I’m sure that every management team sits down on occasion to discuss ways to improve dealership operations. Whether that improvement has to do with sales goals, employee satisfaction, or simply lot appearance, typically what happens is that everyone is gung-ho about it and it kicks off great. Then, slowly that momentum dies and all of a sudden nobody is making an effort anymore. Sound familiar?

 

How many times has your dealership implemented a new technology, lead source, or any new initiative just to find that they don’t get used, or seem to fail? Sometimes we find ourselves scratching our heads in wonder. Perhaps it’s not the technology, but rather our team members aren’t following a process or using it improperly. It’s very easy to dismiss a new technology or process as ineffective simply because employees tell you it’s not working. In my experience, most of the time it’s not the technology or the newly launched process that’s the problem. The problem is usually that our people aren’t using it properly, are not practicing consistency or have just plain lost the vision of why it was implemented in the first place. That’s why it’s important to have a champion. And, it’s not always about the money. Sometimes simply the opportunity to be recognized as a potential leader who is passionate about a new initiative is reward enough for an employee to champion the initiative.

 

So, how do you go about finding or making a champion? Once you make the executive decision that this new technology or process is a path you want to go down, bring your team into the conversation and see if they share your vision. If they do, ask THEM for a champion. See who wants to and is willing to be held accountable and lead the initiative. Ask them to create a list of suggestions for winning, and take the time to share your experience and support. Give that champion extra attention - it will be well worth it. When the team sees management pat that person/champion on the back, when that person is getting all the recognition and accolades, and perhaps even a promotion, other champions will all of a sudden start coming out of the woodwork. And that is a win-win for the dealership, for management and for the employees.

 

There is no limit to the areas in the dealership where this can work. Champions can be lot attendants, in the service lane, accounting, or even in the showroom or customer lounge. The initiative they are in charge of can be something as simple as ensuring that the showroom stays clean and organized. You could even make someone a champion for any non-profits your dealership is involved in.

 

When you find a champion that is willing to be held accountable to monitor, train and assist other employees, and/or take charge of the initiative themselves, success rates skyrocket. I’ve seen it at my stores when a champion gets promoted and a replacement champion isn’t put in place. Success rates plummeted.

 

Let’s face it -- great employees/teams are the very core/foundation of our ultimate success. The need to train and nurture the staff you have into a group of people that thrives in their work environment; are engaged, care about you and are invested in your dealership and share a common vision, has never been more important. Discover your champions today and watch as your initiatives explode with success. I love this industry!

 

I’ve talked plenty of times about disrupters entering our industry in an attempt to take sales and market share away from dealers. The Carvanas, Beepis and Vrooms dangle carrots of lower prices and better buying experiences and tempt consumers to try a new way of purchasing their next vehicle. Now, it appears, at least one manufacturer has taken notice.

 

A recent article in AutoRemarketing reported that GM is set to launch a used car online buying experience for consumers – tagged the “Factory Pre-Owned Collection.” The manufacturer intends to offer as many as 30,000 vehicles for sale -- all of which will have under 37,000 miles and include extended warranties. Consumers will be able to go to the manufacturer’s website, browse inventory, select a vehicle and have it delivered to the GM dealership of their choice. They are also extending a 3 day/150-mile exchange program for cars purchased through this medium. It’s unclear as of now how the dealerships will be compensated for these sales.

 

It’s obvious that this move is in direct response to consumer demand for an easier car-buying experience. It would seem pretty safe to speculate that manufacturers have been watching the disrupters and have decided to enter the online buying space -- And, perhaps, beat them at their own game. The mere fact that GM has the ability to maintain an inventory of 30,000 vehicles for sale; which it stated are lease, daily rental and company vehicles; begs the question of how their dealerships will replenish used vehicle inventory if GM makes the decision to keep them all.

 

It’s my guess that it’s only a matter of time before other manufacturers enter this space essentially book ending dealerships. On one side you will have the Carvanas in the online space selling direct to consumers. On the other side you’ll have manufacturers doing the same thing. Unless dealerships make the decision to join this movement towards an online buying experience, they may find themselves quickly becoming delivery centers for their manufacturers.

 

I am not blaming the manufacturers. I have seen firsthand that many dealers are not interested in delivering an online buying solution for the customer. They are making profits and simply don’t see the threat….yet. We as dealers simply must understand that things have already changed -- and for the better. This is what I am calling the “Customer Automotive Experience Revolution.” Customers now have the same choices and power in the automotive buying process that they have long had in all their other shopping verticals.

 

The technology is there, ready and waiting for dealers to embrace. There isn’t an entry barrier for dealers into this space – other than their own thought processes. The fact is that they can offer an online car buying experience that consumers demand while still maintaining profits and even increasing back-end profit as well.

