Day two of the DrivingSales Presidents Club was intense. The dealer executives in attendance were prepared for excellence, but I don't think they were fully prepared for what was about to come at them at the stage within the historic Waldorf Astoria.
Raj Sundaram, President of Dealertrack's Dealer Solutions Group, wasted no time highlighting key ares of importance dealers must focus on while having a clear understanding of the granular activities.
It's one thing to have an employee manage the activities but it's a whole different ball game when the organization is on the same page with these activities. Dealers must bring their A-game with regards to merchandising, their SEO efforts and driving more traffic to underutilized elements of their site such as the finance page. Even more opportunities exist by providing greater functionality for consumers to customize their payments with both financing and leasing options; customers want to feel like they have some control over the process.
Raj stated, "Your branding efforts build the trust while the granular activity drives the traffic." Often times these activities and efforts become blurred by the people who are managing these efforts.
Raj raised the awareness of some eye-opening behavior shifts that must be considered as well. Dealers must make the effort to provide real photos for their new inventory. There is no reason why a red Cadillac should display a black stock photo - customers don't want to guess what something looks like, they want the real thing and they want it fast.
Why is this important? In 2006 consumers visited 4.1 dealerships before making a purchase. In 2012 that number dropped to 1.3 dealerships. You need to win shoppers online first. And it's only going to become more important as eventually 60% of all consumers will consist of Gen Y & Z buyers - the consumers of the future. Raj also stressed the importance of the used car segment and it's ability to provide deeper content rather than just stopping at pictures of the inventory.
Up next was Tom Webb, Chief Economist for Manheim Consulting. Tom is rare gem in that he can deliver incredibly technical economic themes in a digestable format while providing a nice slice of entertaining commentary. He was very quick to point out that economists don't solve problems, they simply point them out. And he did just that as he fired off several problems within the industry in order to help raise the awareness.
Tom presented an optimistic outlook for the used car market based on items such as the total wholesale supply drop, from it's peak to it's trough from '06-'12, was 36%. He was also firm in his position that no monetary policy can forever forestall the effects of fiscal policy. His positive position on used cars echoed many of the other speakers - he did urge everyone to "get used to high wholesale prices - that won't change."
He also predicted that used vehicles sales will reach an all time high by 2015. Historically new home sales and vehicle sales move in lockstep; both of these segments should remain healthy and continue that pattern. Also contributing to this anticipated high is the fact that 80.4% of the vehicles on the road are 15 years old or less. (with the majority being within 9-15 years old.) Tom also said dealers need to focus on the CPO segment as this has the ability to provide 11-12% of the industry's sales based on the recent output and supply from the OEM's.
Considering that Tom stated economists don't find solutions, he closed with an interesting comment, stating that moving forward "It's all about mobile!"
The next portion of the event was a new segment: The Most Valuable Insight Competition.
This competition brought out some of the best information from solid industry leaders, all designed to blow minds, make jaws drop and get dealership executives to think deep about what's happening in their organizations. This kicked up the intensity level very quickly as they all delivered top-notch presentations with incredible attention to detail and shared more data than anyone expected.
Scott Pechstein from Autobytel Inc. presented "Capitalizing on Changes in Online Shopping Behaviors" - Scott informed us that customers are shopping an average of 3.3 vehicles online before making a final decision and that 54% of buyers who submitted an online lead bought a different make. (Cheers to contest judge Andrew DiFeo for asking if dealers should simply buy leads for different brands based on this data?) 40% of new car leads submitted wind up buying a used car. Scott stressed simplicity as well: "Create one simple buying path within your websites; let your customers compare and research easily. don't make it hard for the user to make a decision." Scott also urged dealer to spend more time within their lost sales report to help determine why they're losing deals and learn from that information.
Jack Simmons from Cars.com presented "Mobile, your key to winning online shoppers when they're ready to buy" - Jack taught us that mobile views/clicks of maps and directions increases 300% on the weekend and consumers are more than 184% more likely to read dealership reviews on their mobile devices. These should be predictive indicators of your floor traffic. Dealers also need to review their mobile stats and their in-market buyers data from their Cars.com reporting to help connect with their local shoppers more effectively. And while we know that showrooming happens, we may not know to what extent. On average, over 60% of your customers may be doing doing this and your lack of merchandising efforts may contribute to it more.
