Once in a blue moon, I get contacted to share my opinion on things that aren’t necessarily related to DealerKnows. Somewhat randomly, Mega Dealer News wanted an opinion regarding a fractional ownership service. For those who follow me on social media, you know that I have strong feelings towards the Mobility Movement, so I was obliged to share them. Before we get to the article, I’d like to preface it a bit.

During January 2016 I wrote a post titled You Don’t Have to Like It where I explored some changes that were brewing in the future. Since that post was written, my feelings towards the Mobility Movement have solidified. Between the time that I jotted down those feelings, we’ve taken on a client in the space, and that client was acquired by an OEM. Eighteen months, people. Too much has happened in the way of investment from the Silicon Valley juggernauts to the automotive supplier conglomerates to the manufacturers themselves to stop the tides of change. At the time of this writing, Apple has more available cash than the combined market capitalizations of GM and Toyota combined. If you don’t think there is enough intellectual and financial capital available to completely disrupt the current vehicle distribution model, I have some lovely oceanfront property in Nebraska for you.

It’s not all doom and gloom. For those dealerships who embrace the change, it’s going to be like winning the lottery. The boat anchors of negative equity, bad credit, and high insurance costs could become relics of the past. The complicated, yet sizable, market of lower-income Americans can once again be tapped into without the reliance on alternative financing. This can still be a gold mine…that is until a new gold mine comes along.

***

Higher car payments, rising insurance rates, expensive vehicle repairs and congested areas with too little parking available will eventually become a luxury for millions of people, according to an auto industry consultant.

These reasons are why a subscription car service, such as Flexdrive, may find consumers racing to sign up. Cox Automotive, the same company that brings consumers Autotrader and Kelley Blue Book, recently entered into a joint venture with Holman Enterprises as shared owners of Flexdrive, a new mobility company that enables consumers to subscribe to a vehicle, rather than buying or leasing it.

Bill Playford, vice president of DealerKnows Consulting, told Mega Dealer News that ventures such as Flexdrive are developing because new vehicles are increasingly out of reach to the average American, especially considering the type of vehicles consumers are demanding.

“Customers who aren’t good candidates for leasing are having to turn to long-term financing – up to 84 months – to get to an affordable payment,” Playford said. “Objectively speaking, these changes are out of the manufacturers, retailers and consumers’ hands. It’s something that we all have to contend with, and it’s part of a much larger shift.”

A vehicle subscription service likely will benefit dealerships for at least a short period.

“It will help dealerships better address the need for late-model used vehicles that better reflect market demands,” Playford said. “Instead of having to rely on off-lease manufacturer vehicles and fleet auctions, dealerships will have access to their own vehicles once they are out of subscription service. They can either choose to keep them or offer them up for sale to dealerships where subscription penetration is minimal, thus creating a completely new market for vehicles.”

However, a shift from ownership to subscription will essentially remove the need for the traditional retail model.

“Banking on a diverse inventory mix, multiple service bays and palatial dealerships will be a thing of the past,” Playford said. “As in other industries, this dramatic shift will create a ripe opportunity for a startup (Uber), a non-automotive entity (Google), or the manufacturers themselves (GM/Lyft) to cut the dealership out of the equation entirely. It only makes sense for the large dealer groups and vendor conglomerates to move first during the transition phase. In essence, it allows the traditional players to keep what is theirs before it gets taken away from them completely.”

Also, this concept will go a long way in improving customer perception, Playford said. Likely, the shift will move from everything being about price to convenience and customer experience.

“Does the customer want a Holiday Inn, Marriott or Montage experience?,” Playford asked. “Dealerships (or any organization involved in the space) gets to decide on how they’d like to compete, without the notion of having to gamble money on back-end profit and service loyalty to ensure the customer feels like they got a fair deal. It’ll take time for dealerships to unlearn the behaviors that were successful in the past. Those who do will cash-in on automotive’s future.”

With any new innovation comes questions and potential negative consequences.

Playford said those in the automotive industry will be wondering, “How long will investors and shareholders be willing to wait before this model reaches critical mass? Can fleets scale with demand? Will vehicles always be available when people actually want them? How fast will these vehicles depreciate, and will there be any demand to purchase retired units (will the cars just be considered sunk cost at some point)? Will the future of the industry end up with a Microsoft Zune or an Apple iPod?”

Playford predicts densely populated areas, such as New York City, its neighboring New Jersey boroughs, the San Francisco Bay area, Boston, Washington, D.C., and Chicago, will be “waiting in line” to get in on a subscription service.

“The privilege of parking a vehicle in these cities can exceed what a working underprivileged person makes in a year,” Playford said. “As these services become more ubiquitous (and thus more cost competitive), usage should increase across all income levels, with the higher income levels moving from two or more daily-driven vehicles to just one and lower income strata getting rid of their vehicles altogether.”

Early and continued growth should also be expected in American technology centers, such as Seattle, Austin, and Denver, due to the high concentration of innovators, non-traditional workforces, and extremely diverse populations in those cities, Playford said. “Detroit should be thrown in the mix because, like it or not, they’ll still be the motor city, no matter what,” Playford said.

