Sitting on inventory is a costly and highly inefficient way of running a business. If you’re sitting on Ford Fairmonts, Plymouth Dusters, or a handful of LeBarons I can understand why you can’t turn inventory over. But if you’re a real car dealer that is proactive in moving units as fast as possible, or are intrigued at the thought of monetizing a vehicle before it changes titles, you need to read on.  Aside from Lotlinx to target sitting inventory (literally), there is another emerging solution that makes a dealer $ on "sitting" inventory.

HyreCar is a publicly traded company that has figured out an ingenious way to turn sitting inventory, both new and used, into a revenue stream that runs fast. They took a hard look at the concept of rideshare and came up with a very creative way to insert car dealerships into the money making formula.  It’s really quite simple, instead of letting used or slow moving new inventory sit, why not rent the fully insured assets to local drivers who need a vehicle for Lyft or Uber gigs, but either have no vehicle, or don’t want to put excessive mileage on their current vehicle(s).

Once the rental hits say 2k miles, the dealer pulls it off of the road, labels it a demo (still a new car designation, but at a more buyer-friendly price), and puts the driver into another vehicle. At any point in the process, the rideshare driver can make arrangements to buy the car he or she is using at a discount after putting on the 2,000+ miles. It’s a great way to make money for both the driver and the dealer that could, as a result, develop a customer for life. It’s also a great way for someone who needs money and a car, but has a credit challenge, to make their life better and more productive. The driver can choose the length of their rental from a day, to a week, to a year. The program requires no additional hiring of personnel and can be easily managed by the fleet manager who would be trained to use the HyreCar management software.  

If you are having issues with aging inventory, and it’s tying up your cash flow, I highly suggest you have a conversation with a representative from HyerCar, a truly unique outlier in automotive that brings results that can keep you running in the black.

As much as we talk about autonomous cars, electric cars, and the future of the automotive industry in regards to future cityscapes, one thing we may have overlooked in our crystal ball is the non-inclusion of privately-owned motorized vehicles in certain cities, or city centers altogether.  The benefits to the municipalities and folks who may one day live in towns that adopt such drastic anti-auto measures, may be far more substantial than one would ever expect.  Pontevedra, Spain is one existing example of such an experiment, and it works just fine for all that live there. (DealershipNews.com)

Full Guardian Article (https://bit.ly/2Ozr3jV ): People don’t shout in Pontevedra – or they shout less. With all but the most essential traffic banished, there are no revving engines or honking horns, no metallic snarl of motorbikes or the roar of people trying make themselves heard above the din – none of the usual soundtrack of a Spanish city.

What you hear in the street instead are the tweeting of birds in the camellias, the tinkle of coffee spoons and the sound of human voices. Teachers herd crocodiles of small children across town without the constant fear that one of them will stray into traffic.

“Listen,” says the mayor, opening the windows of his office. From the street below rises the sound of human voices. “Before I became mayor 14,000 cars passed along this street every day. More cars passed through the city in a day than there are people living here.”

Miguel Auxo Fernández Lores has been mayor of the Galician city since 1999. His philosophy is simple: owning a car doesn’t give you the right to occupy the public space.

“How can it be that the elderly or children aren’t able to use the street because of cars?” asks César Mosquera, the city’s head of infrastructures. “How can it be that private property – the car – occupies the public space?”

Lores became mayor after 12 years in opposition, and within a month had pedestrianized all 300,000 sq. meters of the medieval center, paving the streets with granite flagstones. “The historical center was dead,” he says. “There were a lot of drugs, it was full of cars – it was a marginal zone. It was a city in decline, polluted, and there were a lot of traffic accidents. It was stagnant. Most people who had a chance to leave did so. At first, we thought of improving traffic conditions but couldn’t come up with a workable plan. Instead we decided to take back the public space for the residents and to do this we decided to get rid of cars.”

They stopped cars crossing the city and got rid of street parking, as people looking for a place to park is what causes the most congestion. They closed all surface car parks in the city center and opened underground ones and others on the periphery, with 1,686 free places. They got rid of traffic lights in favour of roundabouts, extended the car-free zone from the old city to the 18th-century area, and used traffic calming in the outer zones to bring the speed limit down to 30km/h.

The benefits are numerous. On the same streets where 30 people died in traffic accidents from 1996 to 2006, only three died in the subsequent 10 years, and none since 2009. CO2 emissions are down 70%, nearly three-quarters of what were car journeys are now made on foot or by bicycle, and, while other towns in the region are shrinking, central Pontevedra has gained 12,000 new inhabitants. Also, withholding planning permission for big shopping centers has meant that small businesses – which elsewhere have been unable to withstand Spain’s prolonged economic crisis – have managed to stay.

Lores, a member of the leftwing Galician Nationalist Bloc, is a rarity in the solidly conservative northwestern region. Pontevedra, population 80,000, is the birthplace of Mariano Rajoy, the former Spanish prime minister and leader of the rightwing People’s party. However, the mayor says Rajoy has never shown any interest in an urban scheme that has earned his native city numerous awards. Naturally, it hasn’t all gone off without a hitch. People don’t like being told they can’t drive wherever they want, but Lores says that while people claim it as a right, in fact what they want are privileges.

