The tribal wisdom of the Dakota Indians, passed on from generation to generation, says that "When you discover that you are riding a dead horse, the best strategy is to dismount."
However, in government, education, and frequently in corporate culture including Dealerships, more advanced strategies is often employed, such as:
1. Buying a stronger whip “Great idea, just change the pay plan to get better results of course with same strategy”
2. Changing riders “Hire a new manager only to run the department according to current dealership’s philosophy and strategy”
3. Appointing a committee to study the horse “Appoint top Manager of the dealership or Group of dealerships only to study to see how this dead strategy work can work, let's see how we can make our current philosophy & strategy work”.
4. Arranging to visit other countries to see how other cultures ride horses “Let’s visit the peers of same Group who are employing the same strategy” LoosersC...

Once upon a time, cars were driven off the road by horse drawn carriages.  Drivers were mocked and told to revert to the old methods of transportation.  Where, exactly, would we be if we had listened then?

The fight between online and offline is very similar.  Sure, you may feel ill prepared to make the change, but that doesn’t mean that you should remain unchanged. 

Facts are facts.  When 90% of consumers are online, 90% of your business is online.  If it’s not, you’re in trouble.   Why should you approach 90% of consumers with 10% of your dealership?  Those numbers simply do match.  

It’s time for your dealership to step up and get online - all of it.  It may seem harsh, but a good employee that can’t figure out the Internet is not going to be a good employee for long.  There are two ways to deal with that.  You can either help your good employees by getting them trained on ...

First of all, thanks so much for all the comments and conversation on my last posting.  This is really a vibrant community with many smart people involved!  I hope we continue the discussion with this next posting.
Business never sleeps.  The most effective way to be available 24-7 is by getting online and staying there.  When your showroom closes down for the night, your virtual showroom continues to shine.  When the mechanics go home for dinner, potential customers should still be able to schedule service on your website.  It's clear that whatever departments a client can visit in your physical establishment should also be available online.
When a potential client wants to check prices at 3AM, you should be available to them through the virtual dealership (website).  Hopefully the next day they'll come in and take a test drive. But if you're not providing the latest information online, you're operating with a major handicap. 
In your physi...

Does your dealership have a “walk-in” department?  How about a “call-in” department?  Do you have an “ups” department?  These departments are obviously absurd, but the concept of an Internet department is still widely accepted.  The Internet is just another way a potential client is reaching out to your dealership.  It just so happens that the Internet now accounts for something like 87% of your customers!  Sounds like your Internet department is becoming your dealership…   

Walk-ins and call-ins don’t always tell you where they found your dealership.  Most of them probably found it online.  Even if they saw a commercial or a billboard, they still probably Googled the dealership for your address.  Your website deserves more than an “Internet department.”

Isolating your website and squeezing all your physical departments into the hands of an “Internet manager&...

It requires much more than a single department to run your dealership.  Why shouldn’t it be the same for your dealership website?  Your website IS your dealership.  It’s a virtual way for customers to “walk-in.” Most of your clients start their search online.  Even your physical walk-ins are most likely there because they found you on the Internet.   The statistics should help us realize the importance of getting it right online.   
Would you advertise cars in the paper that were sold last month?  Would you refrain from telling customers in your dealership about a special financing deal that might convince them the time is right to buy?  Would you send one of the guys in the shop to greet a potential customer?  No, no and no.   
Why, then, would you consider allowing one department cover everyone’s bases?  The people that compose your sales department, service department, etc. are ther...

 
When someone walks into your store, chances are, they’ve seen you before.  It’s naïve to assume that a stranger driving by just happened to decide to stop in.  That’s just not the way it works any more.   People don’t go car shopping on a whim --  especially not in this economy. 

 
The fact of the matter is people are taking their time. People are planning their purchases and researching before making major decisions.  When a potential customer walks into your showroom, there’s a 9 out of 10 chance they’ve already scoped you out online. 

If they liked your website, they found your address, browsed your inventory and decided to head to your store and take a look around. This is a prime reason to maintain consistency between your web site and your physical site. 

So what does consistency mean?  In dealer world, it means no special “Internet pricing.”  If y...

It's no secret that the Internet Department is on the decline, but that doesn't mean what it used to! Instead of forgetting the Internet, it's time to recognize that every person at your dealership should be involved in ye olde Internet Department. And not just involved, but also savvy.

