Derrick Woolfson

Company: Beltway Companies

Derrick Woolfson Blog
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Derrick Woolfson

Beltway Companies

Jul 7, 2020

How Much Are You Paying In Vendor Fees for Ad Spend?

Now more than ever, your dealer needs a clear, defined marketing strategy. One that lends itself to maximizing your dealers budget. It is times like this that push us to think and approach ideas differently. Keeping in mind that the very decisions and actions made today can and have a lasting impact. Instead of approaching the situation with band-aids - with the hopes of things picking back-up naturally - you have to get ahead of the situation. There are many ways to approach your marketing strategy, but it starts by reviewing your actual marketing budget. That is removing all of the white-noise out of the budget - i.e., CRM Costs, Website Hosting Costs, and Software/App costs are not marketing expenses! That and stop solely worrying about what the same OEM down the road is doing, and focusing on your dealership and its surrounding area.  

Advertising Budget. Make the Right Moves. 

Advertising budgets tend to be more complicated than they need to be on the dealer level. The idea that the budget, itself, includes far more than actual advertising. By that, I mean, they tend to include everything from CRM costs, dealership expenses, and website & software expenses, to name a few. In most cases, it is best to have a separate line item for 'operational' expenses, which is your software, CRM, and websites (not advertising, but the actual cost to host your website). When you break down the budget and solely look at your real advertising spend, it becomes easier to identify areas you can cut, vendors to remove, and possibly vendors that you will need to add to maximize your dealerships efforts. 

More importantly, one of the go-to band-aids for "spend reductions" in our industry is to simply "pause," or "cut" ad spend. At first, this seems like the logical thing to do. Make no mistake, though; in many cases, this can wind up doing more damage than good! You have to remember that simply "flipping" the switch on/off does not solve any problems other than an "immediate" drop in costs. But keep in mind that an "immediate" drop-in spend could be costing you more in the long-term. We tend to think short-term (like today) versus thinking about future ramifications. Not to mention, what we tend to ignore (and overlook) is that by the time you decide to flip the switch back "on" your ad spend tends not to go as far as it did previously. 

Instead of slapping on a band-aid and saying, "well, we just need to cut expenses. The more money we make, the more I can spend with advertising." Focus on the ads you are currently running! When is the last time you actually read the vendor reports? When is the last time you reviewed the actual campaigns (Google PPC Ads) the vendors were running? Your dealership needs change, and so should your ad campaigns! 

For example, several dealers often neglect marketing for fixed-ops other than the occasional - expensive - OEM mailer. Or the ground-breaking (repeated, expected) organic social media post for a coupon (FYI, collecting likes does not increase your absorption rate) that does not get much traction. 

As for the PPC Campaigns, when is the last time you reviewed your OEM's detractor report (the report that outlines the OEM you are losing the most sales to?) and worked with your vendor to devise and strategize new ad campaigns? Cleaning up and re-working your ads can make your spending go further. And selling an extra two to three vehicles a month can make all the difference. 

One of the other things you need to review is what percentage of your ad spend the vendor is taking from the top! If your vendor is taking 30% of the ad spend for "fees," you need to negotiate a better cost! 30% of your $15k budget is $4,500 in fees! For example, if you have five stores in your group, which is $22,500 a month, you're not spending to run ads. 

Bottom Line: You do not know what you do not take the time to ask and review. And to keep your dealership on the right track - a sustainable track - you have to have a clear picture of your *actual* advertising spend for the dealership! Once you have a clear outline of your total spend, it is best to devise a refined strategy with your vendor making sure you are getting the most out of your ad spend. 

When is the last time you checked your dealer fees on ad spend? Have you found more success after taking the time to restructure ad campaigns? 

 

Derrick Woolfson

Beltway Companies

Business Development

1219

9 Comments

John Finucane

CarData, Inc.

Jul 7, 2020  

30-39% fees are common...and crazy! 

C L

Automotive Group

Jul 7, 2020  

GM really bogged us down with who we can use for ads and the fee structure. I dont like it one bit. 

Morgan Hardy

Phone Ninjas

Aug 8, 2020  

@Chris- why?

Dean Love

Birchwood Automotive Group

Aug 8, 2020  

I've seen management fees starting to run as high as 30+% and I agree that is CRAZY, and often unwarranted.  However, if you happen to be paying a pre-negotiated 'flat' amount (regardless of the total spend), I think you need to ensure the vendor is held accountable as well, since the incentive to drive performance can be affected.  

Morgan Hardy

Phone Ninjas

Aug 8, 2020  

@Dean- I think it is beneficial for the dealer to do as much as possible in house. 

Josh Sacks

AutoLeadStar

Aug 8, 2020  

Any vendor that takes a % of spend should be a cause for concern for a dealer. The vendor is incentivised to try get the dealer to spend more even if it isn't in the dealer's best interest. Dealers should have a transparent relationship with vendors. Short term contracts, no % of spend, clear expectations from the beginning. 

