On Saturday I started to use the new FB feature that allows you to basically switch modes and log in as the dealer. Taking it one step further, I then began to copy and paste the email address of customer that just bought cars. I mean they literally had left within the hour.  When I did this it pulled up their profile and I was able to write on their wall as the dealer thanking them for visiting us and that we hope they enjoy their new car. I also liked that on our wall it shows the post and the FB profile pic of that user. I actually pondered posting my discovery on DrivingSales, but figured it had been out for awhile. I then noticed a tweet this morning from @marshacollier with a description of the process/feature so perhaps this is newer than I originally thought. The link gives a pretty good how-to as well. 

http://marshacollier.posterous.com/new-facebook-fan-page-design-how-to-upgrade-u

So far, I've noticed some decent impressions and there haven't been any negative (or for that matter positive) feedback from any customers I've done this to. I was considering even posting a thank you or some followup on customers we didn't make a deal with too, but I'm not so sure, due to whatever caused them not to do the deal if this is a good idea, then again, what would we have to lose? 

Pretty much every other sales book out there mentions "Quid pro quo" (from the Latin meaning "something fo something").

I've recently put on my price quote emails a little extra line that says-

When you arrive check in on Facebook Places and Foursquare for an additional $50 off your quote!!

I've told the sales managers and service director when they are doing a write up they should include something similiar.

If you're going to give a discount why not get a little something for it? 

Our finance guy pours out of his sales office, hands down by his sides as if defeated in horrific ways we'd never want to know about. He looks like he's about to walk out the door and down the street, occasionally stopping to heave his chest up and down and hoping some little old New Jersey lady might see him from her window and offer to make him a "sangwitch." 

"What do you expect? I don't have any leg. What can I do?"

There's no little old lady there to tell him it's going to be okay – no sangwitch, no glass of milk, no cookie – just the disappointed look of his GSM. A look that might say something about finding his replacement. 

For the next deal, the finance guy tries to sell an alarm, but the customer tells him the car already has one – the salesperson said so.

For the next deal, he "gives away" a warranty and the desk manager yells at him because they're backed up five people deep and what the hell is wrong with him? 

Before he even looks at his next deal, he takes a heat call from a customer asking what a VIN etching is, why it costs $495 – and for his money back. 

I have to wonder why we do this to the poor guy, but what I will propose isn't going to make it much better for him.

I've worked in a few stores over the past several years. From my experience, the more an internet department grows, the more critical the penetration issue becomes. The only stores that seem indifferent to their finance department's performance also seem to have a non-performing, token internet department. Ironically, these stores are also quickly losing their foothold in their respective district rankings, but that would be another topic on another morning. Not this morning. Not on this cup of coffee.

What I'm about to propose may seem insane. You may shake your head and stop reading. However, it would be equally insane to think we can fix our dilemma by adjusting the poor finance fellow's pay plan to encourage a higher penetration ratio, while patting ourselves on the back: 

"That should do it. Now we'll see some results out of finance."

"How's that, sir?"

"I adjusted his pay plan. If he doesn't give me what I need, he won't earn any money."

"Sir, you're a pretty smart guy."

"I know, now tuck in your shirt and get back to work."

Of course, nothing changes. Maybe a new finance person joins the team, or maybe a new GM or GSM. The problems remain the same, just with different faces trying to solve them.

So, what I'm about to propose doesn't stem from work experience. It's reinforced by something I do on my days off. On those days, I usually go to Barnes & Noble and The Apple Store. Lately, I've expanded this to include Lululemon Athletica. I go to B&N to look at books, but at the other stores I observe and learn. As salespeople, we should follow and learn as much as possible about successful companies. If you're a sales samurai, learning about successful companies and successful processes is part of your job.

What I've learned in my samurai studies at Apple will startle and baffle us in the car industry. I've been making little notes here and there, and I noticed something. It didn't occur to me for awhile, but lingering around the store confirmed it.

The Apple Store closes almost 50% of their customers on extended warranties. These warranty costs are about 15%-20% of the price of the computer, and the questions and objections I heard there are the same ones I hear in the dealership.

"I don't need that."

"I can buy it later."

"I don't have enough money right now." 

"It already comes with a warranty." 

"But does it cover X, Y, and Z?"