“If someone wants to get married in the car-free zone, the bride and groom can come in a car, but everyone else walks,” he says. “Same with funerals.”

The main grumble is that the scheme has led to congestion on the periphery of the zone and that there aren’t enough parking spaces.

 “The city is the perfect size for pedestrianization,” says local architect Rogelio Carballo Soler. “You can cross the entire city in 25 minutes. There are things you could criticize, but there’s nothing that would make you reject this model.”

Later, at a children’s birthday party, a group of parents discuss the pros and cons of the car-free city. “The problem is first thing in the morning in the few streets where cars are permitted there are traffic jams,” says Ramiro Armesto. “There’s no public transport from the peripheral car parks into the center. On the other hand, I’ve lived in Valencia and Toledo but I’ve never lived in a city as easy to live in as this one.”

Raquel García says: “I’ve lived in Madrid and many other places and for me this is paradise. Even if it’s raining, I walk everywhere. And the same shopkeepers who complain are the ones who have survived in spite of the crisis. It’s also a great place to have kids.”

“What’s needed is more areas where you can park for five minutes so that you can take the kids to school when it’s raining,” says Víctor Prieto. “Here, if it’s raining – and it rains a lot – people get in their car to buy bread. They do it less now. I hardly use my car at all now.”

The works were all financed locally and received no aid from regional or central government.

“In effect, these are everyday public works that have been carried out in the context of a global project, but they cost the same or even less,” says Lores. “We’ve haven’t undertaken grand projects. We’ve done what was within our grasp.”  #GuardianWalking

Is there a town near you here in the USA or Canada that this model would work in?  It wouldn’t have to be an entire city, rather as in this example, it could be in a central gathering area of any decided size, accessible by shuttle services adjacent to a huge parking lot(s). The boon to local businesses, cafes, and sight-seeing destinations by drastically changing the ambience, and eliminating the unnatural clang, clatter, and congestion caused by cars would be welcome to many looking for a return to a more organic urban way of life. (DealershipNews.com)

When former President Obama mandated higher fuel standards for the automotive industry back in 2011, most manufacturers, feeling the pressure to comply and be ahead of the curve, responded by investing billions of dollars into “green alternatives” to the combustion engine. Currently, these include a variety of options as collectively, the industry hopes one or more of these formats will be embraced by the majority of consumers sooner than later. Toyota’s Prius (which I’ve owned since 2011) has been a favorite for several years due to its fuel efficiency.  Early on, I felt as though I was being friendlier to the environment, and sticking it to the oil barons at the same time.  

Whether or not we really have environmentally friendly/green alternatives is debatable on many levels (https://bit.ly/2NuLrBA).  Remember, oil was at $112 per barrel when Obama signed his mandate.  With all of the investment and marketing strategies being employed by virtually every manufacturer, recent sales performances by Hybrids, BEVs, PHEVs, and FCEVs lead one to speculate that America isn’t quite ready to walk away from the combustion engine just yet.  President Trump’s elimination of Obama’s mandate suggests that some manufacturers may have acted too quickly, and that the vast majority consumers can care less about “green” cars, preferring the lure of the SUV and pickup truck.

June sales for EVs, PHEVs, hybrids, and FCEVs are still down.  Here is a quick breakdown of exactly what’s going on through July:

Tesla sales are perhaps the one and only alternative outlier in the conversation.  Tesla is more of a luxury/status brand than anything else as is the BMW 530E which are all showing positive growth but are not practically priced for the average consumer. Granted, it’s cheaper to drive either one from a fuel investment angle, but at the price point that Teslas and BMW 530E’s are offered, it’s not a practical investment for most of us. Tesla drivers may be eager to do their part in eliminating our dependence on fossil fuels, but they still want to show their neighbors that they’re affluent, and so they invest in, and trust the Elon Musk products (The Tesla family has nothing to do with this company).  

Meanwhile, Volvo is working hard to reduce Tesla’s dominant position in the market, and will soon be 100% alternative themselves, having committed to beat Tesla out of its market share by the next decade. Volvo announced earlier this year that it will completely do away with the combustion engine and that all new models in 2019 will have electric motors (BEV, PHEV, HEV) including an all-electric SUV VC-40.  Volvo Cars has been majority-owned by the Geely Holding Group, a Chinese multinational automotive manufacturing company since 2010, and is looking to eclipse Tesla in sales by leveraging their more familiar, trusted, and technologically sound brand to the global market. More on Tesla vs Volvo next month.

So, where are we now as far as new car sales are concerned involving alternative technologies?

Currently, we are experiencing a downturn in sales of hybrids, EVs, PHEVs, BEVS, and FCEVs.  Aside from the west coast, and other liberal, big-city bastions, it’s a trend that’s a bit concerning to automakers who have all banked on just the opposite. When oil prices are stable, and gas prices aren’t outrageous, people will buy vehicles that are less fuel-efficient with aplomb.  Currently, we have very healthy SUV and pickup segments because oil prices haven’t driven gas prices up through the roof like they have in past cycles.

