Dennis Galbraith

Company: Dealer e Process

Dennis Galbraith Blog
Total Posts: 50    

Dennis Galbraith

Dealer e Process

Jun 6, 2013

The Role of Trainers and Consultants

Various trainers and consultants are viewed as anything from industry experts to industry washouts. Some dealership owners owe their continued existence to one or more of these people, and some owners want nothing to do with them. As with any profession, they are a mixed bag. Their role is not to run the store, take ups, or close deals. The job is to rapidly improve the organization, or individuals within the organization, leading to greater profitability.

Fortunately for the industry, the best promotional strategy for many of these firms is to give away free samples of what they know. Most are confident they know enough and can facilitate execution well enough that it makes sense to give away many of their best ideas. On any given day, DrivingSales is packed with a number of examples. There is a spillover benefit to dealers from these trainers and consultants.

Dealership disappointment with trainers or consultants is often a result of insufficient buy in. These people can’t work miracles; even their best ideas will not work if they are not executed properly. The organization’s leaders still need to do the leading. Things also break down when the trainer can’t properly train or consultants don’t properly execute on their ideas. Some are good at articulating theory, but not so good at putting them into action in the areas the dealer needs help. The fundamental role of these professionals is not to generate fancy new ideas; it is to facilitate execution. If the store leadership didn’t already buy into the core ideas, the opportunity to execute would not exist. Ideas are for getting attention and for offering a better system within which to execute.

Sharing ideas is a great way to get attention for this type of business. It is certainly better than the practice of trying to fluff one’s own self up by attacking vendors or alternative solutions. We see some trainers position themselves as the grand defenders of dealers in a holy war against vendors, and some vendor trainers who can’t say anything nice about anything they don’t sell. But these are the rouge exceptions. Most trainers and consultants know their role is to execute and get results for individual dealers and dealer groups. Bloviating is for pundits who don’t really produce anything but entertainment. In this fast paced market, automotive retail needs trainers and consultants more than ever, at least the ones who can achieve results.

Although I don’t do this kind of work today, I spent much of the last 21 years consulting and/or training for automotive and other industries. I’m proud of that work, the achievements I helped organizations realize, and the profession of helping businesses as an outsider. Automotive retail employs many full-time trainers and consultants. Some are independent, some work for a training or consulting firm, and some work for a specific vendor. Within the Vendor Ratings section of DrivingSales, 17 firms are listed for Sales Training, 49 for Internet Training, and 35 for Dealership Consulting. Many of the people involved know each other, refer each other, and share ideas. They have a positive role to play in both thought leadership and execution, but they get paid for the latter.

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

4432

6 Comments

Glen Garvin

Autosoft

Jun 6, 2013  

Execution. Great execution of a decent plan is better than bad execution of a perfect plan

David Kain

KainAutomotive.com

Jun 6, 2013  

Dennis...I appreciate your perspective and think it hits home. All of our client's success is a result of their efforts and execution. We prefer to celebrate their skills and talents and reading about their success. They pay us to make them better. When I operated our family dealership we had some exceptional trainers come in and guide us forward so that's the model we've used in our own company. Thanks for shining light on all the great trainers in the industry who I consider close friends.

Brian Pasch

PCG Consulting Inc

Jun 6, 2013  

Dennis, the need for strong leadership inside the dealership is so key for change and progress to be realized. When the consultant and the Dealer/GM agree and support a clear common goal, the results can be amazing. If the store leaders are not fully bought in, the positive outcomes that were promised, will never be realized. One of the challenges for consultants between "onsite visits" is blocking out a regular time to communicate with the dealership, because everyone is very busy. However, once regular communication between the store's leadership and the consultant becomes a "habit", then progress can accelerate between in store visits.

Joe Webb

DealerKnows Consulting

Jun 6, 2013  

Dennis - Thank you for highlighting the many pluses and minuses of today's training and consulting. I've written about the problems with trainers and consultants endlessly, and that is... there is no prerequisite. There is no certification one can (read: should have to) achieve before proclaiming themselves as one. With the overflow of information on these resource sites, far too many fledgling dealership managers take to the streets as consultants simply regurgitating others' information. Admittedly, I never had the benefit of a trainer or consultant while I was in retail. I essentially had to learn through trial by fire. And for me, that was the best way to do it. It means I can actually "train" and not just "consult" because I've actually executed these strategies myself. And getting dealer buy-in to execute these tactics we're teaching is the uphill battle of every consultant. But it is a just cause if the consultant actually is worthy of being one. A friend on mine from high school (nowhere near our industry) recently wrote on her Facebook wall "Speak not of what you have heard, or what has been said....speak from your own perception...(whether right or wrong)." THAT is what I think good trainers do. (Granted, it's best they speak what's right... but it still applies.) A good consultant relies on their own experience being successful to make others successful. Speakers regurgitate information. But dealers don't need speakers. They need someone who can show, not just tell. That is what makes a good trainer/consultant. As you know, Dennis, I pride myself on not receiving money from vendors so I thank you for highlighting this moral dilemma facing our industry. Not accepting kickbacks allows us at DealerKnows to stay subjective and... well... and biased. I'm actually allowed to support those vendors that do the best job, but don't have to support just one simply because they give money. Refusing "referral" fees allows integrity to remain. Yet far too many are being coerced through dollars (much like politicians) to make decisions for dealerships that aren't always in the best interest of the dealership themselves. What made me successful in retail was that I CARED about what I did. It is also what translates well to DealerKnows Consulting. Our clients know that we CARE. If my clients ever could find another consultant that cares more about them, and their success, I'd urge them to hire that person. But they won't find one. CARING, both in retail or in consulting, allows people to focus their efforts on the positives, and not the negatives. Back-handed dealings and bad mouthing vendors doesn't get dealers anywhere, yet far too many self-proclaimed consultants do just that. It's time our industry finds a way to let the cream rise to the top and quiet some of the noise from those that don't have the dealers' best interests at heart. Or, worse, don't have the documented success to be training them in the first place.