The salespeople overcome the objections and close warranties on about half their computer sales. Not only that, they never reduce the cost of the warranty. It's full pop or nothing. 

Why can't we close like that? We're the sales pros, right? Our finance guys have years of sales experience under their belts, right? They can't be outsold by some kid making $15 an hour with tattoos slathered up and down her arms, right? Our guy has a suit, an office, and gets to spend time with his customers in private, but the Apple kid closes right there on the showroom. 

How does she do it, you may ask? And how can we sell extended warranties to nearly 50% of our customers? Maybe even at full pop?

The answer is very simple. We need to abandon our unsuccessful model. Forget everything about how we normally sell back-end products. Forget trying to pencil it in the payment. Forget trying to let the finance guy sell it. Forget all of it. In the end, our finance guy is more like a cashier if he's not selling warranties and other back-end services. But isn't that what he is anyway?

Since you can't separate Apple's result from their process, here it is as I see it – and why it works. It's worth repeating that we shouldn't expect similar results if we don't follow a similar process. In fact, I'd follow it exactly.

Why are warranty sales successful?
Trust.
It's not sold by another person. It's sold by the person they established trust with – the person they've been talking to about their computer. Not only does the customer trust the salesperson, they trust the brand. For us, this trust also needs to extend to the dealership.

If our customer agrees to buy the car from the salesperson, he trusts his salesperson. If he's buying a car, he obviously trusts the brand, and hopefully he's there because he read about us online and trusts the dealership. We have two of the three things working in our favor every time, no matter what. In fact, every dealer does – it's just that we usually strip away the most important piece: the value of the trust between the salesman and the customer.

How is this warranty sold? 
On value.

The salesperson illustrates this value to customers, through examples. It's not sold on price. It isn't slipped in. It's sold 100% on value. The customer wants to buy it.

What do dealers do? 

Create a distrustful situation, independent of value.

The customer builds a relationship with the salesperson – no one else. As a result, the person selling the warranty must appeal to emotion rather than logic. Time constraints prevent them from developing their own relationship with the customer. In turn, the dealer attempts to pack it in more, creating a hit or miss situation – and we know the misses usually turn ugly.

We should train our salespeople on warranties, and on a different sales process. One that might lead with, "I'm glad you want the car! We're getting it cleaned up right now. I'd like to also tell you about our maintenance plan and HondaCare… With our maintenance plan you will get… "

What other benefits might we see? How about less wait? When the customer agrees, he could walk straight over to finance. Do we really need an hour or even a 10-minute wait? Why not an open checkout counter? Samurai the entire process. 

Finance personnel costs will lower significantly. You can pay salespeople more, which lowers turnover, creating a more talented workforce and more positive online reviews, referrals, and so on.

What of our fine Finance fellow? He served us so well in different times. We do him no honor by blaming him, accusing him of victimizing us, of letting him wither inside his office. 

I found this samurai poem, by Minamoto Yorimasa (1104-1180), along with the fate of the man: 

Like a rotten log
half buried in the ground-
my life, which
has not flowered, comes
to this sad end. 

Let's not leave our warrior half buried in the ground. His skills, knowledge, and assets will prove invaluable to the new process. Let us who begin to forge ahead pool our knowledge, our successes, our failures, and lastly some money so that we may kindly fly out some little old New Jersey ladies and have them deliver sangwitches to our competitors. 

I've been using Facebook places for about 11 hours now. This morning I woke up and several of my friends are also using the app. I can see where they are checked in right now, some even including comments on the walls of the places they're checked into.

I was then thinking back to a conversation I had with a friend yesterday in the ad business.  She said, “rep is the new god." So, as more of my FB friends check into various locations, it seems the importance of rep grows even stronger.

A dealer's treatment of its customers, even those whoe've never before posted a review, can come back to haunt or reward them. There is no expiration date on this rep and on these reviews. I myself have been mistreated by dealers, and if a friend were to “check in” to one of those dealerships I would do my best to suggest they leave and see someone else. I think a lot of people have had similar experiences and I think they would make similar types of suggestions to their friends.

I’d really like to go on about the implications for dealers and how they can predict how their strenth and survivability. How’s their rep currently? How's their turnover? But, I have to get ready or I’ll get written up for being late to the 8:30 meeting.  Perhaps it would be better to collect some feedback.  

