to your customer network to remind them of the advantages of buying from your dealership. Plus, news of a recent award could help you cut through the noise and stand out from the countless other communications shoppers receive each day.   Tip : If you've won a service- or review-based award like  CarGurus Top Rated Dealer , it's likely that great ratings from customers helped you earn the award. Share your success with them via email and thank them for their feedback. Encourage them to visit your store again when their car needs to be serviced or they're in the market for something new. 4. It sends a great message to your employees Beyond brand building and business opportunities, awards also help boost employee morale. By making accolades a priority at your dealership, you send the message that you're invested in the business and care about being the best. This can build team morale, increasing motivation among existing employees, and attracting top talent for future success . Tip : Celebrate the victory with the people who helped make it possible: your staff. Your dealership wouldn't be what it is without them. It always feels good to be recognized for hard work and dedication, and your employees will appreciate the gesture.   Once you've won an award, don't ease up on your efforts. Awards should play an ongoing role in your marketing strategy, whether you run an independent dealership or franchise or sell used cars or new ones. Set your dealership up for long-term success by creating an awards calendar to keep track of what's coming up next. Assign ownership of key responsibilities like managing reviews or putting together awards submissions to a trusted staff member, so you never miss an opportunity. However, you approach it, plan for your dealership to be a winner in 2021!
The Importance of Reviews in Your Google AdWords Strategy

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In our last article, Online Reviews: The Golden Key to a Solid SEO Strategy , we dove into how reviews can impact your Google SEO investment to increase your appearance in consumer searches. Reviews will also impact the ROI of your Google Adwords campaigns, and so it's important to understand how reviews come into play for advertisers before you commit to a substantial pay-per-click budget. First and foremost, your reviews impact your Google Seller Score, specifically, it is your average rating that counts here. Google Seller Ratings showcase advertisers with high ratings (must be above 3.5 stars) aggregated by Google from reputable business review sources. This should be seen as a base requirement, and the good news for dealers is that the vast majority are above this threshold. A point to keep in mind is that better seller ratings display higher in search results reaping the benefits of building a strong reputation. Better seller ratings also have higher conversion rates, which can influence the ROI of your AdWords spend. Google states Seller Ratings can boost your text ads' CTR by up to 10%, which can make a big difference to any company battling with their competitors on Google ads. Looking past seller ratings, we can see in a study by Brightlocal (below) how your average review score on Google impacts your click-through rate. You can see that a 5-star dealer can expect to get 24% more clicks than a 3-star dealer. The obvious benefit is that you get more clicks to your website, but ad campaigns that get a higher click-through rate get a higher quality score from Google and are thus rewarded with a lower cost per click. The bottom line here is that a 4.5-star dealer can spend significantly less to get the same amount of clicks that a 3.5-star dealer would get, and why would anyone purposely want to spend more for the same end benefit? On a side note, if you have recently invested in separating your Google Service and Parts pages, and a primary focus now is to generate more calls, driving directions, and web clicks, then it's important to know that Google has a new ad format which allows a dealer to promote their GMB listing and their reviews in map search results (the map pack) to drive these actions from your Google My Business page specifically. The final point here is to reiterate what was said in the beginning and that dealers need to stop thinking of review counts and average ratings solely as a measure of customer service, but instead that your reviews, specifically on Google, are a basic building block to a successful advertising and SEO strategy, and so an integral part of your marketing program.
