Dennis Galbraith

Company: Dealer e Process

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Dennis Galbraith

Dealer e Process

Dec 12, 2013

Honda Dealer Options on $3,000 per Vehicle Incentive

What is the best way for Honda dealers to capitalize on the new December incentive money offered by Honda?

  1. Cut price and make additional profit through volume
  2. Continue on with business as usual
  3. Increase television and radio advertising to promote a sale
  4. Focus communications on your customer base, particularly where the money can be used to help shoppers get financed
  5. Increase digital marketing

 

Some shoppers are more price sensitive than others, and this translates into some vehicle categories being more price sensitive than others. If the inventory you need to move most is price sensitive, then this may be an option. However, cutting price does no good unless you tell people you did it. Now you have three costs to the campaign: 1) a lower gross on the new business received, 2) a lower gross on the business you would have received anyway 3) the cost of additional advertising to support the promotion. Keep in mind that there is a cap on the program of 20% over last December sales. If you go over 120% of last year’s unit sales, you may be giving a discount you don’t have incentive dollars to support. It is all too easy to sell at or above the targeted number of units without moving the profit needle, or even losing money.

A store that expects to be at or near this level without any change in pricing and promotions might wish to simply pocket the additional incentive. This is the position we strive to keep our Honda dealers in all year. In this position, one needs to keep a close eye on unit sales and competitor behavior. If other Honda dealers are trying to make their number by taking sales from you, then you need to be positioned to strike fast, even in the last week of the month.

This is the hardest time of the year to acquire sufficient TV and radio to achieve frequency, and it is the toughest time of the year to make a message stand out. Special offers seem to be the best attention grabbers, and that puts you right back into the problem of spending more on advertising and decreasing front-end gross per unit at the same time.

A store that really works its CRM will be able to identify deals that could have been made earlier if this money were available to assist customers who are upside down on their trade. However, one needs to be realistic about the ability to get those customers financed now. Some will already be thousands of dollars deeper in credit-card debt. This can be a good strategy for bringing a few additional deals into the incentive, but it probably won’t get a store into the money that was otherwise going to have a December 90% as big as last year. It’s a competitive month.

A digital campaign can instantly target a wide range of shoppers with incentives at a variety of levels. It can be dialed up or dialed down. This is ideal for targeting a small window, like 100% to 120% of last December’s sales. However, the devil is in the details. Getting more aggressive on digital marketing by only raising bid prices can be deadly, especially when others selling the brand are in the same boat. Those buying digital marketing via a custom approach, as opposed to the common automated approaches, have a huge leg up in their ability to add additional opportunities, rather than simply bid more for the same old thing.

The dealers who will gain the most from this incentive are the ones who have grown all year and would have made 120% of last December’s sales even without the additional funds. These programs don’t show up for every brand every year, but the dealers with good, steady, growth tend to be in the best position regardless of what the manufacturer does. I hope every dealer has a great December and enters 2014 ready to position themselves even better. Call if you need help, (518) 703-6109.

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

9204

1 Comment

Stan Sher

Dealer eTraining

Dec 12, 2013  

In theory it should be D and E. However, in reality it will be A. That is just how it is.

Dennis Galbraith

Dealer e Process

Aug 8, 2013

Demonstrated Value

Vendors have a wide range of methods for demonstrating the value of their products, some of which vary from one rep to another. Some vendors bundle products up in a way that makes it virtually impossible to measure the value of their offerings in any comparable way. Many dealers are responding with their own methods for determining the value delivered by vendors. It would be useful to hear from vendors and dealers alike on what they see as the best methods for demonstrating the value of various products. 

Many methods have their flaws. Cost of Sale does not take into account that some sales are worth much more than others. Cost per lead is difficult for products driving walk-in traffic. Last-click attribution models are certainly not ideal. In an integrated campaign, some products benefit from the presence of others, making the isolation of benefits difficult. The focus for some dealers is not to find a perfect method, but to find a basket of objective measures that collectively help the dealer make a decision.

Clearly, it's hard to compare products that drive traffic to a dealer's site with leads or listings products, but in the end they all compete for the same share of wallet. So what are the best ways for dealers to decide whether or not to keep buying a product? 

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

3491

5 Comments

Kelly Holloway

ActivEngage

Aug 8, 2013  

This is great Dennis. One area that dealers seem to forget about is if the product/service impacts all of their departments. Live chat is usually noted a sales tool for a dealer's website. However, live chat can bring significant revenue to all departments at the dealership, not just sales. We see that 30% of chats taken are related to fixed ops. 30%!! Unfortunately, their are many dealers out their only looking at the sales leads/ROI generated from chat and forget about the huge potential it has for your service/parts departments. Therefore, they are ignoring the other 30% of chats that could bring big business to your fixed ops teams. Don't put your vendors into department silos. Dealers need to review how the product/service is going to help ALL departments. Take off your departmental glasses and look at the dealership from a holistic view point. Are you using live chat for your fixed ops department, or is your sales staff the only reps using the service? We have seen too many times where a dealer representative says "I am in the sales department. You will have to call the service department to set an appointment." Your customers don't care about departments. They want your help. Be ready for them, no matter what channel they use.

Dennis Galbraith

Dealer e Process

Aug 8, 2013  

Great post Kelly! I have heard horrible comments about calls and chats regarding service from sales managers. I think most sales managers understand the importance of service, but GMs need to be sure marketing decisions are made both objectivly and with a holistic view.

Craig Nebeker

Deutsch Inc.

Aug 8, 2013  

Working on the agency side, these are common questions and I have seen many methods used to try to answer them. The answer frequently comes from a vendor who inevitably chooses the method that will point to their particular product or service. Attempts to attribute the effectiveness of the many tactics in play are usually hampered by either a lack of expertise in measurement and statistics, a vested interest in the outcome or a combination of the two. I am constantly stunned by the sloppy or disingenuous analysis I am presented on a regular basis. Supposed experts from reputable research companies regularly violate basic rules and assumptions they should have learned in an intro to statistics class. I've been finding remarkable success utilizing ensemble classification methods across a broad array of challenges where you have a large number of predictors and a small number of observations. However, these methods require a solid foundation in measurement theory, statistics and a researcher that isn't drinking the Kool-Aid. The solutions to these problems are out there, but you have to be willing to make the initial investment in the right people to solve them.

Stan Sher

Dealer eTraining

Aug 8, 2013  

I would look at a few factors. The first factor would be to consider how well the products integrate with one another. Integration is very important because it saves management a lot of time doing manual work. I also believe that it is important to think about how well the people working at the dealership will use the tools. Will management hold their people accountable to use these products? I also look to see if this particular product has features that will let me try "outside the box" practices to increase the possibility of running my business in a better way. I am always looking for a game changer. After that, I will consider price.

Dennis Galbraith

Dealer e Process

Aug 8, 2013  

Great point Craig! I've heard presentations from agencies who did the same spin-doctor thing some vendors do to focus the dealer in the area of their own specialty. That is a horrible shame. There is an important roll for agencies as part of the solution. Few agencies serving dealers have anyone close to your level of talent in this area, analytically sorting out the truth, but this should be a rapidly growing service agencies offer.

Dennis Galbraith

Dealer e Process

Aug 8, 2013

You Might Not Be Customer Centric

There are a number of practices still common across automotive retailers which are not customer centric. That doesn’t necessarily mean dealers using these tactics need to change, but it does mean they shouldn’t be kidding themselves about being customer centric in their approach. It means they shouldn’t mislead themselves about offering superior customer service as their why-buy-from-me message.

If your prices are negotiable, yet your customer cannot speak directly with the only person who has pricing authority, then you might not be customer centric.

If your team is still answering questions on the phone with “come on in and we’ll have that answer for you,” then you might not be customer centric.

If your sales team does not give too hoots about the customer’s needs for accessories or service, then you might not be customer centric.

If you are not fully utilizing your CRM system to maximize customer satisfaction as well as leads, then you might not be customer centric.