What should dealers be thinking about in regards to their rep and Facebook places?

    I recently went on a series of job interviews for the position of Internet Manager,  and I'd like to address the number-one concern that I’ve heard in these interviews with GSM’s and GM’s. This concern was gross profit - specifically, the impact (perceived and real) the Internet Department has on a dealer’s gross profit margins.

After listening to me speak they would simply lean in, squint an eye at me and ask if I give cars away. The experience might be similar to what to a woman would feel in a job interview in a society where sexism runs rampant. She could be highly educated and skilled, yet her interviewer leans in and asks questions unrelated to the job at hand.

I’m not going to list stats already appearing in nearly every other paper regarding the “internet shopper” or the future of the auto industry. Rather, I’ll outline the concepts I attempted to discuss in these interviews.

Though Internet Departments have been around for many years, they are still very much a niche within the dealership. These departments are both loved and hated. They are hated for “giving away cars” and not working a traditional process - and loved for their ability to move units with great ease. They are accepted not unlike a society seems to accept a slight injustice on a people - discounted and tolerated because the change is in process rather than complete.

I’d like to address this injustice - the number one fear that keeps the internet department tucked away in the corner office or sometimes even in an entirely separate building. The fear that prevents total integration. The fear of losing control of the dealerships ability to earn a profit.

The concepts here will provide clear outline or common point of reference for the GSM or GM who is afraid that somehow the Internet Department impacts store revenue.

My goal is not necessarily to educate, but to intervene and create a wholesale shift in thinking in the GSM and GM. To give them a new perspective on the Internet Department.

Often, in an intervention, a line has to be drawn. I believe such a line already has been drawn - by the competitors savvy to the concepts discussed here, and by the customer themselves.

Below, I will provide immediate steps for increasing floor traffic and revenue. I would suggest no matter how far along you believe you are in any or all of these areas, you create a project on each key area and determine where you and your competitors stand relative to each area. I would then create a plan (in-house, outsourced, etc..) to improve your position in each one.

You will be surprised at the relative simplicity and how generally familiar you are with each area; however, each area’s dependence on the others can not be overlooked. Some areas can even bring down the rest, regardless of how much money you’d planned to invest in them. For this reason, I’ve purposely excluded a few topics you might have expected to see here as I feel immediate implementation of them doesn’t greatly impact revenue or floor traffic though these shouldn’t be ignored as part of long-term component of a successful Internet Department/Strategy.

With that said, simply seeing where you stand today and what you should consider for the future is only the first step. You must make the status of your and your competitors’ progress in these areas a topic of an ongoing meeting. This is perhaps the most important step. 
 

Spectrum
I’ve outlined five key areas of focus that not only create sales for the Internet Department but also increase overall floor traffic and lift revenue for the entire store.
These areas are:

• SEO
• Site & Content Management
• Reputation Management
• Lead-Provider Evaluation
• Sales Performance/Sales Process

This paper will not spend much time evaluating or discussing secondary initiatives like social media, though these areas should be addressed in an overall strategy.

SEO (getting traffic)
The importance of Search Engine Optimization cannot be underestimated. SEO can effectively drive more traffic to your website. SEO covers not only key word/phrase updates but also link-building and other important updates on locations like Google Places to further improve relevant site visits. The more successful the SEO, the less reliance on third-party leads, the lower the cost of sales, and the higher volume of converting traffic. 

When I say conversion ratios, I don’t exclusively mean visitors filling out a form. I’d also include physical visits to the store as gathered from fresh up-counts and hits on your Directions/Contact Us pages.

All traffic can be baselined in your existing reports, and monitored on an ongoing basis to improve upon. Some fixes will be one-time, and others will play out in steps for maximum results.

Site & Content Management (converting your traffic)
Once visitors come to your site, you want them to  become customers. The strength of your site’s content will increase this conversion ratio. Simply having the canned dealer site in place is not enough. Your site provider likely offers editing tools, a blogging platform, and video support for good reason.

Someone must create and manage this content, and it must be personalized and compelling. A mediocre site creates mediocre results. Very few dealers customize their sites. I would imagine many larger corporate dealership groups will or already have made significant investments to do so and will soon distribute content and associated processes to all their dealerships. Once implemented, this will create a competitive gap – something to catch up to.

