Asking The Right Questions:

Identifying customers who are more likely than average to buy is one of the things Business Intelligence can do for a dealer. It’s a simple question: who are your customers and why do they buy? Most of the time dealers will identify customers through a lead source and drop leads sources that don’t produce deals.What about the thousands of service customers and past customers who are looking, or could be looking to buy? Analyzing the customer base it was found that repeat customers were twice as likely to buy once they passed 60,000 miles. The lease customers were twice as likely to get another lease if they were in the second year of their lease and they had greater than $1000 in mileage penalties. These facts help target the dealership’s marketing efforts getting the most bang for the advertising buck.

Planting The Seeds:

Using our example we see that several customers are just below 60,000 miles on their vehicle. Sending a free oil change coupon with an offer of a free appraisal done in the service department is a great way to “prime the pump”. Lease customers would get an oil change coupon and a reminder how that if they lease a new car mileage penalties on their current lease will be forgiven. The advertising dollar spent with a high probability of return is the dream of every General Manager. Instead of an expensive mailer or print ad that “shotguns” a low probability customer base the dealer selectively contacts fewer customers with a higher probability of buying.

Tender Loving Care:

If you know who are likely to become a repeat customer your Service Department can begin communicating with them early and often making sure they get every service special, car loaner, or a van pickup when their car is in the shop. That is not to say that all customers should not get VIP treatment but a dealer’s focus should always be on a deal.

Organizational Transformation:

Business Intelligence gets the right information to the dealership decision makers letting them concentrate on those things that work and shedding activities that have a low return on dollars and effort. The organization becomes leaner and meaner as better information drives organizational focus. Selling more cars and while spending less money is just the smart thing to do.

While flying the other day, I began considering all of the important and essential components which were working together in keeping the aircraft aloft. An immense amount of electronics, engine components, fluids, aerodynamics, etc., all working together and each very important. Then, the simple word picture occurred to me that presented the above question, “Which wing on an airplane is most important”?

Similarly, in a dealership there are multitudes of components that keep the store climbing toward a growth oriented flight plan and often, if even one of these is not in place, a dealership begins a rapid descent. I have listed below a few of the critical components required to maintain a steady course towards total dealership growth.

Directional leadership

Generating the flight plan direction for the store and implementing how the team is going to hit the business altitude the dealership desires to reach is a role played out by the leader. In today’s market, a leader’s followers no longer want to accept the old fashioned methodologies, full of authoritative or bureaucratic ideas or leaders who impose here today… gone tomorrow techniques.  Your position does not create followers. Followers decide to follow you.

Today’s followers want leaders with well-rooted human values, character and integrity. In addition, they want leaders who will respect and acknowledge the talents and contributions given by others. People want leaders who can identify and create an atmosphere of teamwork and creativity as they seek to match the best production levels for themselves and the dealership. Failure is contagious, but success is infectious. Say: “I’m proud of you,” or “You’re a bunch of winners.” Reinforce success. You must reward success. Expect some failures.

Remember you are dealing with human beings. Give the people the latitude to learn and watch them soar to new heights.  Your “pre-flight” checklist has to contain certain leadership initiatives in order to gain proper altitude for sustained flight into the new levels of achievement. Make certain you give them clarity as to what the mission is. Remember, when the shepherd sleeps, the sheep wander. Stay on your game, be alert to what is going on and be the catalyst to inspire greatness in every person on your team. Again, the directional leader’s primary role is to lay down a long-term performance improvement strategy and then with clarity, implement it throughout the dealership.

Engaged employees

Most organizations are still struggling with this challenge -70% of U.S. employees are not engaged at work, as measured by various surveys of employee engagement.  These surveys also have clearly proven that a more engaged employee is also a more productive employee. The research proved that a more engaged employee is also a more profitable employee, a more customer-focused employee, a more motivated and safer employee and an employee who is more likely to withstand temptations to jump ship.

Many of us have long suspected this connection between an employee’s level of engagement and the level and quality of his or her performance. This research laid that matter to rest. Engaged employees reject intimidation and manipulation, and want to be recognized as an important integral part in these changing high flying times.  We must get them involved and make them a part of the design and planning for the growth of the dealership. This way they have a sense of ownership of the plan instead of just being told what to do. We want our employees coming to work with their hearts and not just their hands. When they love coming to work it no longer is work, it becomes their passion for success.

Total ‘customer-focused’ business strategies

Every customer touch point has to have the customer’s best interest in mind. Starting with developing customer-focused business strategies (also known as the step we most want to avoid, because it’s all about planning). Who has the time and patience for planning? Any store that wants to be successful, that’s who.