Not every business needs to be customer centric, but those who are not need to stop kidding themselves about who they are. Those who are trying to be customer centric must realize the reason to focus on the customer is to maximize profits. This does not mean just short-term profits but total profitability over the life of the customer relationship and spilling over into that customer’s network of friends and family. Managing toward that may require lots of changes, maybe even changes in compensation, but a change in attitude is the most important of all.

In my grandfather’s day, no one needed to tell this to a small town dealer. It was obvious. You lived or died by your reputation. It seemed everyone talked to everyone, and no one got away with faking it for very long. Social media is bringing our industry back around to the days of the small-town dealer and away from the fifty-year era of most customer relationships starting at the curb and ending as the customer drives off it.

Every dealer will choose their own focus, and many variations can be profitable when executed properly. The most important thing is recognizing what the focus of your store really is.

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

17930

31 Comments

Mat Koenig

KonigCo

Aug 8, 2013  

Dennis I think this is a great article. It's common sense but as Joe Verde said years ago, "Common sense isn't that common." Online reviews and video reviews are everywhere and folks who aren't making this a priority are foolish. Just like in your grandfather's day, we still live and die by our reputation - only today the reputation spreads a lot further :) I think many dealers in our industry get confused with the phrase 'customer centric' because some idiot consultant years ago told them that being customer centric means selling vehicles for low profit because the only way to make a customer happy is to give your cars away. WRONG! If the experience is great and the value is good, the price doesn't have to be a giveaway. I remember selling a Nissan Frontier Pickup for $600 more than the Nissan Dealer that my consumer spoke to that was 70 miles away. She had the info from the other dealer who was barely an hour away but they were willing to pay more because they wanted to do business with us at Cole Nissan. She enjoyed the experience and I made sure to introduce her to her service writer who would be taking care of her needs going forward. I explained how our customers, who purchased from us would ALWAYS get priority in service over those who bought elsewhere - it was a priority service for customers who did business with us. The benefits of buying from us were worth the extra $600 to her. In my opinion, being customer centric means working to serve the consumer's wants, needs and desires better than anyone else so that if they leave and shop elsewhere, they'll appreciate the experience enough to come back and do business. I said to my customers before, as I still say today: "I'm not the cheapest person to work with but I can tell you that I'll work harder for you and do it better than anyone else." Keep up the great content DG.

Dennis Galbraith

Dealer e Process

Aug 8, 2013  

Thanks Mat, you hit it right on the head. It seems to me it would be tough to maximize profits from a kissing booth by focusing on the price while you're doing the kissing. Is your focus the negotiating process over price or is it getting the customer into the right vehicle, listening and meeting their needs, and confirming beyond a doubt you're the preferred place to do business? Being customer centric is not about cutting the price; it's about elevating the relationship beyond the price. That said, there is room for all kinds of dealership, provide they can be true to what they set out to be.

Sheila York

CDK Global/Performance Solutions

Aug 8, 2013  

I have seen the transformation work. Give 110%, follow the sales process, ask for the money, be professional, and they had the highest grosses in the zone and unbelievable CSI. #1 in the country in 5 areas. No customer could even take a demo without a full vehicle explanation. That was a customer centric approach that really worked. Thanks for being customer centric yourself!

Jeff Scherer

Lifestyle Integrated Inc.

Aug 8, 2013  

Good subject Dennis. I am not sure that many orgs really know what "Customer Centric" really means. IMHO, I think it means having tools and processes that suit the buyer best. I have worked with orgs that made decisions largely from an ivory tower- instilling changes they felt were beneficial to the customer, but without really asking customers if that was the right move. Sure everybody does CSI surveys post-sale, but wouldn't it also make sense to gather some pre-sale information? The car business is still largely price-driven, I believe in large part due to the reasons you cite above. If you dance around answering the price question over the phone, you will have a tough time holding credibility and trust. A lot of buyers may already be distrustful of car salespeople even before they pick up the phone. The buyer may think their biggest fear is that they may get ripped off, but I think it really is the fear of making a "wrong decision." If a salesperson tells me that based on my needs (which hopefully they asked me about), that vehicle B may be a better fit for me than vehicle A, I think I have someone that is more concerned about helping me than getting me over the curb. If an organization truly wants to be customer centric, they should take the time to study what happens in the customer's journey. Take a lesson from Jon Taffer (Bar Rescue) and have your cousin do some mystery shopping on the phone and in person. That will provide better feedback than any CSI survey.

David Ruggles

Auto Industry

Aug 8, 2013  

If you're making gross profit, then you might not be customer centric. If you aren't completely transparent, down to disclosing your bare costs and negotiating the margin, you might not be customer centric.

Sheila York

CDK Global/Performance Solutions

Aug 8, 2013  

If you are not making gross profit and you can't afford to stay in business to serve your clients, you might not be employee or customer centric.

Mat Koenig

KonigCo

Aug 8, 2013  

David I disagree. There are many retailers today that serve the customer well while naming a fair profit without sharing their cost. This business isn't about sharing margins and being a "price whore". There are many dealers who give am of that info out yet they are far from consumer centric. Consumer centric means having a servant mentality imho but that doesn't mean serving for little or no profit. If you provide better service than the dealer down the road it's ok to be more expensive within reason as you are providing more value. Price isn't what seeks cars or Saturn would still exist.

Mat Koenig

KonigCo

Aug 8, 2013  

Sorry for the typos, darn galaxy s4 lol :-)

Dennis Galbraith

Dealer e Process

Aug 8, 2013  

Thanks Sheila! Great point about listening Jeff! Consultative selling starts with listening.

David Ruggles

Auto Industry

Aug 8, 2013  

Define "fair profit," then tell me whether you are a sales person, manager, or dealer. If you aren't disclosing your cost, you aren't being "transparent." Consumers will NOT pay you a fair profit if they know exactly what it is. They will ALWAYS take your "best price" to shop with UNLESS they are dealing with a trusted sales person that they already have a relationship with. And since our industry turns over sales people 3 - 4 times per year, every time the consumer goes out to buy, they have to find a new sales person. And there is a cohort that would prefer to cut out the middle man and buy direct from the OEM. While one can always cite anecdotes that prove one thing or another, let me point out a couple of things. The Ford Collection didn't implode that long ago. I can't understand why so many people in our industry have forgotten that. Ford Motor Company certainly hasn't. But that turnover thing raises its ugly head again. I guess there just aren't that many people who have been around to recall it in the retail world. Recall Saturn. The cars were priced at retail $1500 under the market and supplies were limited be design. GM lost money on every one from the beginning, trying to establish the brand. They thought they could raise margins later on. Never happened. A Silicon Valley startup tried to sell cars at a loss for a while to get established. Consumers took their prices and shopped with them. The fact is, the industry's cost structure is so complicated, to provide it to consumers would be like asking them to drink from a fire hose. Hell, our own people don't understand it half the time. Dealers aren't transparent with their own staff. But lets go back to defining what a fair profit is.