Dennis Galbraith

Dealer e Process

Jun 6, 2013  

Great input gentlemen. Joe is right, there is no license or documentation that shows who has the qualifications or who will even care about the store once the agreement is made. I hope we can get more reviews for these categories on DrivingSales. It remains unfulfilled relative to many other categories. Brian, there is a saying among advertising agencies that the client ultimately gets the agency it deserves. From what you say it is similar between dealerships and consultants. Even the same consulting firm will perform better for a dealership with strong leadership and a good communication channel. It's just human nature for this to be true in any industry. Thank you so much! David, you always bring things back around to where they should be. Trainers need to execute on the training, but the end result comes from the activities of the people in the store. I see the importance of congratulating them and bringing the celebration back to them. I think many trainers do this, but you articulate it so well, and having done that it is far more likely to happen to the full measure that it should. Glen, your 16 words are so powerful, what a fantastic summary!

Stan Sher

Dealer eTraining

Jun 6, 2013  

Dennis, What a great post. As you know I believe that you are a class act and have added so much greatness to the automotive industry. It is also great to see colleagues like Joe Webb and David Kain speak about what makes an effective consultant and trainer. I believe that a great consultant and trainer should enjoy what they are doing first and foremost. When someone in that role walks into a dealership they should be excited about what they can and will do for the dealership. They should also be excited about the relationships they will be building. A great consultant and trainer should also be able to adapt to any situation that they walk into at a dealership because they need to be experienced enough to understand how to relate to that specific situation. It is not always about going in and making a complete culture change but sometimes making the pieces fit.

Dennis Galbraith

Dealer e Process

Jun 6, 2013

The Role of Trainers and Consultants

Various trainers and consultants are viewed as anything from industry experts to industry washouts. Some dealership owners owe their continued existence to one or more of these people, and some owners want nothing to do with them. As with any profession, they are a mixed bag. Their role is not to run the store, take ups, or close deals. The job is to rapidly improve the organization, or individuals within the organization, leading to greater profitability.

Fortunately for the industry, the best promotional strategy for many of these firms is to give away free samples of what they know. Most are confident they know enough and can facilitate execution well enough that it makes sense to give away many of their best ideas. On any given day, DrivingSales is packed with a number of examples. There is a spillover benefit to dealers from these trainers and consultants.

Dealership disappointment with trainers or consultants is often a result of insufficient buy in. These people can’t work miracles; even their best ideas will not work if they are not executed properly. The organization’s leaders still need to do the leading. Things also break down when the trainer can’t properly train or consultants don’t properly execute on their ideas. Some are good at articulating theory, but not so good at putting them into action in the areas the dealer needs help. The fundamental role of these professionals is not to generate fancy new ideas; it is to facilitate execution. If the store leadership didn’t already buy into the core ideas, the opportunity to execute would not exist. Ideas are for getting attention and for offering a better system within which to execute.

Sharing ideas is a great way to get attention for this type of business. It is certainly better than the practice of trying to fluff one’s own self up by attacking vendors or alternative solutions. We see some trainers position themselves as the grand defenders of dealers in a holy war against vendors, and some vendor trainers who can’t say anything nice about anything they don’t sell. But these are the rouge exceptions. Most trainers and consultants know their role is to execute and get results for individual dealers and dealer groups. Bloviating is for pundits who don’t really produce anything but entertainment. In this fast paced market, automotive retail needs trainers and consultants more than ever, at least the ones who can achieve results.

Although I don’t do this kind of work today, I spent much of the last 21 years consulting and/or training for automotive and other industries. I’m proud of that work, the achievements I helped organizations realize, and the profession of helping businesses as an outsider. Automotive retail employs many full-time trainers and consultants. Some are independent, some work for a training or consulting firm, and some work for a specific vendor. Within the Vendor Ratings section of DrivingSales, 17 firms are listed for Sales Training, 49 for Internet Training, and 35 for Dealership Consulting. Many of the people involved know each other, refer each other, and share ideas. They have a positive role to play in both thought leadership and execution, but they get paid for the latter.

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

4432

6 Comments

Glen Garvin

Autosoft

Jun 6, 2013  

Execution. Great execution of a decent plan is better than bad execution of a perfect plan

David Kain

KainAutomotive.com

Jun 6, 2013  

Dennis...I appreciate your perspective and think it hits home. All of our client's success is a result of their efforts and execution. We prefer to celebrate their skills and talents and reading about their success. They pay us to make them better. When I operated our family dealership we had some exceptional trainers come in and guide us forward so that's the model we've used in our own company. Thanks for shining light on all the great trainers in the industry who I consider close friends.