The first Holman franchise to offer consumers the ability to “flex” is Flexdrive of Cherry Hill, New Jersey, located about 10 miles outside of Philadelphia.

Through Flexdrive, consumers can subscribe to a car via a mobile app within minutes and drive away without worrying about insurance, maintenance or any other expenses that typically come with buying or leasing a vehicle, according to Cox Automotive. Drivers can swap vehicles at any time, giving them the flexibility they crave without committing to a long-term contract.

Flexdrive aims to address the pain points of vehicle purchasing, vehicle ownership, and vehicle disposal. Subscribing doesn’t require a down payment or a credit check. Also, weekly and monthly payments cover maintenance, roadside assistance, and insurance, according to Cox Automotive.

***

Does this mean the end of car dealerships? Absolutely not. However, it does mean that dealerships who aren’t already adapting, may be too late to make the necessary changes. To quote Alexander Graham Bell, “when one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.” Over 5,000 retail stores are slated to close through the first half 2017. That’s almost as many that closed during the entire Great Recession year of 2008. You don’t have to make the same mistakes.

The Terminator franchise has been one of the most successful entertainment series in history, ranking up with the Toy Story trilogy, the Lord of the Rings trilogy, and even the original (and best) Star Wars trilogy. If you’ve been living under a rock, or are Amish, and haven’t seen the Terminator, it starts in the near-future where an artificial defense intelligence system becomes self-aware. After the scared military operators tried to pull the plug, the system (Skynet) decides that humans pose a threat, and summarily launches a nuclear assault on humanity. It’s just the type of stuff you want to talk about with your kids before bed. I’ll be back to the Terminator reference in just a bit.

As with last year, SXSW Interactive had some real face-melting presentations. Whether it was in the title or not, geolocation, virtual display of reality, speech recognition, gesture input, and artificial intelligence pervaded many of the sessions. What this means is that location-based services are about ready to go into overdrive. Although, I know a lot has been written regarding location-based services (LBS), including a recent piece by Joe Webb and DrivingSales’ very own Eric Miltsch, I got to hear about the future of these services from those who created them. I'm here to tell you, those services are not as simple as they seem.

At face value, these applications look like games, or a means to get hammered with your friends in Vegas. However, most of these tools have already moved beyond the game element, and are starting to drive value for retailers. The key thing you need to understand is that these platforms that we are using today are not permanent. The current technology still cannot support the true potential. Most of the LBS technology we are using today will be obsolete in a matter of months, and will be utterly antique within a decade. The millions of users who use LBS technology everyday will continue to jump from platform to platform because they find it valuable. So while I won’t get hung up on the platforms or the different services, I will tell you this: If you are not using LBS, you will be ignored.

Why would I make such a bold statement? The answer is simple: In just a matter of months, augmented reality hardware will be widely available. For those of you who have seen the Terminator, you will soon have the means to see like the Terminator. You will be able to scan objects by simply looking at them, with relevant data popping up in your vision to help you make decisions. Military jets have utilized this technology for a few decades, projecting critical data onto heads-up displays, and even a few cars have adopted this technology. Soon services such Wikipedia, Google, Facebook, Wolfram Alpha, and Foursquare, can, and likely will, supply their data directly onto your eyeball. People won’t just see a car lot anymore - they will see OEM information, vehicle data, pricing matrices, incentives, customer comments, and ratings - all without lifting a finger

Before you quit your job, realize that this technology can also be used to your advantage. Remember that CRM your manager has been bugging you about? What if that technology was leveraged in an augmented reality environment? Imagine if a customer’s name, current vehicle, time of last interaction, service visit frequency, website activity, family information, etc., appeared right next that customer as soon as you looked at them. How much easier would your job be? Would you start taking better notes if the information would automatically be recalled later? Would you terminate skating coworkers? I bet you would.

The good news for some, and the bad news for others, is that augmented reality will be available to the masses come Christmas time. Google will be offering glasses that will be connected to your Android device, and will project its Places and Latitude data into the users field vision at the end of the year (Sergey Brin was spotted wearing prototype glasses on 3/5). Other hardware and software is being evaluated, and will available next year. Contact lenses offering the same technology have already been tested, and will soon follow. Even without the glasses, there are already enough smartphones for nearly every man, woman, and child in the world, and the technology exists to automatically display alerts on those phones. The Internet age is just hitting its stride. 


How do we prepare for this onslaught the future? By being better today. Claiming your dealership’s Foursquare/Places/Yelp/etc. location is the first step, and frankly it’s not enough. Understanding the users behavior is the next, and most crucial, step. Even without adding users as friends, you can still gather data about their destinations, achievements, tips, and how many friends they have. If you are able to “friend” them, you can uncover more useful information. Understanding how to navigate this information will allow you to see how your customers interact, what they may say about you, and find out how loyal they are to other businesses. All of this information needs to recorded. Right now people have to take the time to gather information about your dealership. YOU must begin capturing just as much data and developing just as much software before you get overrun as it will be the only thing to save you in the future. There is no avoiding it. Take advantage of today’s technology before customers can gather information automatically, tomorrow.

