I am hearing across the industry from people all over the country that February was an incredible month. We are no different. Not only did we have a great month, the Parts Department had a record month as well. Living in the snow belt, we would expect that to be with a successful Body Shop. This year has been different though since we have had a mild winter. We have only moved cars 2 or 3 times to plow. Body Shop is holding its own, but has a little less business since mother nature decided to get with the global warming this year.

So how did the Parts Department have a great month with wholesale to the Body Shop down? Two words...Accessory Sales. When a customer decides on their new or certified vehicle of choice, the salesperson will get all of the paperwork together for the Business Department and then while waiting, ask the customer how they would like to "personalize their new________." I have no idea what the percentage of customers that decided to purchase accessories, but for the parts department to have a record month while wholesale was down a little, that has something to do with what the sales department contributed.

So what are you doing with your accessory sales?  This will help the dealership in two ways. One, it will increase profit in the parts department. Yes, it is a wholesale to the sales department, but profit is profit. Then the sales department will have additional profit in the accessory sales.

With consumers keeping their vehicles longer (average age of vehicle on the road 11 years), we as salespeople have to take advantage of every profit center possible. So how can you make it successful?

1. Pay the sales team differently. Don't make the accessory sale as a part of the commissionable gross. Pay them the percentage of accessory gross separate from the deal and don't pack the commission.  It goes back to the WIIFM?
2. Have an accessory sale sheet and or accessory catalog for the vehicles to be presented at the time of the sale.  Ask the customer how "would like to personalize your new vehicle" and not "would you like to buy some accessories for your new car?"
3. Be consistent. Offer it on 100% of your customers. Even the ones that beat you down and down, chances are, they are ones to take care of their vehicles and will probably at least buy all weather mats.

Hopefully you will be able to at least add a $100-$200 or more to your per vehicle average, but every little bit helps, right?  How are you presenting accessories if at all?

The other day I was at Panera Bread.  As I was sitting there eating my lunch during the busy lunch hour, I watched 8 people walk in the door within 45 minutes, and every single one said something to the effect of being too busy and “let’s go somewhere else.”  This was all within an earshot of employees that were helping clean tables.  Not one word was said to any of those customers as they just turned and walked out.  What if those employees were able to offer them a cookie or a pastry to keep that customer there and have a great lunch?  Would that have been enough to keep that customer in the restaurant?

Most managers have gotten a call or an email in their career where the customer states, “I was on the lot for 5 minutes and wasn’t helped.  I left and bought a car down the street that same day.”  So what is that first impression when we don’t help that customer?

Most dealerships will spend somewhere around $300+ to get a customer in the dealership.  So what are we doing with those customers when they get there?  There has been a lot of discussion about ZMOT over the last few months.  But what about the first moment of truth when the customer gets to the dealership?  Are we making that great first impression when they set foot on the lot to look at a car or make make that call to the dealership that we marketed online?  Are we getting to those customers within a few minutes, or are we letting customers go?  We work so hard and spend so much money to get the customer to the dealership or on the phone, and sometimes we have failed.  Too many times have I listened to phone calls where the customer is describing the vehicle to the salesman and then they are looking it up on the website themselves.  Salesmen need to walk the inventory and know it like the back of their hand.  It is their paycheck.  As far as i am concerned, if the customer knows more about the vehicle they are looking at than the salesperson, the customer hasn't done their job.  So when we fail that customer, or potential customer, what was that customer worth?

When that customer comes on the lot, be enthusiastic.  Are you going to sell the sizzle or the steak?  I have too many times seen a salesman walking the lot with his/her hands in their pockets and head down.  There is just no enthusiasm some times.  It goes back to the basics of selling yourself, the dealership, and then the product.  They need to know their inventory and where it is and show the customer what they are looking for in their wants and needs interview.  This will make them stand out from the guy on the lot a few blocks away.  So what are you doing to make yourself stand out from the rest of the crowd?

DealerSocket hits the market with 3 new products within their CRM to take them to the next level at NADA in Las Vegas this week.  I was able to get a sneak peek of the 3 new features that they are rolling out last week that should bring their CRM up towards the top of the market.