The object of planning customer-focused business strategies is to find win-win opportunities with customers. Do more that benefits them so they’ll do more that benefits us—like buy more from us and stay with us. The “customer relationship development” planning approach is relatively simple. Put yourself in your customers’ shoes. See through their eyes. Discover what they want and how they wish to be treated. Even anticipate what they don’t want yet, but will. And when you’ve done that, you’ll be ready to identify the best mutual opportunities for your customers and your dealership. Then, you can prioritize these opportunities, pick the best and put them into play. Obviously, there’s a little more to it than that, but that’s the gist of it.

You always have to be looking for improvements in the way you do business vs. the way your competition does business. Your store must become customer focused, professional and do the little extraordinary things that the ordinary dealerships are not willing to do. Remember, you want to develop loyal customers not just satisfied customers. A loyal customer deserves all the elements that go into a wife/husband relationship, like remembering special occasions, respect, good communications, notes, cards, phone calls, listening, caring, gifts of perceived value, etc. A satisfied customer remains satisfied for around 90-120 days then, as the invoices keep coming in they may become dissatisfied if they are not shown continued appreciation from the dealership. So, regularly love on them by staying in touch to maintain the development of this important relationship.

Solid and consistently maintained processes

In order for a store to grow, it must have a top down approach to adhering to solid process skills before they can grow their people or the store. And, this applies not only to sales but service, parts and administration. You see, sticking with processes needs to be an all inclusive dealership campaign. The tone of the store’s culture however starts at the top. Conversely, without effective top down leadership it becomes like a rudderless plane going in any direction without any control.

Ok, so where do we go now?  We start again at the top. Top down strategy simply means that everyone in management has to be committed to the business strategy, design elements, planning, implementation, managing and leadership of all processes. This includes the dealer/principal. This first process is the relationship with the management team. They have to work together by looking in the same direction toward the same dealership goal attainment. Getting them involved in the process and letting each member know that they are playing a very important part in the building project is a good start. Keep the management team in the loop and you are more likely to engage them in the process long term. Constantly remind them that they are valuable and essential to the project’s success because, frankly, they are. When the rest of your store sees this team working together as one team, it sends a signal that there is buy-in at this level and therefore it must be something good.

The business process now involves not the transactions, but people and the top down leadership business relationship between with them. If you do what other dealerships won’t do, you will have what they will never have. If you do not develop good processes for every customer touch point it, will be as confusing as attempting to move the lot inventory around with blind folds on your employees.  Don’t give into compromise, which becomes average. Stick to the processes and watch them grow the store.

Team synergy

Individual talents of your employees are nothing compared to summation of the talents of a team working as one team. Have you ever witnessed a champion sports team or a well-rehearsed Cirque du Soleil performance and then felt the commitment and energy the team demonstrated? What you saw was more than just teamwork – it was team synergy. This phenomenon occurs when a team achieves greater results than the sum of its parts. Using learning instruments, hands-on activities, and interactive team exercises, teams gain a clearer sense of direction, clarify roles and responsibilities, improve operating processes, bolster both interpersonal, and inter team relationships. And, what a difference it makes in a dealership. Employees are happier, managers are happier, customers are happier, production increases and the business grows. Team synergy looks like this:

Team synergy essentially is the ability of a group to outperform even its best individual member’s efforts.

Make sure you are fair and balanced with your team taking care not to play favoritism because this will create cracks in the framework and diminish the synergy needed for smooth aerodynamics.

Well-prepared employees

Zig Ziglar said it best when he said: “There is only one thing worse than training employees and losing them, and that’s not training them and keeping them.”

There are many new leading edge communications, relationship development and sales technique tools out there which conform perfectly to today’s marketplace. Ask yourself this, “What have I done in this area for my employees lately that is different from what I have done in the past”?

Numerous studies over the years indicate that if your hire someone, don’t train them and they end up leaving within 120 days, it could cost you upwards of $50,000.

Here are some of the reasons how it costs you money when you do not train your employees:

• Untrained sales personnel end up ‘brooming’ customers because they don’t know what to do.

• Damaging your reputation happens because of untrained employees’ frustration being taken out on customers.

• Administration time required getting replacement employees on board.

• Employment advertising costs to attract replacements.

• Managers spending unproductive “maintenance fix-it” time correcting mistakes made by untrained personnel, instead of on productive tasks.

• Low gross profits on sales.

• Missed sales opportunities because the untrained did not know how to handle prospects.

• And finally, the untrained employee typically creates a morale problem.

Lots of money goes down the drain because they were not trained in the first place. And, if you would have just invested a small percentage of your ad budget, this person could be contributing to the overall growth of the store instead of making it slide backwards. The lack of training is also commensurate with high attrition problems.

Would you agree that your greatest assets are your people? If so, invest in them and your ROI will be multiplied several fold, month after month.