Dean Love

Birchwood Automotive Group

Aug 8, 2020  

I would tend to agree.  A setup like this makes it easier for any vendor to at least be tempted  to continually make recommendations around increasing the spend, and it can end up being the major recommendation - all the time.  I've seen it.  It's lazy and disingenuous.  

Dean Love

Birchwood Automotive Group

Aug 8, 2020  

It's helpful to have a cap on this - like a percentage UP TO (and not to exceed) a particular dollar amount ($500 to $700 or so).  The value is high enough that effort is still put into ensuring performance, there's adequate risk for the vendor and there's still a ceiling amount which helps with budgeting.  

Dean Love

Birchwood Automotive Group

Aug 8, 2020  

@Morgan - I agree, where possible and feasible.  We have a mix of strategies in place which works for us, but we review the situation regularly and make changes when necessary. 

Derrick Woolfson

Beltway Companies

Jul 7, 2020

Stop Wasting Time On Bad Leads.

Every month we get leads, lots of leads. But as you know, not all leads are of quality. Yet so many dealers waste precious time answering bad leads. For the sake of this article, a bad lead is one that does not have the following: valid contact information (phone/email), a coupon inquiry from a customer that has sold (yes, this happens), or are plain old spam. If your Sales Consultants or BDC Agents are spending time calling, emailing, or texting bad leads for the sake of completing their CRM work-flow, they are wasting a lot of valuable time. Time that could be better utilized calling leads with a higher probability of booking an appointment. And no, this is not about "cherry-picking" or only working with low-hanging fruit, either. 

So what do you do with bad leads? How Do You Manage Bad Leads?  

If there is no means of connecting with the customer, the lead needs to be marked "bad." However, there are multiple ways to go about marking the lead bad. One of the best ways to do this - depending on your CRM's capabilities - is to mark the "status" as "bad-lead." At which point, at the end of the month, you can easily report on how many leads were not able to be contacted. This does a few things for your dealership: 

First: your BDC Agents or Sales Consultants are not wasting their time trying to contact a lead with invalid information. This also helps them stay on task with calling customers that have valid contact information. And while this - itself - seems trivial or not a big deal, it is a big deal. There could easily be 10-20% of bad leads monthly! That truly adds up after a month or so.

Second: The more you start to mark and report bad leads, you can start to look at the vendor who is supplying them. The idea is that while the vendor is saying you are getting a "tremendous" amount of leads, you can report back saying that out of the 125 leads, 35 were not able to be contacted and we only sold three. Those three sold units - after taking the cost of the provider out - did not have a strong ROI. More so, after two to three months of tracking this vendor's lead quality, it might mean that you ought to move those funds to a campaign that is pushing more traffic to your dealer's website with a stronger conversion rate. 

Third: Morale is everything. If your sales managers are not taking out bad leads (again, this has to *CLEARLY* be outlined/defined as to what constitutes a bad lead), then it can - in many cases - become nearly impossible for your BDC Agents or Sales Consultants to hit their core objectives. That is hitting a specific set/show rate when the lead quality is not making that a remote possibility. Again, this is not about marking "leads" bad if the customer simply does not respond. That is a whole other discussion. Instead, this is about removing the "bad" leads that are not possible to communicate with. 

Bottom Line: Marking leads bad - due to invalid contact information - is not about "skewing" the system to show better results. The purpose and point of marking leads bad due to invalid contact information is to help keep your team on task and make sure that you are holding your vendors accountable. And yes, it is no secret - that with any vendor - there will be leads that are bad. However, when the majority of the leads are invalid and or the set/show/sold rates are the lowest out of the mix, then you have the data on hand to make a well-informed business decision. 

How do you handle bad leads? Do you actively manage this in your CRM? 

 

Derrick Woolfson

Beltway Companies

Business Development

1245

2 Comments

Morgan Hardy

Phone Ninjas

Jul 7, 2020  

A lot of GM's and GSM's don't understand this. Thanks for breaking it down! 

Derrick Woolfson

Beltway Companies

Jul 7, 2020  

@Morgan, thanks! And agreed. But thats largely because they are focused on the wrong reports, and/or data that does not paint the whole picture. Better communication is needed on the dealer level, and GM's & Sales Managers have to trust their employees. And stop this "work-flow" non-sense. That is "following" a work-flow that is not relevant to the lead!! 

Derrick Woolfson

Beltway Companies

Jun 6, 2020

How to Pay Your BDC Team

Designing a pay plan focused primarily on commission on the dealer level is not uncommon; in fact, the entire premise of the pay plan is “the more appointments you book that show and sell the more you will make,” which can be true depending on the pay plan. However, if the pay plan is just focused on commission, it can quickly become a group of individuals working separately. And because there is not a team effort when it comes to managing customers, there are often gaping holes in your follow-up. Just check one of your BDC Agents work-flows at random, and you will find several uncompleted tasks.

To avoid the risk of losing sales due to a lack of team effort, there are other components to consider when approaching the pay plan:

Hourly Rate vs. Salary?