Brian Pasch

PCG Consulting Inc

Jun 6, 2013  

Dennis, the need for strong leadership inside the dealership is so key for change and progress to be realized. When the consultant and the Dealer/GM agree and support a clear common goal, the results can be amazing. If the store leaders are not fully bought in, the positive outcomes that were promised, will never be realized. One of the challenges for consultants between "onsite visits" is blocking out a regular time to communicate with the dealership, because everyone is very busy. However, once regular communication between the store's leadership and the consultant becomes a "habit", then progress can accelerate between in store visits.

Joe Webb

DealerKnows Consulting

Jun 6, 2013  

Dennis - Thank you for highlighting the many pluses and minuses of today's training and consulting. I've written about the problems with trainers and consultants endlessly, and that is... there is no prerequisite. There is no certification one can (read: should have to) achieve before proclaiming themselves as one. With the overflow of information on these resource sites, far too many fledgling dealership managers take to the streets as consultants simply regurgitating others' information. Admittedly, I never had the benefit of a trainer or consultant while I was in retail. I essentially had to learn through trial by fire. And for me, that was the best way to do it. It means I can actually "train" and not just "consult" because I've actually executed these strategies myself. And getting dealer buy-in to execute these tactics we're teaching is the uphill battle of every consultant. But it is a just cause if the consultant actually is worthy of being one. A friend on mine from high school (nowhere near our industry) recently wrote on her Facebook wall "Speak not of what you have heard, or what has been said....speak from your own perception...(whether right or wrong)." THAT is what I think good trainers do. (Granted, it's best they speak what's right... but it still applies.) A good consultant relies on their own experience being successful to make others successful. Speakers regurgitate information. But dealers don't need speakers. They need someone who can show, not just tell. That is what makes a good trainer/consultant. As you know, Dennis, I pride myself on not receiving money from vendors so I thank you for highlighting this moral dilemma facing our industry. Not accepting kickbacks allows us at DealerKnows to stay subjective and... well... and biased. I'm actually allowed to support those vendors that do the best job, but don't have to support just one simply because they give money. Refusing "referral" fees allows integrity to remain. Yet far too many are being coerced through dollars (much like politicians) to make decisions for dealerships that aren't always in the best interest of the dealership themselves. What made me successful in retail was that I CARED about what I did. It is also what translates well to DealerKnows Consulting. Our clients know that we CARE. If my clients ever could find another consultant that cares more about them, and their success, I'd urge them to hire that person. But they won't find one. CARING, both in retail or in consulting, allows people to focus their efforts on the positives, and not the negatives. Back-handed dealings and bad mouthing vendors doesn't get dealers anywhere, yet far too many self-proclaimed consultants do just that. It's time our industry finds a way to let the cream rise to the top and quiet some of the noise from those that don't have the dealers' best interests at heart. Or, worse, don't have the documented success to be training them in the first place.

Dennis Galbraith

Dealer e Process

Jun 6, 2013  

Great input gentlemen. Joe is right, there is no license or documentation that shows who has the qualifications or who will even care about the store once the agreement is made. I hope we can get more reviews for these categories on DrivingSales. It remains unfulfilled relative to many other categories. Brian, there is a saying among advertising agencies that the client ultimately gets the agency it deserves. From what you say it is similar between dealerships and consultants. Even the same consulting firm will perform better for a dealership with strong leadership and a good communication channel. It's just human nature for this to be true in any industry. Thank you so much! David, you always bring things back around to where they should be. Trainers need to execute on the training, but the end result comes from the activities of the people in the store. I see the importance of congratulating them and bringing the celebration back to them. I think many trainers do this, but you articulate it so well, and having done that it is far more likely to happen to the full measure that it should. Glen, your 16 words are so powerful, what a fantastic summary!

Stan Sher

Dealer eTraining

Jun 6, 2013  

Dennis, What a great post. As you know I believe that you are a class act and have added so much greatness to the automotive industry. It is also great to see colleagues like Joe Webb and David Kain speak about what makes an effective consultant and trainer. I believe that a great consultant and trainer should enjoy what they are doing first and foremost. When someone in that role walks into a dealership they should be excited about what they can and will do for the dealership. They should also be excited about the relationships they will be building. A great consultant and trainer should also be able to adapt to any situation that they walk into at a dealership because they need to be experienced enough to understand how to relate to that specific situation. It is not always about going in and making a complete culture change but sometimes making the pieces fit.

Dennis Galbraith

Dealer e Process

Mar 3, 2013

Where Your Hard ROI Don’t Fit

I keep hearing bold talk about hard ROI justifications for things like branding and even customer service improvements. The sayings generally go along the lines of if I can’t measure a hard, direct ROI from an investment I’m not going to make it. With this way of thinking, you can be the Dollar Store of car dealers but you can’t be the Nordstom or Tiffany of car dealers.

Over the years, clients of my customer satisfaction research included Ritz-Carlton, Four Seasons, Fairmont, Atlantis, and Disney. None of those companies got to the price points they command by getting a measurable return from every little thing they did. It just can’t be done. If you make up your mind your store or group is going to have a premium brand image (e.g. Carl Sewell), then you are going to do some things just because you can trace them back to improved satisfaction, even if you can’t quantify the exact amount of financial gain coming from that investment. Improved satisfaction can lead to higher loyalty and advocacy, but it takes time, often years. Additionally, it is difficult to know what the rate of loyalty and advocacy would have been today if the actions to improve it had not been taken years ago. There are just too many other variables causing noise.

