Carwoo launched a new infographic (below) today that is notable for two reasons: 1) it does nothing to sell Carwoo, 2) it provides valuable observations for dealers about what consumers respond to and when they respond to it. Sometimes just being nice to work with is a significant competitive advantage. The infographic suggests, "Maybe it's time for a swing shift?" For those with the ability to be friendly during evening hours, it may very well be that profit awaits.

“Just get ‘em in!” Do sales managers really still say that? Unfortunately, yes. What’s even more unfortunate than the lack of transparency offered to customers on the Internet or over the phone with that strategy is the lack of understanding about the way the automotive industry is shifting. Not being upfront about details in the retail automotive sector used to have its benefits: giving dealer time to sell their value proposition first, being able to feel out the customer for negotiating purposes, and maybe even getting the upper-hand when it came to closing the deal. But the truth is, the market doesn’t respond well to that tactic any more, and some dealers have been slow to realize that transparency in the process can actually be a huge competitive advantage.

Twenty years ago, dealership sales people held all the cards when it came to customers buying a car. They knew all the details, all the pricing information, all the disclosures, incentives – everything. About the only thing the customer knew was what color vehicle they wanted. Today’s transactions tell a different story. It’s not uncommon that customers come onto the lot knowing more about the car they want than the person selling it. Hiding information about your inventory is not as useful or beneficial as it used to be, but each individual dealer needs to weigh the risks against the rewards of being transparent.

  Less than five years ago, Dennis was being driven around to various stores who were using this relatively new thing called chat. By the end of the day, he realized chat was not about online advertising. It was the fourth way in which shoppers would transition from an online world of purely technological touchpoints to their first human contact with the store. Chat and texting join phone, email, and walking in as one of the doors available to consumers for that first human touch point. Today, chat is used by the vast majority of franchised dealers. It accounts for a growing number of initial contacts between shoppers and dealers. Wherever inventory is listed online, it is essential that consumers be given the opportunity to reach out to dealers in the manner they are most comfortable with at the time. The recent agreements for both Edmunds and Dealix to begin offering chat through ContactAtOnce highlight the ultimate ubiquity of chat around listings. Chat is the only i...

  We mentioned weeks ago that FTC enforcement of advertising regulations related to auto sales and loans would step up. Today was more evidence of that crackdown. The FTC came down on two California lenders promising consumers they could stop repossession and reduce payments. (FTC Press Release) By all accounts, these companies were clearly involved in deceitful advertising practices, and they deserve what they have coming to them. In our follow-up discussion with the FTC, they acknowledged that the federal government has more "cops on the street" and is determined to combat deception aimed at consumers. Today's actions were not aimed at dealers. Indeed the uncovering of these scams is good news for our industry. However, the bigger lesson is that getting your dealership within the clear parameters of advertising regulations is not optional this spring. These same scams went on for an extended period of time in the mortgage industry. Virtually every American ...

  There are some things about being young that most people grow out of. Like most of the men of his generation, Dennis does not wear the shoulder-length blond hair so many of them wore in high school during the 70s. There are other things that are generational. For example, generations tend to hold on to their music for life.  Kids do thing differently compared to how their parents participated in those same activities.  Will today's young people eventually interact with autos and auto dealers the way their parents and grandparents do, or is this where the American path turns in a different direction? A recent University of Michigan study points out that only 84% of Americans in their 20s even had drivers licenses in 2008, compared to 94% just 25 years earlier. The study concluded that many young people would rather spend their time traveling across the Internet than the open roads. DMEautomotive recently released a study on vehicle service trends. We talk...

Generally, upcoming events are not something we editorialize on, but the Digital Summit at Mountain View is free, in a unique venue, and aimed at an area of the business we think is essential for dealers pursuing an advantage through advanced online marketing.  Lots of conferences provide information about getting the most out of Google. Some offer more speculation than fact. Some even appear to deliberately confuse the dealer in an effort to sell consulting services. The 2012 Digital Summit at Mountain doesn’t just have Google, it will *be* at Google.  Yup, the Digital Summit at Mountain View will be held at Google’s headquarters, May 7-9, 2012.  Attendees will be able to meet Google Product Specialists and even tour the Google campus. The event will kick off with guy Kawaski, former chief evangelist of Apple, and Co-founder of Alltop.com and Garage Technology Ventures.  Google will cover search marketing, display, mobile, and an industry ove...

