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From: Jared Hamilton
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Dennis Galbraith

Dennis Galbraith Chief Marketing Officer

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Extracting Full Value From Vendor Reps (a DS Exclusive)

The relationships between a dealer and the vendor reps that call on him or her have always been an important part of the retail automotive business. I noticed in the 70s, that the newspaper rep was the information conduit between local dealers. The GM would ask, "What are you hearing out there?" At a minimum, they needed some gauge as to whether their own movement is sales was something earned or simply a function of the local market going up or down.

Today, dealers have access to incredible tools like J.D. Power's PIN for transactional data and Dataium for shopping data. (Both can be acquired for free in their basic forms.) So the vendor rep has less usefulness as a mere conduit of information regarding sales and shopping activity in the local community.

Some reps are leaned on heavily by dealers for their knowledge about technology and other vendors. They often hear things like, "I'm not happy with my website, what are you hearing about Dealer.com?" Dealer satisfaction studies and rich repositories of dealer reviews, like DrivingSales.com, allow dealers to accesses hundreds of opinions and ratings from other users at one time. So the value of this added service can best be obtained from sources other than the rep.

Ironically, most dealers are not receiving all the value from vendor products that they should be or could be. Personal selling is very expensive. Reps need to be constantly evaluating the performance of their dealer customers and recommending actions sure to increase profitability. That doesn't mean just up-selling them all the time. Dealers need to be diligent about asking the question, "what can I do to get more value out of your product?" Just telling the rep that you are not happy with the product or not happy with the price will likely put them on the defensive and eliminate any chance you had of getting real value out of them.

I've written plenty about when dealers should not buy something, but millions of dollars are being wasted each week on vendor products that should be purchased, but the dealer is only extracting a fraction of the value from. From my experience, most dealers using vAuto are getting sufficient value from the product, but not all the value it is capable of delivering. Some dealers buying leads from AutoUSA, Dealix, Autobytel, and NewLeadsPlus have teams skimming those leads rather than working them diligently. A good rep can show you signals when that takes place. Many dealers using listings services like AutoTrader.com, Cars.com, Edmunds, and others are not sufficiently merchandising their vehicles to receive full value. Worse, they are too slow in merchandising their vehicles at all.

As a dealer, you may wish your vendors would just move to a transactional selling model and lower their prices accordingly. Over time, I'm certain that more and more vendors will do that. For now, you are paying the price anyway, so you may as well be strategic about how you extract value. Some reps are as useless as a hangnail, but many know how to get maximum value from the products they sell. Start there. If you exhaust their ability to improve the value of their products, then you can grind them or dump them; however, it may not be the most profitable place to start.

Jim Bell
Great insight Dennis. I still do ask my reps how business is out in the market place to keep a pulse on it. I have a few reps that I have placed trust in and know that they will be telling me the truth. Then they put on their selling shoes and say that "this dealer just signed up for this product..." That just happened to me last week and I ended up signing on the dotted line.
Dennis Galbraith
Good point Jim. Even today, person-to-person is an important method of communication. Those reps who are the most helpful always seem to be the ones with the highest sales.
Bryan Armstrong
It's funny, but look at every complaint lodged against you by a Customer and then look at your frustrations with any of your products/vendors. I guarantee that if communication is an issue on the retail side it is on the provisioning side as well. As my good Mother who raised us 5 kids would say, "A closed mouth doesn't get fed". Ask and do so politely and almost every Vendor would LOVE to show you how to better utilize their product.Amazingly, when you do so you will find you DO have overlap and be able to trim the least efficient and save some money. But then that's just what I've found.
Dennis Galbraith
Great input Bryan. I'm going to remember your mother's advice, "a closed mouth doesn't get fed."

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