Let me be clear, it is okay to not make any investments in anything you can’t directly and immediately measure results from. However, it doesn’t mean you’re a better business person for doing things that way. It means you are a different business person. I’ve made a very nice living measuring things so business people could make better decisions with the information, because it works. However, that doesn’t mean anything not resulting in a quickly and directly traceable profit is not worth doing.

For those looking to provide extraordinary service, let me caution that you must be disciplined about it. Many of the over-the-top stories about customer service in fact were over the top. The classic story of Nordstom refunding a customer for tires when they in fact never sold tires is an example. (note: Norstrom doesn’t do this today but was reported to have done it once). Fresh flowers in the restrooms may be nice, but it may also be over the top. Let’s start with restrooms that are kept clean. Don’t use the some-things-cannot-be-measured card as an excuse to do whatever it is you feel like doing. The core point of the hard-ROI people is that we need to become less reliant upon gut feel in our decision making. They are absolutely right about that, even if they (we) can sometimes be just a bit impractical about measuring every little thing. Remember my grandfather's old saying, you don't need a whole lot of research to know a donkey has two ears.

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

14360

12 Comments

Larry Schlagheck

DrivingSales

Mar 3, 2013  

Great comments Dennis. Hard ROI isn't always available. I had a conversation with a dealer at NADA who had put offers on a few stores that were for sale in my region. This particular dealer did not "win" any of these deals and the reason was that the CSI scores at his existing dealerships was too low and the manufacturers said no way. Now that's some hard ROI concerning customer service that wasn't immediately available two weeks, two months, or even two years ago.

Bryan Armstrong

Southtowne Volkswagen

Mar 3, 2013  

So true. You can't measure the ROI of a "Thank you", but I guarantee it's there.

Tommy Bay

DrivingSales

Mar 3, 2013  

Dennis, I'm always amazed at how you make me chuckle as you teach me a great truth. I hope that you publish a book full of family sayings some day soon. I'd like to start working those into my every day dialogue.

Jim Radogna

Dealer Compliance Consultants, Inc.

Mar 3, 2013  

Brilliant Dennis, absolutely brilliant! Thank you.

Randall Welsh

CIMA Systems

Mar 3, 2013  

Great blog Dennis. Having been in the Sewell stores myself, it is clear they are there for the customers experience. Every day we (People) have a recipe, that we follow. A Dealership is no different. They have a recipe (Plans, processes and procedures) they follow on a daily basis. Where a recipe goes bad, is when it does not work and the cook won't make the changes needed. ROI is one way to measure an ingredient in the recipe. While some ROI measurements are fluff, they still can give you an ROI measurement that has value. Dealers need to remember, plate frames and inserts have a place in the recipe, but try to measure that ingredient. Last but not least, you can't expense your way to a profit. Deleting ingredients, only makes the flavor bland and not palatable. rwelsh@cimasystems.NET

Chuck Barker

Impact Marketing & Consulting Group, LLC

Mar 3, 2013  

Well done!!!

Guy Tonti

Unified Brand

Mar 3, 2013  

Great message. Any way to get this in front of every dealerships' controllers? :-)

Dennis Galbraith

Dealer e Process

Mar 3, 2013  

Thanks for the kind words! Guy, I know your question is a bit in jest, but it is the big issue isn't it. Knowing how to best make decisions is useless until it persuades the person(s) making them. I find that the audience for DrivingSales is mixed. It some stores, the whole store is bought in and keeps up to date with it. At other stores it is the decision maker, and at other stores it is exclusively the influences who are active online. Progress in this area will come from in-store influencers as well as vendor influencers passing along the best practices to more and more decision makers. Hopefully, those decision makers will eventually figure out that they too should be tuning in. For those of us who have the data and are self-proclaimed thought leaders, the challenge is to deliver information in a way that not only informs those reading it but empowers them to share the message with confidence and credibility. I constantly question whether I am just doing a good enough job to win converts to best practices or whether I'm creating apostles for known best practices. The former is good, but the latter is great!

Chuck Dapoz

Align Research

Mar 3, 2013  

Good one, Dennis. Successful dealers must be disciplined with expenses and investments. That's essential. But smart business people often make decisions based on gut feel and incomplete info. They experiment and take chances. What's right for one dealer or business is not necessarily right for another. In addition, ROI can be tough to measure, especially when it takes years for results to come in. For example, raising service satisfaction can lead to improvements in the sales department. Sewell, Nordstom and many other businesses know this.

Tom Gorham

Apple Chevrolet

Mar 3, 2013  

Great article Dennis. No one believes ROI is not important, but it's not the ONLY thing that is important. We give a free car wash and vacuum to every car we service. Where's the ROI in that? And yet when you read reviews and satisfaction surveys, it is one of the things our customers say repeatedly (along with great customer service) that they love about bringing their vehicle to us. Trying to measure the ROI to that may not give much satisfaction, but the rewards are staring you right in the face (like two donkey ears).

Stan Sher

Dealer eTraining

Apr 4, 2013  

Great post. After working for some of the best and smartest owners and GMs I have learned how to breakdown costs (investments) versus net profits. I did just that for a dealer yesterday as I created a plan based on a $17,500 monthly budget, a $120k eCommerce/BDC Director, 4 BDC reps, and 4 yearly college interns. After factoring the costs I found that the dealership will still keep $1.3 million in profits annually.