Dealers are incredible business owners. Show me some other business where the owners operate on razor thin margins the way that dealers do and I’ll commend them equally. It’s amazing that a company can make a grossly larger profit selling a $1,500 piece of furniture than they can by selling a $40,000 car. Boggles my mind. Why are dealers so successful in this endeavor? Two reasons: consistency and execution. Dealers who can’t execute or consistently walk through the same process over and over again don’t last long in the business or at least aren’t making any money at it.

Last week, Automotive News released its annual list of the top 125 dealership groups. The publication astutely points out that stores ranked on the list this year increased new-vehicle sales 28% over the past two years and used-vehicle sales 27% while the industry grew only 23% in new-vehicle sales. This is often the case with these lists, partially due to weaker groups falling off the list and being replaced by better performers. Our interest was drawn to the top 10, which is made up of the same 10 companies for several years.

An announcement was made regarding the crackdown on ads promising to pay off the consumer's trade. The Federal Trade Commission (FTC) named some prominent dealerships in its complaint. While most consumers recognize that the amount they are upside down on their trade is going to be applied to the price of the vehicle they buy, we are entering an era of regulation and enforcement aiming to protect even the most unknowledgeable of consumers. What is clearly not going to fly are ads promising to pay off the loan balance of the customer's trade-in, even if they owe more than the value of the trade-in. We talked to FTC officials Thursday, and confirmed that

Our friend, Ed Brooks, turned us onto an article released today in Forbes.  The article points out that a store receiving a great deal of its site traffic from generic searches is an indication that the store does not have a very good branding campaign. If people in your community really understand and buy into your unique selling proposition, then you will receive a great deal of direct traffic to your site as well as traffic through search terms that include the name of your store. Most stores receive well over half their traffic this way. Some can be 70% or more. But this may be the sign of a strong branding campaign or a weak search campaign.

Of course, it would be nice to achieve a huge amount of site traffic from both the brand image and unbranded search terms. Either one done in excess can take the store deep into diminishing returns. However, there is a strong regional variation. In some markets, a strong branding campaign is prohibitively expensive. The price of ra

In the way of product integration, we’ve found that there are more or less two kinds of approaches: vendors who buy up other companies so they can provide their own suite of products with seamless integration, and those that will openly share their products to interact with other vendor products that dealers’ have in place already or will have in place. Product Integration is also possible when either of these two companies add new products organically through product development. It's no secret that the largest vendors for dealers are considerably larger today than they were a few years ago. Whether the growth is through acquisition or organic, it generally involves expansion into additional services. Gradually, this will change the way many vendors interact with their dealer customers and charge them. Vendors sell to dealers in one of two basic ways...

The world is becoming increasingly more targeted. Remember when we used to only have 11 channels on the TV and it seemed only every other one actually came in clear. We’d wait all day for the local ball game to be on wishing, “I wish I could just watch my favorite teams play all day long.” Cue ESPN. Finally, a channel that televised sports, sports, and nothing but the sports, so help us hockey fans. We loved it because we got to watch our teams play all day and marketers loved it because they got to advertise to a targeted audience all day. A defined, targeted audience makes your marketing dollars that much more effective, so let’s tip our hats to Facebook once again for making this process even easier. As Ed Brooks indicated yesterday, Facebook just recently rolled out more refined options in targeting messages to a particular population – expecting parents, people who just moved, and even recently engaged couples. But the most essential category for our industry is “Auto Intenders.” You guessed it, people who are most likely interested in purchasing a new vehicle.