 

But think about it for a minute -- When a customer buys a vehicle from a Carvana, or even the manufacturer, who do you think they credit for the great experience? You guessed it. Carvana or the manufacturer. How can dealerships expect to begin a relationship with a customer and nurture them into a loyal service, and perhaps future repeat customer, if the customer’s perception is that the dealership had absolutely nothing to do with the sale? What does this say about the dealership in a time where we as dealers must build trust with our customers and shed that old 1980 car dogma?

 

 

Don’t find yourself stuck between a rock and a hard place -- even if the rock is perhaps just a pebble for the moment. Realize that consumers are demanding an easier car buying transaction and that your dealership has the ability to give them what they want. They certainly have companies willing to give them the experience. And, now at least one manufacturer is willing to as well. If you keep procrastinating, you may find your dealership transformed into a test drive and delivery center.

 

This change is good! Imagine being a customer, if you had all these choices to shop and buy, which would you take? How about your neighbors? If your dealership offered them an escape from the friction of the showroom along with all the advantages that only a dealer can offer, I think I know the answer!

We all love this industry and what it can, and has done, for our families, friends, country and our local communities. But, I fear that if we do not stop and take a serious look at where we are as far as operations and culture in our stores today, our future generations may be in jeopardy.

 

With the massive shift in the way businesses are being built today, it is obvious that we have arrived at a tipping point. This is exciting and screams “new opportunity!” for automotive retail, (as seen by Wall Street jumping in with both feet). Some of us have been satisfied for far too long with the “old school” way of operations in our stores. While other businesses and industries have evolved through continued education; commitment to consistent improvement; and by being held responsible for stock prices and the evolution of conscious capitalism, which is creating sustainable businesses out of brick and mortar, instead of straw. That may be harsh, but I think as we start 2016, we as executive managers may need to take a good look in the mirror.

 

There are new modern ways of operating that solve the pain points we have lived with for decades and decades. These new modern ways of doing business can create solid, sustainable and profitable businesses that exceed the demands of today’s consumer and employees. The facts today are different than they were just 5 years ago. If we do not solve the consumer and employee pain points, someone else will.

 

The tallest building must be built on the strongest foundation. I believe that the very foundation of any business starts with the culture. Culture is a key component in business and has an impact on its strategic direction. Culture influences management, decisions and all business functions -- from accounting to production. A business culture will encompass an organization’s values, visions, working style, beliefs and habits.

 

Maybe we should all start from scratch and have a culture meeting with our executives. Honestly define and write down the culture you have organically created at your dealership today. Then write down a vision for an improved culture and the benefits that culture will bring. Look at other business platforms that are succeeding, at competition that is breaking new ground and at pain points such as ‘turn over,’ and more. I am a believer that money will not fix your turn over – culture will.

 

Our industry continues to operate on the retail side as it has for decades. Unlike many other industries, we have positions with incredible income levels available to people with minimal education, or experience requirements. Our education level is one of the lowest in the country -- while our pay is one of the highest. Maybe in today’s environment, we need to start by looking at the most important capital we invest in - our human capital. Maybe we should demand continuous education from our executives, middle management and staff in general, and build a culture that attracts a wider range of skill sets.

 

The single greatest asset you have in your dealership is your people (human capital). The culture will dictate how they perform and the type of experience they will provide for your customers. Your employees (team members) can work from a place of passion, heart and pride, instead of doing just what they need to so as to avoid getting fired. They want to LOVE coming to work. They desire a workplace where their voice is heard and where they can be proud and part of a team that is moving forward at all times. Your people (human capital) will elevate and inspire every aspect of your business.

 

OK, so we agree it may be healthy to take a good look at our culture, now how do we get started?

 

Get educated, read books on business success and great CEO’s. There is a mountain of great inspiration out there. Write notes as you read these books. Take a sentence that moves you and throw it in your notes. At the end of a book or 2, revisit your notes, you may be surprised how well it is coming together.

 

I think you probably do realize how important culture is, and just how important it is to hire the right coachable executives and middle management. Those that are committed and motivated by culture, ethics, integrity and then by money. These people will be inspired to be a greater part of the solution that encourages new thought. I always have believed that people in general will work harder towards a ribbon or a purpose than a paycheck.

 

With a positive and conscious culture flowing through your store, you will see more productive, energetic and happier employees. And, let’s not forget, happier customers. In the words of Richard Branson, “If you look after your staff, they will look after your customers.”

 

I believe this may be one of the most important thing you can do to ensure the health and growth of your dealership in 2016 and beyond. I also know that once you have championed this new culture, you will see more than just financial rewards. I wish you all the best of success!