Mat Koenig

KonigCo

Aug 8, 2013  

Great question David. Let me first say that my perspective comes from the viewpoint of 12 years on the retail side, and the past 8 years on the Vendor side. That said; I know there are many schools of thought regarding a 'fair profit' and I don't believe I can change your opinion, I am merely stating mine. Since you point to Silicon Valley though, let's talk about a company who isn't the cheapest but their products and service experience are arguably some of the best in the world: Apple. A Macbook pro with the same specs as a comparable windows PC is nearly $1000 more expensive. Both have intel processors, etc., and heck, you can even install windows on the Mac too but what makes it ultimately worth more? The experience with it is better. It doesn't crash as often, when you need help the Apple support staff is friendly, fun and cool to deal with. They almost make it fun to get service done (go figure). I don't think we should hide the margins when a customer asks, but I don't think that we should make the focus of a presentation all about price. Your title says "jack of all trades" so I don't know what you do but let's take an Automotive Consultant for example. Their cost structure is mostly for their labor right? What's that cost financially for them - zero. But what do they charge? Good ones charge quite a bit but the Dealer doesn't say: "Well since your labor really doesn't have a cost associated I'd like to know what all of your expenses are related to consulting with me and I'll give you $100 for your time." Time is valuable, every hour away from your family is valuable. For each person that value is different so I don't believe there is a one size fits all answer and it will depend on how competitive the market place is that you're selling vehicles in. One thing that I can say to a certainty is that giving a way all of your gross does not, and never will, make you 'customer centric'. All it does is make you a person who gives away profit. There is a reason that McDonalds isn't the only place to eat. For me, I'd rather pay $20 for a great salad in a clean restaurant where someone cares to serve me as a customer than to pay $6 in a fast food joint where I'm #326 and my table may not be clean unless I grab a napkin to wipe it down. Your rational regarding the Saturn demise only goes to further my point. They were selling cars below margin - giving them away in relation to profit/loss - yet that didn't get consumers excited enough to purchase them. That said, as we all recall, in the later years of Saturn the 'experience' went into the toilet because they started negotiating trades more 'creatively' and overall changed their model from a 'good car with a great experience' to 'the same experience as everywhere else with a cheaper car'. There are dealers today that have great reviews, great reputations, and they don't sell their cars at net or near net. Again, I don't expect we'll agree on this notion but I will close with what Shiela mentioned: "you can't afford to stay in business to serve your clients, you might not be employee or customer centric." If you're broke, you can't provide better service than the competition. Dealers should serve better than anyone and charge what they believe they're worth. If consumers disagree with your value proposition as a dealer, you'll learn that quickly. Thanks for keeping the dialogue going :)

David Ruggles

Auto Industry

Aug 8, 2013  

My opinion is that you will NEVER make a fair profit based on consumers perception of what that means. My perspective comes from 43 years in the auto business starting as a sales person who stayed in the same dealership for 7 years, and was a price quoter who managed to sell some cars. I've been around to know this business is about the production of gross profit and your perception of what happened with Saturn is just wrong.... not totally wrong, but you haven't given proper weight to the fact that consumers are consumers. I don't care how good your price is, UNLESS you have managed to hang around long enough for previous buyers to come back to you, quoting a higher price than your competition assumes you are better than they are at building value. And it most cases, that isn't even the primary reason people will buy from you. It has more to do with how your personality jives with them than anything, and in the beginning a commissioned sales person will have a really difficult time. Ford lost BILLIONS trying to do business the way consumers said they wanted to do business in surveys. What they say and what they mean are two different things. RE: "Since you point to Silicon Valley though, let's talk about a company who isn't the cheapest but their products and service experience are arguably some of the best in the world: Apple." Let's talk about Mercedes Benz. Apple products aren't sold through franchise dealers. MB products are. MB sales people can earn enough to make auto sales a career. They have managed to maintain some semblance of gross profit via perceived value. Volume franchises like Toyota or Ford are much different. Have you seen the national numbers for gross profit on Toyota and Honda volume models lately? Comparing the Apple model to the car business is so far from valid I really don't know where to start. Apple can control their pricing, just as Elon Musk hopes to control pricing by owning his own sales outlets. At Apple, they don't take trade ins, let alone trades where the consumer owes more on it than its worth. They certainly aren't transparent and would nicely tell a consumer to kiss off if they were offered less than "their price." Try doing that in the car business with a competitive dealer within an easy drive or a phone call. Credit? You either have room on your card or you don't. And Apple is under tremendous pressure to keep coming up with ground breaking products that can command the high margins. Much of that has to do with patents, BTW.

David Ruggles

Auto Industry

Aug 8, 2013  

RE: "I don't think we should hide the margins when a customer asks, but I don't think that we should make the focus of a presentation all about price." Perception of low price is what draws car buyers. Price your inventory too high and see how many hits you get. So when a customer asks about margin, what do YOU tell them? Which "cost" do you use?"

David Ruggles

Auto Industry

Aug 8, 2013  

RE: "Your rational regarding the Saturn demise only goes to further my point. They were selling cars below margin - giving them away in relation to profit/loss - yet that didn't get consumers excited enough to purchase them." You misunderstood what I said. The dealers made plenty of money while the factory lost money on every car. When they moved AWAY from their original model, the factory lost less but still couldn't sustain it. And that was with a single dealer owning all the Saturn outlets in a market, making the price fixing legal. Toyota has tried this in Japan, where it failed miserably as well.

David Ruggles

Auto Industry

Aug 8, 2013  

RE: "Their cost structure is mostly for their labor right? What's that cost financially for them - zero. But what do they charge? Good ones charge quite a bit but the Dealer doesn't say: "Well since your labor really doesn't have a cost associated I'd like to know what all of your expenses are related to consulting with me and I'll give you $100 for your time." This also has absolutely nothing at all in common with retailing cars.

David Ruggles

Auto Industry

Aug 8, 2013  

RE: "One thing that I can say to a certainty is that giving a way all of your gross does not, and never will, make you 'customer centric'." So who decides what is "customer centric," and what isn't? YOU or the consumer? The consumer doesn't usually know what is in their best interest. They certainly are not always right. Less than 30% of them have a fast track credit score. Many are quite demanding even when they will need considerable help from the dealer to get a deal done. As an industry we have to get over the false analogies between our business and others. We need to be strategic. We need to provide all the transparency the law demands and then some, but there is a point when it is not the consumer's business to know our inner workings. IN fact, it isn't the business of our employees to know so much. Hell, if they want to know let them all scrape up the money to buy one of these joints, hire a bunch of folks to expect to get paid, then let them all tell you how to run your business. Then they can have complete transparency. http://autosandeconomics.blogspot.com/2013/05/transparency.html

David Ruggles

Auto Industry

Aug 8, 2013  

RE "If you are not making gross profit and you can't afford to stay in business to serve your clients, you might not be employee or customer centric." TRU DAT!! The REAL bottom line. Its all about gross profit. Imagine a world with no dealers. That's what an efficient market creates once buyers and sellers have the same info. With no dealers the OEMs are free to do whatever they want on pricing. After all, there are no middle men competitors to worry about, only other OEMs. Consumers don't know what they want because most don't understand business. There are MANY consumers who will NOT buy an APPLE because of the independent nature furthered by the monopoly they have on their own products. Android seems to be eating into that. Plus they manufacture in 3rd world countries and pay squat to those employees. Have to use iTunes? No interchangeable battery? No SD card slot? No "Flash?" Let them have to deal with unions once and do business in a REAL environment. It will catch up with them unless they can keep inventing and maintaining their dominance.