Post Script:

Ignoring technological advances does not make them go away. Consumers take advantage of new technologies every single day. They buy a car every three years. By not embracing these changes, you accelerate the way these changes impact your business. You have created several opportunities for other companies to exploit your desire to keeps things the same. Don’t let the machines beat you. Take every opportunity to learn about new technologies on your own. Use change to your advantage. As it is with the Terminator, technology will just keep on coming. You can’t stop it.

There's no fate, but what we make for ourselves.

The Terminator franchise has been one of the most successful entertainment series in history, ranking up with the Toy Story trilogy, the Lord of the Rings trilogy, and even the original (and best) Star Wars trilogy. If you’ve been living under a rock, or are Amish, and haven’t seen the Terminator, it starts in the near-future where an artificial defense intelligence system becomes self-aware. After the scared military operators tried to pull the plug, the system (Skynet) decides that humans pose a threat, and summarily launches a nuclear assault on humanity. It’s just the type of stuff you want to talk about with your kids before bed. I’ll be back to the Terminator reference in just a bit.

As with last year, SXSW Interactive had some real face-melting presentations. Whether it was in the title or not, geolocation, virtual display of reality, speech recognition, gesture input, and artificial intelligence pervaded many of the sessions. What this means is that location-based services are about ready to go into overdrive. Although, I know a lot has been written regarding location-based services (LBS), including a recent piece by Joe Webb and DrivingSales’ very own Eric Miltsch, I got to hear about the future of these services from those who created them. I'm here to tell you, those services are not as simple as they seem.

At face value, these applications look like games, or a means to get hammered with your friends in Vegas. However, most of these tools have already moved beyond the game element, and are starting to drive value for retailers. The key thing you need to understand is that these platforms that we are using today are not permanent. The current technology still cannot support the true potential. Most of the LBS technology we are using today will be obsolete in a matter of months, and will be utterly antique within a decade. The millions of users who use LBS technology everyday will continue to jump from platform to platform because they find it valuable. So while I won’t get hung up on the platforms or the different services, I will tell you this: If you are not using LBS, you will be ignored.

Why would I make such a bold statement? The answer is simple: In just a matter of months, augmented reality hardware will be widely available. For those of you who have seen the Terminator, you will soon have the means to see like the Terminator. You will be able to scan objects by simply looking at them, with relevant data popping up in your vision to help you make decisions. Military jets have utilized this technology for a few decades, projecting critical data onto heads-up displays, and even a few cars have adopted this technology. Soon services such Wikipedia, Google, Facebook, Wolfram Alpha, and Foursquare, can, and likely will, supply their data directly onto your eyeball. People won’t just see a car lot anymore - they will see OEM information, vehicle data, pricing matrices, incentives, customer comments, and ratings - all without lifting a finger

Before you quit your job, realize that this technology can also be used to your advantage. Remember that CRM your manager has been bugging you about? What if that technology was leveraged in an augmented reality environment? Imagine if a customer’s name, current vehicle, time of last interaction, service visit frequency, website activity, family information, etc., appeared right next that customer as soon as you looked at them. How much easier would your job be? Would you start taking better notes if the information would automatically be recalled later? Would you terminate skating coworkers? I bet you would.

The good news for some, and the bad news for others, is that augmented reality will be available to the masses come Christmas time. Google will be offering glasses that will be connected to your Android device, and will project its Places and Latitude data into the users field vision at the end of the year (Sergey Brin was spotted wearing prototype glasses on 3/5). Other hardware and software is being evaluated, and will available next year. Contact lenses offering the same technology have already been tested, and will soon follow. Even without the glasses, there are already enough smartphones for nearly every man, woman, and child in the world, and the technology exists to automatically display alerts on those phones. The Internet age is just hitting its stride. 


How do we prepare for this onslaught the future? By being better today. Claiming your dealership’s Foursquare/Places/Yelp/etc. location is the first step, and frankly it’s not enough. Understanding the users behavior is the next, and most crucial, step. Even without adding users as friends, you can still gather data about their destinations, achievements, tips, and how many friends they have. If you are able to “friend” them, you can uncover more useful information. Understanding how to navigate this information will allow you to see how your customers interact, what they may say about you, and find out how loyal they are to other businesses. All of this information needs to recorded. Right now people have to take the time to gather information about your dealership. YOU must begin capturing just as much data and developing just as much software before you get overrun as it will be the only thing to save you in the future. There is no avoiding it. Take advantage of today’s technology before customers can gather information automatically, tomorrow.

Post Script:

Ignoring technological advances does not make them go away. Consumers take advantage of new technologies every single day. They buy a car every three years. By not embracing these changes, you accelerate the way these changes impact your business. You have created several opportunities for other companies to exploit your desire to keeps things the same. Don’t let the machines beat you. Take every opportunity to learn about new technologies on your own. Use change to your advantage. As it is with the Terminator, technology will just keep on coming. You can’t stop it.

There's no fate, but what we make for ourselves.

