Selling does not start at the curb. When I started selling cars in 1979, I stood by laser focused on the curb. That is where my hunt began. Like a chained dog my operative range was limited to the edge of the curb. Cross the line, and you were mine. My grandfather before me had knocked on doors and gone into barns to talk to people about his new Chryslers and DeSotos. But that sort of outreach was not part of the program for dealerships in my day. The hunt started at the curb.

In 1995, Autobytel began reaching past the curb via the internet. They lured customers online and packaged them up as leads. AutoTrader.com followed closely behind with an online listings model that was a huge improvement over newspaper classified ads. The ads were interactive. They went back and forth with the shopper. Most dealerships viewed this as advertising. My grandfather, had he still been alive, would have quickly recognized it as sales.

After all, the internet offers two-way communication. One-way devices (radio, television, print, and outdoor) were advertising, meant to stimulate the customer into coming to the store for a two-way conversation we called the sales process. The telephone, a two-way communication device, was clearly recognized as a sales tool in my grandfather's day, but by my time the approach to the phone was "just get them in." After all, everyone knew sales started at the curb. No wonder the internet was quickly misunderstood as an advertising medium rather than a sales tool.

Today, selling cars starts with price, photos, video, and text descriptions. Vehicles not online are not offered to the more than 80% of car buyers who use the internet in their automotive shopping process. Vehicles online without pricing or complete merchandising are generally dismissed by consumers as not really for sale either. Shoppers engage in a two-way conversation with the internet. The shopper clicks or types and the internet responds with content. If your vehicle has little or nothing to say for itself, the conversation quickly dries up and moves to another vehicle that is for sale and ready for an online conversation.

My grandfather would have been amazed at this modern sales tool. The notion that he could put everything he knew about the vehicle into an online listing and dozens of people would interact and converse with that information until one of them was sold enough to contact him would have seemed amazing. It also would have saved a great deal of shoe leather. He might have been intimidated by the first fifteen years of technology surrounding automotive internet. But now merchandising a vehicle is literally as easy as turning on an iPhone application and following the built-in steps (e.g. cDemo's Mobile Inspector App). Any eight year old can do it. No second device, no cables, no moving files around. My grandfather would have been able to pick it up without any training, and he would have recognized that he was selling cars, not just advertising them.

We have come full circle over the past four generations. During the depression and late 1940's sales efforts went out to where the customers were. As television advertising took hold, sales efforts were chained down. But the internet set those sales efforts free, going back out to shopper's homes, places of work, or wherever they want us, whenever they want us. The chain and collar are off. Take your price and rich content beyond the curb and get some new sales started!

J.D. Power and Associates has been releasing its Sales Satisfaction Index for a quarter century, and it has contributed to profitable changes in how dealerships interact with customers during the in-store sales process. However, in the age of relationship building between retailers and customers, we need to think beyond the customer's satisfaction with the in-store sales event.

I recognize that many critics of satisfaction research believe people are either satisfied or dissatisfied, but that conclusion simply is not supported by the results. It has long been true that restaurant and hotel customers are more apt to fill out table cards when they are delighted or disgruntled, but when surveys are well distributed by an independent third party, more of the 2-4 ratings appear on the five-point scale. This is a serious challenge faced by those who would like to replace customer satisfaction surveys with ratings from Google, Yahoo, or DealerRater that also rely on convenience sampling. I have yet to see evidence that these ratings represent the car buying population as a whole. They have their place, but survey data may still be necessary to gauge the mean satisfaction of buyers at the brand or store level.

However, is the mean satisfaction rating from a single event what really matters to the dealer's business? What dealers want is loyalty and advocacy, and there is a good case to be made for paying closest attention to the extremes rather than the averages.

At a given point in time, most car buyers are not strong influencers regarding where anyone else buys a car.  Pareto's principle would suggest that 80% of the advocacy influence in car buying comes from 20% of the car owner. My hypothesis is that advocacy related to where to buy is significantly less dispersed than advocacy related to what to buy. For dealers in particular, the opportunity for more business may lie in expanding the positive extreme than gently moving the middle of their customer base. Dealers need to focus on having very strong relationships with the few customers who are extreme influencers.  Sales satisfaction is nice, but turning that satisfaction into loyalty and advocacy for your store is where the money is. Look at the adjacent chart. The distribution of your customers probably looks a lot like this, with many of them giving you a high rating and darn few doing anything for you that will grow your business.

