autosuccess sep08

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September 2008

AutoSuccess Magazine is published monthly at 3834 Taylorsville Rd., Building A, Ste. 1B Louisville, KY 40220; 502.588.3155, fax 502.588.3170. Direct all subscription and customer service inquiries to 877.818.6620 or [email protected]. Subscription rate is $69 per year. AutoSuccess welcomes unsolicited editorials and graphics (not responsible for their return). All submitted editorials and graphics are subject to editing for grammar, content and page length. AutoSuccess provides its contributing writers latitude in expressing advice and solutions; views expressed are not necessarily those of AutoSuccess and by no means reflect any guarantees. AutoSuccess accepts no liability in respect of the content of any third party material appearing in this magazine or in respect of the content of any other magazine to which this magazine may be linked from time to time. Always confer with legal counsel before implementing changes in procedures.© All contents copyrighted by AutoSuccess Magazine, a Division of Systems Marketing, Inc. All rights reserved. Reproduction in whole or part is prohibited without express written consent from AutoSuccess. AutoSuccess may occasionally make readers’ names available to other companies whose products and/or services may be of interest; readers may request that names be removed by calling 877.818.6620. Printed in the USA. Postmaster: Send address changes to AutoSuccess Magazine, 3834 Taylorsville Rd., Building A, Ste. 1B Louisville, KY 40220.

Isaiah 9:2The people walking in darkness have seen a great light; on those living in the land of the shadow of death a light has dawned.

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September 2008

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HIGHLIGHTS OF ATTITUDE

JasonBlair

TomHopkins

DougBurkert

An Interview WithJanelleKershbaumer

MarcSmith

SMALL COST...BIG REWARDSAND A LOT OF LOST GOLF BALLS

MattBaker

ChuckPatton& TriciaPatton

StephenR.Covey

IF IT’S ROUND IT’S NOT SOUND

PROFOUND ADVISE - 45 TO THRIVE

PaulD.Cummings

HelmiFelfel

DalePollak

D.J.Harrington

POLICY AND PROCEDURE FOR PROFIT

THE CULTURE OF TEAMPart 1

SteveBrazill

CAN YOUR STAFFED EVENT COMPANYDELIVER WHAT IT PROMISES?

JimAdams

MarkProctor

SeanV.BradleyINTERNET SALES 20 GROUP XI

SPECIAL FINANCE REALITYCHECK: THE SKY IS FALLING! NOT

WILLIS HONDA ACCELERATED FROM 60 TO 130INTERNET UNITS IN LESS THAN 60 DAYS

8TH HABIT LEADERSHIPPart 2

SERVICE: CHANGING THE SIMPLE MAILER MINDSET

RED FLAG RULE AND YOUR DEALERSHIP

CONVERSATION WITH ERIN

A CRYSTAL BALL IS NOT ENOUGH

COUNT TO 10 AND WIN

LarryCochranBILL WALSH AUTOMOTIVE TAKES ADVANTAGE OF THEIR WEB SITE TO INCREASE TRAFFIC AND

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www.autosuccessonline.com

TomHopkinsSTS

HIGHLIGHTSOF ATTITUDEYou must work on keeping your own

positive attitude every day. Too many people in automotive sales wait for a good client, an easy sale, a motivational meeting, a seminar or their manager to provide motivation.

The day you turn pro is the day you realize that attitude in selling is everything. A good attitude is something you must cultivate and grow within yourself. The most important things you carry with you every day are your enthusiasm and your excitement for the job you do in serving people.

A key element in a successful automotive sales career is to realize that people say “yes” to you based more on your conviction and your enthusiasm than anything else. And if you don’t have it inside you, you won’t be able to transmit it to others.

So how do you get this attitude? First of all, you must get rid of some of the things in the past that might be holding you back. Stop dwelling on your failures. You can’t change the past — it’s gone forever. Throw it out and don’t dwell on it. Every time you let it take over your thoughts, you’re reliving negative emotions. Why would you want to allow that to happen?

If need be, take a few minutes now to envision any past failure that’s sticking with you. Picture it on a chalk board or white board. Then mentally erase it. Get rid of it. If you’ve been dwelling on it for a long time, you may need to do this exercise more than once (like whenever it raises its ugly head), but do it. Erase that bad experience. It’s holding you back.

Then, every morning make a commitment to live in the present moment. The present moment will determine your feelings, your attitude toward the day — which will determine your productivity. So by the negativity of yesterday you are ruining the future. Let it go and live in the present. Want — but don’t need — everyone’s approval. You’ll never get everyone’s approval. There’s always someone who will say they don’t agree with you, they don’t believe in what you believe or that something you propose just can’t be done. Don’t take advice from anyone more messed up than you are. If you do, you are letting them determine your attitude that day. Another thing to work on is anger. Anger can cost you not only income, but relationships. Control your anger. Don’t get mad — turn other people around. What does that mean? When talking with an angry client, be kind, be gentle. Let them know you are glad they called. Not only will they appreciate this, but also after two or three minutes of venting their anxiety and emotions, they will probably apologize for losing their temper. Now you have won a client by not matching their anger with yours. Don’t demand fairness. Many of us get down when we have lost a sale to our competition or because our potential client changed his or her mind. Don’t sit back and say, “That’s not fair.” You’re a grown up, not a little kid. Let it go. If something is not fair, do what you can to change it, but don’t dwell on it if something doesn’t go in your favor. You’ll fi nd things in your life that may not seem fair, but that’s just the way life is.

Procrastination can also negatively affect your attitude. Never do tomorrow what you can do today. Procrastination is a disease that many of us have. Procrastination is defi ned as living yesterday, avoiding today, and thus ruining tomorrow. If you have this disease, remember it takes 21 days to effect a change. If you will give 21 consecutive days to working on overcoming procrastination, you will overcome it.

How do you do this? Do it now. Successful people do the things average salespeople are afraid to do or stop just short of doing. They do what they fear most. By doing those things you fear most, they will become your strengths and carry you forward to success.

And fi nally, realize that one of the keys to a good attitude is to really be proud of what you do. In our country and our times, people need vehicles to get to their jobs, to spend time with their loved ones and to do their chosen work. You help those people to have the right vehicles for their needs at investments they can afford. And you’re good at it because you know your inventory. You are a great listener when potential clients explain their needs and you’re a great communicator. All those traits help you to help them make wise decisions and you benefi t for providing that valued service.

Walk with your head held high because you chose the profession of selling. Go out and do the best job ever.

World-renowned master sales trainer Tom Hopkins is the chairman of Tom Hopkins International. He can be contacted at 866.347.6148, or by e-mail [email protected].

marketing

solu

tion

MSMarcSmith

IF IT’S ROUNDIT’S NOT SOUNDWe all know that $1.99 sounds better

than $2.00, and judging by its success in the retail world, we know that this type of marketing works. But why? I recently read an article about how to price real estate to make it more attractive to the buyer. The author remarked on how most people don’t understand what appeals to the buyer when pricing their property because they are pricing it from the seller’s point of view.

When you think about it, what does the consumer look for in the price? Research shows that consumers tend to look in blocks as to what they want to pay. For example, people will look at properties between $100,000 and $199,000 or $300,000 to $399,000. If you were to take a property that you have listed for $310,000 and reduce the price to $299,900, the number of potential buyers would increase. The research suggests that round numbers, for example $400,000, may convey quality, but a precise number like $395,385 indicates a bargain. In other words, an uneven number gives the impression that some thought has been given to pricing. At this price, buyers believe they are not only staying within their $300,000 block, but are getting more value.

These strategies can be applied in the negotiation process when selling a car. In the early 1990s, I was working for a dealership in the used car department. To this day, the manager who I worked with was one of the best closers I have ever met. One of the things I learned from him was the principle of structuring a bump. The bump is when you may or may not have a deal, but you want to improve on the offer the customer has made. For example, instead of sending me back to the customer for another $500 down, the manager would send me back asking for another $484 down. This seemed to work better than asking for $200, $300 or $500 down, which many previous managers had suggested I do. Again, an uneven number appears to have taken some thought and calculation in order to justify the request. It is more likely to be real and sound. A round number appears to be fabricated out of thin air.

If I were to be unsuccessful in getting the customer to bump up to the $484, he would then come out to meet the customers face-to-face and give it one more try. If the customer would still not budge, he would tell them that

he would see what he could do. He would excuse himself, returning shortly with a fi nal proposal. With a slight nod he would tell the customer that we were close. “I need your help. I need another $379.16,” he would say, and then wait for the customer to respond. I can’t tell you how many times the customer would close on the uneven fi gure.

This is also an effective technique when trying to bump the customer’s payment. The customer may be at $465 but you need to be around $550. In this example, you would want to present the customer with a number like $546.63. Many managers today would still send someone back or take a T.O. and ask for another $100 to $200. Remember, you appealed to the customer’s emotions on the selection of their new vehicle; now you need to focus on their logical side.