The first part of the CRM enhancement is SocketTalk.  SocketTalk is a fully integratable texting feature within the CRM that will store everything in the history of the customer file.  When you click on the button to text a customer from within the CRM, it will open up a window and look like a text string like an iPhone.  You can also have instant messaging between employees that will pop up on the desktop.  The other nice feature is that it will integrate with your DMS so that when a customer’s vehicle is done in service, it will also alert them when the RO is closed.  Everything is opt in to cover any state and local laws to make sure that they dealership is compliant in texting laws.

The second enhancement that DealerSocket is releasing is Revenue Radar.  Revenue Radar is an equity alert program that will alert the sales rep when there is equity in a vehicle and can trade the customer out of their vehicle early.  This is a great program where you can do searches within the database for customers with specific vehicles in their ownership that you can trade for and source for your used car department.  The filtering within the program was very user friendly and all in drop down menus.  DealerSocket is tied in with the manufacturer programs so you will have the most relevant information to get to the customer when you call and try to schedule that appointment.  DealerSocket also has call centers that you can take advantage of and have them make the calls for you.

The last element of the enhancements is the Mobile CRM.  It is accessible on iPhone and Android platforms.  It was a very clean app as they were going through all of the paces of the product.  It is tied in with the main CRM so the Sales Managers can know what is going on out on the lot.  They can do a quick entry with basic customer info and they can fill out the rest as needed when they get to the computer.  The other nice feature is currently on the Android platform and coming soon to iPhone is the scanner for the customer’s trade in within the customer information screen.  One concern we all have as managers is sales people ‘faking’ their calls.  When they are clicking within the app and making the calls from their cell phones, it is a verified call and we as managers know that the call was actually made. 

If you are looking at adding a CRM or changing CRM companies, swing by the DealerSocket booth at NADA and they would love to show you the enhancements in person.  They are at booth 3180 and will be happy to go over all of their platform enhancements with you.   

One thing that some salespeople have a hard time with is trying to stay busy in the slower months. They maybe sitting in your showroom at the window waiting for the next up. Just like a farmer, you have to work on your fields or current customers/prospects. There are so many things that they can do while they are waiting for that 'up' by farming their database.

Most dealerships do have a CRM of some sort. The salesperson can go through and see all of their sales for as long as the database has been in place. They can do some of the following:

1. Make anniversary calls - 1, 2, 3, 4, and 5 year.
2. Make birthday calls. Call the day before their birthday. So many appreciate that call from their 'car guy or gal.'
3. Make renewal calls with customers that their lease is up within the next 6 months. They have to do something soon so stay in front of them.
4. Make a renewal call when a customer is 12 months from maturity of their purchased vehicle. We need used cars! Let's sell them something new.
5. Call recent customers sold for referrals
6. Work the service drive - Come in thirty minutes or an hour early. I have seen several deals get written up before I even got to work when I was a Sales Manager.
7. Call all the customers that you have talked to in the last 90 days. Don't leave any stone unturned.
8. Email your database your monthly specials.
9. Go make a relationship with a body shop owner. Winter is here and the snow is flying in the northern states.
10. Check the service logs for your customers. They will be there an hour or so, so why not it be with you and attempt to sell something.

Are you a farmer? So the challenge is to stay busy on the phone while you are waiting for that customer to come in the door or are you going to be like the badger waiting at the window.

What are you doing to farm your data base and generate business?

We all have to face it; the internet has changed the way our business has been conducted.  It has affected used cars and now with the whole dare I say it, TrueCar (I won’t open that can of worms) movement; customers want transparency.

Are you giving it 300% so far this year?  Yes, I said 300%.  What I mean by that is are you presenting to 100% of the customers that you talk to?  Are you presenting 100% of the options to the customers?  And are you doing this 100% of the time?  With transparency taking over our business models, we have to try to stand apart from the others.  What makes you different from the guy down the street selling the same vehicle?

I know that this is a lot of basics, but how many times does a customer walk in the showroom and announce, “Who wants to sell a car today?” and go right to a desk and go to numbers without a presentation?  I know we are all guilty of it at one time in our lives (insert sarcasm), but do you really want to put your paycheck amount in the hands of the guy that did a piss-pore walk-around?  Build some excitement and why the customer should buy from YOU!  I read recently that only 1 in 5 shoppers are true price shoppers.  Hmmm....something to think about.