I believe that, as an automotive community, we intuitively know that we need to change. The sales to consumer model is outdated – our fault for not demanding of ourselves consistent improvement in the consumer experience arena. Consumers are demanding more and Wall Street has taken notice. Backed by hundreds of millions of dollars, companies are quickly rising that threaten to take market share from us. The longer we allow them to thrive and establish their brand and message, the harder it will be for us to retake the market. These disruptors – the Beepis, Vrooms, Carvanas and others – are a threat to our core business model. Right now, they may seem unthreatening, as we continue to go about business as usual. But that would be very wrong.

 

Take for instance Vroom’s recent acquisition of Texas Auto Direct, one of the earliest and most successful retailers to embrace online sales (Largest independent dealer in U.S.) and offer this method of buying to consumers. They’ve thrived for years, happily shipping vehicles all across our country. Do you think they could do so if it weren’t extremely profitable? As dealers, we’ve long had the ability to facilitate a quasi-online transaction. It tends to jump back and forth between e-mails, online credit applications, documents sent via Fed-Ex, notarized, and vehicles then shipped. Today, technology exists that allows us to accomplish this with far greater simplicity. It also enables a better customer experience. We as dealers must step out of our (now) profitable comfort zones and stretch our minds. We must adopt, or invent new ways to attract customers. We must think like the customers!

 

It’s time to step back and learn from these disruptors threatening our livelihoods. They aren’t doing anything hugely different from what you can do in your dealership. We have the infrastructure, the inventories and our manufacturers backing us. No matter what anyone may say, customers still want to touch and feel a “sea” of vehicle choices before signing on the dotted line, especially used vehicles. The simplest way to fight back and watch these companies disappear is to replicate their customer experience online – with the extra value that only a dealership can offer. We need to identify the pain points customers feel exist in the process and take steps to change our processes to eliminate these. By taking a page from these disruptor’s playbooks, we can learn to increase market share, improve customer relations and evolve our teams.

 

The future of our business rests upon our willingness to meet our customer’s demands without sacrificing margins. We can accomplish this by simplifying our processes – both online and in our showrooms. And, by relieving our customer’s pain points in the vehicle purchasing process through the use of technology. We all know where the jams occur in our processes – customers that aren’t getting prompt service because all available salespeople are sitting with customers. Some of these salespeople are merely babysitting, while their customers await financing. We see a backlog of customers waiting for figures while sales managers try to desk 5 deals at the same time, while appraising 2 trades. Our internet leads go unanswered as the Internet managers are all busy with appointments – and these are ripe for the picking by the competition. This list goes on and on…… Every dealership will have its own pain points and areas that could be improved. You know which exist in your dealership. Yes, it will take a fresh commitment that will take a champion to lead this initiative in your store. It’s hard when we are (currently) profitable. But, remember all those stories – Blockbuster stock was at one time $25 a share and they were smiling and golfing and resting on their current success.

 

All of these problems can be remedied through the use of technology and a committed culture. And through the creation of a champion in your store who is committed to consistent improvement -- without sacrificing gross profits. Adopting new technology and processes can be quite intimidating. Believe me. I know. I’ve been there. After 35 years in automotive retail and 30 of those years in management / GM, I’ve made those decisions, despite the fears. But, I actually found that there was nothing to fear after all – actually quite the opposite.

 

Take a step back and look through the eyes of your customer. Envision your dealership and the customer experience you want! Then, make a commitment to adopt technology that offers your customers a better buying experience and name a champion or a team of champions that will lead this new initiative. Let’s disrupt the disruptors. Thoughts?

There’s little doubt that the experience provided by auto dealerships in the past has jaded consumers into a stereotype and perception that isn’t necessarily accurate any longer, yet continues to persist. Because of this perception, companies such as Beepi, Carvana and more are creeping into the automotive space and threatening to snatch sales away from dealerships. (how? by providing customers the ability to purchase their car online) These companies pose a true threat as they are luring our customers away – and make no mistake, these are our customers – through messages of convenience and an excellent customer buying experience. Carvana was just named #5 on Forbes list of America’s Most Promising Companies. The hundreds of millions invested in these companies show that Wall Street believes their business models are viable.

 

Online deal creation is simply a response to consumer demand. Consumers no longer wish to spend hours at a dealership in confrontational situations with salespeople and sales managers hiding behind one-way glass. These consumers have more knowledge at their fingertips than they have ever had in history and that transparency is only going to grow. We have countless studies that prove that only 1.5% of consumers expect to be satisfied with their showroom experience when buying a vehicle, and that is the truth - not a manipulated CSI report where the sales person begs for 5's and Y's.  This is a failure on our part and the catalyst for these online auto sales companies that are creeping into our space, taking our sales and resulting service and parts business.