Working environment

I can walk into any dealership and immediately determine the personality complexion of the employees, which in turn permeates the customers. Do the store and its employees radiate a comfortable, professional, organized, secure and confident environment or does it radiate the common haphazard crazed approach? One of the primary reasons for the latter is that the employees are not given enough positive, motivated attention and/or they are not trained well enough to feel competent at their job.  Your store does radiate one of these two. The question is, which one? Look around. Are there papers laying in a mess on employee’s work areas? Are there dated posters hanging in the waiting area? Is the coffee area messy? Is it time to paint the walls and clean up the boxes lying around the showroom. A clean, efficient looking work environment sends a signal to your customers and your employees that this dealership takes pride and care in everything they do. Make certain that everyone who works in the dealership greets every customer, whether it be their customer or not, they cross paths with a simple “good morning or afternoon” and a smile.  We like to practice this with employees greeting each other as well then it becomes second nature.

Accountability

Cultivate accountability because it creates motivation. We must hold people in the same roles accountable for the same performance outcomes but challenge each person to reach these outcomes by capitalizing on his/her unique talents. We must teach managers accountability in how to distinguish between talents – which cannot be transferred from one person to another –  and skills and knowledge, which can. We must build performance management systems that label a person’s talents his “areas for development” and that encourage him to “work on” strengthening his talents with the relevant skills and knowledge. And we must stop promoting people out of their areas of talent, and instead build paths that encourage them to grow within their areas of greatest talent.  Accountability should be on everyone’s job description. For it is through accountability that things get done. You cannot allow some employees not be accountable and then insist that others be accountable in various day to day tasks or you will destroy team synergy and working relationships within your team. When you wait, you lose, when you act with accountability – you win. As a leader, do what you say you will do. If you, as the leader, emulate accountability, the team will follow suit. Consistency is the key to accountability.

Just like both wings of the airplane are equally important for flight, the above eight areas of flight components for your store are equally important as well. These are critical elements required for accelerated business altitude increases. Which one or two of these do you feel your store could eliminate committing? Most likely, your answer would be none of them. So, begin today to take your store to a new cruising altitude.

Please send me an e-mail with any thoughts or questions you may have, if you would care to receive a few more guidelines for your dealership’s growth or need a copy of the first two steps of this process. You can reach me at: cbarker@dealer-communications.com.

The Good Ol’ Days:
In the ’80′s and ’90′s, Before Internet,  the customer didn’t have Edmunds giving them an invoice on the vehicle. Dealerships operated with impunity and the power was with the Dealership: The Golden Era of Front End Gross.  The Brave New World of car sales has customers armed to the teeth with pricing, how to short circuit a 4-Square; it’s not “give me the invoice price” but “how much below invoice can I get the car”. If the customer wants to take the time he can agree to come in on one price and then shop the price at another dealer and then go back to the original dealer and so on and so forth. Eventually one of the dealers cries uncle and the remaining dealer has the opportunity to lose money selling a car.

There is No More Buffalo:
The days of plenty are over. The customer has the leverage and that leverage will drive front end gross ever lower; in fact most Internet Departments have negative front end gross. The manufacturers themselves are now using their profit to reimburse dealerships who make certain volume goals. And woe be unto you who is trying to sell the same car as a dealership that needs ten cars to meet its manufacturer’s volume bonus. Car buyers fantasize about a car at or below $10,000 and they will try to get invoice on that.

The New Market Place:
Cheer up. Buffalo meat had too much cholesterol anyway. It’s now about information and convenience. Customers can get about the same price at any dealer–Think Costco, AAA, etc. It’s now about convenience. We are told not to sell the car over the phone but if you were to ask the customer that is exactly what they want. The want to get and agree to a price and then come in to check their purchase and sign the papers. Simple and easy. And did I mention they don’t want any “surprises”. Those surprises are how a great many dealers make money, rightly or wrongly. Now there are new ways to make money; a dealership’s Finance Department should be its profit center. In fact the best salesmen are no longer on the floor or in the Internet Department they are in Finance.

Do Everything Before They Come In:
It’s time to sell convenience. Instead of four hours in the dealership try to make it one. Run credit, pick the car, and get the customer involved in the process. If the customer is involved in the process and feels comfortable then coming in should be the only commitment required. In terms of pricing that should be dictated by what the dealership needs in terms of volume but setting low, automated quotes is a good place to start. Shop the competition and always know where you stand. The profit is going to be in your pre-owned inventory. That’s not to say that you don’t sell convenience to pre-owned customers, not at all. The faster they leave the dealership the more gross you will hold.

Don’t Plan The Funeral:
The car business will always make money. It is still one person talking to another about  buying a car. Customers still get excited about cars–check out the people who went to the LA Car Show and tell me there is no enthusiasm in the car business. Selling cars is now about information and how selling leverages that information to make buying a car simple and easy.