If gas prices stay at acceptable levels, we can expect “Green Car” sales to be far less than robust, unless of course you’re Tesla - whereby status is your primary buying incentive.  YTD, only the Chevy Bolt is besting last year’s numbers, but June’s fall off in sales was precipitous even for the Bolt.

Should you carry alternative inventory on your lot?  If you have slow movers, how do you as a salesman, speed up the turnover of "Green" cars on your lot?

Ask your customer what kind of vehicle they are looking for, and most importantly, why. If they are tight on funds, a hybrid or EV will be 50% of the annual operational costs of a conventionally fueled vehicle. That’s $1,000 less per year, or a savings of $83 per month.

Used Car Dealers need to continue finding the best vehicles available to match their PMAs. If you serve an area with a higher per capita income, and you sell vehicles to parents of new drivers, then carrying some used Priuses, or Volts might make sense. Both are hybrids but the Volt gets 53 miles on battery only while the Prius electric only range is almost negligible.  If you serve a market with a lower per-capita annual income, the Prius, Nissan Leaf, and Chevy Volt are good additions to your inventory.

If you serve a mid to upper middle-class demographic, you’re still looking for SUVs and pickup trucks as your primary movers. Gas prices are stable, and oil prices have actually started to drop despite the media suggesting otherwise. In fact, if one is to look at oil pricing trends, we can see that the artificial forces (banks, investment houses) that historically jack up the price of a barrel of oil, have been muted.  

As a used car dealer, hopefully, you’re seeing a lift in sales this summer.  New car sales are down in most markets if you compare May and June of 2017 with May and June of 2018. People with marginal or bad credit can no longer buy a new car so easily.  Rising interest rates and the fact that loans are harder to get are funneling consumers to used car lots en masse.

QUICK TIP:  If you have EVs on your lot that require a charging station, make sure to amortize it into the cost of the vehicle. Selling it separately as a line item is a turn off and gives a customer pause to reconsider. Charging stations run between $379 and $4500 depending on your vehicle and need for commercial capacity.

Where we will be a few years from now is anyone’s guess, but I’m going to postulate that although sales are slow for alternatives now, there is likely no stopping the transition.  The gas-powered engine is clearly on the endangered list. The amount of maintenance needed is far less in electric-powered vehicles, let alone engines that utilize hydrogen as a power source like the Toyota Mirai which is in its infancy as an experiment. The cows have definitely left the barn, you just couldn’t tell by looking at this summer’s sales numbers.

This article was inspired by Amanda Gordon who responded to a very recent article on this site by suggesting that no matter what, it always comes down to human interaction at some point during a sales transaction, regardless of the circuitous route taken to consummate that sale.  Thank you for the inspiration Amanda.

Now, I wrote a piece a while back suggesting that we can have all of the automated systems we want in order to facilitate salesmen-free car deals, but at some point we need to interact with a real person. We are a social species by nature! We do best face to face and always will,  although technologists are trying to change our core behavioral proclivity with their addictive technological heroin called a "mobile device."

Do you want to make more sales, have more return customers, have more referral business, and improve the performance of your service department?  Here are a 8 novel concepts first published 81 years ago by the one and only Dale Carnegie that are guaranteed to "boost sales." Excuse his dependence on male references, he lived in a day when a man was a man, and ...forget it (LOL).

1. Do not criticize. “Criticism is futile because it puts a man on the defensive, and usually makes him strive to justify himself. Criticism is dangerous, because it wounds a man’s precious pride, hurts his sense of importance, and arouses his resentment.” (Do not even criticize a competitor in the company of a prospective customer!)
2. Give honest, sincere appreciation. “Dr. Dewey says the deepest urge in human nature is ‘the desire to be important."  Find something in everyone to sincerely appreciate, we all have value!
3. Get the other person’s point of view and see things from his (or her ) angle. The thing here is to give to your interlocutor what he (or she) wants, and not what you, you want or want to sell.
4. Become genuinely interested in other people. “Encourage others to talk about themselves."  Folks are generally more interested in themselves than anyone else these days...you don't have to be.
5. Smile. A smile is human sunshine (I made that up just now).
6. Remember names. “Remember that a man’s name (or a woman's) is to him the sweetest and most important sound in the English language. 
7. Be a good listener. God gave us two ears and one mouth, listen attentively and learn about what the customer needs to best serve them.
8. Make the other person feel important. “And do it sincerely”

Seems like some of these concepts overlap a tad, but for the most part, when the best practices of Dale Carnegie's book are followed, really good things happen.  Human behavior hasn't changed since the beginning of our time on earth, and all of the technology in the world cannot change our need to inter-relate with one and other. We are a social species. The bottom line here is pretty obvious; get good at interacting with real people by better understanding their basic nature and needs, and service them accordingly. Technology may be touch screen, but the human touch wins out in the end.

WELCOME TO THE NATIONAL DEALERSHIP STANDINGS SUMMARY REPORT JUNE 2018

If you believe automotive industry articles analyzing June sales numbers, sales of new cars haven't fallen off the cliff as expected. If you look at new car sales numbers in May or June of 2017 compared to May or June of '18 (calendar month sales), some dealers in the big markets are doing OK, but most are seeing a distinct fall off of new car sales. Are we at the precipice of that major downturn in new car sales? Are we already in it?  You be the judge.