3 Things Your Dealership Can Learn From a Blockbuster CEO

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On Monday morning, June, 28 2007, John Antioco sat down at his desk and shuffled through his notes. Nearly ten years as the Chairman and CEO of Blockbuster Video, today Antioco was to deliver a company update to eager-eared lenders buzzing on a conference call. The largest movie rental chain on planet Earth, Blockbuster was plowing through another quarter, swatting down competition but also pivoting in a new and hazy landscape of customer experience. On this call, Antioco touted a leading 40% market share, despite their nearest competitor’s sliver doubling the last two years. This film-hawking foe, Netflix, was a pesky movie-by-mail subscription service that had just introduced a new streaming platform branded as the YouTube for movies. Blockbuster themselves had just recently launched a mail service to compete, and while Antioco asserted that digital delivery- the ability to watch a movie online- would provide customers the control and flexibility they ultimately wanted, the actual nuts and bolts of a Blockbuster digital service were still “TBD”. In other words, there was no plan for that yet.  You couldn’t really blame him at the time. Blockbuster in 2007 was still an industry titan, the retail catalyst that brought the wonder and excitement of the motion picture studios into the living rooms of consumers in 22 countries across the globe. At their peak just a few years before, Blockbuster had 9000 stores, and a stranglehold on market share. The video rental stores were staples in every community; as common as a McDonalds. On any evening in the 90s and early 2000s, a row of warm car bumpers lined Blockbuster storefronts across the country, all lit-up bright blue from the signage above. The glass front door would be swinging open all night long, almost as much as the cash register drawer. They were a truly giant, a world recognized brand. Their partnerships were strong and far-reaching. They had a NASCAR driver, a college football bowl game, and had just debuted a Superbowl commercial. But halfway through 2007, behind the sponsorships and bright blue bulbs, something was wrong with Blockbuster. John Antioco and his team did their best to twist and swivel the optics, and cheerlead with presentation slides and smiles, but the future was becoming evident. This giant was tired…and behind it, stood a young Netflix with a pebble and a slingshot.  Change is Too Fast to Chase: Stay Ahead  That conference call was on a Monday. John Antioco didn’t make it through the week. After ten years as CEO, he was unceremoniously replaced that Friday. His successor may be best remembered for his cavalier comments of Netflix, saying they weren’t even “on the radar.” However, it was Blockbuster themselves that would endure a difficult few years navigating that radar before finally taping out to the competition and filing for bankruptcy protection in 2010. Now, just think about that for a second; they were all done by 2010. Just for perspective, if John Antioco had leased a car the Monday afternoon following his conference call, he would be unemployed before the first payment was due, and his world-recognized empire would be broke and liquidated by the time the lease matured. Change happens fast, and a transformation of that magnitude must have felt like a knockout jab to the Blockbuster brass. That quick pain was felt partly because Blockbuster died while trying to chase Netflix (and Redbox for that matter). Even with the resources of the public investment, and a twelve-year head start, they were caught flat-footed by the change in consumer behavior. By the time Blockbuster became hip to the movie-by-mail model, Netflix had already jumped to the streaming subscription model. Game, set, match.  Soft Markets & Hard Decisions Another red flag on that call, Antioco attributed a soft in-store rental market to mediocre studio content. In other words, it was Hollywood’s fault that Blockbuster sales were lagging. He insisted that a more-favorable release slate in the second half of the year would create momentum. Spoiler alert: that momentum never came. Has anyone ever told you that traffic was down because the product was stale, and that a new redesigned model would bring buyers through the foyer? Don’t accept this premise. You can’t run your business on the prospects of carrying Motor Trend’s Car of the Year, much more than a video rental business could run on the prediction of an Oscar-winning performance by Tom Hanks. A solid and customer-centric business model should thrive whether you are selling cash cars on a corner lot or collecting rooftops for your auto group. (Listen, I’m not referring to once in a generation happenstances like the Covid-19 outbreak for example; nobody can save you if your business isn’t allowed to open.) That said, global pandemics aside, if your business has a reoccurring “softness,” problem, you need to look at your people and/or your processes, because one of them (if not both) is failing you. It’s your job to create momentum, not to wait for the factory to create it for you. When a business model is disconnected, hard decisions and difficult conversations are going to occur-one way or another- you may as well be the initiator.  Obsess on the Customer Evolution We are in a landscape of consumer control and flexibility today, and there are dozens of competitors raising their slingshots. That’s why it’s critical during these times to remember when plotting the future of our own empires to have a legitimate vision for the customer evolution and to create the best path forward. That may sound like a lot to unpack, but it’s a simple idea and it can’t be overthought: keep your eyes on tomorrow’s customer. Blockbuster and John Antioco were instead exhausting ways to service yesterday’s customer. They squandered millions of dollars on in-store campaigns and promotions that failed when they could have been investing in profitable channels outside the four walls of the store. At that time, you might have even heard his district managers imploring their franchisees to “just get them in the door!” (Sound familiar?) All the while, Netflix was so dialed-in to the customer evolution, that they actually poured the footings for the next steps. As dealers, the true time-tested experts of this industry, will we ignore this time of evolution with phony confidence of the past? Will we just chase Carvana into the next decade, stumbling behind like a tired giant; or will we have the obsession, the vision to pave the new customer experience ourselves? 