What the…

Me: “Hi, this is Ed in Room 521. I checked in a while ago today, and now I’m hearing a persistent loud banging noise. It’s quite annoying and I would like to change rooms please.”

Cold Front Desk Attendant with absolutely no smile in her voice: “Won’t do no good (sir). The bathrooms are being remodeled on every floor so the noise is everywhere.”

Me: “Well, how long is this noise going to continue?”

Front Desk Attendant with still absolutely no smile in her voice: “Till 10 p.m. (Pause and another ill-disposed background voice) No, I have been corrected, only till 9 tonight, so that is better.”

Me: “Are you kidding?” I am conducting training in this hotel the next day, staying here for three nights. What the… !

As it turns out, the banging stopped around 5 p.m. or so, and I was able to deal with it. What happened here from a customer-handling standpoint? No apology, no sympathy, no empathy and no love at all. It was more of a frozen take it or leave it transaction, and it made me wonder if this woman had ever been to any kind of a customer service school, or a wedding.

Reputation is your daddy

Considering that the front line people are the greatest influencers of customer retention (or not), and the molders of the company’s reputation, the selection, expectation and subsequent training of these individuals is essential to ongoing profitability. Especially in today’s consumer-driven society of ultra-high expectations (say do me and do me good).

Who are the front line people of any dealership? Service advisors transact with more customers in one day than the rest of the dealership does in a week. As the clock turns, these people also experience more stress in one day than the entire dealership does in a week too. If you question my proposition, I dare you to try out this heady position for yourself – come on don’t be a wimp. No wonder one guy called himself a “circus” advisor in my class.

So, who to hire? How about Happy Joe Smiley, my favorite candidate? (Note: Don’t hire his cousin, Snappy Jo Snarky, she works for the aforementioned hotel anyway.) Happy Joe is the kind of front line person I prefer – someone who inherited a constant smile, happy attitude and positive approach to common negative issues, probably inherited from a combo of Mommy and Daddy’s tiny genes and the precious childhood environment.   

Teach me tacky

I often wondered how effective the mostly manufacturer-sponsored “Interpersonal Skills” classes were. Did Bernie actually stop spitting on other employees (to be fair, he had a big split between his two front teeth), and did Martha stop biting her lower, then upper, lip every time a customer asked a question – just before she snapped-ho the answer? Probably not has been my experience, but a nice try nevertheless. My friend who manages hotels says that his group hires the “service” within employees, they don’t teach them the concept, and they don’t beat it in to them either. “Either they have it or they don’t. The key for us is to determine that when we interview and verbally test. If we can’t make ‘em cry, then we feel we might have a keeper.” Tough crowd.

I did run across some noteworthy customer-service related material on the Internet. A Ms. JoAnna Brandi, who states she is a “happiness” (good start) coach (www.CustomerCareCoach.com), outlined some solid fundamentals, which you can use to maybe sway forward your current herd of reputation makers.

1. You chose this job (don’t say dumb…here)

She has a good point here. If you don’t truly enjoy being a service advisor, another name for a professional car caregiver, then do something else. Employees who relish in what they are doing are very apparent, and they make a powerful statement about the company overall. Do you want to be best known for hiring unhappy employees?

2. Be proud of what you do

I feel this is the largest slice of the customer service pastry. Like the Marines, dealers need a few good men and women who are proud to wear the uniform – once a service advisor, always a service advisor. Semper something …. (well, I was in the Army ROTC).

3. You have emotional genius

This revolves the emotional intelligence to make good emotional decisions. My take is to hire people who manage their emotions, not visa versa. I would never hire someone who brought a claw hammer and/or a box of tissue to an interview for example.

4. The customer is not always right

Please don’t tell this secret to the general manager. Frankly, this is a great point, missed by those who cannot manage the many emotions that get dumped on them every day. As Ms. Brandi points out, sometimes they are wrong, mean, nasty or angry. An innate ability to deal effectively with each “patient,” (my approach) is who I want on my team. Some just need meds.

5. You work in the performing Arts

My teachings here have revolved around sports. As a paying spectator (the customer), they expect to see professionals at work. If they call the first baseman an idiot, they don’t expect him to jump into the stands and beat them to a pulp (which most first baseman could do single handily). They expect them to not react, but rather to get motivated to do a better job. I guess it’s a kind of negative reinforcement mojo.

6. You have a stressful job but the amount of stress you take home is up to you

This reminds me of the answer I got from a Dallas, Texas service manager when I asked him how far he lived from his dealership. “Four beers,” he casually replied. Most managers don’t coach service advisors about the toll of stress, if they even notice it at all. Interestingly, listening is the primary skill needed to help fix stress, not that difficult to master for most.