It is quite common for your BDC Agent to be an hourly employee, which can be quite costly. A prime example of this is overtime. Take a look at their hours; are they clocking out for lunch? If not that can add as much as five hours per week in unintended over-time, which depending on your state is time and a half for their pay. You take one to two BDC Agents doing that, and now you are paying ten hours a week, and forty hours a month! If you salaried your BDC Agent, you would potentially save thousands of dollars in overtime. However, when it comes to determining their salaried rate, it is best to review the going rate in your area. So while it might sound harsh - business is business, and in many cases, the overtime that is worked was highly unproductive.

Only Paid if the Appointment is Sold?

There are two sides to this scenario, and both are worth addressing; one of biggest reasons dealers do not pay based on whether the appointment sold or not is the age-old argument of “they do not have control on whether or not the customer sells,” which is true. The primary purpose of the BDC Agent is to book an appointment getting the customer into the dealership. Now that said, the reason why dealers have moved towards the plan that only pays if the customer sells is due to the issue of “the BDC agents do not bring in quality appointments. They will try and qualify the customer more if they know they only get paid if the appointment sells.”

Two things, if your BDC Agent is bringing in a customer with a recent repossession or if the customer wants a $350 payment on a $45k vehicle with zero money down - then yes, that is not best practice. However, your BDC Agents have far more significant issues if that is what they are doing. The second issue with that pay plan is the fact that if the BDC Agent is being paid only if the unit sells then they might be too involved in the deal. For example, instead of the BDC Agent moving onto the next phone call, email or text they are steadily focused and involved with the desking manager and sales consultant handling the deal. That distraction can cause ill productivity; as much as a half an hour can be lost as their focus has shifted.  This is not to say that your team does not need to have a commission-based plan, but this does offer that there are perhaps better ways to pay your BDC Agents. One of the ways of doing so is by paying if the appointment were to show, and then pay a volume bonus. If they hit “x” amount of shown appointments, they get a tiered bonus.

Bottom Line: your hourly rate could be costing you thousands of dollars in unintended overtime. It is best that you take some time and review the amount of overtime year over the year looking to see if your appointments increased. Chances are it is minimal, and if it is minimal then you know, it has cost your dealer money decreasing an already thinning bottom line. The other thing you ought to consider too is reviewing the cost of the BDC. Wherein, once you look at the payout of their commission, plus the salaried rate (or hourly), less their “sold” units, you can look at their actual cost and what their ROI is for the dealership.

How do you pay your BDC? Do you have an hourly rate or salary? For those with a salaried rate have you noticed any changes in their performance?


 

Derrick Woolfson

Beltway Companies

Business Development

1995

4 Comments

Sandy Zannino

Innovative Auto HR LLC

Jun 6, 2020  

This is an interesting article.  I would be remiss if I didn't comment my warning regarding the advice about pay plan structure for BDC and urge any dealer who is looking at this to consult with your HR professional and perhaps labor attorney.  Why?  Seems simple right?  A common misconception that just putting someone on "salary" means that you don't have to pay them overtime.  This simply isn't true.  The overtime exemptions are very specific and BDC does not fall into one of those exemptions.  Therefore BDC reps would be eligible for overtime. With that in mind--the overtime calculation is often misunderstood as well and any commissions, bonus' etc MUST be added into the calculation for "regular hourly rate".  Yes, you read that correctly.  A wage and hour audit by the DOL is no fun and can cause an employer to loss exemptions they ARE qualified for sometimes.  Another alternative is to create a pay plan based on average total income and pay that hourly rate, no bonus/commission--build in increases based on performance.   OR keep the commission and do not allow overtime.  It was actually a wage and hour suit 20 years ago that was the defining moment in my career.  The dealer lost because of lack of knowledge not bad intent.   #protectingprofits 

Derrick Woolfson

Beltway Companies

Jun 6, 2020  

@Sandy, you raise a good question/concern. I should have clarified that more in the article. Each state has its own "laws" pertaining to the "salary" amount should the employee be salaried. In that, if the employee is not paid a certain annual amount - to your point - it can land you (the dealer) in hot water. The main premise for this article was to outline the notion of "paying hourly" does not always make sense. If you paid enough salary wise it can be mutually beneficial. Now, where I have a different perspective is "paying" an hourly rate or salary without any sort of commission. Depending on the "commission" plan, someone who is highly motivated is not "capped," and can earn more depending on his/her performance. Where dealers struggle with this pay model, however, is having an overall lack of consistency when it comes to the "processes" behind the plans, and/or "total" opportunities for the BDC agent to earn commission on. Namely, if a dealer - let's say - cuts their ad spend by "X" amount, it can and will have an impact on total "lead volume." And if the BDC Agent has to hit "X" amount of "shown"/"sold" appointments to hit their commission, this could cause for mutual frustration. Especially considering what the average set, show, and sold rates are, no? 

Morgan Hardy

Phone Ninjas

Jul 7, 2020  

@Derrick- you make a very good point. When the dealer cuts ad spend, I'm sure most do not take into consideration the pay plan of the "front-line" employees. The BDC is still expected to hit the same numbers.