Doug Davis

Sharp Hooks Automotive Internet Solutions

Apr 4, 2013  

Reading this reminds me of a cartoon that I saw. A clerk is behind the counter at a sporting goods store, holding up a fishing lure. The caption: "it won't catch fish but fishermen". Why are dealers wanting to see ROI? They have seen too many snake oil salesmen. What do Nordstom, Tiffany, Ritz-Carlton, Four Seasons, Fairmont, Atlantis, and Disney have in common? Great public perception. What about car dealerships and car people? Do you actually think that having a great facebook page will make a difference? If a dealership needs to make cuts in advertising, they need to look at ROI.

Dennis Galbraith

Dealer e Process

Mar 3, 2013

Where Your Hard ROI Don’t Fit

I keep hearing bold talk about hard ROI justifications for things like branding and even customer service improvements. The sayings generally go along the lines of if I can’t measure a hard, direct ROI from an investment I’m not going to make it. With this way of thinking, you can be the Dollar Store of car dealers but you can’t be the Nordstom or Tiffany of car dealers.

Over the years, clients of my customer satisfaction research included Ritz-Carlton, Four Seasons, Fairmont, Atlantis, and Disney. None of those companies got to the price points they command by getting a measurable return from every little thing they did. It just can’t be done. If you make up your mind your store or group is going to have a premium brand image (e.g. Carl Sewell), then you are going to do some things just because you can trace them back to improved satisfaction, even if you can’t quantify the exact amount of financial gain coming from that investment. Improved satisfaction can lead to higher loyalty and advocacy, but it takes time, often years. Additionally, it is difficult to know what the rate of loyalty and advocacy would have been today if the actions to improve it had not been taken years ago. There are just too many other variables causing noise.

Let me be clear, it is okay to not make any investments in anything you can’t directly and immediately measure results from. However, it doesn’t mean you’re a better business person for doing things that way. It means you are a different business person. I’ve made a very nice living measuring things so business people could make better decisions with the information, because it works. However, that doesn’t mean anything not resulting in a quickly and directly traceable profit is not worth doing.

For those looking to provide extraordinary service, let me caution that you must be disciplined about it. Many of the over-the-top stories about customer service in fact were over the top. The classic story of Nordstom refunding a customer for tires when they in fact never sold tires is an example. (note: Norstrom doesn’t do this today but was reported to have done it once). Fresh flowers in the restrooms may be nice, but it may also be over the top. Let’s start with restrooms that are kept clean. Don’t use the some-things-cannot-be-measured card as an excuse to do whatever it is you feel like doing. The core point of the hard-ROI people is that we need to become less reliant upon gut feel in our decision making. They are absolutely right about that, even if they (we) can sometimes be just a bit impractical about measuring every little thing. Remember my grandfather's old saying, you don't need a whole lot of research to know a donkey has two ears.

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

14360

12 Comments

Larry Schlagheck

DrivingSales

Mar 3, 2013  

Great comments Dennis. Hard ROI isn't always available. I had a conversation with a dealer at NADA who had put offers on a few stores that were for sale in my region. This particular dealer did not "win" any of these deals and the reason was that the CSI scores at his existing dealerships was too low and the manufacturers said no way. Now that's some hard ROI concerning customer service that wasn't immediately available two weeks, two months, or even two years ago.

Bryan Armstrong

Southtowne Volkswagen

Mar 3, 2013  

So true. You can't measure the ROI of a "Thank you", but I guarantee it's there.

Tommy Bay

DrivingSales

Mar 3, 2013  

Dennis, I'm always amazed at how you make me chuckle as you teach me a great truth. I hope that you publish a book full of family sayings some day soon. I'd like to start working those into my every day dialogue.

Jim Radogna

Dealer Compliance Consultants, Inc.

Mar 3, 2013  

Brilliant Dennis, absolutely brilliant! Thank you.

Randall Welsh

CIMA Systems

Mar 3, 2013  

Great blog Dennis. Having been in the Sewell stores myself, it is clear they are there for the customers experience. Every day we (People) have a recipe, that we follow. A Dealership is no different. They have a recipe (Plans, processes and procedures) they follow on a daily basis. Where a recipe goes bad, is when it does not work and the cook won't make the changes needed. ROI is one way to measure an ingredient in the recipe. While some ROI measurements are fluff, they still can give you an ROI measurement that has value. Dealers need to remember, plate frames and inserts have a place in the recipe, but try to measure that ingredient. Last but not least, you can't expense your way to a profit. Deleting ingredients, only makes the flavor bland and not palatable. rwelsh@cimasystems.NET

Chuck Barker

Impact Marketing & Consulting Group, LLC

Mar 3, 2013  

Well done!!!