It occurs to me regularly that many times we are rewarded in the life for things that we may or may not deserve. We slip into a close parking spot after someone just drove by it. We get pulled over for speeding and avoid a ticket. We use gambling winnings to pay down debt. In many situations we can do everything wrong, but in the end, we still receive a reward for our actions.

I equate this activity to the way airlines treat air travel. When you boil it down, the airline's job in the equation is to get you to a destination (it doesn't have to even be the one on your ticket), alive and unscathed. It doesn't matter when you get there, or even how you get there. Wherever "there" may be, if you make it, the airline chalks up a W.

What happens to you, personally, physically, or emotionally, doesn't really matter in the equation. If you have to wait three hours longer than intended to board the plane, it doesn't matter. If they run out of water on the flight, it doesn't matter. If your connection is cancelled, requiring a day or more of layover, it doesn't matter. If your luggage is lost, it doesn't matter. If you have a nervous breakdown on the flight, as long as you don't appear to be a threat, it doesn't matter. As long as the plane takes off and touches down without disintegrating in the process, the airline chalks up a W. The passenger chalks up an L.

This same scenario, albeit less dramatic, takes places every day at car dealerships around the nation. Despite dropping the ball repeatedly throughout the entire sales process, if a vehicle (any vehicle) rolls over the curb, it's a W. Like the airline passenger, it doesn't matter how the customer was treated, how many members of the staff they had to talk to, how much money was lost throughout negotiation, how many "promises" had to be made throughout hours of back-and-forth, if a transaction was made, sales people are slapping high-fives and exchanging back pats.

I refer to this is as "just get 'em in" syndrome. By the simple act of convincing a potential client to come down to the dealership, if the collective effort of the dealership sells them a car, it is somehow a victory, no matter the pretenses. "Just get 'em in" syndrome has been stunting the growth of Internet operations since day one.

For many, the initial draw of the Internet side of the business is the precision of the numbers, and the perceived scalability of operations. Unlike walk-in traffic, demand can be predicted, and even supplemented if need be, to maintain a relatively steady stream of interested parties. Advertising sources are plentiful, and direct actions can be attributed to impressions. Every month's activities can be broken down and analyzed to look for deviations in patterns. It has always been imagined to be a sales machine.

If an Internet sales strategy is executed properly, it should act as a sales machine. However, with all of the capabilities the Internet has to augment any dealer's business, like a machine, it's only as precise as the quality of its components. If a machine is working properly, it repeats the desired results, over and over, with little deviation in quality. When the individual parts inside the machine begin to fail, the repetition of desired results begins to fail. Some consider maintenance vital, and proactively fix or replace components to preserve precision. Some use duct tape and a magic marker to mask results. Some use bonus miles to apologize for rude flight attendants. Some just get them in the door.

If your dealership truly wants to be successful on the Internet, it should stop focusing on the final destination or the end product, and instead focus on what it takes to get there. If you're thinking in terms of machines, think about all of the actions it takes to create a perfect widget. Think of all of the precise measurements, the wear and tear on tooling, and the sequence of inputs workers have to make. If everything falls within spec, you have successful results day-in and day-out.

If you're thinking in terms of air travel, think about a free entrance to the Platinum Club. Then, think about a free upgrade to first class, an on-time departure, and an early arrival. When you deboard the plane, the senior pilot then offers you a sincere thanks, and a firm handshake. Think about everything going better than expected. As a passenger, everything went the way you wanted it. For once,  it's you who gets to chalk up the W.

It occurs to me regularly that many times we are rewarded in the life for things that we may or may not deserve. We slip into a close parking spot after someone just drove by it. We get pulled over for speeding and avoid a ticket. We use gambling winnings to pay down debt. In many situations we can do everything wrong, but in the end, we still receive a reward for our actions.

I equate this activity to the way airlines treat air travel. When you boil it down, the airline's job in the equation is to get you to a destination (it doesn't have to even be the one on your ticket), alive and unscathed. It doesn't matter when you get there, or even how you get there. Wherever "there" may be, if you make it, the airline chalks up a W.

What happens to you, personally, physically, or emotionally, doesn't really matter in the equation. If you have to wait three hours longer than intended to board the plane, it doesn't matter. If they run out of water on the flight, it doesn't matter. If your connection is cancelled, requiring a day or more of layover, it doesn't matter. If your luggage is lost, it doesn't matter. If you have a nervous breakdown on the flight, as long as you don't appear to be a threat, it doesn't matter. As long as the plane takes off and touches down without disintegrating in the process, the airline chalks up a W. The passenger chalks up an L.

This same scenario, albeit less dramatic, takes places every day at car dealerships around the nation. Despite dropping the ball repeatedly throughout the entire sales process, if a vehicle (any vehicle) rolls over the curb, it's a W. Like the airline passenger, it doesn't matter how the customer was treated, how many members of the staff they had to talk to, how much money was lost throughout negotiation, how many "promises" had to be made throughout hours of back-and-forth, if a transaction was made, sales people are slapping high-fives and exchanging back pats.

I refer to this is as "just get 'em in" syndrome. By the simple act of convincing a potential client to come down to the dealership, if the collective effort of the dealership sells them a car, it is somehow a victory, no matter the pretenses. "Just get 'em in" syndrome has been stunting the growth of Internet operations since day one.