Your Character will have to stand out.  I asked some non-automotive friends of mine to describe a car salesman to me.  Some of the words that were said were very harsh.  They see us as untrusted, deceitful, pushy, shifty, full of lies.  How do we overcome this?  When that customer comes in the showroom, we have to welcome them as if they were coming into our own home.  Don’t fake it, be sincere.  Don’t badger them with 50 questions; try and come up with some common ground and see what exactly they are looking for and try to fit those needs with their wants.  Actually have friendly conversation with them.  One of the couples I asked this question to was in the market recently and have done a lot of car shopping.  They actually said that there was one salesperson that sat there during his presentation (if that's what you want to call it) clicking his pen the whole time.  Their son actually took the pen from the salesman and told him that he "was driving him nuts."  What does that say about us?  Unfortunately, just because of that one salesman, they may have a bad taste in their mouths whenever they walk into a showroom.

When you are building that rapport with the customer, have some fun with them.  That will show that you are a fun person to deal with and buying a car can be fun and not like going to the dentist.  You have to remember that you are dealing with someone that is ready to spend a lot of money and they chose to come into the dealership that you work at for some reason.  It may be that you have the right car, your dealership may have a good local presence, or some type of advertising brought them in.  The dealership spends a ton of money monthly to get customers in the door and you owe it to them not to just waste time with that customer so you owe it to your employer that you commit the 300% rule.  Make it happen and cheers to 2012!

I was talking with another internet manager the other day and this video came up.  There are dealers out there still that are flying by the seat of their pants and don't really have a plan like the Underpants Gnomes.

Phase 1.

• Get Underpants (Go out and acquire cars)

Phase 2.

• ??

Phase 3.

• Profit (or lack there of)

Without a phase 2, there will be no profit in the automotive industry and the dealership maybe on their way out.  With the way that dealerships are getting to be more and more transparent, this will definitely knock those dealers out because they have a plan 2 when it comes to marketing and merchandising their vehicles.

So if you are a dealership that doesn't have a phase 2, start one sooner than later.  If you don't, you will feel the hurt.  Get a plan in place.  Get the vehicles online as soon as possible with photos, descriptions, and video.  Make yourself stand out from the others.  You have to remember that a customer will hit an average of 18 different websites before making a decision.  If you don't stand out, you will be forgotten and the mouse will just go right over your vehicle on to the next one.  So get your plan together for 2012 and make it happen.

If you have never seen the Underpants Gnomes, here is the link. 

So how is your 2011 ending up for you?  Did you get to where you want to be in sales objectives?  Did you hit your goals for the different internet sales teams, sales departments, or the BDC?

Over the last several months, I have heard from several dealerships from around the country that their internet leads seem to be down.  Sales seem to be up, but not the leads.  I have heard some dealers being somewhere around 10, 20, and upwards of 30% down from where they are "normally" are with their leads.  Yes, leads may be down, but is your floor traffic down?

As you are looking at your 2012 advertising budgets, this is something to consider.  I was doing a little research within our back end tools that we have available to us from cars.com and Autotrader.  I came across a report that was intriguing to say the least.  It is the "Sold Inventory Report."  Some of this may connect the dots with your sales.  Here is what I found within our report.   Of the last 64 sales, only 7 had done a 'used car e-mail quote, 16 viewed a map to the dealership,   20 clicked through to the dealership website, and 5 printed details on our vehicles.  Can we credit all of these sales to cars.com?  Probably not, but it definitely connects some of the dots and may be a result of the 'walk-in traffic' that you may be seeing in your dealership.

So this will bring me to the Zero Moment of Truth (ZMOT).  Yes, there has been a lot of rumblings going on different forums in the last week, but I will say that without having full descriptions, multiple photos (minimum of 18 on every vehicle), and reviews, you may not be seeing these types of results.  If you are doing all of the right things with all of the above, hopefully you are seeing results similar to this.

When you put some of the third party sources, specifically classified listings, under the microscope, something that you may want to consider is the cost per VDP and not so much heavily on the cost per lead and sale.  Try and get that cost as low as possible.  I know that I am always shooting for less than a dollar per VDP.  These third parties are generating floor traffic whether you know it or not.  We all hear time and time again that Autotrader and Cars.com are your new newspaper ads and I really do think that they are.  My philosophy that leads are on the decline as dealers are having to be more transparent and get on the internet with their photos, descriptions, carfaxes/autochecks, and pricing policies.  If you aren't watching what the market is doing on a particular vehicle and shooting from the hip, you just may see that vehicle start to age on you.  If you aren't using a tool like vAuto or VIN's product, you may want to make sure that you are doing your research.  This will only help you in keeping your VDPs at the maximum viewing capability and getting the most out of your online marketing with those third party sources.