Scott Hernalsteen, Senior Director of Enterprise Analytics at AutoTrader.com presented "Do You Know Today's Customer? New Findings Show Differences between Prices of Vehicles Shopped vs. Actual Prices Paid." - Scott helped everyone understand just how deep AutoTrader's data runs and how they're tirelessly trying to find the best way to help consumers and dealers improve every facet of their experience. AutoTrader has noticed how the price range of shoppers narrows as they get closer to making a purchase. The average price of the vehicle purchased on AutoTrader was 32k in 2012 and incredibly, 60% of these customers are paying more than the MSRP prices shown within the VDP's. Scott also hammered on the importance of pricing transparency because of it's ability to attract the most valuable buyers; dealers showing prices get 51% more VDP views. Scott said the secret sauce is to leverage online marketplaces, price your vehicles below MSRP and create incredible offline buying experiences to maximize your selling prices - the data proves this is happening now.
Chris Reed, Chief Marketing Offices at Cobalt presented "Your Marketing Team Is Using the Wrong Metric to Manage your Advertising." Chris made a bold statement with the fact that Cobalt has the largest database of research in the retail automotive industry to make decisions based on shopper behavior. It's because of this data that Chris says dealers are watching the wrong metrics when they try to analyze total visits and total leads. Adding to the confusion behind this analysis is the simple fact that up to 20% of your website traffic may be bots. (automated traffic that doesn't contribute to your business) The only metric that matters according to Chris and Cobalt is VDP engagement. This measure of engagement is the best predictive measure of future sales. So, you need ask yourself, are your VDP's spectacular or are they junk? How can VDP's improve? More helpful content and videos. Being prepared with better VDP's is necessary as websites become more interactive. We're experiencing the first wave of this interaction via retargeting campaigns and social integration.
Once the scoring was complete there was a two-way tie. After more deliberating a winner was eventually chosen - and it wasn't an easy task for the judges. (Judging was done solely by a panel of dealers to ensure objectivity) Congratualtions to Chris Reed from Cobalt for emerging as the winner in an extremely competitive event. The ultimate winners were the dealers who gained incredible insight from everything all four presenters shared.
Leadership consultant and entrepreneur David Ibarra presented next. He is the founder of eLeaderTech, The Ibarra-Brito Group and David Ibarra Enterprises. David is an outstanding presenter with a highly polished stage presence who makes you want to listen very intently to everything he's sharing. Jared Hamilton's (DrivingSales CEO) professional philosophies were heavily influenced by David's early mentoring, especially his views on recognizing the capital and talent needed to unlock true success.
David pointed out the different segments of your workforce and how you need to respond to them to ensure success. 27% of your employees are simply unmanageable. Identify these weak links swiftly as these toxic employees will destroy the culture of your business. He recommends the best strategy is to simply "Transfer the unmanageable to the competition!"
It's also important to understand that 60% of your employees want you to lead them. There is tremendous opportunity for your organization's leaders to help guide these employees to greatness. Sadly, only 9% of all employees actually execute their action plan because their leader never followed through to help drive the results needed.
David also shared his six step plan to success:
1. Create the Goal.
2. Create the Action Path
3. Track the Path
4. Score the Goals
5. Manage the Goals
6. Zap the Gap
His philosophy also stresses creating fun and unique consumer experiences - what he calls the "Why" element of your business. Focus on the why and the what becomes obviously - now you're not selling, you're connecting.
The next presenter was Linda Bartman, CMO for Cars.com. Linda shared her successful marketing and branding experiences to help point out the opportunities she felt many dealers continue to miss within their efforts. Your brand needs to stand for something bigger and more important than just a name and a face. Linda recommended building a position upon tyring to improve or change something within our industry, that's what consumers identify with on multiple levels. Most often a dealership's value statement makes the consumer try to connect the dots, this makes it difficult for them to connect with your brand.
Linda recommended plugging the leaks in your messaging and ensure it's congruent across all of your channels to prevent your brand value from leaking and losing connection opportunities where your customers may be active. Consistency of your brand messaging is also important. Going dark for extended periods of time within different channels makes your efforts even more difficult to maintain effectiveness once you return to that channel.
Linda asked if you truly have a "Brand Plan" in place that helps you mange the activities that drive results in addition to your granular marketing activities. This brand plan should be specific enough to help you build brand strength, differentiate your brand help you remain extremely competitive.