 

It wasn’t that long ago that dealers didn’t think they needed a website - we all know how that worked out. As consumers have become more conditioned to shopping online for everything from luxury items to toilet paper, our industry has been the last to embrace this trend. If dealerships don’t wake up and understand that consumers will buy things the way they want to buy them, we’ll only be helping these other companies gain ground. There is no reason for this to happen. The technology exists today to facilitate a similar (and superior) online buying experience as the disrupters entering our market. Embrace technology to provide the same type of buying experience as these start-up competitors and you could literally stall their momentum. Dealers will always have the advantage with a physical inventory. And, consumers want to touch and feel a vehicle prior to purchasing it. Frankly, there aren’t many consumers that want to spend tens of thousands of dollars on a vehicle without even seeing it or driving it first.

 

It seems that the fear dealers have adopted concerning online deal creation stems from a perception that they will sacrifice gross in the deal. I can tell you for a fact that this is simply untrue. At Dick Hannah, we implemented this online deal creation process to massive success and profitability.

 

I think there needs to be more discussion about the "Evolution of Culture' in our dealerships. The entire staff must get behind this evolution - every dealership needs a champion. Which is it, the whole dealership or a champion? We must study these platforms, learn and adapt to satisfy consumer needs/demands and send these Wall Street companies packing!         

As a dealership manager it can be difficult to get participation and buy-in from your team. During my many years as a general manager, I found that one of the simplest and most effective ways to get a team to work towards a common goal is through accountability. Accountability (when managed lightly) can create consistency, successful habits and pride in performance. I say managed lightly because accountability reporting in front of the whole team is like putting individuals in the spot light for all to see.

                                                                                               

Part One: For Long Term Success - E-Mail Address Capture Accountability

 

Collecting customer e-mails is a basic foundation of marketing. Earning trust and communicating your brand may be the single most important rule for future marketing efforts, but also for the most basic of uses - communication. Don’t limit your e-mail capture efforts to the sales department. Your dealership will see many more customers filtering through service than sales, so ensure that e-mail acquisition happens at every customer touchpoint. That being said, despite best efforts, every manager will find contact records in their CRM, or discover sold vehicles that have been RDR’d with questionable e-mail addresses. Typically there are a few reasons why this occurs: your staff isn’t asking for an email address, they don’t want heat from management so they enter a fake email address, or the customer doesn’t want to give it.

 

It is true that some people are hesitant to give out their personal e-mail addresses for fear of being spammed by the dealership. The key to reducing that fear and increasing customer compliance is simple: Give the customer a reason to share it. For example, in service, we would tell our customers something along the line of, “Out of respect for your time, we e-mail you quotes for service work and pertinent coupons, a digital copy of your service record, receipts for completed service work, as well as important - and relevant information. Keep all this info in a folder titled ‘2014 Acura,’ and when you go to sell it….bam! More money and happier buyers.”

 

And for sales, something along the line off, “Most of our customers appreciate a digital brochure – may I email you one?” Simply email them the link. Or, “I think we have more like this one arriving soon, what’s your email address? I will email you the pics, price and details.”

 

As for asking for the email address, I’ve found that if you educate your staff why email address collection is so important, buy-in becomes easier. I used to simply go through all the campaign examples for service and sales that happened on their behalf automatically, but, ONLY if email addresses were provided. I suggest you put the campaign examples, along with a clear explanation as to “why” email collection is so important, in your New Employee Welcome Packet, so everyone views it, every time.

 

You can’t stop there, however. Reinforce the importance of this through ongoing accountability. One of the ways I have found to be very successful is the use of accountability reports. These provide the information needed to gauge both individual and overall dealership compliance. I would share the results with staff in weekly meetings. When someone achieved a high percentage e-mail address collection, the staff as a whole gave them applause. If, however, someone had a particularly low score, the staff would give them a baby “Boo” (one quick boo). The positive reinforcement in your weekly or daily meetings should be enough. In the event that you have consistent underperformance by an individual, a private word with executive management will typically fix the problem. I found that keeping the results in front of the staff and leveraging peer pressure was extremely effective. In fact, our dealership was in the top half of one percent in the nation for e-mail capture rate in both service and sales.

 

Here is an example of the email collection spreadsheet/report we show “every week” and we also email it out but only ‘after” we have shown it in front of everyone at our weekly meetings for both service and sales.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The data from this report is very simple to obtain through your CRM’s reporting functionality, and is well worth the little time it will take to gather the data.

 

By overcoming non-compliance through education, accountability, positive reinforcement and just a little peer pressure, it can be much easier to gain buy-in from your staff and excel at e-mail capture. However, it all starts at the top. Managers must be willing to make a commitment to consistent tracking, reporting and sharing of that information with their staff.

 

I believe that when there is a cop in the rearview mirror, we all drive a little better.