Mat Koenig

KonigCo

Aug 8, 2013  

Let's back up for just a moment. First and foremost I think it's fine that we agree to disagree but my statements regarding the Apple comparison for example are more relevant than we in this industry want to embrace. Apple can price the way they do because they believe that their product has value. Take away Apple's name and replace it with any successful dealership or dealer group that has made the decision to sell value over price. I'm not saying that we can just price our vehicles as high as we like and act willy nilly about it. Any intelligent person is going to evaluate their market, the competition, etc., and price accordingly. My response, initially was to your comment: "If you aren't disclosing your cost, you aren't being "transparent." Consumers will NOT pay you a fair profit if they know exactly what it is. They will ALWAYS take your "best price" to shop with UNLESS they are dealing with a trusted sales person that they already have a relationship with. And since our industry turns over sales people 3 - 4 times per year, every time the consumer goes out to buy, they have to find a new sales person. And there is a cohort that would prefer to cut out the middle man and buy direct from the OEM." I believe the part I'm struggling with is the statement that dealers aren't transparent if they don't disclose cost. So by that statement, transparency would look like selling up from 'cost' right? I've been in dealership environments with many different pricing models. One was a Nissan Dealership with very little competition but they thought that you had to price up from invoice, advertise XXX over invoice, etc. The franchise barely sold enough units to stay afloat and it was a failure. I took over that Nissan department as the manager, retrained our staff on every aspect of the sales process so that we could learn how to serve our consumers better and create an environment that would allow us to ask for what our vehicles were worth rather than starting each deal with the old manager's model. He used to write a deal like so... "Invoice is, plus this cost, that cost, this other cost, etc., which brings us to a selling price of..." Within 18 months we increased sales volume and profit drastically, and we increased our repeat and referral business too. It wasn't because we raised the prices so I don't want to misspeak or be misunderstood. I'm saying that by changing the culture and the overall experience for the buyer, as well as the focus of our sales people, we were able to focus on find the right vehicle, right equipment etc., and we saw that there were less and less customers in the negotiation asking to see invoice. By the way, if they asked, I would always show it to them. Then I would tell them the exact same price that I had before I showed it to them. Depending on availability of the unit and other scenarios some vehicles may have had a lower margin and some may have held a higher margin but we didn't just drop price. My job as a leader was, and still is, to make sure that my client gets better service from me than my competitors. My job is also to make sure my sales team serves the customer better than anyone else - and that they are compensated very well for doing so. Happy sales people who make a good living are less likely to come to work stressed about finances, etc., which means they won't come off like the 'hungry' or 'aggressive' sales people that they compete (at least in my experience that has been the case - obviously there is no way to make a blanket statement for all). When it comes to pricing I do agree with you that the definition of fair is not going to be the same for every customer or every dealer. Heck, the amount of profit varies on market, vehicle availability and the number of competitors you have within driving distance. My point was simply this: Transparency doesn't mean hanging the invoice on the cars and selling from cost up. At the end of the day it comes down to what you and your customer agree is fair. In your 40+ years of experience I'm sure you've seen dealers who sell below invoice that still get outsold by a nearby competitor who isn't selling cars as cheap right? So ultimately, it's not just about 'price'. I agree wholeheartedly that we need to be transparent, but if I'm understanding you correctly, you believe transparency means digging into the cost with the buyer and in my opinion (just an opinion) I believe that cost doesn't need to be initiated on the seller's end unless it is addressed by the buyer. Then, by all means, share it and then be sure you can justify your value. If you can't justify why you're asking for the price you're asking, you'll likely lose the business. Someone smarter than me once said: "If two people want to do business on a product, money won't get in the way of it happening." I understand that to mean that if we have done a proper job of listening to our customer's wants, needs and desires. If we have the right vehicle for them. If we actually care about helping them get it, and they truly want it, we will work together to find a way for it to fit their budget. Thanks for the fun dialogue this evening, I'm off to dinner with the family :) Have a great night all!

David Ruggles

Auto Industry

Aug 8, 2013  

Another false analogy with Apple: When your Apple whatever breaks, you take it back in for exchange or mail it in to an Apple repair center. That isn't likely to happen on a car after the sales tax has been paid and the vehicle is registered. Another: With Apple, there are few color choices and options, compared to a car. Inventory isn't quite the deal it is in the car business.

David Ruggles

Auto Industry

Aug 8, 2013  

RE: "Apple can price the way they do because they believe that their product has value." They can't price the way they do because THEY think their product has value, they can price because. for now, CONSUMERS think it has value. AND Apple doesn't have to worry about a competitive layer of distribution, such as auto dealers. They don't need them. They don't have to build in margin to maintain them. RE: "Take away Apple's name and replace it with any successful dealership or dealer group that has made the decision to sell value over price." Wrong. Just because the dealer decides to price higher than his market doesn't mean the consumer will pay it. Try Apple's model with the additional layer of dealers competing with each other. Its a HUGE difference.

David Ruggles

Auto Industry

Aug 8, 2013  

RE: "I understand that to mean that if we have done a proper job of listening to our customer's wants, needs and desires. If we have the right vehicle for them. If we actually care about helping them get it, and they truly want it, we will work together to find a way for it to fit their budget." This assumes our competitors aren't out equal or better. What does it come down to when all other issues are virtually equal? What if the consumer likes the Kia Optima better but the dealer sticks to MSRP because the market allows it based on supply and demand. So the consumer buys from a sales person and dealer they don't like as well because the monthly payment fits, like on an Accord with a strong lease subvention. "For every complex problem there is an answer that is clear, simple, and wrong." H. L. Mencken

Mat Koenig

KonigCo

Aug 8, 2013  

David, I appreciate the dialogue. There is one point that I want to touch on because I believe you misunderstood me: I said: "Take away Apple's name and replace it with any successful dealership or dealer group that has made the decision to sell value over price." You replied: "Wrong. Just because the dealer decides to price higher than his market doesn't mean the consumer will pay it. Try Apple's model with the additional layer of dealers competing with each other. Its a HUGE difference." My comment didn't mean a dealer can just advertise a higher price and ta-da, people will pay it. The point I'm trying to convey is that there are plenty of dealers who sell the same product (new car wise) that are within the same geographic area. Some advertise giveaway prices, some do not. Amazingly, the dealers who do not are still selling vehicles. Some of them outsell the ones who are giving things away. The long and the short of it, in my opinion, is that low price does not make a business consumer centric. You brought up a good point in saying "who decides, you or the consumer" and I believe we will both agree, it is the consumer who decides if we're consumer centric or not. That said, many consumers still choose, in their opinion, dealers who they (the consumer) feel are more 'consumer centric' - even when the price is higher.

David Ruggles

Auto Industry

Aug 8, 2013  

RE: "My comment didn't mean a dealer can just advertise a higher price and ta-da, people will pay it. The point I'm trying to convey is that there are plenty of dealers who sell the same product (new car wise) that are within the same geographic area." TRU DAT! Which makes the auto industry much different from APPLE. RE: "Some advertise giveaway prices, some do not." Often price leader advertisers maintain higher gross profits than those who don't. RE: "Amazingly, the dealers who do not are still selling vehicles." Its not about the selling of vehicles, but the production of gross profits. RE: " Some of them outsell the ones who are giving things away. The long and the short of it, in my opinion, is that low price does not make a business consumer centric." As a dealer I was gross profit centric. Yes, it is a balance. Some might say that when some consumers pay a higher profit than others, that isn't consumer centric. And I would say if you have a problem with that you are in the wrong business. RE: "You brought up a good point in saying "who decides, you or the consumer" and I believe we will both agree, it is the consumer who decides if we're consumer centric or not." A fact of life in business: In negotiation, if neither party gets their feathers ruffled, money was left on the table. As a dealer, if you want to have the luxury of leaving money on the table in pursuit of all happy customers you had better maintain a lower overhead than your competitors, difficult to do with OEMs cramming "image programs" down dealer's throats. RE: "If your prices are negotiable, yet your customer cannot speak directly with the only person who has pricing authority, then you might not be customer centric." We figured out LONG ago that giving sales people our triple net cost info is a losing proposition. They will figure out a way to give it away. It sounds like you want to give up every gross profit building negotiating strategy there is. Consumers are NEVER going to understand out cost structured. They will NEVER understand stairsteps, holdback, CSI incentives, etc. They don't give a rat's ass about your sales people making enough money to stay on board. Your interest on your inventory, insurance, taxes, administrative, etc. isn't anything they care about. As far as consumers are concerned you can charge that to the next customer. A dealer needs 10% margin per transaction to survive and make a minimal ROI. That's about $3K per deal these days. It is doubtful that many consumer would consider that margin "customer centric." If you give someone a $2K deal, the next consumer needs to pay $4k to maintain the average. This is just the math of the business. But a consumer would NOT consider that "customer centric." I've done extensive surveys on this. You might be pursuing the wrong goal. Perhaps you should be pursuing the PERCEPTION of "customer centricity" in the pursuit of maximizing gross profit. That said, many consumers still choose, in their opinion, dealers who they (the consumer) feel are more 'consumer centric' - even when the price is higher."

Anne Fleming

Women-Drivers.com LLC

Aug 8, 2013  

Dennis, thanks for a great article. Yes, not all dealerships are equal in their standards of customer excellence, nor should they. However, with any business, there is always room for improvement. So last year, we had some fun and Interviewed our top dealer clients that lead in CSI in their respective regions. From those discussions we developed the Take The Challenge: How Customer-Centric is Your Dealership Test. Click here to take this quick 12 question survey and see if your dealership is Leading The Pack, Standing Tall, Treading Water or Missing the Mark. And, perhaps learn a few easy initiatives to make the customer experience more enjoyable at your store.