Derrick Woolfson

Beltway Companies

Jul 7, 2020  

@Morgan, thanks! Exactly, let's not forget, hitting your "numbers" with "bad-leads" is not going to work either!! And while it is essential to do your follow-up, if the customer has not purchased a vehicle within 30 or so days of inquiring online your chances of selling that customer is not very likely. Another "tactic" often used is calling the OEM Manifest Lists (cringes while typing that!) - they tend to have one of the *LOWEST* closing rates, ever.

Derrick Woolfson

Beltway Companies

Jun 6, 2020

Have You Earned Your Customers Trust?

Trust is imperative as it offers the customer the peace of mind that they have made the right decision regarding the servicing of their vehicle. And while the trust is earned through providing the correct information on the site such as accurate pricing, services, and rentals.  Earning the customers trust is also an integral part of other services offered with chat & text being a considerable part of that! 

When is the last time you were on your site and went through the chat or text process? Do you offer that on your site? Those that do offer it - do you have their chat reps handle the leads? If so, have you taken the time to speak with your account manager setting expectations for how customers are to be handled? 

Here are the top things to review and check-out to earn their trust! 

Chat Service 

Chatting can be very convenient for the customer. Where more often than not the customer is simply wanting to book an appointment. Perhaps asking a question about their service inquiring about what their contract entails. Sounds simple enough right? 

The problem comes into play, however, if the customer asks a question that the rep is unable to answer. And what's worse is if the rep misinforms the customer about a service cost or their service contract. When the customer arrives - the service advisor is most likely unaware of where the appointment came from much less what was offered - the customer than has to feel as if they are defending themselves with the information they were provided. Starting the visit off on a bad note. All because the chat rep was misinformed about policy.

One example of a mishap you can avoid is a chat where the customer was told that windshield wipers were a part of the service contract. When the customer arrived and asked “what type of windshield wipers they were getting” the service advisor looked with a blank stare offering that it is not at all apart of the contract. The customer got upset and while we were able to de-escalate the situation it made for a frustrating experience for both the customer and advisor!  

Take the extra minute and work with the account rep to ensure they are on the same page about expectations on customer questions & services! 

Texting 

Having all of these options are GREAT! But, not so great when a customer texts you and their response goes into the abyss as no one is checking the CRM for unmatched texting conversations. 
The customer texts a simple question - can I wait for my vehicle tomorrow while it is in service? Only to not get a response. Comes in the next day and it's completely backed up! And will take 3+ hours for the service! No fun for anyone. 

Do you use texting for service? If so, who handles the texting conversations?

Booking the Appointment 

When the customer schedules their appointment for a service (and the pricing is offered for the said service online), they are expecting it to be the same cost. Now mind you, of course, there will be the situation where the customer did not select the right service for their vehicle. And the advisor has to explain to the customer the price difference. Sure the customer might be slightly upset. But they are most likely going to be more understanding then if the customer were to have selected a service and the cost is much higher in store than of what was advertised! 

Do you show pricing within the service scheduler? If so, has it made a difference in overall spend? 

Bottom Line: if you are offering services to assist the customer offering them a more transparent experience then make sure the quality of their experience is the level of customer service you expect! Turn Key is GREAT, BUT only great if it WORKS! 

When is the last time you used your chat service to book an appointment? How was your experience? Do you manage chat/text in-house? 

Derrick Woolfson

Beltway Companies

Business Development

1060

1 Comment

Derrick Woolfson

Beltway Companies

Jun 6, 2020

Are We Still Comparing Apples to Oranges With Digital Marketing?

Have you ever been in a marketing meeting and heard the question, "well, tell me what the other [OEM] dealers are doing? What success are they having?" Sounds all too familiar, no? And while vendors might oblige with the question - offering what campaigns their other clients with the same OEM are doing - what value does this offer your dealership? 

If this is how your dealership approaches marketing meetings with your vendors, you have to step back and take another look! Instead of asking about what the other same OEMs are doing - ask your vendor what your dealer can do to help you out! 

Think about it for a minute; most dealers (seriously, there are a few out there that do not do much digital advertising!) spend money doing some form of digital advertising. So, in an overly crowded space, why do you want to mix in with the white noise? You don't! Instead, you ought to inquire about what your dealership can do differently to be more visible - digitally - but more importantly, what your dealership can do to be more successful! 

Here are two things to consider when coming up with a game-plan on advertising spend! 

Think Outside the Box. What Are Some of Your Dealerships Pain Points? Over-Aged Inventory? Losing Sales on A Specific Model? 

The sole purpose of online advertising is to help increase your sales. To increase your sales, however, you have to make the most of your digital ad spend. Simply spending money on an ad campaign does not, by any means, offer that you will have any success! Instead of casting a wide-net - hoping for the best - work towards identifying key areas of opportunity. In doing so, instead of the conversation being "what are the other dealers doing" the conversation becomes "I have to move more of this [model]. We are losing three out of every five sales on it!" With a clearer goal, you can then go back and look at how many leads you are getting on that model, what your traffic is on that model, and more importantly, ask the right questions to increase your chance of success! 