Another advantage to superior content is less reliance on price as a driving factor. This being said, the more gains your competitors make with content, the more you’ll rely on price alone and/or profit-maximizing sales practices that cause significant long-term damage to the business on an individual basis and on that individual’s social networks.

Content Management should ideally and eventually be its own department within dealerships in the near future.
 
Reputation Management (makes or breaks all your efforts)
Almost all gains made in advertising and/or the Internet Department can be destroyed without effective Reputation Management. All major review sites should be tracked and managed. Management includes petitioning for removal of reviews that violate guidelines, responding to customer concerns where appropriate, and procuring reviews from satisfied customers. This work is easy but important, and in a large and highly competitive markets, it cannot be overlooked.

Reputation management cannot be fixed overnight, but the rewards are substantial. Let’s imagine, like many shoppers, you are buying your first, second, or even your fifth car. You are educated, you are online, but you may have had a bad previous experience. Maybe a fear stemming from this drove you online for your initial quotes.  Sooner or later, you’ll likely expand your research to online reviews on Yelp.com or dealerrater.com. Or, let’s say you aren’t concerned about reviews, but you pull up google maps for directions to a dealership because you need a tune-up. All the reviews appear on Google (when you click business details). What these reviews say about the dealership and the individual within it can make or break an opportunity for sales and/or service. 

You’re competing to have as many positive reviews of your dealership online, but you’re also competing against other dealers who have more positive (or in an ideal situation more negative) reviews. In an ideal world, you want the differences between you and your competitors to be extreme.

The dealer that reigns supreme in this area:

• Doesn’t have to use price to overcome his competitors
• Doesn’t have to put themselves in a bad light by trying to inspire doubt around their competition
• Wins the car shopper who didn’t get an online quote, but rather used review sites to determine where they’ll buy their next car

To see how powerful reviews can be, visit Starbucks with a laptop and ask a few friendly patrons to visit yelp.com for reviews of the highest and lowest ranked dealers of any brand (perhaps your own). Ask where they would buy a car. Ask whether their answer would still hold if the better ranked dealer were a few hundred higher in their car quote. Would they still be more inclined to buy there? Contrary to old-school thinking, when a dealership is designed correctly, the Internet Department does not have to fight an all-out price war. People go online, not necessarily to get the best quote, but also to avoid a negative car-shopping experience.

Lead Provider and Evaluation (eventual elimination is the goal)
Your OEM and self-generated leads should have substantially higher closing ratios than third-party leads at a fraction of the cost. You’ll want to reduce reliance on third-party leads sources by using SEO, Content Management, and Reputation Management. However, you may need third-party leads to quickly achieve desired unit objectives.

Having an up-to-date understanding of lead sources, which lead sources competitors are using, and ROI of third-party lead sources (if they are to be used for a period of time) simplifies decision-making.

Sales Performance/Process (improving conversion and gross)
Having all the leads, inventory, and systems in place is meaningless if you have no proven sales process in place to effectively respond to and capture business. Prospective customers should receive a unique and compelling auto-response template that sets the stage for all subsequent actions, versus a general [dear insert name] template.

Many Internet Departments have gone astray by thinking response time was most important. Response time is the most easily measured factor, and for that reason managers like it; however, quality of response is difficult to measure. In many Internet Departments’ efforts to remain superior in response time, they have resorted to sending out quotes without attempting to engage the customer or even considering the customer’s notes. An effective sales process today should seek quality over quantity. I  don’t discount response times. I don’t discount the importance of sending a quote. But a dealer that reaches out on a much more detailed level will receive the customer’s notice. And that dealer will receive more responses and higher levels of customer engagement than his competitors. To my knowledge, no dealer or canned CRM report today measures “percentage of engagement.” We should measure this with the same ferocity we measure “response time.”

Conclusion
I purposely have excluded any “how-to” suggestions on these topics. I feel that the GSM and GM need to explore each one and evolve their own understanding on each area. To become as expert as possible in each area. To be highly interested in the ongoing status of each. Not because a checklist isn't easy to create, but because what ultimately makes or breaks the dealership isn't a completed checklist, but rather how connected to and interested its leaders are in their total operational status.

I’m late to work already and I’d rather sit here and drink coffee and perhaps go to the beach today and I can’t imagine anyone else waking up differently. So I’m at the end of my desk right now between two different types of days. The one I’m supposed to have going to work and the one I want to have so instead of either one I’ll write this.