After the initial presentation of payment or down payment, always focus on the difference. When the customer is taken from $465 to $546.63, for example, you want to present the difference of $81.63. Not only will it look better to the customer, but will make it easier to break down the number into an everyday, small difference throughout the negotiation process.

When it comes to discounting the price, it works a little differently. Research has shown that when negotiating an odd amount of a discount, the customer may perceive the number as a small amount. When dropping the

selling price, consider doing it in even amounts. You see, any time it is diffi cult for the customer to compute the adjustment or discount, they tend to see little difference between the original selling price and the discounted price. Suppose you wanted to drop the selling price of a car from $32,854 to $31,950. Showing a number like $31,854 would make it easier for the customer to calculate the savings. When the digits on the left are the same, customers tend to group these together and focus more on the digits on the right. In other words, if the price is $32,854 you may want to reduce the price to $32,654.

The next time you are negotiating, remember, if it’s round it’s not sound.

Marc Smith is the senior vice president of The Cardone Group. He can be contacted at 866.665.4479, or by e-mail at [email protected].

866-964-6397 imnLoyaltyDriver.com

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9

the #1 sales-improvement magazine for the automotive professional

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StephenR.Covey

8TH HABIT LEADERSHIPPart 2

leadership

solu

tion

LS

In my last column, I pondered the

millions of dollars organizations spend on leadership development without achieving any signifi cant breakthrough in leadership effectiveness. I think I know why there’s no breakthrough.

Those millions are wasted because our models for leadership training are hopelessly out of date. We are stuck in a mindset of leading organizations from a controlling Industrial Age model that absolutely suppresses the release of human potentail. As a result, we continue to train leaders for an age that is receding rapidly into the past. We need to shift our entire mindset if we are to educate leaders for the Information Age.

Consider what happened in the 19th century, when the Agricultural Age gave way to the Industrial Age. When the factory showed it could outproduce the family farm by fi fty- or a hundredfold, a lot of people were threatened. Protesters of industry, called “Luddites,” attacked and burned factories because they were fearful of this new way of thinking. Inevitably, though, 90 percent of farmers had to fi nd a new way to make a living.

Do you believe that the age we’re moving into will outproduce the Industrial Age by 50 times? Do you have any doubt about it? I believe that this new age will eventually bring about a downsizing of 90 percent of the Industrial Age workforce. Imagine what it will take for leaders to succeed in the midst of this dramatic shift.

In Management Challenges for the 21st Century, Peter Drucker compares the Industrial Age with today’s Information Age: “The most important, and indeed the

truly unique, contribution of management in the 20th century was the fi fty-fold increase in the productivity of the manual worker in manufacturing. The most important contribution management needs to make in the 21st century is similarly to increase the productivity of knowledge work and the knowledge worker. The most valuable assets of a 20th century company were its production equipment. The most valuable assets of the 21st century institution...will be its knowledge workers.”

In the Industrial Age, you could treat manual workers as interchangeable parts — all you needed was someone who could follow procedures. When all you want is a person’s hands, you don’t need to be concerned about the heart or the mind. All you need to know is how to manipulate people — and that sums up most of what is called “leadership training.”

Many will say, “We know all about the Information Age. We’ve long since made the adjustment. We no longer manage workers as interchangeable parts. We value them as intelligent contributors,” and so on. That claim is tough to reconcile with recent fi ndings from a joint FranklinCovey/Harris Interactive xQ poll. Fewer than half (45 percent) of U.S. workers feel that their contributions at work are valued. About three out of fi ve workers (59 percent) feel that the organization does not tap into the best of their talents and passions.

Consider this analogy. If your stockbroker were allowing three-fi fths of your capital to go uninvested, you would fi re him. Yet we continue to manage people wastefully with our Industrial Age mindset instead of leading them with an Information Age mindset. When treated as interchangeable parts, people are alienated from the

organization, depersonalized in their work and more motivated to sue than to support the fi rm when things get tough.

What is the key difference between the two mindsets? It is summed up in what I call the “8th Habit” of effectiveness: Find your voice and help others fi nd theirs.

The “8th-Habit” leaders see people differently. She does not view people as “functions” or in terms of a “job description.” She views people as endowed with unlimited potential. She therefore sees her task as helping people see in themselves the tremendous value and contribution they can bring to the enterprise.

Instead of limiting or controlling people, she seeks to understand them deeply — to understand the profound potentialities in each individual, so they can be freely and voluntarily unleashed.

This is the essence of “8th-Habit” leadership, what I call “helping others fi nd their own voice” — To communicate to people their worth and potential so clearly that they come to see it in themselves. Think about this defi nition. Isn’t this the essence of the kind of leadership that profoundly infl uences and truly endures?

Originally ran in CLO Magazine

Stephen R. Covey, Ph.D., is co-founder of FranklinCovey, and is the author of the best-selling The 7 Habits of Highly Effective People. He can be contacted at 866.892.6363, or by e-mail [email protected].

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July 29 - Aug. 2, 2008

featu

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solu

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An interview withJanelleKershbaumer

DTX is a registered trademark of Detroit Trading Company.

Willis HondaAccelerated From60 to 130Internet Units in less than

60 DaysWith Help From

AutoSuccess would like to congratulate Willis Honda for their incredible sales effort and taking their Internet delivered vehicles from 60 to 118 units in a 30-day period. Then, 30 days later, they boosted the number to 131 online units. Some of you reading this article may be saying, “Well it’s a Honda store, so that’s not unusual.” But as Paul Harvey says, you need to hear … the rest of the story.

Willis Honda is not a huge facility in a brand new luxurious showroom in an upscale suburb of Philadelphia. In fact, their modest, off-the-beaten-path dealership in Burlington, N.J. barely has room for one vehicle in their showroom. They compete against larger, better positioned Honda stores with newer facilities and better inventories, and somehow this “underdog” dealership has created excitement in the market and achieved what many said was impossible. We caught up with Janelle Kershbaumer, the Internet Sales Director for Willis Honda and spoke with her to fi nd out how they worked their magic.

AS: Janelle, how many units were you delivering online about six months ago?

JK: Our store was averaging about 50 to 60 units online. We didn’t have any fancy system, just worked our Web site, called our lead prospects, and it helped that we were selling Hondas. We knew we were missing opportunities, but weren’t sure how to begin or revamp our process.

AS: Okay, so what got you moving to initiate some changes?

JK: We were tired of missing the boat. We knew we had some good raw skills, and that the Internet part of the business was going to continue to expand, but we were lacking in getting a grasp on the whole BDC aspect of a department and the impact it could have

on our volume. We didn’t just want to boost our sales a bit — we wanted to be a strong, powerful competitor and be one of the dominant stores in the market.

AS: You brought on Dealer Synergy to assist in your efforts. How did you select them?

JK: We researched them online, and were impressed with their site design and content. Next, we Googled them, and looked for them on YouTube, and found that the company and its CEO, Sean V. Bradley, were all over the search results. Previous to this effort, we had looked at other Internet Training company’s sites and were disappointed at their search status, the lack of depth on their Web sites and how they presented themselves online. If we were going to hire a company to build our online presence, we wanted to see that they were able to build their own, as well.

AS: How did they begin when they came in?

JK: First, they set up an in-store consultation. They came into our dealership and analyzed our dealership for literally hours. It wasn’t like an interrogation, but a thorough review of our systems, our DMS, our CRM and our lead management process. We naturally reviewed our Web site, lead generation and even our computer hardware. We were also pleasantly surprised when conversation turned to human resources and we discussed our staff, their job descriptions, qualifi cations, hiring process… you get the picture. It was very in-depth.

AS: What were the fi rst steps they took when they were brought on-board?

JK: We learned that a dealership’s Internet department is maximized or underutilized in four key quadrants: Products, People,

Process and Promotions. We started with our Products. We were not satisfi ed with our current Web provider, so after listening to our concerns about our current site, Dealer Synergy recommended another vendor to consider. TK Carsites had just introduced a new technology that helps dealers in getting better search engine positioning. We found their design team well grounded in the areas where we needed assistance.

Our Internet training company then showed us how to leverage YouTube video testimonials to boost our dynamic content on the Web. Next, we reviewed our lead management and CRM process. We had a basic system in place but it wasn’t too effective; they assisted us in picking out a better tool. Then they supplied us with a library of more than 30 e-mail templates built to escalate the e-mail to the phone call. They even provided a library of voice mail scripts, which turned out to be incredibly valuable for us. We sometimes had issues handling phone objections, but they provided us with a list of common objections customers use and then scripted rebuttals for our sales team to utilize. I was so impressed with these that I made up posters for our call center, and on each one is an objection, and the beginning of the script for the rebuttal. Now anyone working the phones in our center can look up and see these posters, so we don’t stumble when we get hit with an objection now. This was so popular we printed 90 T-shirts with these objections and responses on them, and our team wears them every day.