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Your Mindset will Determine Your Outcome

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There are two perspectives that we can take away from this pandemic. We can grow from a positive opportunity or succumb to a perceived threat. Whichever one you choose will dictate the end result for you personally and for your dealerships. Dave Anderson, Author of a bestselling book called Unstoppable, put it best when he explained mindset: “Thinking determines your behavior and your behavior determines your result.” It's Time to Adapt and Grow Think back to the first waves of information and shutdowns created by COVID-19. How did you react? How did you respond? What example did you set for your employees? Did you succumb to the threat and throw in the towel, or did you adapt and grow? As leaders in the automotive industry, your next moves are critical in determining your success navigating these unprecedented waters. I’ve seen many dealerships hitting record sales numbers and finance profits despite having a closed showroom. Working with limited staff and resources, they still succeeded. How? Mindset! They took a negative situation, changed their thinking and behavior. Which in turn, changed their results. They revised processes and procedures. They learned how to navigate an uncertain world with increased transparency and customer service–shifting the focus from profit and commission to taking care of the customer. I’ve also seen many dealerships closing their doors, not just temporarily because of the Governor’s orders, but for good. They refused to adapt to a changing world by using the same familiar methods that were unsuitable to a new way of doing business. As an industry, for years, we have been challenging the possibility of online sales and off site deliveries. The overwhelming fear of change and losing profit has created a stagnant environment. Throughout my career, I have been to numerous conferences addressing these exact topics. More recently, I’ve watched more webinars than I can count on how to adapt and grow. Some dealers have taken the advice and changed processes and procedures that have driven success. Others have constantly complained and thrown in the towel. Your Customers Are Online Technology companies have tried to convince us time after time, that the future of automotive sales revolves around the online customer. These theories have always been countered by dealership employees with a “never gonna happen” attitude. Then all of a sudden - BAM! An unseen, unpredictable virus has forced our hand. Very few have embraced the changes that customers have wanted all along. Aren’t we supposed to be serving the customer instead of refusing to change? Are Your Staff Focused on Customer Service? Our “normal” way of doing business has taken on a new look. So take this time to re-evaluate and clean house. Start with your own mindset. Which did you choose? Are you leading or following? Then look at your employees–what behaviors are they displaying? Many people will not want to come back to work after layoffs because they are making more money staying home. These may not be the employees you want to bring back. Do you have underachievers or staff members that are considered bad seeds? One bad apple can ruin the bunch, and you now have a fresh opportunity to start over. Recruiting new people can transform the future culture and success of your dealership. Hire people that go to work with a positive and encouraging mindset. The talent pool is larger than ever right now, with people who are ready, willing, and able to get back to work; even if that means making changes and possibly starting over. Navigating Uncertain Times The next few months are still in an unpredictable state. No one knows what will happen to the market once we are allowed to fully reopen. I’ve read articles that state we will experience a boom for the automotive business. While others are still speaking of fear over the uncertainty. Despite these two opposite opinions, one thing remains: the traditional way of doing business has changed. So I challenge you to re-evaluate your employees, processes, and, most of all, mindset. Will you come out on the other side as a success or failure? That choice is up to you and starts with the power of a positive mindset.