Having the Right Landing Pages With Strong Call to Actions is Everything. 

Running a digital ad campaign is one thing. Having the right landing page with strong call-to-action's is a whole other element that can make or break your campaign. All too often, you see dealers running an ad campaign only to have their customer land on the home page! (huh?). Think about it, if you are searching for a specific model, and you literally land on a home page - having to do the searching yourself - are you going to put that extra effort in? Probably not. 

Even if you have the customer land on the targeted model of interest, does it all look the same? Your landing page needs to stand out! The idea that if your OEM is running a specific special for that model, take the extra time to build out a new page with strong call-to-actions. By having a landing page that is specifically made for that campaign, you not only get better insights into the customer's behavior but you also increase keeping the prospective customers interest by having relevant content. Content that lends itself into increasing their chances of converting into a lead! 

Bottom Line: Asking what other dealers are doing is not going to help you much in the long run. So while you might be selling the same OEM, each dealer has its own unique challenges. And by strategizing a relevant campaign that is both relevant, and more importantly, aligning with your dealers' areas of opportunity, you increase your chances of success. To make it happen, however, you have to know what those areas of opportunities are! This process starts by taking the time to review OEM detractor reports, CRM Lead vs. Sold Reports, and Dealer Website Analytics to name a few. By taking the time to strategize with your digital vendors, it will pay off when you see a stronger return on investment!

What struggles and or areas of opportunity have you turned into a successful campaign? 

 

Derrick Woolfson

Beltway Companies

Business Development

642

No Comments

Derrick Woolfson

Beltway Companies

Jun 6, 2020

Isn't It Time We Take the Dealership to the Customer?

While Digital Retailing has remained a buzz word within the industry, the situation we are all currently facing has turned us talking about it into actualizing it in our uncharted new normal. How we actually approach Digital Retailing, however, varies drastically dealer to dealer. Namely, it is easy to talk about what Digital Retailing potentially means, or promoting it on your website - but when it comes to actualizing an internal process, marketing it, and, more importantly, managing the touch-points, there is a lot to accomplish. 

Here are some of the key components to consider when approaching digital retailing. 

Digital Retailing is More than Just Updating Your Website. What is Your Actual Process? What Does Digital Retailing Mean? 

For so long, the digital retailing conversation encapsulated the idea of having a physical cart on your website. The idea that the customer could add a vehicle to a cart and move through the various steps. And while that is a unique idea, it's the steps that define your sales process that count. 

There has to be a clearly defined process that both your dealer teams and customers will easily be able to follow. The notion that merely saying you offer "shopping" from home or "contactless delivery" does not mean anything to the customer. Your dealer teams also must understand every step of the process, everything from inventory selection (needs analysis), credit applications, trade-ins, delivery, and OEM delivery guidelines, to name a few. One of the most essential steps in this online process is the needs analysis. In that, when the customer does select the vehicle they are interested in, you are making sure it is the vehicle they would like to test drive by confirming their needs, wants, and desires in features, etc. 

So what does this process look like? 

Marketing & Sales Process: A transparent process that is outlined on your dealer's website, which really should be its own page - perhaps something to the effect of "contactless delivery." On that page, you can easily layout the actual process. 

Step One:  complete the needs analysis - the customer selects their vehicle of interest.

Step Two: complete the pre-approval process. 

Step Three: select an at-home consultation time.

Step Four: complete the trade-in process.

Step Five: complete the at-home delivery and OEM delivery process. 

Outlining the core steps will make it easier for your customer to know what to expect. As for the actual in-person at-home consultation, you need to outline, again, what the customer can expect in person. For example, you can outline the process - mirroring the above - informing the customer that you will bring the vehicle to them for a test drive, complete a trade-in analysis, etc. 

As for the Other Components to the At-Home Process, Here Are Other Items to Consider: 

Trade-in: This is probably one of the hardest components of the at-home delivery process. Where we must test drive their trade-in and do a complete analysis. However, with all of the tools we have out there - including being able to take photos of the vehicle sending them to the sales manager - we can help our used car sales managers by gathering as much information as possible. 

One of the other things you can do - depending on how far the dealership is from the customer - is after taking the test drive, take their trade-in back to the dealership allowing the customer to keep that brand-new vehicle in their driveway! But make no mistake, the trade-in process has to be transparent! The last thing you want to do is wind up having this process become much like it is at the dealership: the wizard behind the curtain, no? 

Instead of being the wizard behind the curtain - for those of you who use trade-in tools - you can complete the "walk-around" taking photos, and offer the customer the "range," which is entirely based on the information entered. Now (and I can hear the disinterest already), you have to train your sales consultants to make sure they are capturing the core components of the walk-around: tire test, dings, scratches, accidents, and how many owners to name a few. By offering the customer a thorough walk-around, the customer might actually even point out issues with the vehicle! Lastly, the sales consultant has to be honest and explain that the final trade-in value is subject to a final approval! 