AS: Did your Internet training company provide any assistance in acquiring the right hardware?

JK: They had a senior IT offi cer from their company make an onsite visit and he created a scope requirement document on our location and physical setup. It mapped

out how many computers we needed, and included the software and browsers that needed to be installed on the machines. The document even estimated what it would cost us to outsource the IT to a local company.

AS: How did they help with people and the process?

JK: Dealerships often underestimate the value of their People. We agreed that this was a make-or-break proposition. It was critical to have the right staff to hit the numbers we wanted to achieve. The company mapped out our HR growth plan, helped create profi les, job descriptions and pay plans. When it came time to staff up, they posted all of our recruitment ads on Career Builder, Monster.com, WorkPhilly.com and Craigslist.

Additionally, they took all the initial calls, reviewed the resumes, conducted the preliminary screenings and set up second interviews for me. I have to say that this was a tremendous resource because I didn’t know exactly what to look for, and this process is cumbersome.

Once Dealer Synergy was onboard, they went through a fi ve-day onsite training program. It was very detailed and included how to become a “Phone Sales Ninja,” along with how to handle the e-mail leads, incoming and outgoing phone calls. We learned how to be the best coordinators on the planet. The training was intense but I can honestly say our team enjoyed the process. Naturally during the training we spent a lot of time on establishing the Process. They created custom checklists, procedure policies and books we could refer to for information and tips on managing the day-to-day operations. We found that when you stick to the plan, you will get the results you want.

AS: How did they help you promote your dealership?

JK: Once you have the department organized, having the proper Promotion is a key factor in determining your success. Our Internet training company was particularly strong in this area and helped us initiate some very creative and cost-effective promotions. They designed campaigns, crafted micro-sites, showed how we could use press releases to gain more local visibility and made us aware of online reputation management. While the Internet is a positive growth medium, there are some people who use it in a negative way, so we found it very important to monitor our reputation on the Web. CarFolks.com was one of the tools we found that offers us a place to build our reputation and give our customers a place to share their experience with other consumers in our market.

Video Search Engine Optimization went a long way to boosting our visibility in the search engines. One of our YouTube testimonials is now on the fi rst page of Google results and gets a lot of click-thrus. We also use video testimonials on the home page of our Web site.

AS: After the Internet restructuring did you feel like an expert?

JK: I sure knew a lot more than I did before we started working with the team, but I believe there is always more to learn. Earlier this summer, Dealer Synergy held their fi rst Internet Sales 20 Group, Internet Director Immersion Program. This is a fi ve-day program designed for Internet Directors; I wasn’t sure I needed it at this point but was curious and I must say I am glad I attended.

Unlike a lot of Internet training which gives you and overview but little detail, the Immersion Program really got into the nuts and bolts and what it means to be an Internet director. We covered, in depth, all of the technology components including Web sites, lead management and customer relationship software; call monitoring, loyalty and rewards programs, and facility design and structure. I would highly recommend to all my peers to try and attend one of these sessions.

AS: Can you tell us about your results after working with your Internet training company?

JK: They were certainly a results-oriented company. Our department began with just me and two other people. Now a few months later, my department has grown to 14 coordinators and two assistant directors to handle the 131 units online in a month we are selling. We moved our department into an off-site facility across the street, which used to be a Suzuki dealership. Our

owner has another store, Davis Acura in Pennsylvania, and we are consolidating our online marketing efforts for both stores to create a centralized operations center. We have 19 work stations available, and our goal is to achieve more than 200 unit sales in the next 60 days.

We don’t do it all by ourselves. We use the monthly support services provided by our Internet training team. This provides us with call monitoring, mystery shopping and analysis of our leads in our software to help us save deals, and focus on specials which can increase our marketing opportunities. Their support program provides us with access to their support team and regular onsite phone training sessions for our team.Working with our new system, we went from $75,000 monthly gross profi t to over $260,000. The results clearly show we found the right partner to build our success.

Sean V. Bradley is the founder and CEO of Dealer Synergy, a nationally recognized training and consulting company in the automotive industry. He can be contacted at 888.814.0409, or by e-mail [email protected].

14


marketing

solu

tion

MSChuckPatton & TriciaPatton

SERVICE: CHANGING THE SIMPLE MAILER MINDSET

The days of simple and

minimal service marketing have come and gone, and it’s time to adopt a newer, well thought-out plan of attack. What must a dealer do to think outside the box in this economy? As a fi rst step on the path to securing your dealership as a market gainer in a sea of dealerships posting continual losses, you should stop the simple coupon mailer mindset.

Success was a numbers game. Previously, a service department could depend on new vehicle sales to continually feed the customer pool. And if they weren’t capturing enough of those new potential customers, they could look to steady fl ow of warranty work and internal work to keep service bays full. If they experienced a slight dip in RO traffi c, a quick fi x was to send out a coupon mailer with an inexpensive oil change.

Success is a service game. Dealers now need to fi ght their way to the top by examining their processes and innovating new methods and a new mindset to position themselves in the black. These dealers will recognize their service department as the place where their future sales stability lies. These dealers will think past the immediate, and ignore the infl ated promises of getting 50 new customers this weekend with a one-hit promotion.

Service Coupon Mailer Mindset vs. a Service Marketing Program MindsetThe dealers who explode with success will be the dealers who stop thinking “How will I increase business this month?” but rather start running a strategic well thought-out service marketing program for the year. A “service program” is built upon the understanding that, like any successful diet and fi tness routine, these campaigns and efforts are long-term commitments. Long- term commitments require conscious pre-planning, innovative thought, consistent behavior and examination of progress.

Not all mailers are “just a coupon mailer.” The foundation of an intelligent service marketing program mindset is grounded by practices built on frequency. Frequency involves several communications, designed to uniquely address different customers based on their service behavior. While the method of using a mailer to reach a

customer with an offer is still the most effective way to touch a customer, it is important to understand the difference between a simple service coupon mailer vs. an intelligent service marketing program.

Planning and FrequencyThe most obvious difference is that a program plans out further than the next 30 to 60 days. A service marketing program will provide a long-term written plan of not just what service offers will run next month, but rather which offers will run to which customer groupings for the rest of the year, and the plan will provide a method for measuring and adjusting the message as customer behaviors shift.

Reach vs. Frequency: Understanding the Difference“Reach” is the number of customers that you market to, and “frequency” is the number of times you touch each customer with your message. In a world with an unlimited ad budget and a huge co-op account, you would maximize both reach and frequency. However, since most dealers live in a world stripped of co-op and a shrinking ad budget, we must make a choice between reach and frequency. In real situational terms — do you mail to your entire customer database three to four times a year, or do you mail to a part of your database more often? A successful service marketing program will provide a strategy to maximize your reach and identify target markets based on the needs of your dealership.

When faced with the choice between reach and frequency, the golden rule of advertising is: Reach without Frequency = Wasted Money.

The service coupon mailer mindset was determined to mail to as many customers as they could, not worried about details such as the validity of the address, if the recipient still owned the vehicle, how far away they live, if they were just at the dealership recently, etc.

A service marketing program mindset knows that, undoubtedly, one of the biggest wastes of marketing dollars is promotional activities that are implemented without adequate frequency — there are no “one hit wonder mailers.” A “program mindset” is grounded by the basic belief that:

• Frequency demonstrates Consistency• Consistency breeds Familiarity• Familiarity creates Confi dence• Confi dence cultivates Trust• Trust is why people buy

Dealers are achieving record months in this down economy. Amazingly, we work with and talk with many dealers out there that have achieved record months in service and parts gross sales over the recent months. Yes, that’s right — service departments with record sales months in May, June and July 2008. How is that possible? Isn’t the economy terrible? Aren’t sales way down?

This impressive success has occurred because the message being conveyed in the marketing programs was consistency, confi dence and trust. Strategically targeted mailers were sent out as a part of a planned program that:

• was consistent and planned six months to a year in advance by examining existing customers and their servicing behavior

• was sent to markets that were segmented so that mailers with relevant messages went to targeted customers

• were directed by the dealer (not their manufacturer) and achieved through a professional marketing partner

• always kept a consistent branding image and sold the value of the dealer’s brand (their relationship) — not just the manufacture brand

• were campaigns that communicated confi dence and care of the customers and created a trusting relationship

Success is a service game. Achieving results will be attributed to the trust that you build with your customers and the consistent way that you communicate with them. Examine your service marketing and proactively take steps to turn it into a strategic program, giving it the same amount of attention and effort as the amount of absorption you expect your service department to carry over these down sales times. Changing the mindset in service marketing will go a long way to building long-term success.

Chuck and Tricia Patton are the founders of Traffi c Builders Inc. They can be contacted at 866.859.8520, or by e-mail at [email protected].