Each department should be responsible for their part of the website. Every computer in each department should default to that department's homepage on their Internet browsers. For example, your pre-owned manager should see pre-owned inventory every time he opens the browser to do anything. That way, he's constantly eyeing the pages, noticing when inventory is not updated and taking responsibility to keep his inventory fresh and relevant. Not only does this prevent your dealership from getting leads on sold cars, but also will help your search engine ranking. Constantly updated content means higher relevance.

Obviously, everyone at your dealership should want the best information possible on your ...

The Internet has grown to be a part of nearly everyone’s everyday life.  There’s no difference between the customer in the dealership and the customer on your website.  There’s no difference between your online inventory and your lot inventory.  Internet pricing is sticker price.   It follows that your used car manager and your Internet used car manager should be one and the same.
Every single person at your dealership, regardless of department should be your Internet department.  Your service manager, sales manager, parts manager, etc. should be in charge of their own Internet content.  This encourages your team to keep material up-to-date, and to take ownership.  Guaranteed that outdated online inventory would quickly begin to disappear. Once it’s up to them, they’ll get ideas, get comfortable and maximize their returns.   
If any of your dealership’s departments are not represented on your websi...

 There’s been a real struggle over the last few years with online pricing.  Many dealers want to avoid listing prices for a number of reasons.  Competition is able to see your low rates and undercut you, it removes the bargaining that some dealers have grown accustomed to and many dealers fear that if a client doesn’t like their price, they’ll go elsewhere right away.

Some of these items may indeed be legitimate, however, there’s more to selling cars than bottom lines.  Dealers should not be afraid to provide Internet pricing on their inventory; the important thing is to make sure customers get what they need and feel secure on your site and in your dealership.  Transparency builds trust and trust can go a long way. 

Your Internet pricing and your lot pricing do not have to differ.  Online specials should be lot specials, online pricing-lot pricing.  The important thing is that your customers are able to see what t...

Too often we find ourselves in a reactionary mode.  Instead of taking the time to plan and prepare, we find ourselves responding. 

Sending out the same response with the same information to every lead in your inbox is a mistake.  You don’t want to be in the position of reacting to leads.  Rather, take the time you need to determine the point and purpose of each and every lead. 

Here are a couple of things to keep in mind when looking for the best response to your customer’s contact.

Determine the Source
Don’t feed your customers information that they don’t want.  If you know what part of your website they were on when they submitted a lead, you can better determine the information they’re looking for.  Make sure to trace your lead back to its source before you respond.

Ask Questions
Don’t just spit out a template response.  Based on the lead source and information submitted, ask questions to en...

Let’s say you’re in the grocery store. You ask the cashier to point you in the direction of the canned soup. Eager to help, he tells you where the frozen pies are. He responded quickly and was friendly, but you walk away thinking he’s got a screw loose.

That scenario is no different than responding poorly to leads! If a customer asks you about the history of one of your used cars, are you going to respond by giving them a detailed description of the paint job? That doesn’t make any sense.

It’s important to really listen to the customer. Don’t be in such a hurry to respond to leads that you miss your customers’ questions. You want to respond quickly and accurately with the information they request. Your customers ask questions about the things that are most important to them. Don’t overlook their needs by furnishing the information YOU think is most important.

Go even further when responding; dig a little deeper in to your customers’ needs. Fo...

We all agree that now is the time to dig deep into your accounting Dealers should determine what their expenditures are and how costs can be adapted to match the current economic climate. Just be sure that you measure based on performance as well as money.

It’s easy to compare vendors based on up-front costs, but make sure you know who you’re dealing with when you prepare to make a switch. As cliché as it may sound, “You get what you pay for” rings true more often than not. Cheap materials and products make you and your dealership look cheap. It’s important to continue to make a good and lasting impression on consumers, so don’t compromise quality for the sake of a bill (and this is certainly true for your website!).

For example, good printing companies are hard to come by. If you do direct mail pieces, flyers, coupons, anything printer related, make sure you’re working with a quality printer. Nothing says “unprofessional” like a poor print job. T...

Individual dealerships can take a lesson from current events. Everyone knows how violently the industry has been criticized recently. However fair or unfair this scrutinizing has been, we’ve been given some food for thought.