An aspiring actress was planning a cross country move from New York to California to pursue her acting career and wanted to work as an Uber driver between auditions. This, of course, necessitated a reliable vehicle - something that she did not need in New York. She had heard of an online used car buying platform, Beepi, but wasn’t exactly sure if she should trust such a big purchase for a vehicle sight unseen. However, their 10 day/1,000 mile guarantee established enough trust for her to proceed. When she found a 2012 Toyota Corolla with 12,400 miles on the odometer and within her budget, she was interested. She went to her local Toyota dealer that had a similar vehicle in stock, took a test drive and left without giving the sales staff an opportunity to make a sale. A visit back to Beepi’s website and a few clicks and her vehicle was on it’s way to her door. This story, recently told by the Los Angeles Times, is becoming a more frequent one as start-ups attempt to transform the car buying process into one that’s more convenient and consumer friendly. And they have some big money betting that their business models will take off.

 

Since the explosion of the Amazons and Zappos’ of the world, customers have forced retailers to transform the shopping experience. Nobody can argue that Amazon continues to revolutionize and grow by doing the one thing that makes it successful – offering a more convenient platform for people to buy from. Amazon did not get to where it is today by making it difficult for people to do business with them, they did it by making it easier, faster and more convenient. It wasn’t that long ago that if you wanted to purchase a book, you had to trudge down to the local bookstore and hope they had it in stock. Now, in some markets, Amazon will deliver it to your door within an hour… along with your groceries, the latest movies and just about anything else you could want. And consumers love it.

 

Just about every automotive vendor’s service or product is designed at the core to do one simple thing - make someone’s life easier. Whether that’s the widget on your website that allows customers to get their own trade-in value;  a chat service that enables customers to communicate with you instantly without picking up the phone; or the many technologies that make dealerships more efficient, these tools all seek to create a better and easier buying experience for consumers. However, for many consumers, that’s not enough. They want an easy button.

 

I doubt many would argue with me when I say that the consumer perception of the process for buying a car is poor. Certainly those experiences vary from dealer to dealer. But the basic steps of our in-dealership processes remain the same - find needs/wants, test drive, proposal, finance, delivery. It’s only the execution of these processes that perhaps differ dealership to dealership. In the Beepi story, the car shopper did visit a dealership, but only to test drive a vehicle similar to the one she’d already seen on the Internet. That was all she needed to make the buying decision. The website took care of the rest. Imagine if she had been able to accomplish the same thing on the dealer’s website and only had to come in to test drive the vehicle. That’s exactly what she did. The only difference being that she purchased from Beepi instead of the dealer.

 

Many dealers are paying close attention to such start-ups. Used car sales start-up Vroom has closed investment rounds with capital from investors that include John Elway and former AutoNation CEO Steve Berrard. While another site, Carvana, is backed by auto retailer DriveTime, a company with over $1 billion in revenue that specializes in selling and financing used vehicles to consumers with challenged credit.

 

At some point, a tipping point will be reached for start-to-finish online car buying transactions. These start-ups prove that there is consumer demand for this type of buying experience and the technology is already available to do it.

 

I strongly believe it is time to embrace the trend and take steps to provide your customers with an easy button -- then perhaps you’ll find that they choose you rather than your online - and very real - virtual competition.

An article published on Wards Auto shared some interesting views from a recent session at the Automotive Customer Centricity Summit. The article stated that John Finkel, director-client experience and training for Nissan’s luxury unit, Infiniti, does not believe that a 1-hour car deal is good for customers. In fact, he feels that customers don’t even want it. He stated on a panel at the summit that 3.1 hours was the “peak efficiency rate” and Infiniti’s desired transaction time. Infiniti stores currently average an aggregated 4.6 hours. Another dealer panelist indicated that his dealership’s goal was between 2 or 3 hours, with 1 hour being “an impossible dream.” The panel claimed that the trend towards faster transaction times is spurred by Millennials, but that it is a bad idea. The panel even went so far as to compare a “dealership hurrying shoppers is like a restaurant rushing patrons” and that “neither group of consumers likes that.” 
 

Studies have shown that consumers do not like the time it currently takes to purchase a vehicle. Nor do they like the process involved. In the panel session, Finkel claimed that “customers want salespeople spending time with them.” I’m not too sure about that. I cannot think of many times when I had to usher a customer out of the building because they were enjoying spending time with their salespeople.  In fact, in many cases, customers rush salespeople through the delivery process simply to leave faster. The reality is that every customer is different. Are there customers who want to spend time at the dealership kicking tires, test driving cars and negotiating price? Sure. But most consumers simply don’t have time to do that. They want a quick and efficient buying process. Consumers love to buy new cars… they just don’t like to buy them. That sounds like an oxymoron, but when you think about it, it really isn’t.