For many, the initial draw of the Internet side of the business is the precision of the numbers, and the perceived scalability of operations. Unlike walk-in traffic, demand can be predicted, and even supplemented if need be, to maintain a relatively steady stream of interested parties. Advertising sources are plentiful, and direct actions can be attributed to impressions. Every month's activities can be broken down and analyzed to look for deviations in patterns. It has always been imagined to be a sales machine.

If an Internet sales strategy is executed properly, it should act as a sales machine. However, with all of the capabilities the Internet has to augment any dealer's business, like a machine, it's only as precise as the quality of its components. If a machine is working properly, it repeats the desired results, over and over, with little deviation in quality. When the individual parts inside the machine begin to fail, the repetition of desired results begins to fail. Some consider maintenance vital, and proactively fix or replace components to preserve precision. Some use duct tape and a magic marker to mask results. Some use bonus miles to apologize for rude flight attendants. Some just get them in the door.

If your dealership truly wants to be successful on the Internet, it should stop focusing on the final destination or the end product, and instead focus on what it takes to get there. If you're thinking in terms of machines, think about all of the actions it takes to create a perfect widget. Think of all of the precise measurements, the wear and tear on tooling, and the sequence of inputs workers have to make. If everything falls within spec, you have successful results day-in and day-out.

If you're thinking in terms of air travel, think about a free entrance to the Platinum Club. Then, think about a free upgrade to first class, an on-time departure, and an early arrival. When you deboard the plane, the senior pilot then offers you a sincere thanks, and a firm handshake. Think about everything going better than expected. As a passenger, everything went the way you wanted it. For once,  it's you who gets to chalk up the W.

Initially, I intended on giving you all a day-by-day account of the sessions from the 2011 South by Southwest Interactive Conference. After going through four and a half days of notes, I realized one common thread linked all the presentations to together: to do. Not wait. Not over analyze. Not ask for permission. Just do. Nike was on to something.

Many of the panelists and presenters started with just an idea. Contrary to popular belief, they didn’t have access to tremendous amounts of capital. Not all of them were trust-funded super geniuses that went to Harvard or MIT. In fact, many acted, looked, and spoke just like you and me. The key difference is that they were willing to take an idea, and do what it took to get there. When they got there, they hired and inspired those around themselves to continue to take it to the next level.

Before those who embarked on their idea spent any money, they took the time to create a fundamental vision of what they were going to do. They made sure to think through every dimension of the space they were planning to enter. They reached out to others for mentorship. They wanted to understand how, and in what context, the end user was going to take advantage of the product or service. They weren’t worried about the technology or the mechanics because those would come along later. They focused on how the product or service would reach the customer, and how it would improve the customer’s life. For some, it took years. For others, it was a eureka! moment.

When that vision was crystallized, there was no hesitation to begin development. Prototypes were developed, tested, measured, and scrapped until the kinks were worked out. Failures do happen to even the very best. In fact, quick failures were considered a blessing. The results could be meticulously dissected so that the successes would be repeated, and mistakes would not be repeated. As development continued, testing left the developers, went to family and friends, then focus groups, and then the general public. The testing never stopped. The products and services continued to evolve to better serve the needs of the end user.

As many watched their ideas come to fruition, they never lost sight of who they were. They didn’t conform to the culture common in their line of work. They didn’t water down their personality, their ideas, or even their language. They were honest with their partners, coworkers, in their presentations, and in their writings. They were honest with themselves. That honesty reflects in their company’s brand, and what they do.

This is just a small piece of what I’ve taken away from the conference. Sharing more thoughts is some of what I am going to do. Giving my clients what they deserve is what I am going to do. Being a more effective teammate is something I am going to do. Making time for those important to me is something I am going to do. I’m going to act on a plan, and continue to move forward.

What are you going to do? Are you going to laugh this off as some feel-good excrement, or are you going to think about it? Are you going to push aside your ideas? Are you going to play it safe? Are you going to ignore that feeling in your gut? Are you going to go through the motions? Are you going to quit? Are you going to take the easy route? Are you going to keep lying to yourself and those around you? Or, are you going to do more?

Initially, I intended on giving you all a day-by-day account of the sessions from the 2011 South by Southwest Interactive Conference. After going through four and a half days of notes, I realized one common thread linked all the presentations to together: to do. Not wait. Not over analyze. Not ask for permission. Just do. Nike was on to something.

Many of the panelists and presenters started with just an idea. Contrary to popular belief, they didn’t have access to tremendous amounts of capital. Not all of them were trust-funded super geniuses that went to Harvard or MIT. In fact, many acted, looked, and spoke just like you and me. The key difference is that they were willing to take an idea, and do what it took to get there. When they got there, they hired and inspired those around themselves to continue to take it to the next level.

Before those who embarked on their idea spent any money, they took the time to create a fundamental vision of what they were going to do. They made sure to think through every dimension of the space they were planning to enter. They reached out to others for mentorship. They wanted to understand how, and in what context, the end user was going to take advantage of the product or service. They weren’t worried about the technology or the mechanics because those would come along later. They focused on how the product or service would reach the customer, and how it would improve the customer’s life. For some, it took years. For others, it was a eureka! moment.