16


On Oct. 31, 2007, the federal

government announced a rule that specifi cally deals with the prevention of identity theft. Identity theft is the fastest growing crime in America and is projected to touch one out of eight people in the

JasonBlair

RED FLAG RULE AND YOUR DEALERSHIP

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coming year. The Red Flag Rule went into effect on January 1 of this year, and has a mandatory compliance date of Nov. 1, 2008. Time is of the essence to fully meet this regulation.

You are probably asking, “What does this

mean for my dealership?” Auto dealers who engage in fi nancing activities are required to establish an Identity Theft Prevention Program that is designed to detect, prevent and mitigate identity theft.

Your program must consist of six components:1. Identify relevant “red fl ags” (patterns,

practices or activities that indicate the possibility of identity theft) relevant to the credit origination process

2. Detect and evaluate these “red fl ags” in connection with individual customer transactions

3. Respond to the “red fl ags” you detect in an appropriate way to prevent identity theft

4. Ensure your program is updated periodically to refl ect changes in risk to customers from your experiences and new identity theft activity

5. Policy generation and reporting capabilities with annual audits

6. Employee training for those involved in the origination of new accounts

Identity theft continues to be a major threat to and a signifi cant concern for American consumers. Identity theft costs time and money for fi nancial institutions and auto dealers, which can create signifi cant risks to safety and soundness. Even worse, such fraud wreaks havoc on its victims by destroying credit histories, violating fi nancial privacy and ruining good names. Any fi nancial institution or auto dealer should be vigilant and proactive in helping to protect their customers from this serious fi nancial crime.

This new rule is involved and complicated but completely manageable with the right personnel and the right technology to assist in becoming compliant.

“So, do yourself a favor – carefully vet new technologies with your compliance counsel. While certain parts of the Rule lend themselves to technological solutions, other parts may require some good old fashioned subjective thinking. Be sure you know which parts are which, and you’ll keep the regulatory wildfi res to a minimum.”

— Michael Benoit, Hudson Cook LLP

Jason Blair is the president of Dealerspan LLC. He can be contacted at866.618.8235, or by e-mail [email protected].

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CONVERSATIONWITH ERINConversations with children can

be fun, but challenging — especially if you are trying to give guidance. Earlier this month, I had a special conversation with my daughter, Erin, a 26-year-old college graduate. Erin is working as an outside sales representative for a damage restoration company in metro Atlanta area. Her compensation is affected by the customer service that others in her company give to their customers. Something had happened recently with a relatively new customer who she had been working on for several months.

“Erin,” I said, “The person that is responsible for your success in your job is yourself. The person who has created your income, your debt, your relationships, your health, your fi tness level, your weight, your attitudes and your behavior is you. That’s right! Look at yourself in the mirror.” By the raised brow and obvious irritation on her face, I could tell she didn’t agree. She was thinking that I should be more sympathetic and agree that each of the technicians involved in this incident should have been drawn and quartered for not doing a job with her new client. What I was telling Erin was that the person she sees is the person to blame so far for what’s happening.

If you have a situation that’s made you upset, please, stop complaining about it. Everyone has a situation, and yours probably isn’t any different from the next person’s. Last week I heard a fellow speaker say, “Don’t belly ache over what you tolerate.”

What is it that you’re complaining about? Examine it — really examine it. More than likely it is something that you can do something about. Have an offi ce meeting with everyone involved, for instance, to hammer out the problem and fi nd a solution. Change is hard for a lot of people, but if everyone is changing at the same time, then it’s not as hard.

I reminded Erin that everyone listens to the

same radio station, “WII-FM” —What’s In It For Me! Let your team members know what needs to be addressed so that the whole company gets better together.

Last week I heard Erin say, “I wish things were better,” etc. What she was really saying was, “I wish things were easier and I wish you were better.” Make a commitment to get better. In other words, if you were going to change the world, would you start with everyone else, or with yourself fi rst?

Most people who know me know that my daughter means so much to me. I let her know it everyday. I know that the parents who are reading this column love your children, as well. Erin creates her own experiences and creates them whenever she wants. You also create new experiences whenever you want. None of us need to blame outside factors for our inside unhappiness. I want her to take responsibility for her happiness and for her unhappiness, her successes (and she has a lot of them) and for her failures, as well. When you stop blaming others for their failures, you can use that misappropriated energy and redirect its focus by creating a better situation.

Blaming others only ties up valuable energy. Successful people take 100 percent of responsibility for the thoughts they think, the pictures they think about and the actions they take.

I’m just an old fashioned dad who wants his daughter to be better — not bitter — and have all the things in life for herself and some day for her own family. By then maybe she’ll be passing along similar advice to her son or daughter and will remember that day when she learned that she is responsible for her success — not anyone else.

D.J. Harrington is an author, journalist, seminar leader, international trainer and marketing consultant. He can be contacted at 866.855.5781, or by e-mail at [email protected].

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MarkProctor

POLICY AND PROCEDUREFOR PROFITThere are many ways to bring a

current or future prospect into a dealership. How we treat that opportunity is what matters most. Let’s take a look at common dealership problems, and recommend practical solutions that will increase the bottom line without increasing expenses.

Dealerships sell X amount of units primarily based on four things: inventory, advertising, personnel and market conditions. The only question is how much profi t you make and how much you keep?

Most dealerships allow salespeople access to one or more of the following: invoices, used car costs, appraisals, F&I rate sheets, factory-to-dealer and consumer incentives, credit bureaus, computers or factor charts to quote payments. And you wonder why your profi t is where it is; you should be grateful for what you do retain. Most of your profi t is given away before your customer enters the showroom to negotiate a transaction. Nine times out of 10 you end up “backing into a car deal” to get to a certain payment, trade difference or allowance. Sound familiar? A salesperson normally takes the course of least resistance. It is easier to work the desk than the customer.

Remember what it is like to be under the gun at 4 p.m., trying to put something on the books? Many salespeople and managers work every day and deal under the same pressure.

Scared money can’t win. First, if a salesperson has not done his job, he hasn’t earned the right to ask for a fair, just and equitable profi t. Say you have a salesperson who’s in the manager’s offi ce 5 or 10 minutes after meeting a customer needing the “absolute best,” “one shot,” saying “he’s

shopping,” “I need to sell a car,” “help me” or “we have had the unit forever.” Fire him or train him, but do it now. He is costing you a fortune. And it is less expensive to develop and train salespeople for life than it is to replace them.

You cannot have customers for life without employees for life. Salespeople must learn how to slow a prospect down and create a “different buying experience” if they want to hold gross. They must earn the “right” to make the sale and a fair profi t.

Policy and Procedure BasicsIf anyone is allowed to break policy and procedure without consequences, all other dealership policies will never be taken seriously and your ability to manage is reduced. The fear of losing or alienating one customer often results in the loss of many.

100 Percent Management Turn A change of face is a powerful tool. A sales manager must take a turn on every customer, sold or not (though it is equally important in both cases). A courtesy “T.O.” and simple question (“Thank you for considering our dealership. Have you received all the information you need to make a decision?”) will produce an additional 10 to 15 percent in sales.

100 Percent Follow-Up …No Exceptions Getting a name, address and phone number is required on all customers. It is frustrating our prospects don’t follow-up better on our sales people, so we must do a better job following up on sold and unsold customers. Nine out of 10 consumers who purchased vehicles in the last 12 months cannot tell you the name of the salesperson who sold them their vehicle. Closing ratios as well as customer retention can be devastated by

a lack of follow-up. The vast majority of salespeople do not follow-up; therefore, it is up to the dealership to require it. Look at your cost to bring a single prospect in the front door, then ask yourself why you would not do everything possible to maximize each and every opportunity to do business.

Follow the Steps ... No Shortcuts Without a proper product presentation and a demo drive, all you have to sell is price, and you cannot win. Statistics confi rm that 97 percent of our customers will not buy a car without driving it. Pretty simple stuff, yet we continue to negotiate and give shopping packages to prospects who have not received a proper demo or product presentation. Eight out of 10 buying customers list the product presentation as a determining factor in their decision. Any dealer in town will take your customer, often for $100 less. The steps establish a structure that will allow a salesperson to slow a prospect down, Establish a relationship, qualify wants and needs, present and demonstrate the product and ask for the sale. Eliminate inventory price lists. If your inventory is so large or your sales department is unwilling or not required to walk and learn the inventory daily and you feel it is necessary to provide a list, do not include prices. You are enabling weak salespeople. Why should a salesperson walk the lot or check with his manager to see if a new or used specifi c or similar unit is available or can be acquired — much less touch the desk to get today’s selling price, market value or a turn if needed — when it’s easier for him to rely on his two-week-old incomplete inventory list?

Incoming Sales CallsThese must be handled by managers who have been trained to obtain name and phone numbers and set appointments or use a virtual BDC/Phone Center. About 92 percent of potential customers who are given a price over the phone call another dealer who probably assures the prospect “I can beat that deal.” There are only two things you can accomplish by phone. Obtain a name and phone number, and set an appointment.

It is time to get back to basics and always inspect what you expect.