LOS ANGELES MARKET: (Sans Luxury car sales and F-150 trucks), new car sales in the LA area are down 14% on a survey of 321 dealers.  3 new dealerships have no previous June to compare against so if we remove the new downtown stores of Kia, Toyota, and Nissan, only Subaru Pacific has had a better June of '18 than June of '17 out of the top 25 car dealers by calendar month sales.  Galpin Mazda, and Puente Hills Subaru were the only other two dealerships who sold over 200 cars with better showings this June than last June.  

WASHINGTON DC MARKET: Four of the Top Ten dealers are showing increases in sales over June of 2017 but the sales fall offs of some of DC's biggest dealers tip the scales to the dark side. Based on 260 DC area dealerships, new car sales are down a whopping 18.04%.  Dealerships doing well in the DC Top Ten, include Carmax Laurel Toyota up 4.37%, Honda of Chantilly up 3.06%, and Autonation Honda Dulles which is up 14.45%.  Dealerships that showed drop offs include Koons Tysons Toyota 16.22%, Darcars 49.34%, and 355 Toyota 18.94%.   

DALLAS MARKET: Unlike the rest of the country, Texas is it's own nation. Although they are down on a survey of 185 dealers 4.5% overall, the Top Ten Dealers are actually doing pretty well in comparison to the rest of us.  Of their Top Ten, five dealers are showing sales growth. David McDavid Honda was up 7.25%, Vandergriff Chevrolet spiked up 142.64%, Clay Cooley Nissan jumped 4.14%, Huggins Honda up 7%, and Toyota of Richardson did a 7% vert.

CHICAGO MARKET:  Based on a survey of 278 dealerships, the windy city was off 16.84% from June of 2017.  Of the areas Top Ten Dealers by calendar month sales, four dealers showed improvement over last June. The Honda Superstore of Lisle was up 16.8%, Castle Honda had a 9.3% lift, Zeigler CDJR calf-raised 2.92% and Sherman CDJR pole vaulted 30.83% over June of 2017. Car sales performances throughout the Midwest look very dodgy when compared to the same month last year.  Overall, Chicago's Top Ten Dealers experienced a 5.56% drop off in new car sales June 2017 over June 2018. 

As loans get more expensive and difficult to get, and folks with less than superb credit scores get rerouted onto the used car lot, we can expect new car sales to suffer accordingly.  I continue to read articles about how new car sales aren't lagging as bad as experts thought they would be.  Still, as I review monthly comparison data dealer by dealer, I see a trend that may suggest the new car stall is happening now, we're just looking at the wrong data sets.

It’s the Dealership News Podcast, this is Kelly Kleinman of dealershipnews.com and today we travel north of the border into Canada to visit Brandin Wilkinson, a Car Dealership owner by trade, blogger and writer in his in-between moments.  If you want a Wrangler, check him out at  Woodworth Chrysler Dodge Jeep Ram Ltd in Kelwona, BC, and tell him Dealership News sent you.  Brandin and I became acquainted through the pages of Driving Sales where we’re both Senior Contributors - to their SEO benefit and our egos gratification.  Brandin, welcome to the Podcast!

DN: Have you always been a car guy or did you just sort of wake up one day and happenstance brought you into the automotive industry?

Total accident! I am a welder by trade and on one of my days off I went into the local GM Dealership to get my wife’s vehicle serviced and started chatting with one of the sales consultants.  This dealership had a fishbowl style office setup in the middle of the showroom so you could see into all of the offices. 4 out of the 6 had their lights off, and to this day I have no idea where this came from, but I blurted out that I could fill one of those offices if they needed someone.  Within minutes I was being interviewed by the Sales Manager and General Manager. This was on a Friday, and I got the call Monday that I’d be starting my new career. I even asked my boss at the welding shop if I could have my job back in 30 days because I was sure sales wasn’t going to work out for me.

DN: Unless you’re a former NFL quarterback, you don’t just become a dealership owner, what did your path look like?

Haha, I can’t even throw a proper spiral so I’m the farthest thing from a former NFL Quarterback. From ages 22-25 I was a Sales Consultant. From 25-27 I was a Sales Manager.  And at age 27 I was the General Manager of a 53 employee team at 2 locations. The dealership was changing its culture as the owners son was beginning to take things over so I was looking for a new opportunity.  Thankfully, my father-in-law and Don Carter, previous owner of Woodworth Chrysler Dodge Jeep Ram Ltd. were attending a junior game in town that they rarely went to. Somehow, they ended up sitting close to each other and started visiting.  One thing led to another, and I went in, met Don and started my Journey with Woodworth Dodge. I bought 20% when I was 28, and because of the rapid growth we had, I was able to buy 80% of the company in 4 years which is what I currently have and will remain to have.  My 2 business partners make up the other 20%. Since I live in Kelowna, BC and the dealership is in Manitoba, they look after day to day operations along with other key team members.

DN: When you joined forces with your dealership, what changes did you implement and how did you leverage yourself into being in position to purchase the dealership?