Guy Tonti

Unified Brand

Mar 3, 2013  

Great message. Any way to get this in front of every dealerships' controllers? :-)

Dennis Galbraith

Dealer e Process

Mar 3, 2013  

Thanks for the kind words! Guy, I know your question is a bit in jest, but it is the big issue isn't it. Knowing how to best make decisions is useless until it persuades the person(s) making them. I find that the audience for DrivingSales is mixed. It some stores, the whole store is bought in and keeps up to date with it. At other stores it is the decision maker, and at other stores it is exclusively the influences who are active online. Progress in this area will come from in-store influencers as well as vendor influencers passing along the best practices to more and more decision makers. Hopefully, those decision makers will eventually figure out that they too should be tuning in. For those of us who have the data and are self-proclaimed thought leaders, the challenge is to deliver information in a way that not only informs those reading it but empowers them to share the message with confidence and credibility. I constantly question whether I am just doing a good enough job to win converts to best practices or whether I'm creating apostles for known best practices. The former is good, but the latter is great!

Chuck Dapoz

Align Research

Mar 3, 2013  

Good one, Dennis. Successful dealers must be disciplined with expenses and investments. That's essential. But smart business people often make decisions based on gut feel and incomplete info. They experiment and take chances. What's right for one dealer or business is not necessarily right for another. In addition, ROI can be tough to measure, especially when it takes years for results to come in. For example, raising service satisfaction can lead to improvements in the sales department. Sewell, Nordstom and many other businesses know this.

Tom Gorham

Apple Chevrolet

Mar 3, 2013  

Great article Dennis. No one believes ROI is not important, but it's not the ONLY thing that is important. We give a free car wash and vacuum to every car we service. Where's the ROI in that? And yet when you read reviews and satisfaction surveys, it is one of the things our customers say repeatedly (along with great customer service) that they love about bringing their vehicle to us. Trying to measure the ROI to that may not give much satisfaction, but the rewards are staring you right in the face (like two donkey ears).

Stan Sher

Dealer eTraining

Apr 4, 2013  

Great post. After working for some of the best and smartest owners and GMs I have learned how to breakdown costs (investments) versus net profits. I did just that for a dealer yesterday as I created a plan based on a $17,500 monthly budget, a $120k eCommerce/BDC Director, 4 BDC reps, and 4 yearly college interns. After factoring the costs I found that the dealership will still keep $1.3 million in profits annually.

Doug Davis

Sharp Hooks Automotive Internet Solutions

Apr 4, 2013  

Reading this reminds me of a cartoon that I saw. A clerk is behind the counter at a sporting goods store, holding up a fishing lure. The caption: "it won't catch fish but fishermen". Why are dealers wanting to see ROI? They have seen too many snake oil salesmen. What do Nordstom, Tiffany, Ritz-Carlton, Four Seasons, Fairmont, Atlantis, and Disney have in common? Great public perception. What about car dealerships and car people? Do you actually think that having a great facebook page will make a difference? If a dealership needs to make cuts in advertising, they need to look at ROI.

Dennis Galbraith

Dealer e Process

Nov 11, 2011

Lithia's Multimillion-Dollar Lesson and What Dealers Can Learn From It

Earlier this month, Lithia Motors Inc. agreed to pay out $2.5 million to settle a class action claim that it violated the Telephone Consumer Protection Act (TCPA) when sending a series of just two broadcast text messages to its customers, messages that Lithia asserts customers opted in to receive. After reviewing court documents and SEC filings, DrivingSales has discovered that Lithia could have been liable for more than sixty times as much as they settled for.  Lithia, or its agent, made one simple mistake seven months ago that cost the dealer group the equivalent of over 1,000 units worth of gross profit and a mountain of good will among its customers. The facts that follow tell a story every dealer should hear and take heed to.

In April of 2011, Lithia sent text messages to approximately 58,000 of its customers with the help of  DME Automotive, a joint venture between JM Family Enterprises Inc. and DME Holdings LLC. The text message gave the customer the ability to opt out of future text messages; unfortunately, a technological glitch caused the opt-out to malfunction. Approximately 6,000 customers who received the first text message tried to opt out, but were included in the second text message that was sent to approximately 48,000 customers.

The settlement gives $175 to each recipient of the first text, another $175 if the second text was received, and an additional $150 if the recipient of the second text had attempted to opt out of the first text. This settlement appears to be a bargain for Lithia relative to the $500 per violation specified by the TCPA and the fact that Washington state law allows for triple damages, $1,500 per violation. Even at the settlement rate, total payout to all impacted consumers would amount to $20.5 million according to court records. The $1.74 million set aside for the plaintiffs fund is based on the assumption that only 8.5% of those consumers impacted will actually make a claim.

 Breakdown of $2.5 million settlement:

·         Fund of $1.74 million paid out to plaintiffs

·         $600,000 in fees and expenses to plaintiff's attorneys

·         $10,000 incentive award to McClintic

·         $150,000 to administer the claims

The lesson for dealers is that the penalties for violating the TCPA are so severe that defendants of these class action suites are nearly forced to settle for a lesser amount to avoid the extraordinary liability of a loss in court. Indeed, the $600,000 paid to plaintiff's attorneys was the lowest amount the court had seen.

It is also important to note that no damages were claimed from the text messages. This could have further increased the settlement amount. Additionally, Lithia maintained throughout the case that each customer had opted in to receive text messages through at least one of several processes. Lithia never acknowledged knowingly violating the regulations, and there was no evidence brought forth that they had.

One would be hard pressed to find any flaws in Lithia's response to this claim. They appear to have handled it expertly in every way, yet they still face a payout that is many times greater than the gross profit potential of the campaign itself. We reached out to both Lithia and DME for additional tips to pass onto the dealer community. Their mutual lack of response is understandable.

