Last Friday in Miami, emcee Charlie Vogelheim welcomed attendees to the second and final day of the 4th Annual DrivingSales Presidents Club. Vogelheim’s introduction was a high-level summary of factors dealers are thinking about today, all discussed at length in Day 1. He summarized the environment for both OEM and non-traditional auto company innovation in Silicon Valley; i.e., the “battle for the dash” (cars & technology) and “the four horsemen of the automotive apocalypse” (Apple, Google, Tesla, Uber).
Workshops Day 2
- Dealership Brand as Competitive Advantage
Ron Henson, director of dealer strategy & development, from DrivingSales introduced an amazing lineup of speakers in the “Dealership Brand As a Competitive Advantage workshop,” including Tim Jackson from the Colorado Auto Dealers Association, Erik Radle from Miller Ad Agency, and Blake Underriner from Walla Walla Valley Honda. One presenter, Eric Savage, shared his success and experience at Freedom Auto Group and his relentless focus on the alignment among values, mission and action.
“If we don’t walk and live our mission, we’re liars,” he said. Savage was part owner in his family’s group when he realized that his vision was not congruent with other members. It reached a boiling point in 2006, when Savage sold his share to pursue business with his own vision in mind. Freedom Auto Group’s mission is simple; it’s serving others as a “life improvement” company. The group practices a “happiness cycle” starting with gratitude to fill employees with emotional wealth and the spirit of giving. Savage shared evidence of the cultural consistency via organic photos and stories from inside the dealership as well as local news coverage.
- Modern Showroom Floor
DrivingSales designed the 2016 Presidents Club to engage dealers and spark in-depth conversation of topics relevant to owners and general managers. Dealers in the Modern Showroom Floor session quickly took advantage of opportunities to probe experts on the innovation necessary to modernize the showroom and facilitate customer loyalty with increasingly connected consumers.
Mike Anderson, CEO & partner at The Rikess Group quantified the compensation issue – as many as 9 people are paid on the sale of a vehicle. “If there is margin compression, how are we supposed to continue to pay these people?” he prodded the dealer-attendees. His solution focused on strategic selling models, efficiency, employee development and employee empowerment.
- Used Car Centering
Margin compression on new cars, unpredictable incentives, and general OEM maneuvering has driven many dealers to focus on the entrepreneurial opportunity of pre-owned vehicles. Scott Simon, managing partner & general manager at Valley Honda/Nissan/Subaru/Volkswagen, shared how his store views used operations. “I’ve never worked so hard to make so little,” he said referencing the measures the dealership took to remain profitable following the diesel emissions scandal. The dealership takes a committed and thorough approach to their pre-owned strategy as well:
- They expect to make money in wholesale (they average $600-800).
- They aren’t afraid of vehicles with 180,000 miles.
- They don’t buy cars at auction.
Mike Waterman, national sales director at DealerSocket also refuted the common misconception that sourcing vehicles without the auction is near impossible.
“If you’re having a hard time finding inventory, then I don’t know what’s wrong with you,” he said. Waterman attests that supply has caught up with demand and that the DNA (Dealership’s Natural Ability) needs to be better executed to source used. Waterman provided a slew of advice for dealers, including exhausting the three internal lanes first: front door, service lane and CRM.
Jennifer Briggs, director of dealer strategy at Cardinale Auto Group; John Manganaro, VP pricing & analytics at DRIVIN and Marty Blue, senior vice president of business development at Cargurus also added content and dialogue to this session.
- Building A Winning Workforce
Steve Szakaly, NADA’s chief economist, ignited this session by quantifying specific “bad signs” for retail automotive relating to human capital.
Adam Robinson from Hireology went on to offer the audience a new definition of hiring.
Robinson utilized Enterprise Rent-A-Car’s recruitment and employment model to illustrate the necessity to market job opportunities via a strategic employment brand. He also addressed generational differences and the challenges with millennial workers. Robinson shared both attitudes and the economic setbacks that the most-hired generation in retail automotive last year (millennials) face. “Base pay, base pay, base pay, base pay,” he instructed dealers.
The discussion carried on with a panel discussion. Wes Lutz, owner of Extreme CDJR; Cary Perez, general manager at Mercedez Benz Miami and AutoNation Chevrolet Doral, and Andrea Schliessman, senior director of learning and development at AutoNation each offered their insights into creating team environments characterized by growth and pride. All their stores are low turnover and high performance compared to their industry peers.
“I will never be successful if my co-workers aren’t successful first,” Wes Lutz shared. “There are opportunities every day in your dealership to promote your people.” He suggested publicizing positive reviews that highlight a specific employee and making people feel like they are your business daily. “Because, they are your business,” he emphasized.
- Precision Marketing
Attendees heard from innovative dealers, including Andrew DiFeo from Hyundai of St. Augustine and Erich Gail from the Cardinale Auto Group. Two industry thought leaders, Joe Chura from DealerInspire and Jeremy Anspach from PureCars talked about how to solidify winning strategy and the future of digital. The panel discussed the importance of leveraging precision marketing to existing customers and using advertising channels like Facebook to deliver tailored personalized messaging to in-market audiences. Participants engaged the presenters in an active Q&A session, leaving with insights to take back to their dealerships and recommendations on how to measure success and hold vendor partners accountable.
Most Valuable Insights Winner
Jason Jewert from CDK Global received the prize for 2016 Presidents Club Most Valuable Insights Contest. Jewert unveiled completely new research and insights the previous day in a presentation titled “The Language of Closers: Communication that Wins.”
The study involved 1,300 U.S. dealerships. For three months, researchers tracked email close rates and analyzed the content via text mining (looking at text simply as text), NLP or natural language processing (science related to human-computer interaction), and sentiment analysis. Based on the analysis, CDK Global identified specific word sequences that predict high conversion. The results identified the most and least effective language for salespeople’s online communication with shoppers. CDK Global will reveal more insight related to the research at the 2016 DrivingSales Executive Summit in Las Vegas.