I met someone the other day who said his internet department was going to have a 12-step process. As I was getting ready this morning I couldn’t help but wonder about this process and what happens on step 5 or 8 and especially 10 or 12 and why not shorten the steps to get right to those magical things on step 3 or 4?

And I thought if you’re going to go for a 12 stepper why wuss out at 12. Why not go for 32 or really man up and go for a whole 102 step sales process. Then I thought about my measly little 5-step process and started to wonder if it was sufficient and if I shouldn’t have a 12 stepper or 39 stepper instead.

But then I thought my 5 step process works for me and I’ve proven myself over and over again with it. And then I thought that guys 12-step process probably works for him too. Surely he didn’t get to be a newly promoted big time internet director unless he had delivered the goods some day.

So then I thought that what makes these processes good. What made or makes him good and other people is not some super industry or company wide master process but one that enables a person to complete the job process that utilized his/her strengths. They will in turn believe in this process and have hard evidence to back up its effectiveness but maybe what wasn’t effective was the process itself but that it was the person who designed it naturally designed it around their own strengths and it successfully leveraged those strengths.

I wondered if this person I met with a 12-step process was going to have success as he was hiring a team of internet people and planned on introducing this to them. I remember one time I worked in a dealership that had consultants who had sold and implemented and monitored a 4-step process to the dealership. The only sales people who sold cars were the ones that seemed to not follow it and they were not enforcing the process on these 1-2 individuals as they had sold a significant amount of cars. They in effect had their own process.

I just got a text now from my customer that they are on their way so I must go as it looks like I’ll be a salesman again today but if I were the big boss I wouldn’t implement my 5-step process or implement my super improved 7-step process. These sorts or processes seem to be more for managers and directors than sales people and maybe in large organizations it’s better to forego having sales superstars for a predictable and enforceable sales process and its predictable result but such a processes isn’t for sales people and if it isn’t for sales people then then it isn’t for sales and you should call it something else. Process 12 v.1 Department perhaps.

I'm going to try to write this in 10 minutes as I still have to shower and get to work as I have a customer who will be waiting for me when the doors open. The deal is set, car is cleaned, etc.. so I'll be all wrapped up by 11 and by then maybe I'll be playing some basketball in the service drive.

There are a lot of things I do each month and one of them is collect pricing from all my competitors. What I do here in Los Angeles might be overkill if you're in Elmira and also what I do is probably more geared for a person in a similar position as me where I have no resources, no help, no assistant, and to be honest no one to even talk to except for customers. I'm a firm believer that the entire store should be internet but have yet to convince any GSM to make the move yet which makes me question my own sales skills but that's another topic on another day. I have 8 minutes left right now.

To me Different Lead Sources equal different competitors, prices, and templates.

About two times per month I survey the market place on multiple levels and track this. Basically what I'm collect and tracking helps me to better position myself to be as competitive as possible.

Price: Collecting price quotes is easy but I think most people collect pricing towards the start of the month to see "where everyone is at" and I think all they are doing is collecting price. I like to mix it up and I'm more interested in what dealers are doing towards the end of the month to be honest with you (and if I get super price competitive I do this towards  the front half of the month to strengthen my pipeline for the end rather than try to drop my pants in reactionary desperation at the end).

Lead Sources: I'm also trying to estimate the budgets of my competitors on a lead source by lead source basis and have a total awareness of who I competing against on all 3rd party leads.

Competitors: I'm also fully aware of the strengths and weaknesses of the people I'm competing against on a individual basis. I know who is willing to give a lease quote and who insists people come into the store, what they may "exclude", how they attempt to win over deals etc.. and I try my best to pre-counter all of this in my templates, phone calls, and followups.

Templates: My templates and pricing strategy isn't the same for every lead source. Once you have a complete real time and historical summary of your marketplace it's pretty easy to see what you have to do.

Okay, my time is up. My coffee is finished. I better not be late. The customer is from Santa Barbara. If you're familiar with the geography of the area that is in no way close to me but every week I have a few extra gravy deals from Santa Barbara. Why so far away? Because I know who I'm competing against (and who I'm not competing against) if you lived there and received your quotes from the same sources as these folks you'd be driving down too.