What are your thoughts on the lead volumes?

Here we are, it’s already the end of 2011.  Where has the year gone?  We have seen a lot of changes over the year with Google places, how reviews are showing on search results, social media taking the forefront in the automotive business, and much more.  I just got home from the Kain Automotive Workshop in Lexington, KY.  So much information, best practices, and some great ideas were shared over a two and a half day period.

One of the big topics was about planning for 2012.  Yes, it is right around the corner.  We as dealers have to evaluate what has and hasn’t worked for us, evaluate our budgets and where to spend our money the most effectively, and we also have to see what areas in the business that we as dealerships have to focus on.  What are those areas?  Is it just some basics like multiple photos, social media, responding to internet leads effectively, online reviews, or any other processes that need tweaked? 

With so many great tools in our tool boxes, we all have to find a way to stand out.  One of the speakers said this week that a lot of dealers are just like “Where’s Waldo?”  So many dealers will respond the same way, keep on emailing and leaving the same messages, etc.  What are you going to do to stand out when a lot of the dealers are using similar, if not, the same tools as yourself? 

Budgets

I know that our budgets have been under a microscope over the last month or so.  So what makes a lead source a ‘good’ lead source?  I know that when we are doing our ROI tracking, we are using a five times our spend rule.  If the source isn’t generating the five times the spend, you may want to consider eliminating them.  I know that the vendors that we use will ask how they are doing with the ROI for our store since they know that we are using that rule. 

When looking at the third party sites, look at the cost per vehicle detail page (VDP).  We look at trying to be at somewhere around a dollar per VDP.  We all have heard that more and more customers are just showing up at our doorsteps to see a particular vehicle as dealers become more transparent.  Not only look at the VDPs, but also look at the map views and other actions on each provider on a per vehicle basis.   

I can’t say what is the best or worst lead source.  It is different in every market and I don’t think that there is one silver bullet.  I know that one lead source isn’t working well for me in my area, but it is working great on the other side of the country.  It could be due to marketing efforts on the providers, or it just could be where those leads are being pulled from.  I would recommend checking out the vendor reviews here on Driving Sales to see what others have to say about them.   

Social Media

Obviously, social media has been a hot topic this year and will only get bigger in the years to come.  Todd Smith referred to social media as the new “new neon lights” in the automotive industry.  It is so true since neon back in the ‘60s, ’70, and ‘80s was huge.  The bigger and brighter the neon, the better.  That is where social is. 

So many dealers jumped into social media this year with the Facebook pages with iPad give aways and twitter with inventory posts.  I will say one thing.  It all comes down to content and interaction within these mediums.  Also, remember that social media isn’t just Facebook and Twitter.  There is a lot more to it than just that.  Look at blogs, YouTube, and other avenues to take advantage of.  But before just jumping in feet first, make a plan.  Take baby steps in what you do on the social front.  How do you eat an elephant?  One bite at a time.  Just take your time, make a plan, and take baby steps. 

Online Reviews

I wrote about this a couple of weeks ago about putting all of your eggs in one basket when it comes to reviews.  Spread them out among the different websites since your potential customers are on upwards of an average of 18 different website in researching vehicles.  According to cars.com, they say that a consumer is four times more likely to submit a lead or request for more information when a dealer does have reviews.  Come up with a plan and execute it.

Your steps to success

Make a plan for 2012.  We all know that success is a result of people, process, and execute.  Without a plan, it probably won’t happen.  You need a map to go where you are going, right?  I heard last week during a football game that you can have all of the talent in the world, but if the coach isn’t getting full buy-in from the team from the top down, your result may be failure. 

I said this at the Kain workshop this week.  Surround yourself with great people in the industry.  Get involved in the online communities like Driving Sales.  Get involved on twitter if you aren't.  There are a lot of awesome people to help out and lend an ear or give advise on there.  Engage, learn from others, and don't be afraid to reach out to those that post online.  We are all here to learn something and find something to apply to your dealership.    

What areas are you going to focus on next year? 

Dale Pollak has made a lot of ripples in the automotive industry over the last few years with vAuto.  He just announced today Provision (the new stocking feature with vAuto) is going to cause not just a ripple, but a tsunami in stocking your inventory to perform at the dealership’s maximum potential.  Last year, vAuto was acquired by Autotrader, which no one really knew why.  Well, today, we know.  He is taking the stocking feature of vAuto to the next level which no one can touch with using data from Autotrader.