Nothing too complicated. Marketing and Investing in employee development were the biggest things. I went from a $7 million dollar General Motors facility to a Chrysler facility that had huge fixed windows and didn’t have a/c, or wifi, cell reception, coffee machine, water cooler, or a client lounge. So not only did I have to convince my GM clients to drive an extra 30 miles and change product, but also get adjusted to the new facility. Thankfully, they did end up following me and we now have all of those things I mentioned. We send our team to events such as Darci Lang (motivational speaker), Leadership Courses (Dale Carnegie), and personal development seminars like Unleash the Power Within hosted by Tony Robbins.  This has had a major impact on our culture, growth, and overall success. In regards to marketing, we simply say thank you to our current and past clientele in various ways such as: 1) For anyone who has been in for service, parts, or bought a vehicle, we automatically put their name into a draw on a Tuesday for a pair of NHL tickets, hotel, fuel, cash for food, etc. and pull the name on that coming Friday. 2) We send personalized gifts to clients 30 days after they’ve purchased. Imagine going to the post office and unexpectedly receive a package in the mail. It’s a nice surprise to get those right?! Kind of makes you feel like a kid again. Then you open the gift to see a personalized cutting board, tackle box, gym bag, hoodie or hat of your favorite sports team, etc. That’s what our clients receive. 3) When you come in for service and you’ve been a pleasure to deal with, we look after your oil change.  For example, if we have someone who is always smiling, fills the room with their positive energy, etc., we then surprise them by paying for their service that day (we have a weekly allowance for service/parts). The service or parts person would explain why we are taking care of them today. From there, that person leaves with a new level of confidence and pride, then goes on to share that experience on social media and in person to her friends and family. We do quite a bit more than this, but it gives you an idea of our approach to marketing.

DN: Is there a difference between the way Canadian car dealers operate vs the way we do here in the states?  If there is, what would it be? As a follow up, are dealers looked at with the same healthy modicum of distrust as they are here, and how do you deal with changing that perception?

I can’t speak for US dealers as I’ve never been in one. But I would assume it’s much the same. For the most part we probably aren’t trusted but it’s our own fault in my opinion.  We’ve inherited a lot of that distrust but we aren’t doing enough to rebuild it either. Dealers will say that they provide a pressure free buying experience and then on the last day of the month post a video about how you have to buy today because tomorrow’s programs could be a lot worse. This is why establishing trust starts at the top of every dealership in my opinion. We know we need cultures of trust, integrity, and transparency but the biggest thing is acting on it. I believe Marketing plays a major role in this as well. For example, in our marketing we talk about things like the stronger our culture is and the more we invest in our team, the better experience the client has with us. Rarely do we promote sales, rebates and price. In our experience, it has helped us gain trust and respect from the public, and it shows as I mentioned earlier about the growth we’ve had. No other dealership in our area has come close to that kind of growth, and we’ve kept our Customer Acquisition Cost under $250.  We back what everyone else, including ourselves, preaches which is customer service. The difference for us is that we invest in our team first and that in turn pays dividends through a better client experience.

DN: I’ve noticed that new car sales here in most of our major cities hit an iron wall in May, comparatively with May 2017, sales are down double figures in most dealerships, how are you looking up there?

As an industry we were near breakeven from this time last year, we were down 0.6% but our dealership had its best April and May in the 33 year history with selling 29 new retail units in April and again in May. We tend to have more consistency than other dealers which I contribute to how we approach our clients and marketing.  We’re not concerned about getting the sale today if the client is ready. It’s more about establishing a relationship so we can be top of mind when they are ready.

DN: Which vendors do you swear by, and which vendors do you swear at...be honest and name names!

PBS is awesome, they are our DMS Provider. We don’t really swear at any vendors. although I have literally sworn at our Dealer Operations Manager a few times for various reasons. Mostly because of inventory management and Vehicle performance allowance targets.

DN: What are your thoughts about the direction dealers are taking these days in regards to the ever-changing digital marketplace?  Are Canadian dealers adjusting?

We seem to be adjusting slowly but surely.  There is an obvious disruption coming to the industry when you look at companies like Fair, Carvana, etc. There’s less noise about that stuff up here but we know it’s coming and I welcome it personally.  Any tool or resource that can make the buying experience better for the consumer and still a win for the dealer is a win all around.

DN: Let’s chat about your book; “Rethink Selling”, what motivated you to write it, and what are your top 3 reveals regarding what we don’t know about selling and what we really need to know about selling

Oh great thank you for asking about it.  It will be available on Amazon and all major distributors in the first part of July so watch for it there. I’ve struggled personally with mental health. And the auto industry can be demanding, thankless, and stressful, much the same as any business owner will tell you.  Yet it seems as though we don’t have much as an industry to support or guide on how to handle the roller coaster ride of emotions that is sales. I felt we were missing tools and resources to help sales professionals, managers, and owners develop their much needed mental strength.  When I saw Tony Robbins in West Palm Beach a few years ago he said something that resonated well with me and that was “Success is 80% mindset and 20% skill.” The vast majority of sales training programs focus on the 20% that makes you successful, which are the strategies and in my opinion, as tech evolves, those strategies are becoming less relevant.  Mindset will always be relevant and critical to your success. So I focused my efforts on the 80% for this book and it’s like a new category of sales training. No other sales training book has taken this approach before. We discuss the importance of areas such as self-awareness, gratitude, why having a growth mindset matters, and the power of momentum.  At the end of the book, I provide invaluable resources for fitness, nutrition, personal development, sales, and many other categories. It’s an evergreen resource for sales professionals to lean on throughout their career. And it will be available in audio, digital and print.