7. You have the opportunity to make the world a better place everyday

Ms. Brandi makes the point that emotions are contagious, but then again so is malaria. The point is that positive people create more positive customers, influenced by the positive spirit of the employee. To my thinking, aggressively positive service advisors also influence technicians, many of whom are as emotional as a Disney cartoon on steroids, over to the plus side.

Clean the surface

Automotive service advisors who merely go through the motions of managing transactions are a form of quiet poison to the business – let’s call them “surface advisors.” I thought “the devil” was just too strong. Professional advisors help glue the customer to the business, both in service and sales – yes they are that important! Perhaps it’s time to take a microscopic look at your staff. Some may be better off in a different position in the organization where they would wield less effect on customer retention. They would be happier, as they can be, and best of all, so would you – and you know what they say about a happy service manager – four beers.

While this error did not end up being fatal to the case, it made things much more difficult, cost the client a great deal more in attorney’s fees and could have cost the client the case in another court. It is of the utmost importance that all documentation requiring signatures be signed at the time of the purchase by all parties and that the customer be provided fully executed copies of all documents.

In another case, one of the sales documents contained a redundant or unnecessary signature block on the back of a form which was not signed. On the front of the form, just above the signature block, the form stated that by signing the consumer acknowledged that he or she had read all of the terms and conditions on the front and back of the form. The signature block on the back asked the consumer to acknowledge that he or she had read the back of the form. The primary issue in that case was that the arbitration agreement appeared on the back of the form. Fortunately, the dealership eventually prevailed based upon the signature on the front of the form, but not without paying thousands of dollars in attorney’s fees to resolve the issue. If your form features redundant or unnecessary signature blocks, it is generally far more cost-effective to have new forms produced than it will be to pay an attorney to argue that a signature on a subsequent signature blocks wasn’t necessary.

Another issue that often arises involves dealerships that occasionally add additional forms to the sales contract over time without making adjustments to their previously existing forms. However, many sales contracts contain what is known as a merger or integration clause. This clause will essentially state that the document containing the clause, along with a list of additional documents, makes up the entire sales contract and that the parties agree that no other documents that will be considered part of the sales contract. The problem is, as the law changes or as a dealership modifies its practices, additional documents are added to the sales contract without updating the merger or integration clauses. Under certain circumstances, a consumer can use the merger clause that was intended to protect the dealership as a weapon to argue that these new documents are unenforceable. As a result, anytime a dealership is considering adding additional forms to the sales contract, it is generally a good idea to have your attorney review the sales documents as a whole to make sure no updates are required to your pre-existing documents.

Also, there are a growing number of consumer actions based upon improper disclosures and notices in sales documents. Many federal and state statutes require that at the time of the sale, a seller make certain specific disclosure to a vehicle purchaser. A few of the more commonly known statutes include the Truth in Lending Act, Fair Credit Reporting Act and the Equal Credit Reporting Act. Several of these statutes are essentially strict liability statutes, this means there is almost no defense for a failure to properly make the required disclosure. It is very important that you consult with your attorney regularly to make sure that your sales documents comply with all state and federal disclosure and notice requirements.

Finally, many dealerships use form documents that can be outdated or include corporate names or identities no longer in existence. This may happen when a dealership is sold or otherwise changes ownership, when a product ceases to exist, or where a dealership changes dealer affiliations. These forms also need to be brought up to speed.

Many of the applicable statutes allow plaintiff’s attorneys to recover attorney’s fees. While the damages a consumer might recover could be minimal in some case, there is no shortage of attorneys willing to take these case in hopes of collecting thousands of dollars in attorney’s fees from your dealership. Therefore, when it comes to your dealership’s sales documents, the old saying that “an ounce or prevention is worth a pound of cure” could not be more true. Paying your attorney to review your sales document is far more cost effective than paying the same attorney to argue their meaning to a court.

An important part of reducing the risk of workplace violence it to train employee and supervisors on how to recognize and respond to the five signs of escalating behavior:

1. Confusion
2. Frustration
3. Blame
4. Anger
5. Hostility

This chart describes the emotional and physical behaviors of each sign and how to appropriately respond.

*Bureau of Labor Statistics

As the weather heats up, more transmissions go belly up. Heat trashes automatic transmission fluid, not because of an increase in ambient temperature, but rather it’s due to pulling boat trailers, RVs and utility trailers. Taking the family minivan up Pike’s Peak or through the streets of San Francisco is another good way to heat up the fluid.

Furthermore, 90% of transmission failures occur due to fluid breakdown, according to Lance Wiggins, Technical Director for the Automatic Transmission Rebuilders Association (ATRA).

In other words, the beginning of transmission failure is transmission fluid failure. Therefore, the best way to protect your customers’ transmissions is by offering them a transmission fluid exchange service as a part of their regularly scheduled maintenance.