Mark Proctor is the president of Preferred Dealer Services, Inc. He can be contacted at 866.922.3541, or by e-mail at [email protected].

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“Salespeople must learn how to slow a prospect down

and create a ‘different buying

experience’ if they want tohold gross.”

18


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22


Earlier this summer, Allan Errington

packed his clubs, along with a couple dozen balls and a borrowed putter, and headed off to a company golf outing.

The 43-year-old had modest expectations for the day — a break from daily work responsibilities, a bit of fresh air and exercise, and a chance to prove to co-workers and clients that he was much more suited to managing people than a game of golf.

The outing started rather uneventfully. Errington’s foursome set out on the fi rst tee on the Hawkhills Course at Newmachar Golf Club in Aberdeen, Scotland. The 6,670-yard, par-72 championship course is described as the toughest in the area.

Errington, a self-described “rubbish golfer” who hadn’t golfed much more than a dozen times in his life, completed the par-four fi rst hole with an unimpressive seven strokes. He did the same on the second hole, and the third, and the fourth. Holes Five and Six also took seven strokes. If nothing else, he was well on his way to earning the top award for consistency.

Then came the money hole. That’s where a Volkswagen Golf, worth about $30,000, was up for grabs to the fi rst golfer who made a hole in one. The car was a prize offered by his employer in a deal with a prize insurance company. With bravado that belied his skill level, Errington joked, “It’s my destiny. I’m going to win it.”

Perhaps his string of lucky sevens might pay off. As he approached the 181-yard, par-three ninth hole, he said, “My average score at that point was seven, and since I was also in team seven, I said I’d hit it with my seven iron,” he told the Aberdeen Press and Journal.

“I teed up. I looked at the car and hit the ball and it went in the hole. It bounced once and rolled straight in the hole. It was a pure fl uke. Everybody knows me as a pretty poor golfer. I’m rubbish,” he told The Scotsman. “Everybody went mad. We were jumping up and down like young kids. It was hilarious. I win every year but it’s usually the booby prize.”

Opportunity for DealersErrington’s experience showcases the value of big prizes at golf outings, and it’s not the fi rst time an average Joe captured the big prize. With thousands of vehicles awarded to hole-in-one winners, auto dealers benefi t when there are big winners. Media play for Errington, for instance, went Britain-wide — including a bit on BBC. Pick-up even reached across Europe and to the States — at golf Web sites, local papers and even the Christian Science Monitor.

Even when there’s not a big winner, dealers still benefi t, because when dealers support a charity event, they are supporting a cause the golfer believes in and wants to be part of. Dealers can get a chance to meet all of the golfers face-to-face when they take the car out to the course.

Beyond that, golfers tend to have a sphere of infl uence among others, spreading the word. And when people with discretionary income go to dealerships, they often lean toward higher-end vehicles, and, usually don’t haggle as much, making it a better sale.

Dealers can often extend the benefi t of their sponsorship by getting the hole-in-one signs and banners placed in key places within the charity offi ces or at the dealership. These remind people, sometimes for up to a year, that your dealership supports the cause.

Errington’s event represents a largely

untapped market for auto dealers. While it’s sponsoring charity events is common, opportunities also exist at corporate events. Fleet customers are a natural target, so large employers can deliver exposure among a broad cross-section of buyers at company or industry golf days.

It doesn’t always have to be a full-fl edged tournament, either. Dealers can host shootouts at company picnics, for example. For a relatively small premium, dealers can advertise to every employee of the company and, at the same time, cement their relationship with upper management.

A Winner on NineErrington’s hole-in-one on the ninth was not indicative of how he’d tackle the rest of the course. He apparently lost four balls in a water trap at the next hole. And by the end of the event, he had lost 23 of the 24 he started with. The only ball left was the one that earned him the car. His fellow players took it from him so he wouldn’t lose that one, too.

Despite his less-than-stellar performance, Errington has turned pro, thanks to a peculiarity in the rules governing golf in Great Britain. According to The Royal and Ancient Golf Club rules, an “amateur golfer” can’t accept prizes or payment above a certain level.

Errington’s okay with that. He wasn’t an avid golfer, pretty much playing only at the annual company outing. Plus, the goodwill earned at home by giving the car to his wife far outweighs the loss of any status on the links.

Doug Burkert is the president of the National Hole-In-One Association. He can be contacted at 866.859.6407, or by e-mail at [email protected].

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JimAdams

THE CULTURE OF TEAMPart 1

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One of the largest struggles that the

21st century dealership faces is how to get four departments, (new cars, used cars, parts and service) to operate as one team. Anyone that has been in our industry for more than a few years has seen the confl ict that often arises between new and used car departments, between parts and service or used cars and service. They can be a minor nuisance, or they can be a major confl ict that can destroy award-winning customer service. A healthy, profi table dealership must operate as one store. Jeff Calloway, a corporate sales trainer, once said that even though as individual departments we are one part of the dealership, we must be 100 percent responsible for the total success of the team. The healthiest dealerships are the ones that have fi gured out how to work together toward one common goal.

It all starts with a mission and culture statement:

• Our mission statement is: To provide award-winning customer service to every customer who visits our sales department, parts and service department, calls our telephone or visits our Web site.

• Our culture statement is: As a team member of this dealership, I am 100 percent responsible for the total effort of the team.

As the general manager, it is my job to make sure that each department head has a crystal-clear understanding that this is our mission and culture statement. They must live it and breathe it, and they must be able to transfer our culture to their subordinates. The hard reality is that many times we must change leaders in order to change the culture, but I fi rmly believe that everyone deserves a chance to get on board.

Here are a few ways that you can get started:

• Weekly Managers’ Meeting With Each Department Head in the Same Room This includes the new and used car manager, the parts and service manager and the offi ce manager or controller. In this meeting, you review performance, compare departmental objectives and have an open discussion about each department. Your new and used car managers need to hear the discussion about warranty receivables and open repair orders, and they need to have an understanding of fi ll rate and obsolescence in parts, just as the parts and service managers need to have an understanding of used car aged inventory and days supply of new car inventory. Once they have an opportunity to begin to empathize with the complexity of one another’s daily task, only then can they truly begin to understand how important each department is to the others. The parts manager and the new car manager begin to coordinate placing accessories on a unit in the show room to help up-sell accessories and dress up an aged unit. The service manager begins scheduling auction units into the shop fl ow to expedite a quicker turn. These subjects cannot be discussed if there is no scheduled mandatory meeting once a week. Remember the golden rule of great meetings: Start on time, have an agenda and give everyone an opportunity to speak.

• Be AccommodatingWe all have the most pressing issue. Just remember the big picture: to provide award-winning customer service. The most important issue is the one that has the greatest impact on customer service. A bin count can wait to take care of a tech standing at the back counter waiting on a part. Techs do not get paid to stand there; they get paid to repair cars.

• Insist on Internal Work OrdersIt is the used car manager’s fundamental job responsibility to drive every single car

and point the shop in the right direction. An internal work order must describe the work that needs to be completed. It may say:

• Used vehicle inspection• Lube, oil and fi lter• State Inspection• Detail for lot• Touch up bumper scuff• Replace windshield

If we will take the time to drive the vehicle, we will know if it has a hard pull to the left or rotor hop. We can make a decision whether or not to keep the vehicle for retail before we waste valuable tech time. (And, by the way, the weekly meetings will help the used car manager understand just how valuable that is)

• Used Vehicle Reconditioning is a Direct Refl ection of the Service Manager When a vehicle comes out of shop, the service manager is certifying that this vehicle is lot-ready and ready for retail. Service managers cannot let their techs cherry pick gravy work and they cannot let the used car manager pick and chose which work will be preformed and which work will not. It is a simple “yes” or “no.” We recondition the vehicle or we do not. We cannot do anything half way.

• Include Service and Parts in Rewards and Incentive DinnersRecognize the shop and individuals for increased production and CSI awards. At our company Christmas party last year, I made a special point to compliment our fi xed operations and gave our “Associate of the Year” award to our transmission tech. This created more departmental pride than I could describe. Learn every tech and part counter person’s name and look them in the eye and visit with them as much as you can. Our people are our most precious asset.

Next month we will dig deep into confl ict resolution between departments, and how idle talk is destroying dealerships every day. Until then, be different; be a professional.

Jim Adams is the general manager at Fletcher Auto Group in Joplin, MO. He can be contacted at 800.905.0627, or by e-mail at [email protected].

“The healthiest dealerships are the ones that have fi gured out how to work together toward one common goal.”

24


SteveBrazill

A CRYSTAL BALLIS NOT ENOUGH

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When the market gets soft, it’s natural

to get back to the basics and fundamentals of management. Budgeting and forecasting is one of those activities that tends to elevate in importance as revenues fall and margins get squeezed. Let’s review a few basics.