DN: Where will our industry be in 25 years when most of the vehicles will be autonomous and or all electric...or not?

That’s a tricky one, at the speed of technology it’s not unrealistic to expect all autonomous vehicles in the year 2043.  I’m curious to see what role the dealership will play at this time. We could end up being a pick up destination for the clients and there will be less need for salespeople as time goes on.  We’ll see where everything ends up. But in my opinion, we’re transitioning into a high demand for providing an excellent client experience. And that won’t change. In order to adapt to this sales transformation, it starts with personal transformation.

DN: What car do you drive and why?

I drive a 2018 Ram Sport and my wife drives a 2017 Chrysler Pacifica for our 2 kids and black lab. I tried driving an SUV but had to go back to a truck.  There’s just something about a guy and a truck. Can’t part with it!

Good vs evil is a never ending battle.  The issue with digital advertising is in distinguishing who is on which side of the battle. We all know Google admitted a few years ago that 54% of their display ads were likely never seen by human eyes due to bogus site placement and viewability issues. They basically sold bogus inventory and knew it for years. It was a variety of industry watchdogs that viewed Google through their crosshairs and pressured Google into taking far more robust actions to stem the rampant fraud that they had been benefiting from for years.

So for all of those dealers and manufacturers who spent billions of dollars on “programmatic display” and other such folly, and had difficulty attributing real results to it, now you know why.  No one saw your ads. Ya, those ads showed up on legit pages when media was purchased direct on reputable websites, but if you went through the exchanges or ad networks - you got tarred and feathered.  

For those of us who do ppc campaigns, you can bet your bottom dollar that your Google Analytics and your ppc numbers NEVER, EVER match up, but the clicks have been paid for. Are you getting a full refund for the discrepancy?  You better be but most are not. 

Google isn’t 100% to Blame but Maybe 80%

Digital ad fraud is an arms race whereby the bad guys are always one step ahead. Google, having to show that it really cares, actually built a tool for better transparency that will allow a marketer to determine the legitimacy of their ad buy. The issue is then handed off to the marketer to decide how they approach a client who they are buying an unpredictable amount of bogus inventory for. How does that marketer go to ABC Auto Group and confess to them that he or she has been scally-wagged, but it’s a game everyone plays all the time so it’s OK to knowingly be ripped off? It might be easier for a big marketing group, but how does a boutique marketer handle that?  By asking Google to credit the account?

It’s a really dodgy business, far too complicated, and sophisticated to be given the leeway they have been for all of these years. Problem is, government is always several steps behind the tech-sector and that’s been the issue...a license to print money, and no one to really call them out or properly oversight them until relatively recently. Oddly enough, in this instance it wasn’t the “fake news” either.

The Wall Street Journal Calls Foul

According to the WSJ article on the Google fraud refund issue, “Google had been refunding only its fees because the digital ad chain is complex, with multiple intermediaries taking cuts of any spending. One dollar spent on an ad on The New York Times, for example, gets divided up between sell-side platforms, buy-side platforms, various ad tech companies and, finally, the publisher itself.”

Google is now giving bigger refunds to marketers who lose money to ad fraud on its platform.  This occurred because the WSJ published an article spotlighting the issue last year and it took time for Google to come clean and develop a tool so marketers can have more transparency regarding their media buys.

The “good” news came a few weeks after The Wall Street Journal reported that Google was issuing refunds to advertisers whose ads reached bots instead of humans, but only for its fees of 7 percent to 10 percent, not the whole cost of wasted ad spending which has been estimated as high as 50% and low as 10%.  A few years ago we tested a dealership group out of Colorado and found that 90% of their traffic was code.

Per the WSJ; “The new policy only applies to inventory acquired through Google supply partners AppNexus, Index Exchange, OpenX, Teads, Telaria and DoubleClick Ad Exchange, though Google estimates they, along with others, comprise 90% of the available inventory on DoubleClick Bid Manager. The refund system is currently being employed.

Customers of DoubleClick Bid Manager, the portal where marketers buy digital ads via Google, automatically receive full refunds for all detectable ad fraud. Still, the issue is in full transparency, how the heck does a marketer know they’ve been the victims of fraud...really?  Can they trust Google to “keep up” with the other “bad guys,” let alone not supply them with rigged software (conspiracy time)?

Here’s How Bad it Is

Google removed 100 fishy ads per second in 2017! Per Scott Spencer, Google’s director of sustainable ads; “We took down more than 3.2 billion ads that violated our advertising policies” that was nearly double` from 1.7 billion in 2016.