Anne Fleming

Women-Drivers.com LLC

Aug 8, 2013  

Dennis, here is the link to take the quick 12 question survey: http://www.women-drivers.com/howfriendlyisyourdealership/

Dennis Galbraith

Dealer e Process

Aug 8, 2013  

Thank you for sharing the link to the survey Anne. Although the battery of questions has an expected slant, these are all things dealers should be asking themselves. It's an exercise worth going through. Linking back to the interesting debate between Mat and David, I don't recall any of your survey questions being about price. Refreshing :o)

David Ruggles

Auto Industry

Aug 8, 2013  

@ Dennis - RE: "Linking back to the interesting debate between Mat and David, I don't recall any of your survey questions being about price. Refreshing :o)" If price isn't important a dealer can give in to the OEMs on their image programs, not worry about expenses, and ignore the elephant in the room. Just charge everyone the same margin, be "customer centric," whatever that is, and everything will work out fine. To listen to consumers properly you have to often ignore the words they say and discern what they mean. One can get a completely different message on any topic by wording survey question differently, same group same topic. Observing their behavior is essential. Understanding that you might have problem making gross profit from 750 FICO Internet enabled, experienced at negotiating boomers with cash might help. If one wonders why some dealerships engage in perfectly goofy advertising it is because they are trying to attract less sophisticated buyers on whom they can make gross profit. Anyone ever watch "King of Cars?"

Dennis Galbraith

Dealer e Process

Aug 8, 2013  

David, I don't think you and I have a fundamental disagreement. Nowhere in the more than one thousand pages I have written on automotive marketing have I ever said price was not important. I have said many times, and I think you agree, that price should not be the central focus of the discussion with the customer. The discussion of price is pointless if it is not about the right vehicle. To know what the right vehicle is, you must listen to the customer's needs and in many cases help them identify it. In any respectable sales training program, the term listening is used holistically, listening to facial expressions, body language, tone of voice, data (e.g. credit score) as well as the words. I don't mind a good argument my friend, I'm just not sure we disagree.

David Ruggles

Auto Industry

Aug 8, 2013  

Certainly price is not an issue WE want to bring up except possibly in price leader advertising to draw traffic or when we post pre0owned inventory. In fact, I have taught for years that a sales person, soon after greeting a customer on the lot, should say, "Before you leave WE want to answer all of your questions so you can make a rational purchase decision, PLUS WE want to give you some figures to consider." We can actually make a better gross profit if we take the "curse" off the relationship as early as possible. Communication is 20% the words we say, and 80% everything else. I take issue with this idea that we should be completely transparent with our consumers. Gross profit is the objective. AND in negotiation, if neither party gets their feathers ruffled, money has been left on the table. This is just the facts of life. Dealers aren't transparent with their own employees, and aren't required to be. And having the dealer/GM negotiate every deal, giving up the 3rd party negotiating strategy, makes no sense. No one in their right mind is going to "empower" their sales staff with complete information. At some point we need to be more concerned with retaining good talent, not having to constantly train green peas because we forever run off good talent. That's the elephant in the room. As a guy who spent twenty years training all over the U.S. and Japan, it was always good to be able to pick up a check for constantly training new hires. And I could pick up a check for teaching dealership management how to use personality assessments to hire the best from their pool of candidates. I became disgusted with what our industry has done to these people after they were hired and its time to for me to speak out about why we have run off so much talent. We will never have good closing ratios and owner loyalty turning over our sales staff 3 - 4 times per year. Its good for trainer/consultants. But counter productive in the big picture.

William Phillips

Automotive Internet Management

Aug 8, 2013  

Great subject Problem is, almost ALL CRM's do not function as advertised. While user error and laziness accounts for 50% of the lack of customer centered thinking. MOST CRM's actually do not work as promised. Oh, I mean in their current release!!!! That version is coming, again. Lets see more written on the smoke and mirrors these vendors sell to dealers, and the cause and effect of spending productive sales time submitting tickets to CRM vendors over what doesn't work in ALL of them. They are not integrated as advertised and I challenge any one to prove to me in their store that they really are. That all with standing, the point of this article is very valid.

David Ruggles

Auto Industry

Aug 8, 2013  

My beef is with the vague term "Customer Centric." Customer Centric from whose perspective? The fact is we have to make money. The fact is the price has to be negotiated. Those two facts work against "Customer Centric." DO the math. From a consumer's standpoint, it seems immoral to charge a different profit to different customers. A consumer thinks everyone should pay the same profit. The only way that happens is with price fixing, both illegal and also lacking in "Customer Centricity" from the perspective of a consumer. Most consumers wouldn't think it to be Customer Centric for them to pay us a 10% gross transaction profit.

Dennis Galbraith

Dealer e Process

Jul 7, 2013

The Long-Term Forecast

The larger an organization is, the more important it is too see what the market will look like in the future. Size can cause an organization to lose its ability to change quickly, so it must see farther and more clearly. While some organizations do serious work on 50 year plans, it seems to me 5, 10, and 20 year plans make the most sense for auto retailers. These plans require a little knowledge in forecasting.

 

The most important thing I ever learned about long-term forecasting came from Jeff Bezos, CEO of Amazon. He said it was more important to start with the things that will stay the same then to focus on what might change. Here are some of the things I think auto retailers can rely on for the next 20 years.

  1. The dealer’s online domain will remain a critical marketing tool. Today, this is limited to the dealer’s website(s). This may seem obvious, but it is worth noting since the same cannot be said of interruption advertising, tools like newspaper, television, and radio. Nor can one be as certain about any particular 3rd-party site (e.g. Edmunds, AutoTrader.com, Cars.com, or kbb.com). The dealer’s website is the one place the dealer can post all the information they think will aid in the auto shopping process. Much of this data may be sent to other places, willingly by the dealer or unwillingly through scraping it, but consumers will continue to view the dealer’s online domain as the original source direct from the dealer.
  2. Many shoppers will still choose to transition from an online conversation with technological touchpoints to a human touchpoint. An increasing number of shoppers may purchase their vehicle with no human interaction, but it will not be all shoppers and may not be most shoppers. Today, these forms of human-to-human contact are email, chat, text, video chat, phone, and walking in (face-to-face). Email may decline in importance and video chat may become a leading form of human-to-human conversation. What will not change is the dealership’s need to be expert at communicating in all the ways shoppers wish to communicate or contract out that function to someone who can.
  3. Demonstration of the vehicle’s interior will continue or grow in importance. This may happen online, in the store, and probably both, but the portion of consumer benefits being derived from the interior will not diminish. The less important driving the vehicle becomes, the more important it will be to be productive, relaxed, and/or entertained inside the vehicle. Even where the driver maintains the full driving process and rejects all outside stimulus other than the road and its surroundings, the ability to switch over to a fully connected platform will be a standard feature. The importance of the exterior appearance and/or performance may diminish for many shoppers. This seems likely, but the importance of the interior with all its comfort, convenience, and communication features will not be diminished. Many stores have had a difficult time keeping up with the growing functionality within the interior and will need to step it up.
  4. Consumers will demand credible information about the vehicle and the deal. I doubt anyone thinks consumers are going to become less demanding in the amount of information they require. Every shopper is different, but most shoppers today would not spend $20,000 or more on a vehicle with the kind of information they were given 18 years ago. Information demands will not slide back even to the point they are today.

 

This is not an exhaustive list. What things do you see staying the same over the next 20 years?

 

 Note: I will be giving a provocative, detailed presentation at DrivingSales Executive Summit on the way automotive retail will be conducted in 2018. 