A good budget and forecast has three parts:• A prediction of future events• A plan for making desired events

happen• A way of measuring success

Predicting the FutureThere are many methods — you must select the one that is appropriate for you and your situation. Two broad categories are the bottom-up forecast (you collect individual forecasts from salespeople or managers, then combine into a full dealership forecast) and the top-down forecast (dealer or manager prepares the dealership forecast, then assigns individual responsibilities to salespeople or managers). Bottom-up forecasts tend to work better in stable organizations where key players have a history of working together as a team and have high levels of confi dence in each other. In situations where those elements are not present, it might be best for a key leader to prepare the forecast, then break it down into individual components. However prepared, you must be sure that your forecast is realistic. If you forecast 75 cars for the month and that little voice in the back of your head says you’ll be lucky to roll 60, you will be less than 100 percent committed to making it happen. And if you can’t sell it to yourself, you probably can’t sell it to your people. (They are better at reading you than you think they are.) Without buy-in, most forecasts fail to launch.

Making Desired Events HappenThis is where your forecast earns its salt as a management tool, because preparing a forecast is akin to writing fi ction — unless you have a sound plan to turn your ideas into reality. To make the idea-to-reality transition, you must remember that hoping to sell 75 units is not the same as planning to sell 75 units. Planning means you have determined the specifi c tasks that must be executed and you know what must be done to execute each task. If you are a Nissan dealer, how many of those 75 units will be Sentras, Altimas, Titans, etc.? Do you have them in stock or arriving soon?

Are you certain? If selling 75 units means you must earn a larger share of your local market, which competitor will you take it from and how will you accomplish that? If the service department needs to write eight more repair orders per day and increase labor hours per RO from 1.8 to 1.9, how will that happen? Don’t underestimate the importance of dealing in specifi cs instead of generalities. How can you hold your people responsible for executing a plan that you can’t articulate in detail?

Measuring SuccessThis can be as simple as comparing your month-end fi nancial statement to your forecast, but if that is all you do, you are missing a lot of nutritional value. This should be your “After Action Report.” What worked? What didn’t? Why and why not? As with the planning phase, you must break it into specifi c components. Altima sales met forecast, but Murano sales did not because you had the wrong mix of drivetrains and trims. In service, the repair order count was up, but hours per RO were down because you didn’t have enough techs to absorb the increased activity and the advisors were afraid to upsell work that couldn’t be completed on time. OK. You know what worked and can replicate it. You also know where you need to do things differently. Make the necessary changes and bring on the next month.

Two last thoughts on budgeting and forecasting:

• Accuracy in forecasting is like batting in baseball. No one bats 1.000 — but carrying a high average pays better.

• A forecast that spends the month hiding in your desk drawer, waiting for the day you will compare it to the statement before burying it forever in a fi le (or the trash), was probably a waste of your time. The real value in budgeting and forecasting isn’t in the predicting, it’s in crafting of the plan that makes the prediction happen. If you take the time to develop a sound plan, why hide it in your desk drawer? And if you aren’t going to put your best effort into the plan, why bother?

Steve Brazill is the chair of automotive marketing at Northwood University, Texas Campus. He can be contacted at 866.861.1515, or by e-mail [email protected].

25


26


HelmiFelfel

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Let me ask you an important question.

Are you one of the nice dealers out there insisting that the special fi nance business is drying up? Perhaps you’ve been concerned about all of the new competition for the same pool of special fi nance customers. Maybe your team of hard-working salespeople and fi nance managers are upset about the quality of leads and diffi culty getting them bought. Does any of this sound familiar?

First of all — the sky is not falling and special fi nance is here to stay. Even Alan Greenspan recently admitted he didn’t fully realize the enormity of the secondary fi nance market. But, as in any expanding market, competition will enter and only the best will survive — and the rest will lose a ton.

If you’re still doing business like you were three years ago, good luck — you’re on your way to almost certain failure. Change now. The alternative is not fair to you, your family, your employees and your loyal customer base.

Today is the day to recommit your efforts toward learning the best practices required to get deals approved, and more importantly, to serve all of your customers in the most profi table manner.

The single most important key to getting deals approved is establishing and maintaining outstanding relationships with a team of favored lenders. We must consider them team members, partners and family.

Dealers, GMs and fi nance managers need to spot problems before they have a problem. At lightning speed, here are “10 Clear Signs of Troubled Skies”:1. Bottom feeders are getting 40 to 50

percent of your business. You have bad lending relationships.

2. No one is approving your loans. You’ve let your relationships slip.

3. Funding contracts are taking longer or being kicked back. Your lenders are looking for a problem.

4. The advance for your deals keep getting lower. They think you’re hiding something.

5. Your fi nance manager can’t reach the buyers. They’ve lost that lovin’ feeling.

6. You’re getting regular letters cutting you off. There’s a bad buzz about you.

7. They want to talk with your customers fi rst. The trust is gone.

8. They are asking for stips up front. They don’t believe you.

9. The reps aren’t visiting your dealership. You have a bad reputation.

10. They are insisting you buy contracts back. All confi dence in you is gone.

If any of these signs are clearly describing you, let’s fi x the problem before it gets worse. Here are “10 Remedies to Heal Troubled Relationships”: 1. The Dealer and/or GM needs to step

in and personally reestablish the relationship. Give them your cell.

2. Invite one or two lenders to your dealership every week for lunch. Don’t become complacent.

3. Introduce your lenders to the compliance rules you have initiated to protect everyone.

4. Schedule an outstanding quarterly breakfast event to demonstrate your commitment and appreciation.

5. Invite your preferred lenders to join your “20 Percent Elite” club. This is the rock-star treatment.

6. Get them involved in your goals – and make sure your goals are aligned.

7. Show your lenders the checks and balances you have in place to protect them. Show them your audit procedures.

8. Call your lender when you have a good deal for them. Let them know you had other options, but wanted to earn their trust and confi dence.

9. At the end of the month, call each lender and ask them what you can do for them.

10. The best way to fi x a relationship is to never let it break.

Of course, since this is a partnership, we must learn to dig deeper and kindly, politely and relentlessly require our managers and lenders to perform at the highest possible level. Here are my “Digging Deeper 10” for obtaining and maintaining a team of favored lenders:1. Establish a rock-solid relationship with

the lender representative.2. Establish the same quality of

relationship with the buyer.3. Establish relationships built on

trustworthiness, appreciation and accessibility.

4. Remind the buyer and representatives of the guidelines. Ninety percent of the representatives don’t understand their own programs, so we must understand them, insist on consistency and be sure they are willing to make exceptions for us.

5. Evaluate each and every deal at the end of the month. You will never know which lenders are buying and not buying unless you track and evaluate.

6. Just like in professional sports, you must create a team of “bench players” so you are never held hostage by your best lenders. Remember, things change quickly and we must be able to adapt and adjust.

7. Choose your loyalties carefully. Do not give your best paper to lenders who won’t back you on small paper.

8. Track each lender’s profi t chart. At the end of the month, it’s still about our ability to make money.

9. Ask for a commitment for an open and personal line of communication. (“Here’s my e-mail and cell.”)

10. Ask the lender for their current best practices with their best customers. This sets the expectations for excellence and allows you to bring them into your “20 Percent Elite” club.

Is it a lot of work? Absolutely. Is it more work than trying to rehash deals that should have been bought the fi rst time? Absolutely not. The reality is your competition is “trying out” special fi nance and they are doing these things. The reality is there are exceptionally cost-effective ways to generate high-quality leads and get them bought. You just have to learn the same strategies we teach our dealers. The reality is that special fi nance is exploding and the opportunity is golden for dealers willing to commit themselves to the right processes.

The choice is yours — certain failure or certain victory. If you choose victory, I’m confi dent you’ll make a ton of money so long as you follow the right path.

Until then, remember – go BIG or stay home!

Helmi Felfel is an active dealer and president and CEO of HF Consulting,Inc. He can be contacted at 866.481.8812, or by e-mail [email protected].

SPECIAL FINANCE REALITYCHECK: THE SKYIS FALLING! NOT

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STSMattBaker

CAN YOUR STAFFED EVENT COMPANY DELIVER WHATIT PROMISES?Chances are this is

a thought that has crossed your mind when considering a staffed event company for your dealership. Let’s face the facts: There are a multitude of companies out there that promise to increase profi tability, decrease aged inventory and train your staff to perform better. Sounds great, right? Well, maybe not….

As it turns out, not all staffed event companies are the same, and what some promise may be nothing more than a pipe dream. The key to making sure you don’t get duped is to be well informed of the companies you’re dealing with. Asking the right questions can help you weed out the companies whom don’t value your best interest, and help you make an educated decision that will prove to be profi table and value-added.

So, what should you be considering if all staffed event companies aren’t the same? Here are some key items to keep in mind when discussing your event with a staffed event company — big or small.

Spreading the WordAdvertising 101: Effective advertising attracts quality customers. You understand your target customer and value advertising efforts which yield the greatest return with the least amount of waste. Your staffed event advertising plan should be no different.