Following Linda was another extraordinary speaker, Erin Kerrigan, Managing Director of the of the Automotive Investment Banking Group at the Presido Group. Erin delivered an extremely high-level presentation about the current state of the buy/sell environment and the factors contributing to the current ecosystem. This was a significant departure from the standard presentations heard at conferences. Erin educated the audience on a segment that many executive either overlook or are simply not aware of.
Erin recommended that buy/sell plans must begin as early as possible to be prepared for any uncertainties and fluctuations within the market. She also pointed to the current optimistic environment which favors sellers. Erin referred to the fact that sales growth and demand are expected to continue due to the high amount of older used vehicles on the road as drivers will simply need new vehicles.
Finance rates have dropped in half over the years and clearly poised for turnaround. Erin stated "You can't fight the fed at the low rates." Also contributing to the growth is the simple fact that banks are well capitalized right now; bank deposits are at record levels and they're feeling the pressure to make loans to ensure their money is working as best as possible as well.
Other key factors include private dealer profitability sitting at an all-time high - another healthy indicator for the ability of banks to provide loans. Erin pointed out that same store sales basis and a steady flow of acquisitions will continue to drive profitability and positive sentiment. Her analysis of current buy/sell factors such as public company ownership rates and dealership multiples spurred many additional conversations and questions well after the presentation. (And maybe even another deal?)
Erin continued on with a steady stream of highly relevant dealership investment information that clearly demonstrated her authority and knowledge within this niche of the industry. And given the current climate, concluded with saying that dealerships must be the happiest places on the planet right now based on the multiple activity she's seeing.
The next presenter was our own Shaun Raines, Director of Business Development. Shaun was given the incredible task of presenting right before the final keynote, Seth Godin. More pressure than most can handle and Shaun executed as if he was the final act. Shaun also gets major points for adding his blend of heart-felt emotion and humor to a presentation topic that is often difficult to connect with audiences.
Shaun opened strong with his signature move of passing out Hot Wheels cars to several guests in the front row; this is how Shaun brings the "Why" within his presentations.
He painted a very descriptive word picture of where the Internet has evolved from over the years and how our behaviors and interactions have also changed. His points were easily understood and brought extreme clarity for many of the executives with regards to how they need to think about key areas of their analytics, marketing and website. It was as if he answered years of dealer's questions with a few well explained points - all in just a few minutes.
Shaun made the audience stop and think with strong statements such as, "Don't ask, is it working? - try asking am I working it?" And he didn't stop there, he demonstrated different strategies and tactics designed to create engagement on your website and especially within your VDP's.
He ended his presentation just as strong as he started with a touching message inspiring everyone to calibrate their lives around positive core values such as generosity, patience and selflessness. Shaun's stock just shot up several points - great job!
The end of an intense day was approaching and everyone was anxious to hear from Seth Godin. Whether you've seen Seth Godin present before doesn't matter - he will always exceed your expectations. He crafted a very intelligent message to the executives about the industry that was riddled with direct jabs and plenty of snark - just to make sure the message was a direct hit. Seth pulls no punches.
It's very difficult to summarize Seth Godin due to the simple fact that nearly every single sentence he shares can be it's own inspirational quote. He has an unnatural ability to make you think about an activity from a different perspective that challenges you to improve something, yet he does it without coming off as a hokey motivational puff-piece. It just feels genuine as opposed to a canned sound-bite designed to sell a product.
A few of the gems Seth shared that made people stop in their tracks:
"Are you just playing the notes or are you playing using the fermatta?" (That's a good one - Google it.)
"Our future and progress is all about connecting with others, not industrialization."
"You're probably not going to win the SEO game, so find a way to be good enough to have people Google you."
"You don't have the play the game better, you just need to play it different."
"The opportunity to have your customers talk about your dealership is being served up to you on a silver platter every single day. Seize it!"
Thank you to everyone who made the trip to New York City - the dealer executives, the vendors and sponsors, we truly appreciate your continued support. DrivingSales is doing it's part to help improve the automotive industry by providing the highest quality performance improvement information.
If you weren't able to make it to Presidents Club, make your plans now to attend the DrivingSales Executive Summit in Las Vegas on October 13th-15th this fall.
What else did you get out of this event? We'd love to hear your feedback as well!