The last thing you want to do is cut salaries and benefits. You want to keep employees on your side. But what about practices that are comparatively unsuccessful? Are you paying premium prices for average service? Take some time and review your monthly bills. Are you paying vendors more than they’re worth?

Measurement becomes imperative in less-than-ideal economic climates. Tie all of your individual marketing efforts to the leads and conversions they’re bringing in. Make sure to use unique tracking numbers on advertisements. Which of your ads are performing well? Which needs to be retired?

Look at your expenditures with a critical eye. Trimming the fat doesn’t necessarily mean tightening the belt, but it always means streamlining.
...

Before you decide to revamp your incentives process or pay plan, take a minute to look at your business with strategy in mind. Determine the strengths and weaknesses of your business. What aspect of your Dealership puts you ahead of the curve? Once you determine where that strength lies, focus your attention on all the components that make up that strength.

Use your strategic business plan to help you focus on the right segment of your employees. Don't waste resources by implementing company wide changes when you can hone in on one particular area that will greatly increase your ROI.

For example, the same incentives may not work across the board. Where are you doing the most business? What aspect of your dealership sells customers? Is it the excellent care they receive post purchase? If so, focus your attention on the shop. Offer incentives to your employees in the shop and think of additional incentives for your sales team to help focus attention on your shop.

...

As soon as you are getting 1,000 web leads every day, you can use automated response emails. Until then, you should be interacting with your customers!

It may not be as black and white as that, but there are some best practices you should consider as you approach the idea of trigger emails and auto responses to submitted forms. Initially, these responses were created to immediately reach out to the customer and let them know someone would contact them shortly. This is acceptable when you’re dealing with leads that come in overnight or at some other time when an immediate personal response is not possible. However, an auto response should never allow your sales people to be lazy about reaching out to potential customers.

It’s not appropriate to respond to all customers with the same information. You won’t know who is on the other side of your lead until you communicate with them person to person. There is no substitute for interacting with your customers, getting ...

Trips to the dealership are not high on the average American’s list at present. People are beginning to view buying a new car as a luxury that can be put off. Here is a perfect opportunity to show potential customers how painless a purchase might actually be.
The beauty of online advertising is that you can advertise immediately to people who are looking for a car – as they’re looking. Now, when fewer consumers are looking, find new and creative ways to meet them where they’re at.

Create search engine marketing campaigns around popular searches that may not have a lot to do with buying a new car. If someone is online looking for ways to save gas or find public transportation, hit them with an ad that comments on those concerns. Mention that the cars on your lot all get at least 25 miles per gallon. Point out that particular specials at your dealership will keep consumers off of a crowded bus and still within their budget.
A little strategy can go a long way. U...

Part of the nature of an investment is that investment's return. Avoid wasteful spending (and wasteful cutbacks) by recognizing what parts of your spending are true investments.
During times like these, cuts are inevitable. The important thing is to make sure you cut where you can afford to cut. Removing employee incentives, and other opportunities to encourage your dealership’s growth and bolster sales, can be like sealing the leaky dam with your thumb. It may work for a minute, but that dam is going to explode and guess who gets the first face full of cold water?
So before you start laying off good employees or cutting back on benefits and incentives, take a step back and look at the big picture. Your employees are an investment. Take the time to measure the results on all or your investments. Are you confident that your TV spot is bringing in the bulk of your sales? How about that full page, full color newspaper ad? As we’ve all heard before, “measure twice, ...

Car buyers will be back. We don't know when, but they will. The simple fact is that people will still need vehicles in the future. In the mean time, are you doing anything to prepare? An old operations truism is: Do the right things and do things right. Is this happening at your dealership? Are you sure? Now might be the perfect time to take inventory of all the dealership's activities. Are you measuring the performance of employees and other investments including marketing? If not, then start. These days scarcely a penny should be spent if you don't have an idea of the return that you're getting from it. If you are using metrics to measure performance, are you sure you're using the right ones? It's very easy to measure the wrong thing. If what you're measuring doesn't tie directly into the larger dealership goals, then you probably shouldn't be measuring it. No person's goals or activities should even be set until the overall goals and strategy of the dealership are set....