When that vision was crystallized, there was no hesitation to begin development. Prototypes were developed, tested, measured, and scrapped until the kinks were worked out. Failures do happen to even the very best. In fact, quick failures were considered a blessing. The results could be meticulously dissected so that the successes would be repeated, and mistakes would not be repeated. As development continued, testing left the developers, went to family and friends, then focus groups, and then the general public. The testing never stopped. The products and services continued to evolve to better serve the needs of the end user.

As many watched their ideas come to fruition, they never lost sight of who they were. They didn’t conform to the culture common in their line of work. They didn’t water down their personality, their ideas, or even their language. They were honest with their partners, coworkers, in their presentations, and in their writings. They were honest with themselves. That honesty reflects in their company’s brand, and what they do.

This is just a small piece of what I’ve taken away from the conference. Sharing more thoughts is some of what I am going to do. Giving my clients what they deserve is what I am going to do. Being a more effective teammate is something I am going to do. Making time for those important to me is something I am going to do. I’m going to act on a plan, and continue to move forward.

What are you going to do? Are you going to laugh this off as some feel-good excrement, or are you going to think about it? Are you going to push aside your ideas? Are you going to play it safe? Are you going to ignore that feeling in your gut? Are you going to go through the motions? Are you going to quit? Are you going to take the easy route? Are you going to keep lying to yourself and those around you? Or, are you going to do more?

Normally, I have the topics of my blog posts picked out well in advance of posting, however this month I can’t stop thinking about the events that are happening right now. During the last few months of last year, and the first couple weeks of 2011, I’ve been involved in some eye-opening conversations. The subject matter of these conversations is now a matter of public discussion (or amusement?). Whether you’re pointing and laughing, or disappointed, we need to realize that we can be our own worst enemy.

One of the reasons I got involved in the car business is that I wanted to help improve the negative reputation car salespeople have. A variety of polls conducted over the years have shown car salespeople to be viewed among the least honest and ethical of any professionals. While some of the sources are questionable, the granddaddy of pollsters, Gallup has shown in a recent poll that car sales people are tied with lobbyists as the least trusted of professionals. Congratulations us.

I’ll admit it’s bad form to send someone off a blog post before it’s finished, but do me a favor: run a Google image search for car salesman (or just follow this link). What do you see? Is that you? Are you the guy smoking the Grenadier? Are you the guy with the Mr. T gold chains? Are you the guy with the plaid suit? Didn’t think so. Unfortunately, this is how people see us.

So, what are we doing to fix it? Apparently, we’re adding more fuel to the fire.

I’ve certainly seen some questionable car sales practitioners over the years, but I’ve also seen a lot of good ones, too. The funny thing is that you don’t hear much about the good folks. Certainly the nefarious ones have customers who are more than vocal about their dissatisfaction (their customers are friends and family to everyone else, by the way). For some reason or another, you don’t hear much about the sales people with strong moral fiber. Or the sales people, who are youth ministers, involved in 4H, participating in Relay for Life, volunteering at animal shelters, or have served their country overseas. Or how about the professionals who have not only read the blogs, but have developed their own expertise, created their own strategies, and have shared their own success with others. We all work with people like this, or at minimum, have made their acquaintance. Why don’t we hear more about them?

Instead of learning more about exemplary sales people, we get to hear and read about new consultants who seemingly pop out of the woodwork. Unfortunately, the term consultant is a bit ambiguous in the retail automotive world. In the rest of the business world, as well as in health care and the public sector, a consultant typically possesses subject matter expertise and pedigree that is well beyond what can feasibly be attained in-house. Look at the executive leadership of Accenture, Deloitte, and Booz Allen Hamilton, to name a few. These folks are among the very best the world has to offer. Our industry, on the other hand, is wrought with empty-chested, fly-by-night “experts”, who glorify the negative stereotypes, charge exorbitant fees, plagiarize material, and seem to multiply by the month.

This is what I find most troubling. The dealerships who have recognized the need to change, and decided to commit considerable resources to bringing in a consultant have to choose from “experts” who fit the negative stereotypes they need to change.  How exactly do you expect to overcome these pejoratives if you continue to contract the same type of people who ruin reputations in the first place? Moreover, how can dealers hire them in good conscience when there are videos on YouTube of them publicly flaunting their jewelry, McMansions, and sports cars?

The true measure of a consultant’s success is not what they have financially accomplished themselves, but what their clients have financially accomplished on their behalf.

In the spirit of full disclosure, I too possess some of the above items. I wear a (1) gold chain, and, from time to time, wear an aspirationally branded Swiss watch. The gold chain (and the gold crucifix that hangs from it) was given to me by my deceased grandfather after I went on a pilgrimage to see the Pope sixteen years ago. I’ve only taken it off for medical reasons. The watch I purchased several years before I was in the car business when I was doing due-diligence at a venture capital firm during the go-go dot-com days. I’ve acquired my fair share of material possessions over the years, but you won’t see me flaunting them on YouTube (you’re welcome). I take far more pride in the results I have achieved on behalf of my clients.