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

13024

5 Comments

Mat Koenig

KonigCo

Jul 7, 2013  

Dennis, I think you're so right. Unfortunately for so many folks, technology has become a crutch for helping us do 'less' instead of a tool for helping us do MORE. I remember getting our first AutoBase TERMINALS back in 1995 at Battle Creek Honda Mazda (no longer Mazda) and holy golden calf moses...I was blown away at how many more customers I could contact now that I could find their information quicker than my index card file. I went from selling 15 cars to 20 cars per month just because the CRM gave me time to do more. Today, it seems like I see a lot of folks who look at their CRM as a tool to do all their busy work but people just don't maximize the free time that they've been given. I don't think it's because they're lazy though, I think it's because they don't know what to do. Leadership, in many cases, needs to get involved instead of just looking at their CRM reports too and spend more one on one time with the sales reps in the store to help guide them so their team will know how to effectively use the phone, work the service department for referrals, etc. I can't wait to see what will have changed by 2018 but my gut (which is too big right now btw) says that we'll have a wide selection of more tools that empower us to sit back and "come to work to wait". The great news is, there is the smaller percentage of folks out there who will really take advantage of the new technologies, and who understand the importance of being in the PEOPLE business, and those folks will absolutely CRUSH their competition. Thanks again for a great post.

Dee Rawls

Auto Buyer Consultants

Jul 7, 2013  

Dennis, guru, indeed the idea of a forward-looking vision is vital for participants in Auto Retail Future. Like hitting a baseball, the anticipation of where the sweet spot might be combined with the proper form and follow through can lead to a great success at home plate. As Mat mentions, there are likely to be many additional tools, and the idea of the 'sit back and waiters' isn't likely to change. They may be replaced by robots, though - according to Bloomberg. Also, the most significant constant I see affecting our industry is "Change". As almost no other industry has ever accomplished, auto retail remained the same for over a century in the core defining processes and principles involved with transacting business with the consumer public. At the onset of the Internet, change began to affect the traditional 'Road to a Sale' that anchored the brick and mortar galaxy of Auto Retail Past. More has changed for auto retailers/dealers since the emergence of the Internet as a new information exchange for automotive consumers than had changed in centuries before. I soundly believe, the 'change' is what dealers can count on seeing (possibly in greater proportion than now, even) constant in the next 20 years. And, I also believe, they must step profoundly into the batter's box and be ready to anticipate what these changes might bring down the pipe. Jeff Bezo's was right, paying attention to the things that will remain the same is the name of the game for dealers going into the 2018's and beyond. Change is the thing most likely to stay the same. A Big Championship Trophy Hoist to you and the DrivingSales.com for keeping ahead of the count on informative industry topics like these, Dennis. You are well appreciated, indeed.

Joe Webb

DealerKnows Consulting

Jul 7, 2013  

Great work, Dennis. I believe some semblance of technology (regarding a software to house, maintain, continue relationships, trigger tasks) is imperative. Today it is a CRM, but it may not always look as our current ones do. However, that style of technology-assisted management of opportunities will need to remain for dealers to keep consumers engaged. I too believe that a dealer's online presence/entity will be at the forefront, but websites will be 100% different amalgamations than they are now in just 10 years. Lastly, I would say it is the ability to "sell" trust to the consumers. (I hate using the word "sell" there, but I am in a hurry.) ALL consumers, even in 20 years, will prefer to do business with an organization that they trust or have a previous relationship with that they still...well... trust. We, as dealers, need to define all interaction we ever do (and online information we put out on the Interwebs) with the end goal of building trust-based relationships. Our "trust auras" need to be in full bloom for auto dealers to survive the next 20 years.

Dennis Galbraith

Dealer e Process

Jul 7, 2013  

Thank you Mat, Dee, and Joe. Wow Chris, an increasing focus on the total consumer experience sounds like a future worth working toward. Great vision my friend!

Dennis Galbraith

Dealer e Process

Jul 7, 2013

Big Data To Make Selling Cars a More Rewarding Job

Big Data will change the way salespeople interact with shoppers in the store. Eric Miltsch does a great job every morning of providing this community with a top-ten list of internet news items. Today he served up a particularly good article from the New York Times about the way data is now being captured in brick and mortar stores, like Nordstrom. As this technology goes down in price and up in value, dealers will be able to utilize it in stores as well. 

We can learn a lot about our future from fight between big-box retailer and ecommerce sites. Most retailers have a split between online and in-store sales that is at least 80% to 20% one way or the other, and many of their shoppers are not combining the two prior to purchase. In our business, well over over 90% of the sales are made in the store and roughly 90% of all sales are to shoppers who use both the internet and the physical store before they buy.

We are never going to be the earlier adopters of retail methods for collecting data, in the store or online. However, we have an opportunity to tie the two together like no other retail industry. We still intercept out customers in the store with a human. So we can do more than hit them with an e-coupon at the right time, we can ask them the right question and match them to the right vehicle, financing, service contract, etc..

All this needs to be automated. And several vendors are working in that direction. The future for people inside the store is not so much about collecting data or analyzing it as utilizing the benefits of it in the conversations they already have with consumers. Knowing what questions will change the entire nature of the frontline salesperson in a way that is more successful and more enjoyable.

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

4526

9 Comments

Dennis Galbraith

Dealer e Process

Jul 7, 2013  

I friend of mine just responded to me with a link to an article on how Big Data is being used to stop suicide among veterans, http://www.fastcolabs.com/3014191/this-may-be-the-most-vital-use-of-big-data-weve-ever-seen This is a great example of data that is changing human conversations. These models are not perfect. They are not going to lead to an email telling someone they are about to take their own life. They are going to lead to a question coming from a human, the right question or questions at the right time in enough cases to save lives. The same will be true for enhancing quality of life within the showroom.

Eric Miltsch

DealerTeamwork LLC

Jul 7, 2013  

Dennis - this activity is definitely coming, and it may even arrive sooner than we think in the form of intelligent sites that are able to read our behavioral data before we arrive to a website. Imagine the website pulling in your desktop or mobile history, or even your social graph (Facebook) or knowledge graph (Google) to provide you with the content you're most interested in seeing without having to search for anything - it's already there. Better experience, more accurate information and improved performance. That's what I see...

Paul Rushing

Stateline Sales LLC

Jul 7, 2013  

The biggest problem you have with all of this "big data" is exactly what is pointed out in the article about Nordstrom's. Consumers are opting out from being tracked and it's negatively impacting consumers perceptions of businesses that use and collect the data. We as an industry are at a tipping point. We need to dial in what we have before adding more confusion to the mix!! http://www.drivingsales.com/blogs/iMagicLab/2013/07/12/how-will-sell-cars

Mat Koenig

KonigCo

Jul 7, 2013  

Thanks Dennis, I believe that it is important that we understand "big data" and more important, how we can use that information to shift our everyday interaction with consumers. I think Google and Nielsen did a good job in March of sharing some info on how the mobile consumer is interacting and the relevance between their online (mobile) engagement to their in-store purchases http://www.google.com/think/research-studies/creating-moments-that-matter.html Thanks again for sharing the post and I look forward to having you on our weekly Hangout on Air next week to discuss the vendor ratings system you have here at drivingsales. Be sure to share the link so others can watch our conversation live! http://koing.co/hangoutsonair

Mat Koenig

KonigCo

Jul 7, 2013  

Apologies everyone, my fat fingers did a typo. The correct address for the weekly hangout is http://konig.co/hangoutsonair Thank you very much to Paul Rushing for the heads up :)

Eric Miltsch

DealerTeamwork LLC

Jul 7, 2013  

Paul - that's the key factor: making it into something that people don't want to opt out of. Take Google now for instance. It's delivering me info only I am interested in seeing. It may all be worthless or even considered spam to another user - but it's special to me. That's where I see this going. Users have warmed up to retargeting over the users and they know it happening. It'll just get smarter and more personalized.

Paul Rushing

Stateline Sales LLC

Jul 7, 2013  

Eric I agree if the data is being used to improve the user experience the users will adopt it. For now no one is doing a great job with this not even the big G. Its why I have two browsers open on my desktop. One is logged to he G and the other is not and all tracking is disabled..