Times are tough and we all know it. Along with other cuts, some jobs are being lost. For the employees that you do have, make sure you don't do anything to create perverse incentives during an already challenging period. By definition, perverse incentives create undesirable, unintended consequences. If you stop giving any real raises, for example, make sure to think through the possible consequences. You may think what you're doing is improving the bottom line, and it might in the short term, just make sure it's not going to hurt you in the longer term.
A client recently shared a cautionary tale about the unintended consequences of the elimination of any significant merit raises. The management at a large dealership decided to help combat declining sales by not allowing anyone, under any circumstances, to receive more than a 3% annual raise. They didn't communicate the policy to employees ahead of time and it wasn't clear if this policy would be applied to management. When ...

To accomplish organizational goals, three main steps are required: 1.) Process, 2.) Measurement and 3.) Accountability. (Of course these three steps must be attached to the right goals, but we will discuss that in other blogs). Using this method, any organization, especially a dealership, can achieve success. I know this because I've used these steps to accomplish success at numerous dealerships and dealer groups for years. And today in my consulting, I use these steps to help other dealerships be successful, even in today's economic environment. The process is the actions and specific steps individuals and groups take; what they do make things happen. The measurements are the agreed upon metrics, both quantitative and qualitative, that let you know what's (and who) working what's (and who) not. And that measurement must be tied to accountability with real consequences for success and for failure.
And in the absence of process, measurement and accountability, the larger th...

Have you ever been on the receiving end of an annual review where there were lots of "surprises" and subjective comments about your past year's performance? (Have you ever given this type of review?) If you have, then you know what a confusing, frustrating, painful experience this can be. Rather than being constructive, as reviews should be, they are destructive and can lead to irreparable damage. Feedback should be continuous and immediate, not "saved up" for up to a year after something has happened. Poor management is the only reason for ever having any real surprises in a review, and subjective evaluations are unprofessional, non-constructive and detrimental to both individuals and organizations.
A very sharp, hard-working, successful Internet director I work with recently related an experience she had with this type of review earlier in her career. She came into her annual review meeting sure that she'd done a great job and that she would be rewarded. She had successfu...

Are you familiar with O.M.I.T., the strategic method for focus and unification? I spend a lot of talk discussing tools for pay plans that align employee performance and incentives with the goals of the dealership, and it's true that you should have quantitative measures in place to make sure incentives are aligned. But, we should also always remember that there are important qualitative steps that should be taken to make sure all employees have the proper motivation. Okay, everyone wants to make money. That's a given for both employees and management, but let's move beyond that.
One incredibly powerful (and simple) method to make sure that everyone's motivation and focus matches is the "One Most Important Thing" (O.M.I.T.): "In any collective endeavor, the prospect for success is directly proportional to the degree everyone agrees on what constitutes the One Most Important Thing."
Let's break it down:
One- What is the single focus that will achieve the desired long-term outc...

This week's post is the third and final component of the SAM tool, the BDC Department Performance and Projection measurement.  This really brings everything home.  Now there is no excuse for not tying all dollars spent on marketing initiatives and staff member pay.  You can now project how many leads you need to have coming in to make the desired number of sales, based on industry averages and your own store's numbers.  Using these tools is more important than ever in today's economic environment.  I don't know anyone who can afford to waste a penny these days!        Access the complete Sales Activity Management Tool at the following link:http://spreadsheets.google.com/ccc?key=pXHR0EqhMEb03uOYX6nZHYg&hl=enBe sure to click on the "BDC Proj." tab in the spreadsheet!  And you should have a Google account to access the documents.  In-put cells are highlighted in yellow as with the other parts of the tool.    Share you experiences with these tools and post others that ...

In our ongoing quest to measure what's working and what's not, I have added another simple yet powerful to tool to help monitor important metrics. This BDC sales activity management (SAM) tool lets you tie your leads and lead sources directly to projected sales activities and results. Using industry averages and your own dealership's data, you can tie all your activities together and measure their effectiveness. Again, the input fields in these spreadsheets are highlighted in yellow. Do not enter data into any of the other cells.

Visit the following link for the next section:
http://spreadsheets.google.com/ccc?key=pXHR0EqhMEb2sWCZtXXRnDw&hl=en
Again, you need a Google account to view the link.
Let me know if you're using these tools and/or post similar tools you find useful.
...