The company blocked 79 million ads in its network for attempting to send people to malware hell-sites, and removed 400,000 of these nasty sites in the past year. Google also pulled 66 million “trick-to-click” ads,and 48 million ads targeted to get folks to download unwanted software by dangling a carrot which is usually the actual download they were looking for.  That’s bad enough, but it’s literally one scam after another that the already dodgy Google has to mount a reactive fix to.

Google removed 320,000 publishers from its ad network for violating the company’s publisher policies. It also blacklisted nearly 90,000 websites and 700,000 mobile apps.

As an aside, Facebook removed nearly 500,000,000 fake accounts on it’s platform just to further demonstrate how wild the Internet still is. In 2017, Google removed 2,000,000 pages for policy violations each month after expanding its policy against dangerous and derogatory content in April to cover additional forms of discrimination and intolerance. Aren’t you happy Google, the overlord of the dirtiest digital platform on the planet, decides what bad content is?

Visibility issues complicate the entire issue even further when we take into consideration that 26% of web users have ad blockers on their PCs and 15% or more have ad blockers on their smartphones. The estimated loss of ad revenue to ad blockers is 10-12 billion bucks per year.  

RhythmOne released some research last year that focused on blocking and fraud prevention trends across the programmatic marketplace throughout Q4 2017. The company said it processed 2.8 trillion bid requests on average between October and December.

The report reflects trends of blocking by the platform’s filters of both suspicious and under performing inventory.

Here are the main factoids per ANA:

• 56 percent of ad inventory on desktop was blocked compared to 38 percent on mobile for the quarter.

• On average, programmatic video inventory was blocked at slightly higher rates than that of banner ad inventory; 49 to 45 %.

• On mobile, inventory was blocked significantly more often on mobile web (56 percent) than on in-app mobile inventory (27 percent). The company says fraud on mobile apps is inherently complicated —making detection more varied and more challenging.

The concerns around programmatic video buying are largely focused on fraud and viewability because the worst measurable fraud is in view-through metrics and who or what is actually be viewed.  In many instances, code is created to simulate an actual view...isn’t that nice?

Solution Offered

So, with all that said, what the heck can we do about it?  For one, find a way to correctly measure cause and effect in your digital marketing universe.  If you can’t make the analysis yourself, then bring in a 3rd party to forensically analyze your digital advertising via Google Analytics and see what the heck is really going on. Of course, you have to trust Google Analytics to be accurate which is not always the case but is all we really have.  You may save your company thousands or millions of dollars...and then you’d look like a hero - because that’s exactly what you’d be.

Meanwhile, it’s summer, go catch a wave, some rays, a ballgame, put the top down, and let someone else worry about it for now.  

KK

Patrick McMullen of MaxDigital.com and Senior VP of Strategy and Innovation podcasts with us about developing dealership profit centers and optimizing profits in every nook and cranny of a dealership. If there is a way of optimizing profit, he'll disclose it...hear it here!…

As I peruse the new car sales numbers by dealership in some of the top markets in the US, I can’t help but look at the calendar month sales data as a negative indicator of things to come.  Although sales have performed better than expected this year, deeper data diving (BASED ON CALENDAR MONTH) indicates big dealers got plowed this past May. How bad were new car sales if you compare May of ‘18 with May of ‘17 (sans the Ford F-150 which seems to be an evergreen)?  You be the judge. Here is an overview you’ll find nowhere else based on near-real time numbers at their time of collection.

LA Market Quaking? (Down Approximately 25.37%)

The LA new car market is getting absolutely shanked with catastrophic 30-50% downturns in sales across the areas top 10 dealers. Longo is still the world leader in auto sales, but sold 475 less cars this May than last!  That difference alone would be a hugely successful May for most car dealers across the country, but a 32.53% slide still isn’t the worst fall off in the market. Car Pros Kia sales have been KIA (Killed in Action), down 42.06% despite the release of the company acclaimed “Stinger”. Overall, minus luxury brands and Ford F-150s, the LA market has lost 25.37% May ‘17 over May ‘18.

Phoenix New Car Sales Drying Up As Well (Down Approximately 32.53%)

There is good news and bad news for AutoNation in the Zone.  First the good news; their Honda dealer in Chandler sold 287 cars this May vs 245 in May of last year.  Now the bad news; their Tempe Toyota store sold 217 cars less this May than last May! If misery loves company, AutoNation must love other Toyota dealers. As LA’s Eastern-most suburb, Phoenix too experienced a downturn in new car sales .  The average top 10 dealer is 30% south of last May’s sales numbers. That loud wind you hear is an Arizona scirocco carrying off new car sales and tumbleweed in its wake. Overall new car sales are down 32.53%!

No Wind in the Windy-City/Illinois Sales Down 25.21%

Toyota stores in Chi-town are getting mugged by Honda dealerships Valley Honda, and Schaumburg Honda Automobiles, as the 3 biggest Toyota franchisees in that market are averaging a 43% downturn in sales. Overall, Windy City new car sales are on life support as downturns in sales far exceed upturns. The good news is that Muller Honda and Ray Chevrolet are up over last May.with both dealerships plus 13%  Ray Chevrolet was somewhat of an anomaly when we consider that Phillips Chevrolet was down 29%. Although Currie Motors Chevrolet didn’t sell enough cars to make the top 10, it only missed by 3 (151) and had a 31% increase in sales which was somewhat of a positive outlier in the market. In total, Chicago area new car sales were down 25.19%.