 

It’s been shown time and again that, in most cases, consumers tend to distrust the dealer. A lot of this distrust is perhaps because the sales process we have had for decades hasn’t evolved with the times. Consumers are making buying decisions online which they wish to quickly execute. Amazon has made the buying process so easy that now you can order a “dash” button for your washing machine and order detergent simply by pushing this button… no need to even go online anymore. I believe the evidence is there that consumers DO want a faster, friendlier and more transparent car buying processes. Poor customer experience, lack of transparency and long transaction times are consist complaints on every customer survey and study that is published.

 

Personally, I think that a 1 hour deal is possible for used. But, due to the new car delivery, 1.5 hours should be the goal.  The bottom line is that everyone has different ways they want to do things and it is important to offer experiences for each type of buyer. If a customer wants to come in, spend hours at the dealership chatting it up with the salesperson, as Finkel suggests, then great. But if they don’t have time to spend all day at the dealership, and would rather complete the process online, and just arrive at the dealership to take delivery - why wouldn’t you offer them that option? Why not provide an “Easy Button” for the consumer?

 

The point is that It isn't necessarily that the customer wants to spend less time at the dealership- they don't want to be 'hurried'- they just don't want the time to be spent haggling, feeling frustrated and stressed.  They want an easy and fun buying process. Allowing the customer to do the hard part from home means that however much time THEY choose to spend at the dealership is up to them.  My guess is that they won't be exhausted by the time they get delivery and they will have a much better time of it- maybe spend more time touring the service department and on delivery- leaving much more satisfied and happy...more likely to remain loyal --  Just a theory at this point.

 

Today’s consumer is busy. They don’t have time to spend the whole day at a dealership. They’re also tired of the traditional vehicle sales process. Enabling consumers to buy a car in their pajamas, online, from the luxury of their own home, on their terms, from start to finish, is where our industry is headed. In the end, all that matters is that they purchase a vehicle and are happy with their experience. After that, everything else will take care of itself. 

 

How can it be possible that I would leave a job I LOVE after 25 years?

The fact is that I have always liked to be ahead of the curve and today’s customers are rewarding evolving dealerships that offer true Online Deal Creation with real perfect payment – where all that is left is the test drive. Don’t believe this can be done? Well, I am convinced that it can – and the results prove it. In fact, after 35 years, I have decided to leave the world of automotive retail to join my wife, Kim Orr, and her team, to build our automotive industry marketing/branding company, DealerSuccess, into a tech heavyweight. Kim and her team spent the last year launching CloudEngage.

For the last 25 years I have worked at Dick Hannah Dealerships, most of the time as a GM for the Honda store. While working as GM, I also served on the creative team with DealerPeak to totally re-create and re-brand their Online Deal Creation tool for my Honda store. I fell in love with the product and decided to leave automotive retail so as to further develop this tool (now Virtual Deal) for use in auto dealerships. I now work with my team at DealerSuccess to offer consulting and other revolutionary products that are meaningful to both dealerships and consumers.

At Dick Hannah, my team and I spent a great amount of time and energy researching technologies that we felt had the potential of helping our dealerships gain market share. Through implementation, accountability and analysis of results, we determined whether a product was worthy and, if it was, we improved our processes. We never stopped looking. By combining this process with an open-mind, a willingness to take risks and, by paying attention to consumer trends, together we built Dick Hannah Dealerships into one of the largest in the Northwest.

Over the years, I’ve seen our industry transform. If you’ve been around awhile, my guess is you know what I’m talking about. Technological advances have taken us from no websites, to rich, content-filled ones that allow consumers to virtually stroll through our inventory from home in their pajamas. Consumers don’t have to back their car up to the phone to get an appraisal on their vehicle any longer – they can do it through our websites, all on their own, without our help.

I’ve travelled the country sharing my findings with other dealers, attempting to help them become more successful. My speaking engagements have changed over time. As new trends and technologies became more prominent in our industry, my presentations have included topics such as transparency, online reviews and new technologies. I have seen, as I’m sure you have too, that the retail processes we’ve all employed over many years is increasingly moving online. Piece by piece. Bit by bit.

Consumers are now used to shopping from their home or office for just about everything you can imagine – including cars. Amazon didn’t become the behemoth it was because it made the buying process more difficult. They did it because they made it so simple. Then they made it fast. Today’s consumer is busy. They don’t have time to spend the whole day at a dealership. They’re also tired of the traditional vehicle sales process. Enabling consumers to buy a car in their pajamas, from start to finish, is where our industry is headed.

Is this possible? And, if so, will dealers embrace it? Or will some allow fear to creep in and prevent them from evolving? I get it. I’ve been there. I know all of the questions. Will I lose profit on the front-end or the back-end? Can I really work an entire deal online? Can a deal really be finalized – payment perfect – online so that all that remains is the test drive? How does this benefit my dealership?

Here’s the deal: I’m so convinced that online deal creation is a game-changer; our industries next evolution; that I have resigned as a general manager at one of the greatest dealer groups in this nation.