Dennis Galbraith

Dealer e Process

Jul 7, 2013  

Paul, I deeply appreciate your article last week and your continued involvement in this issue. I saw your article as being more about the use of data to know what to purchase or continue to purchase. I’ll add to that post regarding that issue. With respect to how data will impact showroom operations, let’s not throw the baby out with the bathwater. 1. Some shoppers are opting out, not all, not even most. 2. Some shoppers are taking a dim view of this practice, which is one of the benefits our industry has as a follower. If the cultural shift turns increasingly negative or accepting of the practice within big-box retailers, we will know before dealers invest. 3. We do need to use the data we have now, and that requires systems that make things simpler and easier. I think we all agree paralysis by analysis is a bad thing. Automated analytic tools that get you the information you need when you need it without even requesting is the future. It’s tempting to try to identify a handful of data points dealers should care about. No one has time to deal with the mountain of data dealers already have at their disposal. However, the dealer taking this approach will be at a competitive disadvantage to those who employ systems sifting through the data with little or no human involvement to produce better information when the salesperson or decision maker needs it. Data is but a means to better information. Better information relative to selling vehicles with time left to focus on the practice of selling those vehicles is what we need. We cannot get the focus on selling if we try to analyze everything, and we cannot get the rich information we need by simply discarding most of the data. We need automated systems that will turn the increasing amount of incoming data into increasingly valuable information. There is almost certainly more agreement here than first meets the eye. I think progressive guys like you will be leading the effort to get dealers there.

Dee Rawls

Auto Buyer Consultants

Jul 7, 2013  

A specific answer to the question about using big data to sell more cars is being provided by my partners at eShare, Sean Marra and Eric Miret. They have leveraged data aggregation into a GUARANTEED!!! way for dealers to sell more cars. The company has plays on big data in other sectors, but the automotive offering is the headliner. These guys are doing really BIG things with big data. (learn more here www.ePush.us/#automotive) Also, to the point about auto retail not being a place of early adoption for big data, you all are the data. In order for big data to have massive effect on industry, their must be large multiples of transactions. Big data has no finer home for optimization and study about how to make it of best use than right here in automotive. Few industries are able to generate the type of data created by automotive retail. The sheer size of each transaction is a distinctive factor - and, the growth potential for 20 Million plus transactions by the end of the decade means every one from IBM to the White House (including Google) has their 'Glass' on us.

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

Apr 4, 2013

Conversations That Sell

Advertising is a one-way communication, but selling is a conversation. When I sold Jeeps in 1979, there were only two forms of sales conversation, in-person and on the phone. Today, the conversations that sell also include:

* Chat

* Email

* Video Chat

* Back and forth click and response between a shopper and your website

* Back and forth interaction with you inventory on AutoTrader, Cars.com, etc.

* Back and forth with information about your store, store policies, and your employees

The in-person conversation is usually where the sale is closed, but the selling process includes all these conversations across both human and technological touchpoints.

The dealership website can be built to quickly lure shoppers away from technological touchpoints and into a conversation with a human. Some stores find the number of phone calls from their site goes up when they take price off the vehicles, only to realize many of those calls simply ask for the price and drop off. The irony here is that ecommerce sites try to keep shoppers from calling the store for simple information requests. Labor costs money. There is even a cost to having commissioned sales people answering these calls. They can get so burnt out being free information providers. They end up working the customers too hard too soon out of desperation or give up working them altogether.

It's frustrating for human employees to try to catch up with shoppers who have been having conversations with websites for hours and are just now letting the sales person in. More and better tools are being built to help stores bridge the gap and improve the holistic steam of conversations. I was delighted with some of what I saw in this area at the NADA convention and in online demonstrations since then.

Selling has not changed. It is still about conversations that help the shopper get the right bundle of features and benefits. What has changed is where those conversations are taking place. Keep your eye on video. Recorded videos are a chance to get the customer engaged with their ears as well as their eyes, and live video demonstrations are a fantastic conversation.

Look for interactive video to play a major role in the future. These videos will have tables of contents next to the screen, allowing the shopper to get right to the portion of the video they really want, or to bounce back and forth. Imagine that, the shopper having a conversation with your video.

The basic technology is available today. The army of people capable of fully utilizing these tools is a work in process. Fortunately the focus among product development teams is shifting toward ease of use for those in the dealership as well as consumers. As an industry, we will get better at these conversations, online and offline. The industry will sell more vehicles more cost effectively as a result of it.

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

14512

5 Comments

Eric Miltsch

DealerTeamwork LLC

Apr 4, 2013  

Totally agree with the video component. Better networks, improved devices, larger screens - it's the perfect recipe for video. It'll eventually include the ability for internal workflows with video as well.

Bryan Armstrong

Southtowne Volkswagen

Apr 4, 2013  

Great points Dennis. Forcing a conversation because you've failed to provide adequate info to engage the customer is not a good way to start a relationship.

Ali Salman

Rapid Boost Dealer

May 5, 2014  

Throughout the customer's journey if dealerships can connect at a personal level, and work on to built a trust specially online through copy writing, videos, call to actions etc. than we will see a huge increase in conversion ratio's. Potential customers are looking for an experience and someone who is really solving their problem, this is how conversations begin online.

Ali Jeep Girl

Chapman Chrysler Jeep of Henderson

Nov 11, 2014  

Thanks for the share. Conversations are what I am great at! The video chat is also an amazing idea that I am going to work into all of my future emails from now on.

Michael Crain

Retired

Dec 12, 2014  

We had 4 sales manages and 1 Director. We took the leads set the appointments sold the vehicle. We did not share our leads with the sales floor. We did not take any ups unless everyone on the floor was busy. We round robin the video chat between the 5 of us. That is the best tool you can have. These are the people that do not want to come to the dealership except on Sundays.,,,lol. That's not all together true. They will tell you more here (open up more). The wall here is soooo much small to break down and start the relationship and build rapport. Your appointment ratio will go up so should your sales. If you have done a good job then the customer is 2/3 sold before he comes to the dealership for a test drive.

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

Feb 2, 2013

The Apples and Oranges of Dealer Marketing

The wealth of data being provided to dealers from their vendors is truly incredible. Twenty years ago, dealers thought it was amazing when I could show them cost-per-thousand numbers for their radio, TV, print, and outdoor advertising. Today the amount of marketing data available to a typical dealer has increased more than one-hundred fold.

This spawned a number of additional products available to dealers, from full business intelligence tools like our own DrivingSales Data to an array of dashboard products designed to organize the data. That's the good news. The bad news is some of these products are mixing apples and oranges. The purpose is to have valid, reliable information for decision making. Mixing incompatible data can lead to precisely inaccurate results that drive dealers in the wrong direction.

DrivingSales recently conducted a research project to uncover the true meaning and compatibility of vendor metrics. We found a wide range of cases where metrics with the same name do not mean the same thing from vendor to vendor. None of these vendors are necessarily wrong, but it is wrong to group their metrics together in a dashboard simply because they have the same label attached to them.

The complete report is available for dealers and vendors alike in the latest edition of Dealer Innovation Guide, http://drivingsalesinnovationguide.com. Over time, vendors will come together around standards and third parties, like Google Analytics, will provide apples to apples comparisons. Those provide everything from simple dashboards to complete business intelligence suites will understand which metrics can be aggregated and which cannot. Until then, more and more research like this will be need so dealers can know what to trust. 

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

7673

8 Comments

Brian Pasch

PCG Consulting Inc

Feb 2, 2013  

Dennis, I couldn't agree with you more that our industry needs to create a lexicon of terms and definitions. For example, think of the word "leads". If website form submissions are "leads" then we could mix up job applications, finance applications, and sales leads. That of course makes no sense. Inventory VDP and SRP views have a wide range of meanings, and third party classified sites seem to feel that they are defined differently by site. So, as the industry moves toward data warehouses and business intelligence tools, a lexicon needs to be created. Sign me up if you plan to organize a committee on this project.

Jon Scott

Bob Smith Motors

Feb 2, 2013  

Glad you brought this up Dennis - it is something we have been struggling with in our Internet 20 Group as we discussed. Analytics are taken from one URL but we have a portal and 4 micro sites along with two OEM mandated sites. Marketing is mainly on the portal but the data is just from our Honda store. Some in our group have RVs too which can mess with the gross averages. F&I revenues is another bone of contention as to what is or is not included. Some things just can't be split out when there is more than one roof top. Cost of Websites was another issue, some of us were dividing the cost between 5 URLs others were putting in the whole cost so the range was from $280 to $2800 for Website costs. Apples to Apples is tough, but we have to try to get it as close as possible. Love what you are doing Dennis - Love the Driving Sales Think Tank! We all benefit immensely!