The other morning I was walking my dogs. I live on the main street right below the Hollywood sign. If you’re a tourist and you’re looking for a picture of the Hollywood sign you always end up on my street because it looks like it drives right into it. Okay, enough details. Back to my walk. A car slowly slides up next to me. It’s a very thick June gloom morning. The fellow rolls down his window and like most tourists they always ask me how can they actually get to the sign for which there is no easy answer as it’s a twisty maze of narrow streets with signs that seem purposely hidden so I usually tell them there is no way but this fellow wasn’t asking how to get to the sign. He was asking me if he was even close to the sign. I asked him to repeat himself and he asked me if the sign was even close to where he was. In my mind I’m thinking that’s an insane question because it’s in massive letters right before him about 500 yards straight out his windshield. I look and that’s when I notice the fog is so thick that you can’t make out the sign. Through the fog I can make out the outline or at least I think I can as I’m sure it’s there but this fellow has no idea if he’s even in the right neighborhood or pointing the right way. I tell him it’s straight ahead and he looks ahead and at me again. I tell him to trust me that the sign is right in front of him. He mumbles something to himself about me being an unhelpful asshole and drives off into the fog making a sharp left hand turn. 

I think to myself this will rank with the great allegory’s of all time. It had all the right ingredients. What story could better sum up the added difficulty we throw on ourselves for not trusting in someone who knows better. Not only refusing to believe the person for your own good but taking it one step further believing he is attempting to cause you some harm because you can’t see what he knows to be true. 

That was 2 weeks ago and I’m still waiting for the dinner party or company meeting where I’m able to communicate my new witty story.  My new allegory. In my mind I’m already ranking my Allegory to rival Plato’s Allegory of the Cave. So great perhaps they’ll just banish his unnecessary allegory and replace it with mine. T-shirts ought to be printed depicting my new allegory. Fog machine sales will hit all time highs. Teachers are giving demos to students. Students are giving demos to other people. Strangers in bathrooms begin to discuss the dynamics of the foggy allegory. Oh yes, surely the foggy allegory will be credited 500-years from now for giving birth to a new renaissance. A new period of enlightenment.

Oh but surely I think to myself the foggy allegory can’t be all that unique. It must exist in other forms but I am too lazy to research allegory’s. The Lakers will be on in an hour. I was supposed to go back to an interview today which made me re-live this whole allegory scene in the first place. You see, what happened was last night an old friend asked me to stop by a dealership he started working at. I hadn’t seen him in a few years and thought it would be nice to see him. Before I know it he’s insisting that I come aboard. That I meet with the GM. That I’m exactly what they need. A real internet person. I try to get details and the only details I get are standard. Sounds like a standard position where they want someone who is good online and on the phone to respond to inquiries and make deals. Surely I am exceptional at this but it had been a few years and my old friend seems to not have accounted for that during the last 4 years I’ve grown to slightly more of a managerial role. I feel that I have more value passing on what I know rather than just doing it. My friend insisted that I come back today and meet with the GM and see the pay plan and get a drug test, and to come back dressed to the nines etc... Keep in mind I already have a job. So last night I figure maybe it’s a good idea to learn more about this dealership and so I begin to research them and their competitors and collect data and create a sales strategy complete with action items to take them from what I can tell is one of the lower performing dealers of their brand in Los Angeles to a top 3 performer. I even intended to do this by eliminating all 3rd party leads and kept budgetary constrictions in mind by simply imagining there was no budget. I even documented exact key word phrase alterations for their website to improve their rankings. I had data that showed they weren’t a google local result for a majority of Los Angeles because their site was indexed so poorly. I even had a reputation report. I missed nothing. Even noting how there was no wifi network (which I checked while I was there after checking in on Foursqure). I noticed a dealer next door had listed as a tip for the area that they have free wifi and coffee and even though I’m sitting there with my old friend I’m considering going to that dealership instead so last night I even considered taking it upon myself to create “nearby specials” on behalf of this dealer. So today being my day off I go to the gym, I walk the dogs on what was a another foggy morning and I eventually shower and remembered my friend said something about the nines so I put on my suit. I walk into my dining room and grabbed my ipad with the massive sales document I typed the night before and my keys and then just froze. 

These people are going to think I’m an absolute maniac.