Through my research, studying live dealerships, and with actual implementation of Virtual Deal on the Dick Hannah Honda website, I am 100 percent convinced that this technology produces spectacular results -- I have never seen a conversion tool dominate like Virtual Deal.

I am thrilled to be able to join the team of DealerSuccess full-time as CEO-Spokesperson and will dedicate myself to sharing Virtual Deal across the nation. 

How Advanced SEO, Online Reputation Management - and a New Social Media Strategy - Are Transforming Dick Hannah Honda

2009 Snapshot: * 40% of Total Sales Generated Directly Thru Internet * Jumped from #3/#4 Positions in Major Metro Market - to #1/#2 Spots *Slashed PPC Spend $60,000/Year; Cut Nearly 100% of Traditional Advertising, Including ALL Newspaper, Used Car Liners and Radio *58% of all Internet-Generated Calls Coming DIRECTLY thru SEO and Review Sites/Directories (540 Calls a Month) * Leads Generated via SEO & Review Sites Cost $1.58, vs. $28 for Third-Party Leads Background: At Dick Hannah Honda in the metro Portland market, an intense focus on advanced SEO combined with Online Reputation Management (and, now, set for 2010, a new social media strategy), form the backbone of our marketing game plan. My goal here is not only to touch on why our dealership decided to get aggressive at the search engines and customer review sites, but how we implemented these campaigns, and the fully-tracked, seriously eye-opening results we're seeing. I've been in the car business 30 years, and a passionate student of the Internet for almost 15. I'm always seeking smart, efficient new ways to drive more business. But it's been in these last three years, where we've taken 'Search' to a whole new level, that's been the hands-down revolution, the 'aha' moment, for our dealership. 1) The Impact of Advanced SEO: There's usually a serious lag in what consumers are actually doing (and today that means online), and how we dealers are trying to reach them. Back in 2007, I realized search engine adoption had reached a massive tipping-point. I digested the data: 9 in 10 car shoppers were using search engines, and they'd quickly become the #1 way consumers selected dealers. And while I'd been spending $6,000 a month on PPC ads, I grasped that consumers trust the organic results far more. I was determined to tackle SEO to drive far more - far cheaper - 'first-party' leads directly to my dealership. SEO Results: Before the campaign our dealership appeared on the crucial first-page results only 18% of the time. But after our advanced SEO 'went live' in 2007, we've consistently achieved 72%-plus levels. I ferociously track exactly where our call and web traffic originates (using 3^rd-party tracking companies, deploying 800#s at the search engines, etc.), and we've amassed three years of powerful evidence on the impact that 60%-plus first-page results have on a dealer's business. Out vastly improved search placement quickly led to huge increases in our site traffic and Internet-generated calls, and the ROI just keeps multiplying over time. In 2009, SEO was directly responsible for: * 48% of our unique website traffic *44% of our 900-plus/monthly Internet-generated calls - trumping PPC, and OEM and 3^rd-party sites *410 sales and service calls a month * Plus, 90 website-submitted leads/month SEO was the first piece of the search puzzle for our 'digital dealership,' and it remains our bedrock: the single biggest contributor to our web traffic and incoming calls ever since. 2) The Impact of Online Reputation Management: * We've now generated over 1000 positive reviews across the Web, with an average 4.9 out of 5-star rating. * Now driving 150-plus super-motivated calls/month from review sites/directories. In 2008 we saw another consumer revolution gathering steam: the rise of customer reviews at sites/directories like Google, Yelp, CitySearch, Merchant Circle, Edmunds, DealerRater, etc.  My Internet Director, Merla Turner, really educated me on how 3 in 4 car shoppers turned to online dealer reviews, and 1 in 5 actually switched dealers based on what they read. By simply Googling our dealership's name she showed my what huge traction the review sites have on first-page results, and how our customers were one click away from bad reviews that would cost me business. There are two different ways auto consumers search: they either use brand searches without a dealer name, or they insert a dealer name into the phrase.  Generic searches (without a dealer name) are covered by advanced SEO - but the other searches, involving your name, are heavily trailed by review site results, and this is where Reputation Management becomes crucial. To cover our search bases, as dealers, we must tackle both. We consulted with eXtéresAUTO, and together decided that we would once again be their 'test dummy.' So we launched a year-long beta test at Dick Hannah Honda to nail down the most successful customer review process. This trial-and error test took us hundreds of hours of manpower...but the processes we discovered now underpin eXtéresAUTO's 'Online Reputation Management' solution, which has automated much of the laborious manual process I outline below.  