Dennis Galbraith

Dealer e Process

Feb 2, 2013  

Thank you Brian and Jon. Brian, we do need to work together on these things, and it's always a pleasure to do so with you. Jon, you are pioneering something wonderful in the Internet 20 groups. I've enjoyed watching the progress of the groups and the growing profitability of the members. One of the wonderful aspects of the 20 group is that you do talk and you do uncover these things. There will always need to be a balance between time spent improving the inputs and time spent increasing profitability with the good findings coming from the outputs. Over time, the shift has been from the former to the latter. Members seem to be getting more from the groups each time they meet. Thank you for your pioneering leadership in this area.

Tom Gorham

Apple Chevrolet

Feb 2, 2013  

Dennis, thank you. Analytics and data have become overwhelming and confusing for many dealers. On the one hand it is exciting to see information that was never before available. But on the other hand, it is increasingly difficult to organize, interpret and make use of the vast amount of information. It would help tremendously if there were benchmarks and agreed upon terms for what we're seeing across the spectrum.

Joe Webb

DealerKnows Consulting

Feb 2, 2013  

Collecting the data is imperative to understanding the store's opportunities and shortcomings. It's hard to move forward without garnering the right data. You're right that there needs to be universal understanding of the data terms so everyone can measure the same logic. The most difficult part for dealers, however, is taking the data and actually enacting corporate structure/policies to improve their performances. That is the biggest gap in understanding. Data to directives.

Dennis Galbraith

Dealer e Process

Feb 2, 2013  

Joe, few people understand that link form data to information to profitable action items the way you do. Some trainers and consultants fear data; it holds them accountable. The good ones realize the availability of a well constructed database allows them to do more for dealers and show credible results. As the need for people in math-oriented positions outstrips our education system's supply of them, it is a certainty that most dealership are not going to find all the talent they need in-house. Long live the out-sourced expert.

Dennis Galbraith

Dealer e Process

Feb 2, 2013  

Tom, I don't want to oversell DrivingSalesData.com; the system we are building is much better than the system we have available today. However, dealers can access it for free. After putting dealership data into the system, you can see your data compared to the average of other dealers in the system, benchmarking. The system is strictly for marketing strategy. The privacy policy is designed to protect dealers, and It does not collect data at the VIN, customer, lead, or employee level.

Bryan Armstrong

Southtowne Volkswagen

Mar 3, 2013  

The wide array of interpretive analytics can be confusing at best. Morphing the data to quantifiable action plans can be even more so. When OEMs, Vendors and Dealership personnel quit trying to manipulate reporting to look good rather than be good changes can occur. Thanks for a great post and sharing the link

Dennis Galbraith

Dealer e Process

Jan 1, 2013

The AutoNation Brand

 

AutoNation announced that nearly all of their stores will carry the AutoNation name, similar to CarMax. The shift from the AutoNation collection of stores to an AutoNation brand carries with it a lot of implications. Experimentation will undoubtedly continue, but a brand image demands a high degree of uniformity. You can't have one GM trying to become the second coming of Carl Sewell and another GM under the same brand name going on TV in a clown costume and acting crazy. Some degree of uniformity with respect to promotions becomes mandatory under a brand strategy.

You can't have one store delivering full value transparency and another refusing to price their vehicles online. So there needs to be a uniform level of transparency across the brand, and AutoNation appears clear about their dedication to transparency as a competitive advantage. Already, stores uniformly offer a three-day, 150-mile money back guarantee.

Brand uniformity is easier across used cars, and CarMax has done a good job of it. AutoNation is not including its highline vehicles as part of this move. Selling Bentley under the same brand name as Smart is a bit like trying to expand the Kmart name across Tiffany stores. There will need to be some level of uniformity around the quality level of used vehicles and the quality of customer care provided. The more different the product mix is across a retail brand strategy the greater the need for uniformity around how those products are merchandised and delivered.

Much of the uniformity necessary has already taken place. It would be a mistake to announce a national brand strategy and then hope it can be pulled off. AutoNation has not been secretive about its long move in this direction. By the firm's own accounts, this has been in process for at least 13 years. Other dealer groups appear to be taking similar steps toward the same objective. It will take time.

CNN compared the AutoNation move to becoming the McDonald's of car dealers. I'm not sure that is a good analogy. There are some things AutoNation still cannot do, like national advertising. Outside of manufacturers, only AutoTrader.com and Cars.com have enough national coverage to cost effectively buy advertising on a national level. (I know others have done it, but I said cost effectively.) AutoNation claims to have no ambition of becoming a truly national brand. However, AutoNation already had branding strategies within various regions. There is a reason they are moving forward with a national brand strategy.  This strategy of a national brand without national distribution would have been less beneficial in a TV era than it will be in the Internet era.

While I am not permitted to discuss the online marketing I performed for one publicly held dealer group. I can say the Internet has opened new opportunities for retailers with a widely recognized brand name selling dozens of nameplates. In my first book, Sales Integration, I suggested some of the changing opportunities. This first is but one of the many milestones to be crossed in the future of automotive retail.

 (Sources used include public documents and articles from AutoNation, Automotive News. CNN, Sun Sentinel, and Bloomberg)

Dennis Galbraith

Dealer e Process

Chief Marketing Officer

5888

7 Comments

Eric Miltsch

DealerTeamwork LLC

Jan 1, 2013  

Such a smart - and overdue - move by AN. The decision to keep the highline out of the mix is also a wise move; their entire marketing efforts always seemed very fragmented and inconsistent. And even so, they still did a great job at connecting on the local level with their customers, this should make their marketing efforts even more productive and efficient. (Kudos to their original social marketing team as well: Gary, Stephen and Mallory)

Jeremy Alicandri

Maryann Keller & Associates

Jan 1, 2013  

Great post. I agree with Eric; this decision should have occured a long time ago. Better late to the dance than never.

Bryan Armstrong

Southtowne Volkswagen

Jan 1, 2013  

The logistics of this are nightmarish yet this. is a long overdue move.

Daniel Boismier

FordDirect.com

Jan 1, 2013  

Dennis, good points. My first thought: Welcome to Point-Click-Buy. 2 years and they will be nationwide. My second thought: Lots of risk. What if stores don’t quite go along? There is no unrigging this bell.

Jim Radogna

Dealer Compliance Consultants, Inc.

Jan 1, 2013  

I think this is a great idea. If they do this right, it should greatly enhance their reputation and that of car dealers in general. It should also raise the bar for independently-owned dealers and groups much as CarMax has raised the bar in the used car markets they serve. All-in-all a great move forward for the industry.

Jeff Scherer

Lifestyle Integrated Inc.

Jan 1, 2013  

I happened to have been part of the initial AN rollout back in the mid-90s in Florida. At first, well-known dealership names were preserved, partially because they wanted to use the AN brand for the used car superstores. The Autoway brand name was then rolled out to the new car stores in FL. The consolidation of branding should certainly benefit in reducing their marketing overhead and as pointed out by previous comments, improve the overall consistency in customer expectations. I can tell you from having worked for other national retailers through many acquisitions, once you navigate through the internal cultural hurdles, the benefits to the consumer are very evident. Interestingly, it was not the shuffling of the store names that caused the most heartburn within. It was the adoption of the "one-price" strategy that sent many of the ants off the driftwood.

David Ruggles

Auto Industry

Jan 1, 2013  

I wonder if there is transparency at AutoNation between their management and their sales staff, let alone consumers. How is transparency defined? Do we reveal all of our costs and negotiate the margin. Do we inform consumers of the margin we are actually making, INCLUDING hold back, trunk money, star step, carry over, etc? In most stores who brag about their "transparency," none of this is in place. The sales people aren't even provided this information.

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