Ask the event company how they plan to reach those who are your best potential customers. Ideally, you are looking for an answer that supports the use of a well-balanced marketing mix. Everybody is different; some may react to direct mail while others are more likely to be enticed by TV, radio or newspaper. Look for companies that use a mix of media and have a variety of campaign themes to ensure your marketing is fresh and effective. Avoid the “one-mailer-fi ts-all” companies.

Now for the touchy part — how does the staffed event company ensure their event advertising is 100 percent compliant with your state’s rules and regulations? When discussing this topic with a staffed

event company, do not be surprised if some responses to this question consist of nothing more than hot air. The truth is that the attorney general is constantly changing the rules of the game, and your chosen staffed event company should be apprised of these changes. A good agency will diligently research restrictions regarding advertising in your area and develop a cohesive plan that plays within the boundaries. However, in an effort to protect yourself and your dealership against any unforeseen mishaps, it never hurts to make sure who is being held responsible for non-compliance. Beware of false promises. Get the agreement in writing.

Sales Team QualityObviously, the quality of the event staff (team) is a fundamental part of the event execution. Ask whether or not the staffed event company performs background checks and drug screening on their sales teams. Responsible staffed event companies take pride in hiring people of character and professionalism. Always inquire about proper licensing for the sales teams. Many states are increasing rules and regulations regarding sales licenses. One bad move here could be the ultimate demise of the event, and your thousands in advertising dollars down the drain.

Who does the sales team work for? This may seem like an off-the-wall question, but can be one of the most important things you discuss. If sales teams (or sales people individually) are working for several staffed event companies, who do you have to fall back on if something goes wrong? Check to make sure the sales team works exclusively for the event staff company and does not “fl oat” from one company to the next.

Talent Management Look for a company with a set training and improvement plan for their managers and sales reps. Continuous training helps the managers and sales reps improve their game before they show up on your dealership fl oor. If you are considering a staffed event company that has no self-improvement plan, how do they prove their commitment for improving your dealership?

Put It in WritingMake sure the company you choose enforces a code of ethics for all sales teams on-site. Many may claim this is true, however you should always suggest a copy of this agreement in writing. Additionally, always make sure your advertising investment was allocated in the right manner. Request written documentation verifying the number of direct mail pieces delivered as a part of your campaign.

Consider whether or not the staffed event company has a documented process to sign off on each car deal as it happens. Bypass the Monday morning mess and ensure your event company of choice has a plan to make sure all deals are complete and you aren’t left with a mess.

Finally, have the staffed event company document how they will be involved in the charge-back process. The event company should only get paid when you get paid.

Don’t Forget the UpsideBy asking the right questions, you can eliminate the headaches. Remember — there is a lot to gain from a staffed event. Well-executed events can quickly move aged inventory, increase sales and gross profi ts, but consider the long-term benefi ts. Look for thorough pre-event training. This will not only prep your staff for the event, but will often create long-lasting positive effects on your sales and management team. Obviously, increased sales means increased pay, which affects employee morale. Keep in mind, a happier and more profi table sales team is a happier and more profi table store.

Bottom line: Beware of false promises. Be educated about who you choose and always ask for verbal promises in writing. Ultimately, your decision should be based on the company whose products and services best help you reach your short-term and long-term goals. As the old adage goes, if it sounds too good to be true…chances are, it probably is.

Matt Baker is the vice president of sales of G&A Marketing. He can be contacted at 866.618.8248, or by e-mail [email protected].

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MSLarryCochran

BILL WALSH AUTOMOTIVE TAKES ADVANTAGE OF THEIR WEB SITE TO INCREASE TRAFFIC AND INBOUND SALES CALLSBill Walsh Automotive operates

24 new vehicle auto groups southwest of Chicago. The family-owned and operated group actually began business by selling buggies in the 1850s, and has grown into a multi-franchise dealer group with more than 225 employees.

Initially, the dealership hosted a two-dimensional Web site that merely provided a Web presence, but the dealership felt that Internet shoppers were no longer satisfi ed with a Web site that simply offered pictures of cars, an address and phone number. “We wanted a Web partner with the best practices to help us become a leader online,” said General Manager Bill Walsh, Jr.

Today, BillWalsh.com is a detailed, interactive Web site that averages about 125,000 page views every month. The site is designed to meet the next generation Internet buyers’ desires — a fully interactive site that features online service scheduling, accessory purchases, easy inventory navigation and consistently updated information.

eNewsletters Drive Web Traffi c with Relevant Content, Performance TrackingOnce the Web investment was made, it became important to drive traffi c to the site, where the sales process could begin. On top of traditional advertising like radio, newspaper and television to

drive traffi c, Bill Walsh Automotive sends nearly 168,000 eNewsletters to its existing customer database every month. With these newsletters, the group can record which customers click on a particular article, and then can follow up with those customers with additional, relevant information. They can even send customers a “virtual test drive” that corresponds to the vehicle they read about.

“We’re very picky about the content we send to our customers,” said Walsh. As a result of their choosiness, the eNewsletter is proud of a bounce rate less than two percent and an unsubscribe rate also less than two percent.

In fact, the Web site has become an important part of the culture at Bill Walsh Automotive; “We see it as our 25th franchise,” said Walsh. The Web address is listed on every license plate bracket, wearables throughout the stores and on every ad. And, the Web site has its own dedicated budget to help improve its success.

Internet Department Handles 700 Calls Each MonthThe eNewsletters and resulting Web traffi c produce about 700 inbound calls every month. Bill Walsh’s Internet department currently has seven employees handling all of these calls, which are routed to employees’ cell phones from 116 campaign-specifi c phone numbers. Using phone

numbers in this way provides performance-tracking capabilities that allow the dealership to redirect

marketing dollars toward campaigns that are most profi table. As Walsh said, “measuring dollars and the productivity of the dollars is essential to success.”

More important than the 700 incoming calls each month is how the dealership learns from each call. Bill Walsh Jr. listens to each and every call, documenting details in a spreadsheet to cross-reference traffi c and ensure no leads get lost in the shuffl e. Additionally, Bill Walsh Automotive takes advantage of a Virtual BDC Manager, which they fi nd intuitive and easy to use. The Internet team spends all day every day in the system, making sure that every lead has been followed up on properly, capturing notes on the customer profi les, and tracking which information has been sent to whom. “It’s our ‘memory keeper,’” Walsh said.

Group Will Push the Electronic Envelope to Drive Continued ResultsBill Walsh Automotive intends to provide ongoing training and to implement new solutions to respond to customers’ demands. “We want to continue to push the electronic envelope to take our Internet department a lot farther,” Walsh said. The group is working to keep track of which customers buy, which are profi table, which come in for service only, and so on. “There is no magic pill,” he said, “just a lot of hard work and trying out different solutions.”

Larry Cochran is the vice president and general manager of digital marketingfor BZ Results. He can be contacted at 866.618.8264, or by e-mail [email protected].

DalePollak

PROFOUND ADVICE -45 TO THRIVE

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A dealer that I respect very much

told me something profound. He said that he actually welcomes both wholesale and retail loss on used vehicles providing that the loss is on fresh units. He will not tolerate, however, wholesale or retail loss on aged units.

In other words, he acknowledges that you cannot be in the used car business without making mistakes, but insists that those mistakes be recognized and addressed early rather than later. He has no patience for those who can not recognize or refuse to deal with their problems upfront.

Remember that in the old “ineffi cient” used car business, time was your friend. It was usually just a matter of time before somebody could be found that would take the vehicle home for a little too much money. Today, because of the Internet, the used car market is very effi cient. As a result, time is no longer your friend on the used car lot and problems must, therefore, be recognized and dealt with quickly.

Many are predicting that in 2009 we will witness an unprecedented number of dealership closings. I don’t think that this comes as a huge surprise to anyone, but what I don’t think most people realize is that decisions being made right now will largely determine those who die, those who survive and those who thrive.

Think about it: We are experiencing record-high fuel prices, an economy that is spiraling downward and a presidential election in November, which is typically followed by interest rate hikes. It should come as no surprise that the next year is going to be challenging. In such economic periods, cash often determines who will live and who will die. What is the primary source of cash for a dealership? You’ve got it — the used car inventory.

Ask yourself what that means for you. Specifi cally, not if but when your dealership needs cash in the coming year, how available will it be? Will you be able to draw down your used vehicle inventory if necessary? Or, will your cash be locked into assets that, if liquidated, will produce large fi nancial loss? Now is the time to ask yourself this important question, not six months from now.

During the next six months we will probably see inventory values decline at an increasing pace. I say this for a variety of reasons. First, we’re going into the fall and early winter seasons, when it always happens. Second, it is likely that fuel prices will continue to rise and the economy will continue to deteriorate. Moreover, interest rates are likely to rise after the election. All of these factors mean that the cost of not turning your inventory quickly will result in your working capital becoming frozen in assets which will be diffi cult to liquidate.