The automation radically simplifies this super-difficult process for dealers. Here are some core elements of our process: Get Management Buy-In, Motivate Sales Team Tackling our online reputation meant transforming the whole 'mindset' of the store: I knew I needed total management buy-in, and motivation for the sales team to actually make it a top priority. * I replaced weekend and monthly spiffs (for cars sold) with a $25 reward for each review generated - with a firm goal of 4-5 online reviews per salesperson every month. * Knowing staff recognition would be critical, we designed an email that circulated daily throughout our dealership, distributing all new reviews, along with graphs measuring each salesperson's status: how many reviews they'd achieved and needed to acquire. The transparency and tangible incentives quickly reoriented my team around a common goal: get those satisfied customers typing online... * We performed daily searches of the major review sites/directories. All reviews were printed, and placed in three folders: 'Good,' 'Pretty Bad,' and 'Terrible. *An attempt to call every unhappy customer was undertaken. When the customer was only identifiable by their online handle (i.e., Bob123), we searched our CRM tool to find email address matches. * Every negative review was taken hyper-seriously: even if the customer made wild claims and demanded financial compensation, we did everything to make it right. And when we did, we asked that they edit their review explaining their satisfaction. *Most sites let businesses respond directly, and we trained our team on tone and provided scripts. Our mantra: be honest, real, never defensive - and fix the problem. Getting Customers Typing The goal was to get the highest volume of satisfied customers posting, not only because they 'push down' bad reviews, but because, with their huge visibility at the Googles, they gave us the kind of exposure an ad could never buy: the recommendations of real-world customers... We hit on a multi-pronged strategy: * With any visibly pleased customer, staff simply asked them to share their experiences when they got home. * Whenever a strong manufacturer survey came in, we called and/or emailed the customer, politely asking them for a review. * When a happy customer responded to our 'thank you for purchasing/servicing' emails, we responded with an eXtéresAUTO-provided email template, including links to sites where they could easily post reviews. Online Reputation Management Results: The impact of this online reputation makeover on our bottom-line - along with its more subtle effects - has literally blown my mind. First, these 150-plus monthly calls I'm driving directly from the review sites represent the most motivated, highest-closing customers I've ever seen. Because we simply 'own' the state of Washington from a positive review perspective, people are driving 150 miles to do business with us, and asking for salespeople by name. We're gaining market share, our CSI ratings are up, and we now rank at the top of the Internet Satisfaction Index. The more subtle (but equally profound) impact: it's utterly transformed the 'personality' of our store. Our sales team is obsessed with providing better service, our customers feel 'warm and fuzzy' about us, and our owners are proud. Dick Hannah Honda simply flies out at people searching online as the #1 consumer choice. Impact of SEO and Online Reputation Management Combined: This is where our website visitors and phone calls originated:(Note that SEO plus ORM drives 51% of our total unique website visits and 58% of our incoming calls.) So, on average each month in 2009, Dick Hannah Honda generated well over 500 direct calls through the combined force of SEO and Online Reputation Management. For us, it's now responsible for the lion's share of our call AND web traffic, month in and month out. The True Cost & ROI of SEO PLUS Online Reputation Management I dissect (to death) what every marketing line-item costs me, and the true ROI. In general, first-party tactics (including SEO, PPC, website investments, and Online Reputation Management) significantly outperform third-party leads. For us, they deliver nearly 400% more leads/calls at less than a third of our monthly spend - and our closing rates on first-party leads are twice as high. But SEO plus Online Reputation Management outperform any marketing tactic: generating more than half of our web traffic and Net-generated calls, at 7% of the Internet budget. Don't get me wrong, we still use third-party providers, as they can deliver a relatively cost-effective stream of leads.  But with these new campaigns driving so much business, we've been able to really refine our third-party spend so they perform more cost-effectively. Up Next...Social Media Campaigns in 2010 This year we're putting the third piece of our puzzle together: getting our social media strategy right. Yes, we've been Twittering, on Facebook, and have a great, female-friendly auto blog called 'Live, Love and Drive' ...but our management team has put their heads together, and hammered out a game-plan for what we want to achieve at the social media sites next. Our philosophy: no direct 'selling' on any social platform. Everything we do is about building strong community relationships and great content. From helpful and fun videos - to our new blog 'Life in the 'Couv,' which dives into everything great going on in our town - to ongoing contests at Facebook/Twitter - to great content at our partner TV/radio sites. With core fans and followers, every twelfth communication is a very soft sell, i.e., pretty amazing discounts just for them, etc. And to really execute, we've hired a dedicated in-house professional to build out our social media campaigns and SEO-friendly content. At Dick Hannah Honda we talk about our 'digital dealership' all day: how to drive more traffic to it, to sell more cars. Our approach: a bedrock in advanced SEO - and then adding powerful Online Reputation Management and pro-consumer social media campaigns. They represent the highest ROI and most cost-effective advertising we've ever done, period. Joe Orr, General Manager of Dick Hannah Honda.