I was fortunate to see Provision at a 20 group meeting 2 months ago just to get a taste of what was to come.  After the meeting, we contacted Dale to see if there was a way to get on the Beta version of the new stocking tool which he with some hesitation and parameters set forth, he said yes.  We have been able to play in the Beta version for about the last month or so and I will say that it is going to take stocking to the next level for used car inventories.

The biggest change in the stocking tool is the stocking grade.  The stocking grade is a report card based on several factors that the developers at vAuto thought was important.  It is based on:

1. Demand: the number of people in your area that are searching for this car (taken from Autotrader).
2. Interest:  the average conversion rate from SRP to VDP for this vehicle in your area (taken from Autotrader).
3. Volume: the number of units sold in your area recently.
4. Day Supply:  measures the current available supply of similarly configured vehicles and the rate at which such vehicles have been sold over the last 45 days.
5. Profitability: difference between the average auction prices of this car to the average list price of the car after adding in a fixed reconditioning/transportation fee.
6. Availability: the number of units available in auctions now.
7. Experience: measures of the success of your recent sales of this Make/Model.

vAuto will also recommend which vehicles that you should look at buying for your inventory.  It will give you 10 different models in the different categories that you need to focus on based on how you want to have your inventory set up.  It will also let you know where those vehicles are going to be on the auction block.  You have the opportunity to look at the condition reports, condition grade, and place a proxy bid all within vAuto.

Another part of the new sourcing tool is that you can see within the auctions how many cars are running on the recommendations and how many matching vehicles will be running at those auctions.  This will particularly come in handy when planning your auction schedules and whether or not it’s worth going or not.  If you have a good amount of matching recommendations and vehicles running, then go or set up your proxy bids.  If those numbers are low, it maybe not worth the time going to those auctions.

This is just the tip of the iceberg of what Dale has up his sleeve with the new stocking tool.  There will be more to come which I will leave to vAuto to announce when it comes.  For current vAuto dealers subscribing to the stocking tool, the cost is a low cost of $0/month!  Dale’s thinking on this is that he wants to have the premier product out there without gouging dealers.  It is all part of product enhancements to stay ahead of his competitors.

For dealers that are already on vAuto, there will be training webinars for the next 60 days starting Monday, November 14.  Training will be at 8 Central time on Monday, Wednesday, and Friday, and 4 Central time on Wednesdays and Fridays.  Contact your Performance Manager to get the details or you can click here to schedule your online training webinar. 

Dear Mr./Ms. customer:

The market is ever changing in the automotive business and you and the internet has driven that for us auto dealers.  No longer can we be deceitful, lie about previous owners and service history, trade-in values, or pricing of vehicles on our lot.  Almost all of the information is out there for you to find.

The internet has changed everything. You can't offer us thousands of dollars off asking price anymore because we don't have the thousands of dollars of mark-up that we used to.  The internet has changed it so that we have to price vehicles to be competitive in the market place or they won't sell at all or you won't consider coming in to look at our vehicle or even click on it to look closer at it on the Internet.   You and the market are driving the price, not the dealership.

We have to be more and more transparent for you before you even walk in the door. That is why you will see 15+ pictures on most vehicles that you find on the internet. You will also generally find a Carfaxes or Autocheck on every car that you find out there. Again, we are having to be more transparent with you.

Just like buying a TV, you want to make sure that you are getting the best bang for your buck.  It is no different when it comes to finding the right dealership to deal with. Go look at our online reviews on Google, Dealerrater, and any other site. See what others are saying about us and how we treat our customer before, during, and after the sale. Remember, these are people that have done business with us and are the real deal. If you don't like what you read from our customers, don't do business with us and don't waste our time.  You not only want to find the best value for your hard earned dollar, but you want to be treated great which is to be expected since this is probably your second largest purchase besides your house. That is where we can look at how we treat our customers in our online reviews.

If you want to see what others are thinking about our dealership, Facebook it or Tweet it and see what your social network has to say about us or the vehicle that you are looking at. If it gets bashed or frowned upon within your network, let's look at other options.

We are all here to earn your business for the years to come. 

Thanks and we look forward to your business,

Your new used car salesman