Getting a few more of your customers to become extremely active advocates of your store, and taking care of the few you have now, may be far more fruitful than getting another 500 followers who don’t do anything. Quality may be far more important than quantity when it comes to fans and followers in a dealer’s social media campaign. Quantitatively, the number of fans and followers making X number of interactions with your social media effort per month or per quarter may be the more important Key Performance Indicator (KPI). The total number of fans and followers remains important, but may not be as important as the metric has been hyped up to be.

The negative site is extremely important as well. A dealer’s social network becomes a very valuable asset over time, along with the store’s brand image. However, the bigger the network gets, the faster it can burn down with a single incident gone out of control. Here, the substance of the negativity may be more important than the raw number of negative ratings. Negative occurrences in social media might be compared to earthquakes. The world experiences over 1.4 million earthquakes each year, which has no significance to anyone. What does matter is the roughly one time per year that a quake of 8.0 or higher occurs. It often spells disaster.

My hypothesis is that the vast majority of social media disasters have to do with the dealership not honoring a published price. More research needs to be done in this area. Whatever the most prominent sources of social media disasters are, they need to be scanned for constantly, and appropriate action needs to take place rapidly. The raw number of negative interactions should not be dismissed, but certainly should not be taken as seriously as those incidences that could turn into disasters.

Statistical means, like the Sales Satisfaction Index, are but one perspective on the distribution of customers. The size and nature of the extremes now seems more important than the mean. Additionally, satisfaction with the single sales event is becoming less important than activity generated from the ongoing relationship. As previously stated, Sales Satisfaction Index still has its place. After all, many car buyers don’t care two hoots about having a relationship with their car dealer. However, dealerships, OEMs, and vendors need to adjust with new metrics and early warning systems and adapt to the age of relationship building. Your customers have the ability to influence more friends, family, and co-workers than they ever did before. They also have the ability to influence them to a higher degree. We can neither ignore the facts nor ignore the metrics that truly matter today.

Borrowing from a Seth Godin article on alignment, the relationship between a customer and your business only works if you and the customer both want the same thing. I adapted Mr. Godin's thinking to social media.

Social Media Alignment

• Your customer wants a place they can shop with confidence, as though they had a friend in the business hooking them up to a fair deal with no hassles. If this is why you are engaged in social media, to provide a relationship your customers can feel protected by, then your social media effort is aligned with this shopper, and you know which shoppers you are primarily aiming to reach, engage, and nurture.
• Your customer wants a place they can easily pull information from and give it to a friend. You want to make it easy for them to find and distribute useful auto shopping and/or ownership information.
• Your customer wants a website or page they can proudly refer friends to. You want to provide online content shoppers can confidently send their friends and family to.
• Your customer or prospective customer wants to find the lowest prices or highest values possible. You want to sell cars at the lowest price possible or provide the best values possible and are willing to spend money and work hard to demonstrate that.

Social Media Misalignment

• Your customer wants a place they can shop with confidence, as though they had a friend in the business hooking them up to a fair deal with no hassles. You want to bombard customers with sales messages until they surrender.
• Your customer wants a place they can easily pull information and give it to a friend. You want to get to their friends directly.
• Your customer wants a website or page they can proudly refer friends to. You want a website that converts shoppers to tracked leads, regardless of whether shoppers find the information they are looking for.
• Your customer or prospective customer wants to find the cheapest deal possible. You want shoppers to come in believing your deals are fair, then fleece them for all they've got.

I'll be presenting on Hard Social Media Data: Analytics That Prove Your Return or Wasteful Investment at Driving Sales Executive Summit on October 10.

Car shoppers want to give you and your inventory the finger. The iPad is selling at a rate about 100,000 per day, so you've probably used one by now. Isn't it amazing what you can do with a finger. Thousands of auto buyers in your community want to give you and your inventory the finger on their iPads, but they can't. Sure they can access your website on their iPad, but your navigation is not designed to let them give you the finger the way they can with iPad apps.

Owners of iPads strongly prefer to use iPad apps, not those tiny little iPhone apps, real iPad apps. Does this mean you need to rush out and create an iPad app for your inventory? Heck no. Chances are very few people in your community would download it anyway. Navigating to an app is much different than navigating to a website. Soon, there will be a few dominant automotive shopping apps designed specifically for the iPad. They will have millions of vehicles in inventory and virtually every franchised dealer in their dealer directories.

The first of these application is now in Beta and will launch with over 100,000 downloads. This is the year of the iPad. Get ready to let shoppers in your community give you the finger, and their business.