Are you tracking your sales directly back to your leads? And do you also track the cost of the leads and how much you generate in sales from them? In the past this may have been difficult to do, but today there is no excuse for not measuring this. And as more marketing is done online, tracking just gets easier and more reliable. If you're not consistently tracking these metrics, how do manage the pay plan for your ISM and other Internet staff members? If their compensation is not directly tied to Internet leads and subsequent sales, how do you determine their pay plan? How do you know what's working and what's not?
I developed a powerful, yet easy to use tool to help make these measurements, make sales forecasts and much more. Access the first section of the tool at: http://spreadsheets.google.com/ccc?key=pXHR0EqhMEb3XkrmF2AWkCg&hl=en.
(You must have a Google account to access it.)
VERY IMPORTANT: The yellow cells are the only input cells. If you change anything in...

Honestly, I can't believe some of the auto responder emails I've seen from dealerships. I've laughed, I've cried, and in one case I came close to being offended. Any communication with prospects and clients, no matter the channel, requires thought, consideration and courtesy. And using text, IM or email does not mean that grammatical and professional rules go out the window. It's one thing if you're communicating with your friends and family, but it's quite another with clients. In all business communication, all professional rules apply, all the time!

Do you think auto responders are trivial communication? Think about it: this might be perceived as the first personal contact your dealership has with a prospect, even if you identify it as an auto-responder. When you think about it like this, it's not a trivial communication at all; it's one of the most important! Your first response to consumer inquiries can blow the deal for you before it even begins; that's how important...

It's very easy to get caught up in the short term: the end of the day, the end of the week, the end of the month, even the end of this quarter. But this short term focus is just that-- short term. Do you want your business to exist just until the end of the week, the month or the quarter? Of course not! Then why would you focus and direct your time and resources over such a short period of time? Short term focus creates long term difficulties in all areas.
For example, let's think about compensation plans. Do they offer any long term benefit to help motivate your employees to stay, or are they merely one time, at the time of sale compensation? A good sales person can probably make as much, if not more, money at a dealership other than your own, at any time. And we all know that employee turn-over is a big issue in our industry. Why not structure a pay plan with a long term component in the compensation? Certainly the sales person should receive the majority of their compens...

Hello again and welcome to the continuation of the 50 Day Timeline for managing your Internet leads. Refer to (links to previous blogs) for the previous Timeline information.

Day 12 -14: Attempt a phone call and send an email to the prospect that conveys some new, fresh information. Ex. “I wanted to contact you today Mr. Smith, because we have just received news that Dodge is now offering an additional $500.00 rebate for all purchases made before the end of this month. Perhaps you are ready to take advantage of this offer?” Careful wording like this allows you to keep in touch and gives you a specific reason to make contact again.

Set your next contact for 7 days later (or sooner if any special such as financing or rebates is about to expire).

Day 21 approx: Phone call and/or email to request information about their purchase status. Have they purchased elsewhere? Are they still in the market? Have they delayed making their decision for 30 or 60 days? Ask ope...

Let's continue with our 50 day timeline to make sure your leads don't get "lost" or "die" too soon, based on the fact that the average consumer takes about 50 days to make a vehicle purchase, from the time of initial inquiry.

Day 2: Today, Tuesday, send your prospect an email that mentions a “perk” they will receive if they purchase their next vehicle from you. It could be a free oil change, or a lifetime of free carwashes…the point is to keep your name visible to the prospect and help set you apart from the competition, as well as hopefully soliciting a response from the prospect.

Once you've sent the email, set your next contact date for two days later (Thursday in our example).

Day 4: Thursday, call the prospect again. If you talk, ask how their research is going and again, take notes to document the conversation for future reference.

Secondly, send a follow-up email today. If you have not personally talked with the prospect at this point, inquire so...

In my experience (and research concurs), the average customer makes a vehicle purchase approximately 50 days after they initially inquire. So I developed a 50 Day Timeline for handling your leads. The goal is to ensure that leads don’t get marked “lost” or “dead” too soon. And even if they don’t buy now - you want them to remember your name and your dealership. Follow-up is crucial. At the same time, however, you don't want to bother your prospects with too many emails or phone calls.

We will begin with day 1, arguably the most important, and follow the process over the next few weeks, somewhat mirroring the time it takes a consumer to make a vehicle purchase.

Note: For a proactive customer who keeps in good contact, please modify this system as needed to suit your customer’s needs. This model should remain fluid for each customer; you want them to feel that they are getting individualized answers, not generic responses.

The goal is to keep in cont...