Lithia claimed in the court documents that this was their only text campaign. Before long, 58,000 of Lithia's customers will receive a notice regarding the incident, ultimately saying that Lithia did something bad to its customers. In many respects, the settlement notification may be more damaging to Lithia's marketing than the fact that the text messages did not stop when they were supposed to.  

A solid mobile strategy is essential for dealers, and some texting activities are certainly on solid ground. There is no reason any dealer should shy away from texting a service customer about the status of their vehicle if that customer has given them permission to do so.

Broadcast texting, on the other hand, should be left to the pros. Vendor selection should not be made solely on the basis of price. Ask about the vendor's experience and qualifications, and insist on a small, controlled test before embarking on a broadcast campaign. Make your broadcasts to small groups, and make them contextually relevant to the group.

Most of all, recognize that outbound communications to customers phones is an entirely different set of regulations than you face with emails, websites, print, television, radio, or outdoor. Dealers have a reputation for pushing the envelope on advertising, but people's personal phones invite no such push. Behave as though one of your opt-in customers is an attorney just waiting for you to make a mistake. With this much money at stake, that scenario is not far-fetched. Remember, Lithia sent just two text messages. There was only one chance for 6,000 people to recognize that their opt-out had not worked and to cash in on it. The result was a competition over which plaintiff would control the multimillion-dollar class action claims filed in two separate U.S. courts.

The industry has never faced stakes anywhere near this high. Court documents make it clear that DME participated in the financial settlement – they may very well have covered the majority of the claim.  A quick visit to DMEautomotive.com shows that the firm continues to offer text-messaging services.

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

9062

No Comments

Dennis Galbraith

Dealer e Process

Nov 11, 2011

Lithia's Multimillion-Dollar Lesson and What Dealers Can Learn From It

Earlier this month, Lithia Motors Inc. agreed to pay out $2.5 million to settle a class action claim that it violated the Telephone Consumer Protection Act (TCPA) when sending a series of just two broadcast text messages to its customers, messages that Lithia asserts customers opted in to receive. After reviewing court documents and SEC filings, DrivingSales has discovered that Lithia could have been liable for more than sixty times as much as they settled for.  Lithia, or its agent, made one simple mistake seven months ago that cost the dealer group the equivalent of over 1,000 units worth of gross profit and a mountain of good will among its customers. The facts that follow tell a story every dealer should hear and take heed to.

In April of 2011, Lithia sent text messages to approximately 58,000 of its customers with the help of  DME Automotive, a joint venture between JM Family Enterprises Inc. and DME Holdings LLC. The text message gave the customer the ability to opt out of future text messages; unfortunately, a technological glitch caused the opt-out to malfunction. Approximately 6,000 customers who received the first text message tried to opt out, but were included in the second text message that was sent to approximately 48,000 customers.

The settlement gives $175 to each recipient of the first text, another $175 if the second text was received, and an additional $150 if the recipient of the second text had attempted to opt out of the first text. This settlement appears to be a bargain for Lithia relative to the $500 per violation specified by the TCPA and the fact that Washington state law allows for triple damages, $1,500 per violation. Even at the settlement rate, total payout to all impacted consumers would amount to $20.5 million according to court records. The $1.74 million set aside for the plaintiffs fund is based on the assumption that only 8.5% of those consumers impacted will actually make a claim.

 Breakdown of $2.5 million settlement:

·         Fund of $1.74 million paid out to plaintiffs

·         $600,000 in fees and expenses to plaintiff's attorneys

·         $10,000 incentive award to McClintic

·         $150,000 to administer the claims

The lesson for dealers is that the penalties for violating the TCPA are so severe that defendants of these class action suites are nearly forced to settle for a lesser amount to avoid the extraordinary liability of a loss in court. Indeed, the $600,000 paid to plaintiff's attorneys was the lowest amount the court had seen.

It is also important to note that no damages were claimed from the text messages. This could have further increased the settlement amount. Additionally, Lithia maintained throughout the case that each customer had opted in to receive text messages through at least one of several processes. Lithia never acknowledged knowingly violating the regulations, and there was no evidence brought forth that they had.

One would be hard pressed to find any flaws in Lithia's response to this claim. They appear to have handled it expertly in every way, yet they still face a payout that is many times greater than the gross profit potential of the campaign itself. We reached out to both Lithia and DME for additional tips to pass onto the dealer community. Their mutual lack of response is understandable.

Lithia claimed in the court documents that this was their only text campaign. Before long, 58,000 of Lithia's customers will receive a notice regarding the incident, ultimately saying that Lithia did something bad to its customers. In many respects, the settlement notification may be more damaging to Lithia's marketing than the fact that the text messages did not stop when they were supposed to.  

A solid mobile strategy is essential for dealers, and some texting activities are certainly on solid ground. There is no reason any dealer should shy away from texting a service customer about the status of their vehicle if that customer has given them permission to do so.

Broadcast texting, on the other hand, should be left to the pros. Vendor selection should not be made solely on the basis of price. Ask about the vendor's experience and qualifications, and insist on a small, controlled test before embarking on a broadcast campaign. Make your broadcasts to small groups, and make them contextually relevant to the group.