When vendors look at dealer's marketing and training budgets as a fixed pie, disparaging remarks and misinformation are sure to follow. Virtually everything a dealer can buy to increase sales has been said to not work at some point or another. While every product or service related to revenue generation must be held accountable for the value it delivers, nearly all of them can be justified under the proper circumstances and at the right price point.

The following four-minute video uses animation to demonstrate that performing well with one marketing or training solution often increases the value of complementary opportunities. http://revenuegurutraining.articulate-online.com/8685108185 The more a dealership is fixated on a single solution, the deeper they fall into diminishing returns. The good news is that extreme expertise in one area often enhances the value of other opportunities. We refer to this as The Seesaw Effect. The more dealers understand these seesaws the better equipped they are to place the next investment in the opportunity that will serve the store best.

Dealers will be served best by those vendors who accurately identify the revenue enhancement that will come from investing in their products as well as the complementary products that can be profitably invested in before or after their own product is purchased. Vendors have a responsibility to become trustworthy marketing consultants. When a vendor advises the dealer to invest $10,000 per store per month in their own product and minimize the investment in complementary products and services, it's probably time to hide the checkbook until rational advice can be obtained.

There are some cautions and exceptions. Investing in a branding campaign (usually with TV, radio, outdoor, and general display) is not advisable unless the campaign can be sufficiently funded, a unique selling proposition exists, and there is a commitment to maintain the campaign long term. Still, a great branding campaign can have a positive influence on the production of online listings, newspaper ads, SEM, and even the ability to set appointments and close sales. Conservatively, over $1,000,000,000 in dealer advertising and training budgets are misspent  each year. Thinking through the seesaws within Galbraith's map can go a long way toward cutting your portion of that waste. 

I'm looking for some advice from my friends on DrivingSales. We've created a new portal site to facilitate the exchange of free training information from vendors and others to 20 group moderators, trainers, and dealers, http://20GroupTraining.com. It's a very simple site, free to both content users and providers. The theory is that more vendors would produce good, recorded training content for their products, product categories, and strategy discussions, if more moderators and trainers used it. Also that more moderators and trainers would use it if they could quickly find what they want. The most common purpose of recorded training is to supplement live training, not to replace it. Do you think this will catch on? Is there content you would like to see on a site like this? What things should we screen for as vendors submit content? I think some level of advertising at the end should be expected. I also think it is useful for dealers and trainers to be able to compare product use training before a purchase decision or recommendation is made. However I am actively and openly soliciting suggestions.

Recently, there was a very helpful exchange on DalePollak.com regarding a situation where Vehicle Detail Pages (VDPs) increased but sales did not. It occurred to me that there is no exhaustive list of reasons why VDPs and Sales could go separate ways. VDPs are absolutely the best way to measure listings services, and total VDPs per vehicle should be a Key Performance Indicator (KPI) for any dealer. However, the correlation between VDPs and sales is imperfect. Understanding all the reasons why the conversion from VDPs to sales can decline will reduce the chance of misinterpreting the data. What follows is my best first effort. I hope others will add to this list or refute mine as needed.

1. A decline in merchandising performance – declines in either the quantity or quality of photos and videos can reduce the number of contacts per VDP, therefore reducing the number of sales. Poorer seller's notes (text descriptions) will have the same impact. Nearly everything on the Vehicle Details Page is under the control or influence of the dealer.
2. Decline in lead handling performance – A decrease in conversions from VDP to sales can often be attributed to a staffing change or the absence of a key team member.  Occasionally, a team will increase the number of leads coming in faster than the team can expand its ability to properly handle leads. If VDPs increase 40%, contacts to the store through phone, email, chat and walking in will likely rise by 40% as well. If the team is not prepared to handle that increase in store contacts the 40% sales increase will not be realized.
3. An increase in the Market Days Supply (MDS) – Adding inventory with more supply relative to demand will decrease the number of times your vehicles appear on Search Results Pages (SRPs), resulting in fewer VDPs. It can also lessen the rate at which VDPs convert into contacts and sales. When there is plenty of supply to pick from, your vehicles will not only be looked at less, but with less need-to-have-it enthusiasm.
4. A decrease in demand – MDS is the amount of inventory in the market divided by the amount demanded each day. If the predicted level of demand is not lived up to, then the actual MDS during the month was higher than the forecasted numbers indicated. A 20% decrease in demand that was not forecasted in the MDS estimates has the same impact on VDPs as adding inventory with a 20% higher MDS when the forecasts are accurate. (The accuracy of MDS forecasting is a legitimate basis for competition among service providers, but that is for another day.)
5. Decline in branding effectiveness – Over time, a decline in the effectiveness in branding advertising (usually TV, radio, and outdoor) can reduce the preference shoppers have for your store as they examine your vehicles online. Typically, branding campaigns echo over time, so there is not likely to be an immediate decrease in conversion from VDP to sales even if all branding is halted.
6. Changes in surrounding advertising – The impact of banner ads on the Vehicle Details Page are largely overrated; however, they can impact conversion rates. For example, a dealer buying PowerPosition ads on Cars.com will find an increase in the conversion rate from VDPs to contacts and a resulting increase in sales. If those ads are discontinued and purchased by a competitor, conversion rates are sure to decline. Banner ads are sometimes purchased by OEMs or even non-automotive companies. (AT&T is currently running banner ads on some of AutoTrader.com's Vehicle Details Pages). This does not provide the same boost than can be expected by having your own ads there, but it will not decrease conversion rates as much as having competitor ads there. The decision to purchase banner ads on listings sites is nearly as much about not allowing your competitor to as it is having the ads for yourself. In theory, the impact from competing ads should be minimized for vehicles with excellent merchandising. I don't currently have the data needed to test this hypothesis.