OEM Delivery: More often than not, the OEM delivery process is a means of keeping the customer "occupied" while they wait to get into finance. But if we take a step back and think about it for a minute, isn't the customer a bit too preoccupied with what's arguably one of the most stressful parts of the process? By working with the customer at home - on their turf - the customer might be more invested in learning about their new vehicle. The other big difference with the at-home delivery is that instead of waiting on more than one customer at a time, you are giving the customer your undivided attention! What isn't the customer going to not like about that!? 

Social Media & Follow-Up: Given that the customer is on their own turf, they might be more inclined to allow you to take a photo of their new vehicle on their driveway! It does not get any better than that, no!? You also want to make sure that you take the time to follow-up with the customer, which means also offering another "at-home" follow-up consultation to revisit any features that they are either unaware of or having trouble with. If you can accomplish that before they receive the OEM survey, it could have a positive impact on your dealers CSI, but more importantly, it also means that you have a happier, stress-free customer. 

Bottom Line: Is there a lot involved with this process? Yes! Will it be easy to implement at your dealership? No! However, for those dealerships that are willing to make the investment - offering their customers a new experience - it can have a positive impact on your dealership's bottom line. But to make that happen, as mentioned above, there has to be a self-explanatory front-facing process that both your sales consultants and customers can easily understand. The other facet to making this a success is ensuring that your dealer follows the process. And while we all struggle with break-points in the process, it is much harder to "control" those break-points when you are on the customer's turf! 

Have you adopted digital retailing? If so what are some of the successes or obstacles you are facing? More so, how has your dealership handled those obstacles? 

 

Derrick Woolfson

Beltway Companies

Business Development

1305

3 Comments

Derrick Woolfson

Beltway Companies

Jun 6, 2020  

@Martins, thank you! Exactly, dealers have a lot of work to do! Those who re-align their efforts will come out ahead. Only time will tell. 

Derrick Woolfson

Beltway Companies

Jun 6, 2020

Do the OEM's Get Leads Right?

OEM leads. One of the first things that come to mind is that they are not just expensive - some being as much as $25 per Lead - but they are often not the best lead source. Namely, they tend to have one of the lowest closing rates. One might think that because the customer is converting directly off of the OEM site that they have not just chosen their brand, but also their dealer. 

However, when was the last time we (us dealers) questioned how the OEM's lead process works? Asking the bold question: do they cause some of the rifts between dealers? Do they help create the "price-war" games as they send the same Lead to several dealers? More so, what can they do to not just help the dealership but offer the customer a better experience!?

Here are two things the OEM should consider when it comes to managing their lead processes.

How the Leads Are Distributed. Stop Pushing Leads to Out of PMA Dealers! 

We have all been there. That is getting a lead from the OEM that is not in your PMA, which in some cases means that the incentives are not the same. This is one issue I have never understood. Think about it, if the dealer is already hard-pressed to make a profit - losing money to sell the vehicle - why would they want to sell a unit to a customer that is not likely to come back for service? Service is the dealer's profit center. So while one or two deals at the end of the month might make or break your OEM kick-backs, selling out of PMA usually does not have any advantages for the dealer. 

One of the other situations that can arise out of this is OEM Incentives, depending on the month, the unit, and the trim level the incentives could vary slightly between PMA's especially if the Lead is in another state. Another issue dealers face when it comes to out PMA leads is the dealer processing fee situation. Each state has its own laws regarding what the dealer can charge their customers. With some states having as much as a 200 to 300 dollar difference. Whereas, if the leads went to the closest dealership based off of their zip-code, it could - in most cases - avoid most of these issues, and promote the idea of buying your vehicle from the local dealer. 

Are the OEM's Actually Hindering the Customer's Experience? Imagine Getting Emails from Seven Dealerships at Once - Especially if the Responses Do Not Answer the Customers Questions in the Lead! 

Offering the customer the best experience possible should not be an afterthought. The idea that many OEM's send a lead to all dealerships within a 50+ mile radius does not make sense. Sure, one could argue that they are trying to get the customer the best price possible. But chances are that for new inventory - with all of the current OEM pricing restrictions - prices are relatively the same. Why can't OEM's send the Lead to the closest dealership based on the customers' zip code? In doing so, it helps keep that Lead within its PMA, allowing the dealership a better chance of closing that customer. 

As for the customer's experience, getting multiple emails from various dealers - from the same OEM - at once can be frustrating for the customer. Think about it for a minute. Several dealers have auto-responders, send text messages, emails, calls, all overlapping each other. So wouldn't you be a bit frustrated that your inbox gets flooded? Especially considering that most of the immediate correspondence fails to actually answer the customer's questions in the inquiry - yet we wonder why our customers get frustrated? 

Lastly, as mentioned above, the customer is far more likely to service their vehicle with the dealership that is five miles away versus the dealer that is fifty-plus miles away. Sure, you will have the customer that wants to drive an hour further to save a few hundred bucks. But you will still have a better chance of selling that customer if you get the Lead first. Not to mention, we wonder why dealers struggle with retention rates in service, but we fail to adequately build the relationship with the customer - mostly because if they purchase outside of the PMA - with the same OEM - they did not get a chance to build a relationship. It is a lot easier to get the customer to come back for service if they know their sales consultant who is supposed to be introducing their customer to the service department at the time of delivery.  