The only way to survive is to stay liquid. The only way to stay liquid is to turn inventory quickly. For this reason my best advice to everyone is to immediately institute a strict policy that says that no vehicle shall exceed 45 days in stock. Yes, this even includes your acquisition and reconditioning period. Desperate times place greater burdens on all of us and one such burden is to speed up all the processes necessary to turn inventory more quickly.

Specifi cally, I would recommend that dealers institute a strict policy of priority for used vehicle transportation and reconditioning. It is simply not acceptable to have a vehicle investment languish in either the transportation or reconditioning phases of their inventory life. Similarly, there should be a higher sense of urgency to get quality descriptions and photos on the

Internet. Most importantly, there should be a hard and fast rule that allows no vehicle to exceed 45 days in inventory, even if it means taking a loss. The old 60-day rule will get you in a lot of trouble over the next six months. If you do not pay attention to the consequences of accelerated depreciation, you will likely not have the ability to reach for cash when you need it the most. Simply stated, how you manage your inventory today and in the coming weeks and months, may make the difference between surviving and thriving.

Now, if you agree, and really agree, ask yourself how many units you have over 60 days of age.

Dale Pollak is the chairman and founder of vAuto. He can be contacted at 866.867.9620, or by e-mail [email protected].

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COUNT TO10 AND WIN

I have been sharing a magical

process for 30 years as a fail-safe way of increasing sales performance and sales income. Would you share a formula with your team if you knew it would improve their sales effi ciency by 20 percent each quarter for the fi rst 12 months? What if I was off by 50 percent in my assumption? Would you take the necessary actions for a 10 percent quarterly increase? What if I told you that as a leader, you would need to teach, coach and monitor the process every day — would you commit to doing your part? What if I said you might be met with some initial resistance to the new process — would you shy away from the implementation of the strategy? These questions must be answered.

Some facts you need to know and then accept. This is an everyday process that you must put in place and support enthusiastically. You must then be like a postage stamp — “Stick to it until you get somewhere.” You must actively engage in the process and be available to coach your players through initial setbacks. You must understand that as your people participate in the process, their effi ciency will improve through the consistent application. This process creates activity-based high payoff targeted showroom traffi c.

Refi ning The ListIn order to use the “Count to 10 and Win” system, each sales person must create a master list of all their potential customers by using all their database resources. If you want to experience a moment of humor, simply ask your people to bring you their Top 10 prospect list in fi ve minutes or less. This will be all the evidence you need to realize you need a better method of scripting your people’s approach to setting high payoff appointments. Once you compose yourself, I strongly urge you to present this program in a positive and passionate manner to mitigate the natural

push back and resistance your sales people will send your way.

The Remedy: From current buyer’s orders to the CRM system’s customer fi les, every potential sales opportunity must be located. The real work begins when the fi les are located. After the list is compiled, you must then ask your sales people to rank their sales opportunities from “most likely to purchase” to “least likely to purchase.” Then you rank the list based on three criteria:

• Who is your single greatest sales opportunity today? This prospect becomes the defi nite No. 1.

• Who are your backup three if the defi nite No. 1 cannot be reached? These customers become contacts two, three and four.

• Finally, who are your back-up six? These become contacts fi ve through 10.

Now we are organized and ready to set “high payoff” customer appointments.

The Defi nite OneI have a couple of great questions for you today. Why would any sales person ever start a sales day without identifying their single greatest sales opportunity? Another question for your consideration is why would any dealership let a salesperson enter their day without attacking their greatest sales opportunity as a fi rst order of business? I don’t know about you, but I cannot think of a single reason that makes any sense. Let’s talk about the solution.

The Remedy: Purchase a “Single Greatest Sales Opportunity” board and install the board in your sales meeting room. Require every sales person to list their customer on the board as the fi rst order of business when they arrive for their shift. After your morning meeting or training session, meet with the salespeople individually to create a powerful offer designed to get the customer’s feet back on pavement. Release them to call the customer and

make the offer by telephone. Ask them to post the result on the board and then ask for feedback.

Sure Three and Back-Up SixProductivity is a result of activity in the business of sales. The two elements of selling a salesperson can totally control is the amount of activity and the type of activity. The “Count to 10 and Win” system will create a minimum standard of activity excellence for your dealership. By combining the greatest sales opportunity call and the “Sure Three/Back Up Six” calls, we guarantee 10 attempts per sales professional every day. The math is powerful, and so are the results the process will produce.

Let’s do the math: 10 Sales People x 10 Daily Attempts = 100 Attempts Daily 100 Attempts Daily x 6 Days = 600 Attempts Weekly 600 Attempts Weekly x 4 Weeks = 2,400 Attempts Monthly

Let’s assume the following contact ratios: We reach 40 percent of our customer’s called = 960. We set appointments with 30 percent of the customers we speak with by phone = 288. We experience a 50 percent show rate = 144. We write up 60 percent of the customers = 85. We close 50 percent of this targeted traffi c = 43 additional sales every four weeks. There are 13 four-week periods in a year: 43 x 13 = 559. That’s 559 annual sales from high payoff targeted traffi c. What if your numbers are only half that good?

“Count to 10 and Win,” or don’t count and just hope you win. The choice is yours.

Paul D. Cummings is president and CEO of Paul D. Cummings World Wide Enterprises. He can be contacted at 866.865.3171, or by e-mail at [email protected].

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STSSeanV.Bradley

INTERNET SALES20 GROUP IXThe fi rst three habits in the “7 Habits of

Highly Effective People” have to do with you and what you can do internally. If you can master these habits you will be able to achieve independence. We are going to focus on the third habit for this article: “Put First Things First.”

Most people in auto retail have worked bell-to-bell, and before the end of the day (or night for that matter) looked at our watches and said “WOW, I can’t believe the day fl ew by!” And right after we’ve said that, we follow up with “Man! I got nothing done today.” How can this be? How can we work so hard during a day and feel at the end of it that we got nothing done? Really, it’s quite simple. We are working hard but not working smart. There is a difference. Too often we focus on tasks that are not a high priority and offer little payback. Learning to prioritize tasks will be invaluable for you.

Let me break it down for you. Dr. Stephen Covey says in his time management matrix that people fi nd themselves in four quadrants:

• Quadrant One is called “Urgent / Important.” That means it is the No. 1 top priority, and needs to be handled immediately. This is the crisis, an urgent pressing problem or a deadline-driven project.

• Quadrant Two is called “Not Urgent / Important.” That means it is a priority that needs to be addressed, but maybe not that very second. For example, recognizing new opportunities, relationship building or planning projects.

• Quadrant Three is called “Urgent / Not Important.”

This means the needless

interruptions, unimportant phone calls, random IM or e-mails and dealership politics.

• Quadrant Four is called “Not Urgent / Not Important.” These are time wasters, someone just interrupting you just to talk to you, or just “busy time.” At dealerships, we often refer to these conversations as the smoke and joke circle.

Covey says that 90 percent of the time people are in Quadrant One and most of the remaining 10 percent is in Quadrant Four. The results from Quadrant One are stress, burn out and crisis management. So obviously this is not the right strategy. You want to be focused in Quadrant Two, which is “Not Urgent but Important.” Quadrant Two is the heart of effective personal management. Visions, perspective, balance, discipline, control and a few crises are the result of living in this quadrant.

I’d like to make a suggestion that might help you out at your dealership. In the morning, make a list of the top 10 things that you need to do, and number them from one to 10, “10” being the least important. Make a personal commitment to yourself that you will not end your day unless you get through your list. This will be your checklist and keep you focused on what is important at hand.

I know what you are saying: “At my dealership there are always things happening, fi res to put out, new tasks and challenges dropped in my lap, and then other managers are adding to my list of things to do.” Your checklist will help you keep perspective. As a matter of fact, if you have a manager that is notorious for adding more to your plate, show them your checklist and ask them where this new

item falls on the priority list. Be polite and respectful when asking for their help, but be sure they know what you already have on your agenda for the day.

I have been in the automotive industry for almost 10 years now. Half of that has been as a senior manager on the front lines. I know what its like to put out fi res all day long. I know from fi rst-hand experience the intricacies of day-to-day dealer operations. But, I also know from fi rst-hand experience that it is mostly ready, fi re and then aim.

Plan your day, work your plan and when you deviate from your plan, get back on track as soon as it makes sense to do so. Stay focused, and at the end of the day you will feel a greater sense of accomplishment. Remember: You get to have fun and do it all over again tomorrow.

Sean V. Bradley is the founder and CEO of Dealer Synergy, a nationally recognized training and consulting company in the automotive industry. He can be contacted at 866.648.7400, or by e-mail [email protected].

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of the time people are in Quadrant One. The results

from Quadrant One is stress, burn out and crisis

management.

You want to be focused in Quadrant Two, which is “Not Urgent but Important.”

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