Most transmission failures occur between 73,000 and 100,000 miles. While ATRA says the mileage at which failure occurs is trending upward, it is still a sobering statistic. Since most people are holding on to their vehicles longer than they used to, it’s easy to understand that they may have a transmission issue in the future…unless they change the fluid.

In their 2012 Automotive Aftermarket Status Report, the Automotive Aftermarket Suppliers Association says 3.4 million transmissions were overhauled and another 4.5 million were replaced last year. That’s a total of 7.9 million people that had to shell out several thousand dollars to fix a failed transmission.

I bet they wished their service center had offered them a transmission service, don’t you? Do the math: $200 for a fluid exchange, or $4,200 for a transmission!

My point is simply this: offering transmission services to your customers is the right thing to do. It’s good for the vehicle, it’s good for the vehicle owner, it’s good for the tech, it’s good for the advisor, it’s good for the parts department and it’s good for the shop. Everyone wins!

When selling a transmission fluid exchange, two pieces of data are critical in order to make an informed recommendation to your customers. First, you have to know the current odometer reading. Second, you have to know the vehicle’s history—specifically, the time interval since the last transmission service was performed. If your advisors or techs have the opportunity to show a customer what their fluid looks like, then it becomes a dynamic visual aid that will increase their selling success. Let me be clear: fluid color is not scientific, therefore it is not the basis on which to sell service. Service should be sold based on the mileage and time interval since the last fluid exchange. Period.

Once your advisors have determined that it’s time to do the service, it is in everyone’s best interest to show the customer the difference between their fluid and new fluid. A picture is worth 1,000 words, and comparing their fluid to new fluid is the best way to get the customer to understand the value of the service.

I have written before about the most successful sales process I’ve ever seen: The Educate, Offer and Ask Method.

• Educate the customer:
  “Mrs. Jones, you have 62,000 miles on your Tahoe, and our service records indicate you’ve never had the transmission serviced. While doing a multi-point inspection on your SUV, the technician has recommended a transmission fluid exchange.”
• Offer the maintenance solution:
  “We offer a transmission service that includes fluid specifically formulated to meet the requirements of your Tahoe. When we perform this service, our technicians clean up the internal components of your transmission, flush out the old contaminated fluid, and refill it with fresh, new, fortified fluid.”
• Ask them to buy:
  “If we go ahead and do the service today, while your vehicle is here, then we can save you a trip back… does that sound reasonable?”

Most dealerships are recommending a transmission service every 30,000 miles. The goal is to change the fluid while it is still red, before it gets contaminated and turns reddish brown or black. Transmission fluid is the lifeblood of the transmission. Most vehicle owners expect their transmissions to last as long as their vehicle. That is simply not going to happen if the fluid isn’t changed regularly.

By the way, don’t forget about the benefit this service brings to your customer retention numbers. Your goal is to keep your customers loyal to your dealership and coming in for service until they are ready to buy another vehicle. Fluid maintenance services are a major defection point for customers. The best way to prevent your customers from drifting away to your competitors in the aftermarket is to proactively sell fluid maintenance services. Customer loyalty to your dealership is in direct proportion to your ability to sell fluid maintenance services.

More than most, I recognize that Internet sales, lead management and digital marketing are specific talents. These are skills that some have and some don’t. That being said, with training in place, an average employee can deliver above-average results. With the Internet proving itself to generate more traffic and profit for all departments than any other medium, it is absurd that we have it sectioned off as an evil stepchild in our dealerships. (Just look where it is located at most stores. A customer comes in and asks for the ISM and the salesperson says “They’re all the way in the back. Let me go get them for you.”)

Many dealers treat their Internet departments and BDCs as if they are on an island. They have little contact to the outside world (or the showroom). They are positioned out of sight and out of mind. Internet department is still considered the misfits that the leaders of the company don’t fully understand.

An Internet department/BDC may be a different department or island, but it shouldn’t be viewed as a place to send the outcasts. It should be viewed as a rewarding paradise. Being promoted from the sales team (or, dare I say, the finance department) to the Internet department should be a privilege. The e-commerce department should be a stepping stone to the highest echelons of management. It is not where you send weak sticks from the sales floor to go wither away. “Hey, Tommy hasn’t sold more than a few cars for the last couple months. Let’s send him back to the Internet department, get him some leads and sales, and boost his confidence.”

No. That is a bad idea. Tommy needs to be better trained or let go. Poor performance on the sales floor doesn’t bode well for their success in Internet sales. Sales to Internet sales must be considered a promotion. It should come with additional training, vast resources and more power to effect change. It is far better, for this reason, that you promote from within rather than bring someone in from outside. At least the people who’ve succeeded with you know the culture of the store. And yet, far too many dealers don’t consider promoting their top sales people into their Internet departments.