Whether you are new to the business or have been involved at multiple levels for many years, it is our burden to overcome these stereotypes. How do we do that? We can start by:

• Offering consistent and outstanding service.
• Overwhelming customers with honesty.
• Educating customers with information that is not available online.
• Adding so much value that we are indispensable to our customers.
• Sharing personal details about ourselves.
• Participating (regularly) in our communities.
• Supporting causes.
• Hiring manageable people.
• Working with skilled trainers that produce verifiable results.
• Resembling the nurses, military officers, pharmacists, and teachers who have strong professional reputations (and who are our customers).

If we do these things every day, we can surely start to chip away at the negative reputation we’ve given ourselves.

If you want to keep reinforcing these stereotypes, just keep dressing yourself like a Kay Jewelers vomited on you. Keep asking customers if they are calling about the (nonexistent) specials. Keep practicing the underallow/overallow numbers game. Keep on not using your CRM/ILM to capture important personal information. Keep flaunting your material wealth (and general douchebaggery) on YouTube. Keep winking sweet nothings at the camera.  Keep promoting yourself as an expert when you haven’t been recognized as one.  Keep doing these things… and let those of us who want to be recognized as respected professionals blow right by you.

 

Normally, I have the topics of my blog posts picked out well in advance of posting, however this month I can’t stop thinking about the events that are happening right now. During the last few months of last year, and the first couple weeks of 2011, I’ve been involved in some eye-opening conversations. The subject matter of these conversations is now a matter of public discussion (or amusement?). Whether you’re pointing and laughing, or disappointed, we need to realize that we can be our own worst enemy.

One of the reasons I got involved in the car business is that I wanted to help improve the negative reputation car salespeople have. A variety of polls conducted over the years have shown car salespeople to be viewed among the least honest and ethical of any professionals. While some of the sources are questionable, the granddaddy of pollsters, Gallup has shown in a recent poll that car sales people are tied with lobbyists as the least trusted of professionals. Congratulations us.

I’ll admit it’s bad form to send someone off a blog post before it’s finished, but do me a favor: run a Google image search for car salesman (or just follow this link). What do you see? Is that you? Are you the guy smoking the Grenadier? Are you the guy with the Mr. T gold chains? Are you the guy with the plaid suit? Didn’t think so. Unfortunately, this is how people see us.

So, what are we doing to fix it? Apparently, we’re adding more fuel to the fire.

I’ve certainly seen some questionable car sales practitioners over the years, but I’ve also seen a lot of good ones, too. The funny thing is that you don’t hear much about the good folks. Certainly the nefarious ones have customers who are more than vocal about their dissatisfaction (their customers are friends and family to everyone else, by the way). For some reason or another, you don’t hear much about the sales people with strong moral fiber. Or the sales people, who are youth ministers, involved in 4H, participating in Relay for Life, volunteering at animal shelters, or have served their country overseas. Or how about the professionals who have not only read the blogs, but have developed their own expertise, created their own strategies, and have shared their own success with others. We all work with people like this, or at minimum, have made their acquaintance. Why don’t we hear more about them?

Instead of learning more about exemplary sales people, we get to hear and read about new consultants who seemingly pop out of the woodwork. Unfortunately, the term consultant is a bit ambiguous in the retail automotive world. In the rest of the business world, as well as in health care and the public sector, a consultant typically possesses subject matter expertise and pedigree that is well beyond what can feasibly be attained in-house. Look at the executive leadership of Accenture, Deloitte, and Booz Allen Hamilton, to name a few. These folks are among the very best the world has to offer. Our industry, on the other hand, is wrought with empty-chested, fly-by-night “experts”, who glorify the negative stereotypes, charge exorbitant fees, plagiarize material, and seem to multiply by the month.

This is what I find most troubling. The dealerships who have recognized the need to change, and decided to commit considerable resources to bringing in a consultant have to choose from “experts” who fit the negative stereotypes they need to change.  How exactly do you expect to overcome these pejoratives if you continue to contract the same type of people who ruin reputations in the first place? Moreover, how can dealers hire them in good conscience when there are videos on YouTube of them publicly flaunting their jewelry, McMansions, and sports cars?

The true measure of a consultant’s success is not what they have financially accomplished themselves, but what their clients have financially accomplished on their behalf.

In the spirit of full disclosure, I too possess some of the above items. I wear a (1) gold chain, and, from time to time, wear an aspirationally branded Swiss watch. The gold chain (and the gold crucifix that hangs from it) was given to me by my deceased grandfather after I went on a pilgrimage to see the Pope sixteen years ago. I’ve only taken it off for medical reasons. The watch I purchased several years before I was in the car business when I was doing due-diligence at a venture capital firm during the go-go dot-com days. I’ve acquired my fair share of material possessions over the years, but you won’t see me flaunting them on YouTube (you’re welcome). I take far more pride in the results I have achieved on behalf of my clients.