Dealership Management Advice: Work Smarter Not Harder in 2020

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The industry is forecast to be stable in 2020. Stable may be a welcome word for many and is certainly better than the prediction of decline we all lived under in 2019. However, I don't know too many in this industry who would agree that "stable" is the goal. Let's face it; if given stable , we all want to maximize every resource and reach better .  When setting stretch goals, what are typical obstacles? Time and money immediately come to mind. While budgets can undoubtedly be restrictive, they can always be massaged and tweaked according to our priorities. When we look to maximize every resource, dive deep into processes, and conduct analyses on results, time is usually the enemy.  Overcoming the Biggest Management Obstacle You’ve analyzed the reports. You know that certain activities are producing greater results and that it’s time to set those efforts into high gear. But, before you tinker, take a moment. To go higher, you first must go deeper. How can you give yourself the time to achieve more?  An honest review of your skills is a great place to start. My team and I do this every year — we ask ourselves, “where do we, or our leadership team, have expertise?” It’s been an eye-opening exercise that has allowed us to maximize our team’s strengths and fill the skills gaps we would have otherwise missed.  Maybe you’ve been in a location or position long enough that you believe you have the most experience there. Or maybe someone you know has stepped up and filled a need that impacted results. Know where your skills lie so you can optimize your efforts. One major recommendation I must make to help your skills audit go well is this: check yourself. Look around, read articles, review others' results to ensure you are indeed at the level of expertise you think. With the quick and vast evolution of technology going on in our industry today, it is a high bar to say you are an expert in something. Sometimes, Doing Less Achieves More Think of the last time you took something on at the dealership and thought, “I could be doing X, but instead I’m stuck here doing Y...and I really need to do more of both.” Yikes. That’s an impossible position to be in, and not one I enjoy. That’s why my motto is always: work smarter, not harder.  This is where partnering with a managed services company can give you back valuable time. Customer expectations today are high. They want it all and they want it now, which means you need to make smarter investments that will maximize your resources so you can meet those demands. Fortunately, there are many business models today that compete with the traditional dealer for a "stable" revenue base. With that optimized stability, you are free to maximize other efforts. So, what can you best control? Where is your expertise, truly?  A realistic look will have many dealers agreeing that expertise in the store is exactly there — in-dealership interactions. How is the shopper greeted? What inventory is available, and how is it displayed? What exactly is the in-store process? Is there room for improvement? Is that walk to the Service drive happening with every new customer? Are the F&I wait times managed to a minimum? Are all the possible trade-in deals being bought? Can we do better? Where to Optimize So You Can Maximize Now that I have you thinking about what can be, I want to offer some outsourcing opportunities at the dealership and why they just make sense. With word-of-mouth now becoming online reviews that reach much further than the consumers' closest circle, the importance of a fantastic in-dealership experience cannot be overstated. Proper reputation management is not an option, it’s a necessity. If you are managing it in-house, crunch some numbers. It will surprise you to know how much more you’ll save (and achieve) when you outsource. Where else can you streamline processes? Look at what happens before the dealership visit. According to Google, the only two increasing channels of engagement between consumers and car dealers are chat and SMS. Is this an area of expertise for dealerships? A quick look at the number of phone training companies would indicate that non-face-to-face interactions are not a strength in the dealership.  Engaging customers in a way that yields proven results is critical. Anyone who has attempted to build and or manage an in-store BDC understands how much time it takes to hire, train, manage, and measure results. These associates are typically very different than your successful sales team on the floor. Why absorb precious time in-store to achieve less desirable results?  With ever-increasing ways to capture your customers’ attention across multiple channels, a partner specializing in the customer journey can be an invaluable asset to your business. Considering the experience from the consumer's perspective allows the dealer to compete with other, less traditional models.  The Value of Time Can’t be Overstated Look, I get it. Having worked in Operations for most of my career, I understand that “I’ can handle it” mentality. But ‘can’ doesn’t always mean ‘should’, and it’s one of the most valuable managerial lessons we can take with us as we go from stable to better. To quote Harvey Mackay, "Time is free, but it is priceless."  To achieve more than what we have in the past, to get to the next level, we should be as smart with our time as we are with our money. Reaching out for expertise to bolster the opportunities we see in-dealership can be a game-changer. Spend your team's and your own time wisely.