Bottom Line: At the end of the day, the OEM's and dealers have to work together so we can offer the best experience possible. Part of offering a better experience to both the dealer and customer is having a solid approach to handling OEM leads. Ensuring that there is a fine balance in how communication is approached with the customer. All of which can have not just a positive impact on the customer's overall experience, but help the dealers keep their local customer's purchases local. 

When was the last time you engaged with your OEM on leads? 

 

Derrick Woolfson

Beltway Companies

Business Development

1156

3 Comments

Daryl Sanders

Internet Dealer Solutions, Ltd.

Jun 6, 2020  

Your points are very well spoken.  Out of market, and going to multiple dealers will not result in a good experience for the shopper.

Another issue is third party OEM leads are very low closing due to how the leads are generated.  Not from shoppers but from promotion respondents.

Derrick Woolfson

Beltway Companies

Jun 6, 2020  

@Daryl, thank you! You are also 100% correct with the "promotional" leads. And while some OEM's allow you to "score" their leads, ask for a refund, and/or do not count all "promotional" leads in the closing rate, they still do not offer the best reporting. The other issue, too, is that most OEM's fail to efficiently/effectively count "touches" given that most of them still do not count texting. The OEM's have to be on the same page as the dealers. It starts at the top.

Daryl Sanders

Internet Dealer Solutions, Ltd.

Jun 6, 2020  

Speaking of OEM  lead providers.  I am a consultant for all makes and am amazed the differences between number of leads as well as the quality of the leads.  In the same market Toyota provided 430 leads May YTD vs Honda 62 leads for same period.  These two stores have similar YTD sales.

Derrick Woolfson

Beltway Companies

May 5, 2020

Don't Forget About Your Managers.

When we are hit with an unprecedented situation - out of left field - it can easily derail your dealer's efforts. Sustaining everything you have worked on is no easy feat. More importantly, to maintain your efforts, you have to have empowered managers who become empowered leaders. Have you empowered your managers to make decisions? Have you allowed them to be a part of making decisions regarding processes you are currently devising? Have they assisted you in implementing these new processes ensuring that their teams are on board? 

Here are the top three ways you can empower your managers. 

The GM is One Person. They Do Not Have All of the Answers. No One Does. Work Together. 

All too often, every single decision - down to the header of an email - is the sole decision of the GM. That mindset - even when business is good - is toxic and detracts from your managers from growing and evolving if they cannot make decisions. Now more than ever, it is essential that you allow your managers to make informed decisions - working with you, not for you - to get through this situation. Remembering that they, too, are just as stressed. We are all stressed. Giving them support is critical. 

Keep Your Managers Informed. Keep. It. Real. 

No one likes secrets. The longer you wait to keep your managers informed about what is going on, the less likely they will buy in to the process. Keeping them informed also shows that you trust them, and view them as an integral part of the dealership's success. Not to mention, their buy-in is paramount in making your current processes successful. 

Create A Weekly Round Table Discussion. Stop Looking at All the Reports. They Are Not Going to Help You. 

Now is not the time to be worried about YOY reports, or solely worrying about the set, show, & sold rate. Instead of focusing on percentages/numbers, focus on results. Given the current circumstances, the best way to connect all of your departments is by holding a weekly round table discussion. 

Empower your managers to share what they have accomplished with their departments for the week. Having your teams share everything from current prospects, service work, potential leads, and potential leads for other departments. For example, you can have your sales consultants call previous customers and ask them how they are doing and if they need service work, etc. A simple care call and lead to a service appointment. The customer is also likely to remember that you took the time to call. 

One of the other things you can do is ask for marketing ideas! Each week, we get new ideas from having a conversation. Those conversations surrounding marketing ideas turn into actual creative content, which has turned into results. Keep in mind that having this weekly round table is to unite everyone as a team vs. the typical siloed approach. 

Bottom Line: Empowering your managers is what enables them to become leaders. They cannot lead if they cannot manage. Now more than ever, your managers need to know they have the Owners & GM's support. Your support inspires them to go the extra mile, make it happen, and move the needle. We will get past this, what will make or break your dealer getting past this sooner is working together as a united front with empowered leaders. 

How Have You Empowered Your Managers? 

 

Derrick Woolfson

Beltway Companies

Business Development

784

No Comments

Derrick Woolfson

Beltway Companies

May 5, 2020

Videos Still Work, Right?

There have been several rounds of conversation in regards to videos. Namely, videos are the new it factor when it comes to capturing our customer's attention whether that is giving the service customer an update, thanking the customer, or building value in the service advisor by having him/her share a personal video with the customer.

Videos are powerful, BUT - the way we have been approaching video (for some time now, really) might not be what the customer is looking for in a video. Sure there are in fact some customers who love the videos!

This article is not to discredit the hard work of those who have been brave enough to load a million apps, take time out of their personal day, spend their money, and argue with his/her GM & Service manager be a part of taking videos.