If your used-vehicle sales change more than your VDPs, chances are one or more of the above changes were the cause. I've heard people say "it just doesn't work as well as it did." The more likely answer is you are somehow not working the system as well as you did. Fix the problem and you are sure to increase sales.

Fifteen years ago, the shopping radius of your customers was smaller. More of your sales came from people in your local area who used the same cable system, read the same paper, and listened to the same local radio stations. You thought you had a pretty good gut feel for the market, any you probably did. Besides, you didn't have much choice. Good marketing data was scarce.

Today, new customers are considering your inventory from further away and your local customers are looking at inventory from dealers they never considered before. Shoppers are bouncing from site to site like they were in a pinball machine. You have no idea who sees and hears your ads and who strips your commercials from your content. In short, the changes in consumer behavior have given your gut feel a gastric bypass.

I keep asking myself why thousands of dealers subscribing to J.D. Power's PIN product don't use the free PowerDealer tool, or why more dealers haven't signed up for Dataium's free VisiCogn Insite product. Why don't more dealers subscribing to vAuto and FirstLook take full advantage of the tools they subscribe to? These products, and others, provide good useful data that can facilitate sound decision making. I'm beginning to think it's not these analytical tools that are being dismissed as much as it is the process of using them.

Decision makers of my generation need to face up to the fact that marketing is more complicated than it used to be, and our gut feel is less equipped for the job. In fact, some of our experience from 30 years ago is working against us when we make decisions in a vastly different landscape. Networking with other dealers isn't enough either, because media penetration is much different in one community than it is another. You've got to make sense of the numbers in your DMA and base your decision making on the clearer picture they can provide.

We used to say that the homecoming king would make more money than the class nerd. The social skills involved in selling were more valuable than analytical skills. Today, if you don't have enough nerd power going for you there won't be enough store traffic to keep the homecoming king in business. Getting the data is cheap and often free. Start there and begin putting the data to work for better decision making about advertising buys, vehicle acquisitions, pricing, merchandising decisions, and store operations. 

     One reason I left the automotive internet research business in 2006 was the proliferation of online research by amateurs loaded with newfound data. Data has never been cheaper or more abundant, but turning data into useful information still requires care. Most industry publications are understaffed and are not in a position to weed out the garbage from the actual research findings dealers need to hear. The consequence is that even the most ridiculous hypothesis is supported by someone's tortured data.

     Research based conclusions regarding retail marketing bounce back and forth like diet information. Just as consumers are baffled about whether things like chocolate, wine, and eggs are healthy in moderation or always to be avoided, dealers are left with lots of claims carrying little credibility.

     It's hard to separate the facts from the fads. What percentage of shoppers really wants to negotiate price? Does this differ by market, buy vehicle segment, or by demographics? Do women prefer fixed pricing more than men do?  Do they value warranties more? These are important questions that have been publicly trampled with conclusions backed by very questionable data and analysis.

     Vendors have taken such a careless approach with data that the act of publishing non-sense has spilled over into some dealer conversations. Closing rate, or any other ratio, doesn't mean a thing unless both the numerator and denominator mean what you think they do. Averages don't accurately describe one-tailed distributions. Large sample sizes don't make up for sampling bias.

     Regardless of intentions, some of what dealers are being fed is flat-out misinformation. Dealers need to be careful about how much weight they give to information from vendors who are not in the business of providing sound information. Vendors seeking credibility for their findings should provide greater transparency into their research methodology.