Too often during my training of dealerships’ sales staff do I meet potentially great Internet sales candidates that have not been considered for an Internet sales position.

When I tell ownership and management about the opportunity to advance a sales professional to the Internet team, I commonly get two responses:

1)       She’s too valuable to take her off the floor.
(This makes no sense – On the floor, a sales professional touches 100 customers in a month. On the phone and with leads as an appointment-setter, she touches 250 prospects a month. If you give her the ability, as well as the responsibility to assist in closing deals and taking Internet TOs, she is at least twice as valuable.)

2)      She makes too much money on the floor to want to leave.
(Then you are strongly underpaying your Internet team. If someone’s impact can be greater in another department, and bring in more dollars to the store, wouldn’t you agree that their compensation should be greater as well?)

These are two common misconceptions about evaluating talent in your store. Often, because a manager is so close to the people around them, they don’t consider them for other opportunities. However, a salesperson’s closeness to the dealership’s operations is a true benefit. It allows them to hit the ground running in their new role rather than have to start an evaluation process from the beginning.

Before you opt to bring in an outside candidate, review the team you have around you. Recognize the importance of the Internet position and see if there is an opportunity for you to reward a loyal employee with a chance to step up and take on more responsibility. After all, growing in one’s work status is the American dream. Why not support the dream?

This understanding has pushed some dealers in a positive direction. They are more market-smart as they set retail asking prices for used vehicles. They do not automatically apply a standard $3,000 or more mark-up to every vehicle they put up for sale.

But, while they may be seeing more customers, and selling more vehicles, many of these dealers believe they are not as profitable as they should be. “I’m selling vehicles but I’m not making any money” is a common refrain.

As I’ve discussed this with dealers, I’ve found two common problems.

First, dealers have a hard time looking beyond price as the chief way to drive used vehicle profitability. It’s a case where old beliefs and habits are difficult to break. It’s hard to accept that, in today’s marketplace, price is mostly a means to drive shopper interest and traffic. It’s not the dealer’s chief mechanism to control gross profits the way it used to be; the market is what it is.

Second, and perhaps most important, is that many dealers haven’t addressed the profit-draining inefficiencies in their used vehicle inventory management and sales processes. In effect, they are leaving money (and opportunity) on the table at each stage of a used vehicle’s lifecycle.

The following are three guiding principles to address these inefficiencies and improve used vehicle profitability:

Keep inventory fresh. Dealers all recognize that the freshest vehicles hold their mark-up and offer the greatest potential profit. Yet, many dealers remain undisciplined about managing the age of their inventory to offset the profit-eroding effects of depreciation and lost opportunities. In today’s environment, it’s essential for dealers to maintain at least 50% of their used vehicle inventories aged 30 days or less. Today’s technology and tools can help dealers make the acquisition decisions that ensure a fast turn, fresh inventory and profits for the dealership. The exciting part for dealers is the way faster inventory turn rates build even greater profitability potential. When this cycle of the right inventory at the right price repeats, dealers see both used vehicle sales volumes and profitability increase, and a larger departmental contribution their dealership’s bottom line.

Manage your inventory acquisition and add-on costs. Today’s competitive used vehicle marketplace means greater risks when dealers put too much money in a used vehicle. The good news is technology and tools are available to help dealers avoid making this mistake. These tools offer management metrics to ensure a vehicle’s acquisition price is “right” for a dealership (its cost-to-market ratio). This figure shows the “spread” between a vehicle’s wholesale acquisition cost and its most competitive retail asking price. With this, dealers can account for other potential drags on a used vehicle’s profitability—auction/transportation fees, reconditioning costs and packs. Of these, dealers have the most direct control over reconditioning costs and packs, and should manage these diligently to ensure neither erodes a vehicle’s investment and profit potential.

Another profitability booster: Acquire vehicles from your customers. More dealers are discussing new vehicle options (leases, in particular) with customers who own late-model vehicles that would be “right” for their used vehicle inventories. These discussions occur during BDC calls and customer visits to the service department. From a profitability perspective, these vehicles have excellent potential, particularly if a car’s “story” includes a single owner and regular trips to the dealership’s service department.

Be price transparent to “hold gross.” As noted above, today’s customers are price-savvy. They’ve shopped around and landed on a vehicle, at least in part, because of its price. More and more, dealers are openly addressing the “story” behind their pricing and using real-time market comparisons to demonstrate why a $12,750 sticker price really is “the best we can do for you on this car.” Velocity dealers who incorporate this transparency-minded approach into their sales processes rarely discount their asking prices and, if they do, the discount is typically less than $200 to close a deal. I believe such transparency is a more compelling proposition for today’s buyers—and the dealer’s profitability—than four-square and other traditional forms of selling.