We continue to hear a lot of talk about whether or not a particular product works, but the fact is that most marketing products work for those who work them, and don't work for those who don't. However, savvy vendors are putting the burden of improvement on their own shoulders to make it easier for dealers to maximize their ROI from marketing and information system investments. As vendors expand the array of products they provide dealers, some of the benefit is derived from new product features, as we discussed in yesterday's article. But some of the benefit comes from making products easier to work. In our discussions with leading vendors, this focus on the ease of product use was paramount for some...

Each year, J.D. Power and Associates surveys owners of vehicles three years after they purchased them new, to find how many problems they are experiencing. The result is published at the industry, make, and model levels in PP100, problems per 100 vehicles. The 2009 model year vehicles in this year's study had just 132 PP100, compared to 151 PP100 for the 2008 model year vehicles that were measured last year. That's nearly a 13% improvement in one year! And it adds to the continuous improvement that has been going on for many years. There are several ways you can take this information to the bank.

  Through our many interviews at NADA, we uncovered at least three key areas where product integration is and will benefit dealers. One of those three areas is through new products. Most Internet products either participate in at least one of the following areas: 1.     The process of linking shoppers to the store (e.g. listings, leads, search, websites) 2.     Facilitating or improving the store's initial engagement with the shopper (e.g. auto response, call whisper, chat, phone recording, and phone training) 3.     Improving the store's ability to close and maximize profitability from walk-ins and appointments (e.g. sales training, desking tools, and tools for selling accessories and F&I products) Nearly all of these produce information as a byproduct. The more of these pieces a vendor can stitch together, the clearer the picture they can obtain for the entire process. This gives the vendor an op...

There are five ways shoppers can move from interacting exclusively with interactive touchpoints online to their first human contact with the store. We often roll these up into a statistic known as "contacts": Phone, Email, Chat or Text, Walk In, and Video Chat. Of these, video chat is the newest and the least likely to be the first human touchpoint. Dealers and dealer groups successfully using video chat most frequently migrate to it from phone, email, or chat. A video chat is generally something that is arranged through another form of communication. However, that distinction is about to be blurred.

  After posting a Bill of Rights document for consumers, CarWoo! set out to create an Online Dealers Bill of Rights.  But the story within the story is the collaborative way the document was created across a wide range of companies and industry experts.  The current document includes the CarWoo! logo, but CarWoo! insists that the cause is bigger than the desire for promotional exposure. The issue rose from the ashes of the TrueCar debate, yet the document is not a direct slap at TrueCar. This is a refreshing indication that we are collectively reaching a higher level of maturity in dealing with sensitive issues across social media.  The document was worked and reworked prior to release.  What a fantastic contrast to some of the kneejerk reactions that all too often are released before the author thinks through the consequences. It is arguable whether dealers need a bill of rights, and there is no argument about the fact that the document lacks any ...

At NADA, we interviewed some of the largest vendor organizations to find out what they are doing to help dealers achieve organization objectives and how they are going about it. What we found was a mix of acquisitions, development of new product categories, and development of new products spanning the gaps between former product categories. We found that integration can reduce the need for training on software usage and increase the need for training on how to get the most out of new software capabilities. We found a variety of philosophies and approaches to product integration. We found tools for centralization within dealer groups, and tools easy enough to use at the store level to reduce the need for centralization.

One of the more talked about items from Dennis’ presentation at Digital Marketing Strategies Conference yesterday was a proposed change in the way gross profit is calculated for the purpose of paying commission. The fundamental premise is that maximizing customer satisfaction requires a higher level of employee satisfaction. Much of the latter is compromised when employees feel the employer manipulates the cost from which gross profits are calculated. A vehicle’s book value can be higher than the wholesale market value if it is not purchased right in the first place. It can also be inflated by packing the price with reconditioning costs. Repairs are generally packed into the book value of the vehicle at retail cost, creating a gross profit for the store that commissions are not paid on. We have heard dealers exclaim that the reconditioning pack is commission-free gross. Stores are small places, and it doesn’t take long for things like this to develop into an el...