What I am saying, however, is that there is an easier method of being relevant when it comes to video that we have yet to approach. That is creating a collection of videos that ‘effectively’ explain the services s/he needs for their vehicle. And no, this is not a personal video that would be done onsite for each and every customer. But rather a menu of the services your dealership offers.

Think about it, when a customer explains a problem in the service line it is like “it makes this grrr crackkkkk grrrr sound,” to which the advisor says “we’ll take a look.” The more confident the consumer feels - as if s/he were a part of the decision-making process - the more trust they have, which means they will spend that much more money in the lane.

In regards to the videos, you would have a simple to use catalog - using YouTube Videos (45 seconds or less) - explaining the most common problems. The video’s (while short) are informative, offering the customer a plausible explanation as to what could be wrong with their vehicle.

The best way to start this project is to create a video for oil change, cabin filter change, even a vehicle detail. This video needs to be appealing, too - refraining from using an OEM video where everything is too perfect. It is like booking a hotel on Expedia where the photos are from the resorts first day of business. So upon arrival, the hotel has been through heck and back looking nothing like it once did.

How often do you take videos? Are you having great success with it in the service lane? Any customer feedback?

Derrick Woolfson

Beltway Companies

Business Development

1077

3 Comments

John Colban

Authntk Walkaround Videos

May 5, 2020  

Interesting thought.. As a customer I'm having a hard time seeing the value though. More than likely I've already researched my "grrrr crakkkk grrr sound" online and watched a couple YT videos.  What I would love is a video of my car and a technician saying "as you can see, this is why your car is making the "grrrr crakkkk grrr sound".. 

Derrick Woolfson

Beltway Companies

May 5, 2020  

@John, that would be nice, and would probably decrease declined services. Chances are, if they just explain the issue over the phone, you will avoid the service. But to your point, if there is a video, and it is making a bad noise, you will most likely get it fixed. 

John Finucane

CarData, Inc.

Jun 6, 2020  

Would be nice if some type of software/app allowed the service tech to categorize each video done (from stripped oil plug to ball joint issues) along with the year/make/model/trim of the vehicle done for then the catalog could be built & sent to YouTube. Although it would take a long time to build the catalog it would be specific. I think customers want specific answers about their issues & whatever dealer they feel is most transparent/trustworthy will most likely get the business. I think this goes for the sales side as well, whoever merchandises the for sale vehicles transparently typically gets the 1st shot at the business. 

Derrick Woolfson

Beltway Companies

May 5, 2020

Is Your Service Landing Page Up to Date?

Fixed-ops is the dealer's bread and butter when it comes to the bottom line. Your dealer's service landing page mustn't offer just relevant content but strong call to actions. Several dealers do not have much content at all on their service landing pages. And or their service scheduling tool leaves much to be desired. Here are the top things to consider when revamping your service page. 

Remind Your Customers that You Can Service All Makes! 

We all sell pre-owned vehicles, but how often do we remind our customers that we can service them too! Sure, we might offer the "free" oil change program that has not changed since we've opened - but do we even market to them afterward? Most of us do not! And for most of those dealers who do market to them, they are sending them "OEM Service Specials" that do not even apply. You can easily add an SRP Banner on your own site that says "We Service All Makes" with a link to your scheduling tool. It's that easy. 

Highlight Oil Changes With Competitive Pricing 

It is no secret that customers still believe that the dealer is more expensive for an oil change vs. taking it to a bix box service center. But the fact is that the dealer is often less expensive! Yet so many dealers do not explain that on their landing page! In addition to not offering a "price comparison" to show their customers that they are less expensive! To illustrate this, you can create a graphic that includes five different prices for oil changes in the area. Having a strong visual reminder can help increase the chances of potential customers booking an appointment. 

Service Scheduling Tool 

Not all service scheduling tools are made equal! And it is not a fun experience trying to book an appointment on a phone when the platform is not responsive. Yes, sadly, many of the tools out there today are still not mobile-friendly! Not to mention, there are still apps that do not offer you the ability to "sign-in" to easily book your next service appointment. With the ability to review previously declined services, or services that you have been recommended to schedule in the future. Having a tool that works and is easy to use - that offers relevant information - can make or break their not only booking an appointment but booking an appointment with multiple services. 

Highlight Your New Processes for Picking-Up and Dropping Off their Vehicles 

With your processes having been updated and changed with COVID-19, make sure to outline those procedure changes. Making it easy for the customer to understand what they can expect during the process. One of the things that you can also do is create a quick video outlining this process. 

Bottom Line: Your service page is a significant landing page! Make sure you take the time to ensure that the content is relevant. Including a competitive price analysis for oil changes, information about servicing all makes, and an easy to use service scheduler that will make you stand out! In doing so, you will increase your chances of the customer booking service!  

When is the last time you re-vamped your service page? 

 

Derrick Woolfson

Beltway Companies

Business Development

1195

1 Comment

Dana Bales

Kahlo CDJR

Oct 10, 2020  

Do you recommend a certain service scheduling tool?

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