Whether you are new to the business or have been involved at multiple levels for many years, it is our burden to overcome these stereotypes. How do we do that? We can start by:

• Offering consistent and outstanding service.
• Overwhelming customers with honesty.
• Educating customers with information that is not available online.
• Adding so much value that we are indispensable to our customers.
• Sharing personal details about ourselves.
• Participating (regularly) in our communities.
• Supporting causes.
• Hiring manageable people.
• Working with skilled trainers that produce verifiable results.
• Resembling the nurses, military officers, pharmacists, and teachers who have strong professional reputations (and who are our customers).

If we do these things every day, we can surely start to chip away at the negative reputation we’ve given ourselves.

If you want to keep reinforcing these stereotypes, just keep dressing yourself like a Kay Jewelers vomited on you. Keep asking customers if they are calling about the (nonexistent) specials. Keep practicing the underallow/overallow numbers game. Keep on not using your CRM/ILM to capture important personal information. Keep flaunting your material wealth (and general douchebaggery) on YouTube. Keep winking sweet nothings at the camera.  Keep promoting yourself as an expert when you haven’t been recognized as one.  Keep doing these things… and let those of us who want to be recognized as respected professionals blow right by you.

 

Like many of you, I have sat through multiple presentations and webinars regarding social media. While some may touch on it, and others may focus on it, the term “brand building” comes up quite frequently. While on the phone with a dealer recently, it occurred to me that a good portion of our peers may not quite understand brand building, and hence, have a hard time applying it in the real world. For social media, this is a classic case of putting the cart before the horse.

Simply put, a brand is the identity of a business, product, or service. What comes to mind when you think of Coca-Cola? How about Nike? Now maybe Apple? I’ll bet somewhere in your mental imagery, classic white script across a red background came up, along with a swoosh, and a glowing white apple with bite taken out of it. These companies have done an extraordinary job of marketing a consistent brand image, and have created a culture surrounding their businesses. If you need more examples, just walk into your showrooms. You will see brand imagery everywhere.

What comes to mind when you think of your own dealership? (Note: this works best when you think of the positives.) Is it a dedicated, veteran sales staff? Is it consistent OEM recognition? Is it community involvement? What makes your store different from the one down the road? Hopefully, multiple things come to mind. Take those thoughts and jot them down.

Now think about how you want your customers to perceive your dealership. When they think about your store, what images do you want them to conjure up? How are they perceiving your identity on your website’s homepage?  If you are drawing a blank, then it’s time to start working on that. Ultimately, it’s up to your business to craft that identity.

I think we are all well aware that Coke, Nike, and Apple have millions of dollars to commit to advertising agencies, not to mention the top-notch marketing talent they have available to them in-house. They are global brands competing on a global scale. Should you aspire to have their type of brand awareness? Absolutely! Do you need their millions of dollars to reach your market of 30,000 people? Absolutely not!

You have the advantage over national advertisers. You understand your own market better than they do. You understand how your closest consumers talk, think, and dress. If you are using your CRM properly, you may even have notes on where people go to church, where their kids attend school, and how much their fifth-wheel weighs. This information is available to you for free!

Speaking of free, those commercials you normally fast forward through are full of free inspiration. Try actually watching some commercials. What messages are you taking away? What tag lines are you hearing? Tune-in the next time you see commercials from mega-brands like IBM, Microsoft, GE, Red Bull, Starbucks, and UPS. Pay extra attention to what your OEMs are advertising and the images they are reinforcing. Take note of the fact they are not advertising “the largest inventory,” “rock-bottom prices,” or “(region’s) number one (whatever)…”

When you are ready to start coming up with brand ideas, talk to others. Bounce ideas off your spouse. Ask your friends. The wider the variety of people, the better. Then, sit down with your coworkers over some pizza and start brainstorming. Try to come up with one sentence that best describes your dealership (or department).

When you feel good about what your network has to say, have the same conversations with your most loyal customers. In fact, take a walk down to the service department and have that conversation with customers while they are having their maintenance performed. Find out if your brand identity is in line with a perceived value (be prepared for the worst). Compare notes. If the messages are the same, fire up the marketing machine. If they are not, you need to dedicate yourself and your teammates to bringing the ideas closer together. This is when you employ brand-building efforts (like social media, video marketing, and dare I say, a TV ad) to distill your message down for consumption by the masses.

Sounds like hard work, right? It can be, but it’s well worth it. Your customers will know what separates you from the competition. You will attract customers who are looking for an alternative to their local dealer. You will create a value proposition beyond price. Best of all, you and your teammates always have a guiding principle to fall back on in times of question. Trust me, you’ll forget about the hard work when you immediately start reaping the benefits. It’s “time to change everything,” “have a Coke and a smile,” and “just do it.”

Post Script

There have been several great books that have been published about brand building or indirectly touch on the subject of branding. One that immediately comes to mind is the Starbucks Experience: 5 Principles for turning Ordinary into Extraordinary, by Joseph Michelli. While it wasn’t written specifically about branding, it caused me to evaluate my business practices and offered some great perspective. It’s a short and compelling study so you should have no trouble finding the time read it. (I read it in one plane trip). If you have some books that have been inspirational to you, please share. Now that the gift-giving holidays have begun, we can add some books to our wish lists.