Carrie Hemphill made a bold move in planning the Digital Marketing Strategies Conference. She brought in inspirational speaker and fitness expert Todd Durkin as a keynote speaker to a theater full of knowledge hungry dealers. Yet Durkin appeared well received. Automotive retail has always been a draining business, but there used to be down time. Many of those in attendance remember the days of waiting for the next up. Today, there is always a bundle of additional things that can be done to improve sales and profitability. More than ever, it is all to easy to neglect one’s mental, physical, and spiritual health. It certainly didn’t hurt that Durkin gave the kind of energetic and candid presentation that retailers tend to embrace, but the subject matter certainly seemed to hit a cord. How do you maintain your physical, mental, and spiritual health? Is what you are doing now sufficient for the best decision-making, work efficiency, and quality of life? ...

TrueCar announced today through a formal press release that it is making radical changes to the way its product performs for consumers and is sold to dealers. The entire release was published earlier today on DrivingSales.com. It was difficult for TrueCar to grasp how much it would need to change and how much failure to change would damage the firm. Eventually, they did come around to adopt sweeping reforms. Now it will be interesting to watch the reactions of dealers and trainers.

Social media is an incredible platform of influence.  People’s opinions are more influenced by what their friend’s are saying and doing than what marketers are telling them to say or do.  This has never been more apparent in our own industry than through the recent research conducted by Dealer.com, in collaboration with DriverSide and GfK Automotive Research. Opinions are one thing, but actions and considerations are what bring people into your store.  In essence, while social media has a dramatic potential to influence the car shopping and buying experience both positively and negatively, people are actually more influenced into action based off positive posts than negative ones.

The TrueCar controversy continues, this time with state laws. Board meetings have been called, rulebooks have been pulled out, and investigations are under way regarding the legality of TrueCar affiliations with dealers. In fact, a handful of state associations are already prohibiting their dealers from doing business with TrueCar in the current capacity. After reviewing a number of sectional codes across various state associations, DrivingSales is laying out the potential violations and what it means for dealers.

  DrivingSales learned tonight that Group 1 Automotive has ordered its 108 dealerships to drop TrueCar. Recent controversy surrounding TrueCar has been intense, and did impact the corporate decision. In notifying dealerships, the retail giant also advised individual stores to scrutinize which vendors they provide DMS access to and which fields they allow them to access. This need-to-know policy may limit access for other vendors. Some of the accusations regarding TrueCar's use of DMS data involve more speculation than fact. Indeed, the mystery shopping conducted by DrivingSales did not replicate the accusations of leads being sold to third parties without expressly selecting the box requesting pricing from "non-certified" dealers. Tonight, we are not capable of getting that option to appear in TrueCar searches, having explored a variety of popular models in several zip codes. Third party leads have long been "scrubbed" to enhance their value. Wheth...

The TrueCar discussions have kicked up a storm of controversy in our industry. It’s easy to get sucked into the feeding frenzy that the fight engenders – bad mouthing, name calling, posing speculation as facts. In response, DrivingSales aimed to find out the real arguments and the face-value answers. We scoured the discussions online, watched hours of video, policed the print, and even spoke with one of the leaders of the battle, Jerry Thibeau of Phone Ninjas, to find out what really are the arguments against TrueCar. Then, we did the same thing on the other side, including a question and answer session with Scott Painter, CEO of TrueCar. What follows is an unbiased view of the controversy, aiming to confirm or bust the statements that fuel the TrueCar controversy.

To walk away from any leads opportunity is to leave those leads for your competition. Dealers who don't advertise on AutoTrader.com, Edmunds, or Cars.com don't receive the blessing of having their inventory exposed to those audiences. Dealers who miss the chance to participate in subscription based membership programs like Costco Auto Program, Navy Federal Credit Union, and Sam's Club miss out on those leads offering high close rates. And those who pass up pay per lead programs like Dealix, AutoUSA, Autobytel, and NewLeadsPlus will stand idle as those leads go to competitors.