Taken together, these principles will help those dealers achieve the return on investment they seek from their used vehicle operations. As noted above, in today’s market, used vehicle profitability is more about management, metrics and process efficiencies than price.

• Physical assaults with or without weapons
• Bullying and intimidation
• Stalking
• Coercion
• Domestic violence in the workplace

A widely held misconception is that most acts of workplace violence are “random “or “unpredictable”.   This is not true.  Many incidents are predictable and results from the interaction of personal and workplace dynamics.  When these dynamics collide many employees have appropriate coping skills but some employees are not able to cope and workplace violence may occur.

Personal dynamics include marital problems, prior history of mental or physical impairment, substance abuse or the same issues occurring in the immediate family.

Workplace dynamics include real or perceived termination, harassment, discrimination, bullying and unequal or unfair opportunities for advancement.

To reduce the risk of workplace violence employers can take the following steps:

• Establish, communicate and enforce the following policies:
  • Anti- Harassment Policy
  • Zero Tolerance for Workplace Violence
• Perform pre-employment background testing and both pre-employment and random substance abuse testing
• Establish an Employee Assistance Program
• Train all supervisors to recognize the warning signs of employee violence
• Recognize “at risk” situations such as disciplinary or termination meetings and plan appropriately
• Consider professional assistance and/or evaluations of at-risk employees if possible warning signs are observed
• Assess your dealerships security measures
• Develop and communicate a Disaster Management Plan that includes how to deal with incidents of workplace violence.

Let’s take a step back. Recently I was approached by one of my “partners” who has lost the ability to track his ROI. He is a very progressive dealer who has learned that success does not come to those that wait. With this mindset, when he was presented with the newest tool to hit the market he jumped on it. As he added each piece he has seen growth. However, as he signed on his 28^th vendor, he came to realize that he does not have a clear way to track the individual strength and impact of each of the tools. They have become one large conglomerate. This put him in a situation to have to question whether it is one of the products he put in place that has been causing the growth and success or is it a combination of a group of services and if so which ones? If it’s one, should he cancel the others and get an even larger ROI? If it’s a combination, which ones? Where does he go from here?

Clearly many of these vendors are indispensible and certainly you would expect CRM’s to track ROI (they all say they do). In fact many have fantastic graphics and charts to break down every ad/lead source. We are fooling ourselves if we think for one minute that everybody’s calling on a specific toll-free number and not your original land line. Those don’t get tracked the same as the vanity numbers. Remember the quality of our notation and dialogue with consumers is essential for tracking. Vetting said ad/lead source is precisely the backup plan required in today’s fast moving next generation professional automotive sales.

Being spread thin among multiple vendors keeps you from seeing the true strength and benefits of each. To untangle these services and to determine the ROI, it is essential to trace them back to the beginning. Now, with this many vendors, know that the determined results can and will overlap and this is okay. It is essential to eliminate the things that are not showing results first, then break down the rest. To do this you need to first gather information on each of your vendors, specifically what the service was designed to accomplish and then determine how closely the results are matching these intentions.

By no means am I saying that this is an easy process. It takes a little pencil sharpening and can require outside consultations and input. It is key, however, to clean up what you have before you throw more money on the fire. Eliminate anything or anybody holding you back and start implementing specific tracking on everything that you start from this moment forward.

As my dear partner hangs on the walls of every one of his stores “Vision is defined as the precise, clearly defined goal with a detailed plan and timetable for achieving that goal.” Have we all truly clarified said vision for each and every one of the services, leads and products that you are paying for every month, because when, not if, it is precise and clearly defined with a timetable we can have undeniable expectations and ultimate accountability?

Looking forward, one of our most recent “partner’s” approach in the implementation of our training and consulting services was right on the mark. Before taking the step forward we detailed all of the key components that were trackable to help determine that the changes we were about to launch would provide the tangible results that they were seeking. We detailed what their intentions were with the program, including consistency, growth and increased results.

Some of the key elements we were able to provide and track over their six month initial agreements were analysis of where they currently were in regards to attitude, current levels of success and failure in customer contacts, appointments, shows and sales. Next, we assisted in setting clear goals for the next 30, 60, 90 days, etc. The measurements included how each salesperson is using to their advantage the tools we provide, such as the national mentor line, daily warm up and practice, monitoring of progress and retention levels through assessments and quality care calls. As their assistant coaches we are able to use the tools they have on hand and show them, rather than tell them, what is working and what needs adjustments.

This approach is not only effective for training programs, but with all vendors. Before you sign any more agreements know how to use your marketing dollars to maximize their effectiveness. Remember nobody bats a thousand, but getting ahead today requires avid faith in your people and in your process. It must be clearly defined, there must be diligence and most importantly any plan without a backup is still just a wish.