Most of all, recognize that outbound communications to customers phones is an entirely different set of regulations than you face with emails, websites, print, television, radio, or outdoor. Dealers have a reputation for pushing the envelope on advertising, but people's personal phones invite no such push. Behave as though one of your opt-in customers is an attorney just waiting for you to make a mistake. With this much money at stake, that scenario is not far-fetched. Remember, Lithia sent just two text messages. There was only one chance for 6,000 people to recognize that their opt-out had not worked and to cash in on it. The result was a competition over which plaintiff would control the multimillion-dollar class action claims filed in two separate U.S. courts.

The industry has never faced stakes anywhere near this high. Court documents make it clear that DME participated in the financial settlement – they may very well have covered the majority of the claim.  A quick visit to DMEautomotive.com shows that the firm continues to offer text-messaging services.

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

9062

No Comments

Dennis Galbraith

Dealer e Process

Nov 11, 2011

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.

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

2332

No Comments

Dennis Galbraith

Dealer e Process

Nov 11, 2011

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.

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

2332

No Comments

Dennis Galbraith

Dealer e Process

Oct 10, 2011

Mr. GM, Tear Down This Wall

The wall between fixed operations and sales needs to come down.

  • Franchised dealers must regain some of the accessory sales lost to online and offline competitors. That is not going to happen unless Parts, Service, and Sales all work to make it happen.
  • Regardless of what is done with social media, it is impossible to maximize customer relationships for loyalty and advocacy if the store is not uniformly committed to growing those customer relationships.  
  • Service revenue is lost every month when customers call in for service on the same tracking number they used when initially shopping for the car itself. Sales people don't get paid to answer service calls, and the way some of them handle those calls surely reflects it.
  • Most service managers don't get paid to teach people how to operate their vehicles. And it shows when customers call up complaining about their car not operating when the customer simply doesn't know how it is supposed to operate. Vehicle delivery is insufficient at thousands of stores. Of course, most sales people don't care about that. Their only worry is about the next sale, not the last one.
  • Occasionally, nasty comments are tossed back and forth over the variable-ops/fixed-ops wall, but most of the time these departments uttered their disdain for each other to the consumer.

When Ronald Reagan gave his famous speech at the Berlin Wall, telling Mikhail Gorbachev to "tear down this wall," it was not a new policy position. The five previous presidents had all wanted the same thing. In fact the wall did not come down for another 29 months, nearly one year after Reagan left office. Persuasion takes multiple efforts, even when it is clearly the right thing to do.

Many stores are changing their commission plans on accessories, splitting the gross profit equally between parts, service, and sales. Although there are plenty of success stories coming from the use of this approach, some stores baulk at the idea of taking such a big step right away. At a minimum, GMs can start by adding non-human touchpoints that introduce service to sales customers and sales to service customers. Here are a few product examples:

  1. AdVantage Tec, an Innovation Cup finalist at DSES, uses 15% of the TV screen in the waiting area for promotional messages, often promoting sales to waiting service companies.
  2. Dealer e-Process won the 2011 AWA Fixed Ops Technology Award for their service solutions on dealership websites. Many websites are virtually controlled by Sales and neglect service opportunities.

I'd love to hear what your store or product is doing to help tear down this wall. 

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

4475

No Comments

Dennis Galbraith

Dealer e Process

Oct 10, 2011

Mr. GM, Tear Down This Wall

The wall between fixed operations and sales needs to come down.

  • Franchised dealers must regain some of the accessory sales lost to online and offline competitors. That is not going to happen unless Parts, Service, and Sales all work to make it happen.
  • Regardless of what is done with social media, it is impossible to maximize customer relationships for loyalty and advocacy if the store is not uniformly committed to growing those customer relationships.  
  • Service revenue is lost every month when customers call in for service on the same tracking number they used when initially shopping for the car itself. Sales people don't get paid to answer service calls, and the way some of them handle those calls surely reflects it.
  • Most service managers don't get paid to teach people how to operate their vehicles. And it shows when customers call up complaining about their car not operating when the customer simply doesn't know how it is supposed to operate. Vehicle delivery is insufficient at thousands of stores. Of course, most sales people don't care about that. Their only worry is about the next sale, not the last one.
  • Occasionally, nasty comments are tossed back and forth over the variable-ops/fixed-ops wall, but most of the time these departments uttered their disdain for each other to the consumer.

When Ronald Reagan gave his famous speech at the Berlin Wall, telling Mikhail Gorbachev to "tear down this wall," it was not a new policy position. The five previous presidents had all wanted the same thing. In fact the wall did not come down for another 29 months, nearly one year after Reagan left office. Persuasion takes multiple efforts, even when it is clearly the right thing to do.

Many stores are changing their commission plans on accessories, splitting the gross profit equally between parts, service, and sales. Although there are plenty of success stories coming from the use of this approach, some stores baulk at the idea of taking such a big step right away. At a minimum, GMs can start by adding non-human touchpoints that introduce service to sales customers and sales to service customers. Here are a few product examples:

  1. AdVantage Tec, an Innovation Cup finalist at DSES, uses 15% of the TV screen in the waiting area for promotional messages, often promoting sales to waiting service companies.
  2. Dealer e-Process won the 2011 AWA Fixed Ops Technology Award for their service solutions on dealership websites. Many websites are virtually controlled by Sales and neglect service opportunities.

I'd love to hear what your store or product is doing to help tear down this wall. 

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

4475

No Comments

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