Bay Area Bombing (Down Approximately 30%)

Fremont Toyota, Stevens Creek Toyota and San Francisco Toyota are all down an average of 32%, with 8 out of the areas top 10 dealers deep in negatives. Seemingly operating in an alternate universe, Honda has the only few stores that aren’t falling flat although Honda in the Bay area is pretty much halfway to the water treatment plant.  Anderson Honda is up almost 7%, and Capitol Honda is actually up 28% in sales from last May, but their Chevy store is down nearly 9%. Overall, the Bay area is down just under 30% in new retail car sales. With housing prices through the roof, the cost of living in the Bay area has to be hurting auto sales. Commuters spend 72 minutes per day going back and forth to work so the cost of gas, which is on the rise, especially in California, is having an impact as well.

Beantown Blow Out (Down Approximately 33.11%)

Boston dealers are getting hammered with the average dealership well into double figure disappointment.  Boch Toyota in Beantown is down nearly 54% from last year with only Quirk Works Subaru and Subaru of Wakefield (not a top 10 Beantown dealer) seeing any significant upswing in sales from last year.  Boch apparently botched some sales that Kelly Honda scooped up having sold 8 cars more this May than last. In fact, the Boch performance may have been the worst of any top 10 Honda dealer in any city in the USA.  The fall off of new car sales in the Boston area is 33.11% comparing May ‘17 with May ‘18 with nearly 1,000 fewer cars finding new garages.

Did You Know that San Jose is a Top Ten Market? (Down Approximately 29.6%)

They are!  The only top SJ market dealerships improving over last years numbers are Capitol Honda, and Anderson Honda. Dealerships there, as in DC, overlap with other major markets.  In San Jose, it’s San Francisco. The top 2 makes in No. Cal are Honda and Toyota with the average dealership experiencing a 25% fall off or more in sales. Only one American brand, represented by Capitol Chevrolet, made the top 10 list for new car sales in the area, but they were down by 8.76% over last year.  In total, the SJ market is down 29.6%.

Atlanta Hardly a New Auto ATM (Down Approximately 20.24%)

The top 8 dealers in Atlanta all dropped off from May of last year with another AutoNation disappointment, this time in the form of the Toyota Mall of Georgia. It fell off 99 sales from last Mays sales. They may have lost market share to Stone Mountain Toyota who sold 166 new cars.  Stone Mountain is a relatively new Toyota dealership. Toyota South Atlanta went from 90-175 sales last month which explains why all the other Toyota dealers tanked last month. It’s hard to believe that being down 20.24% in new cars sales is well below the national average but it’s true.  

DC Is Loaded With Rich Politicians and Lobbyists (Down Approximately 29%)

Sadly, far fewer of them bought a new car this May than they did last May. In the DC top 10, Hamilton Honda is one of the only major area dealers to shop an increase in new cars sales over last Mays numbers. They sold 37 more vehicles than in May of ‘17. Smithtown Nissan actually did very well with an increase of 105 new cars leaving their lot.  That’s a 33.55% increase, mind boggling considering how sluggish the national market is. The Honda brand dominates the DC market. There are 30 Honda dealers in the expanded DC market, and 8 of the top 10 selling dealerships in May of ‘18 sold Hondas. In that top 10, only Open Road Honda and Hamilton Honda showed growth. Huntington Honda sold 308 new cars, selling 149 less new cars this May than they did last May.  In total, new car sales were down May 18 over May 17 by 29%.

San Antonio New Car Sales Going the Way of the Alamo? (Down approximately 20.23%)

Again, we see a May over May trend that just sits in our craw.  New car sales are down 20.23%. Texas is its own glorious economy, but even Texans suddenly stopped buying new cars at the pace they previously were. WTS, there were a few outliers such as the Ancira-Winton Chevrolet which sold 96 cars this May more than they did last May, Vara Chevrolet sold 44 more new units, and Nissan of San Marcos sold 43 more than they did the previous May.

Sadly, we have no dealer-specific Ford data, but we know 85K or so F-150s are sold every month, and is clearly the most popular vehicle in the US - especially in Texas. Top Toyota dealers are now relying fully on Highlander, Tacoma, and RAV4 sales to keep them competitive against other brands.  On the San Antone battlefront, only North Park Toyota of San Antonio held serve in May up by just 1% over last May. Gunn Honda stayed flat moving 266 units while Gillman Honda of San Antonio was actually up 3% although they sold 98 fewer units than Gunn. Other than that, Toyota/Lexus make up 6 of the top 10 selling dealerships and 5 of the 6 were down approximately 23%.  Minus Ford/Lincoln, Audi, or VW, it’s fair to say that the May sales swoon may be an indicator of the much anticipated car sales slowdown...even in Texas.

Philadelphia Free Fall, New Car Sales Fell 28%

As has become pretty apparent, May comparisons over the last two years demonstrate a sector of the economy that may be set to implode.  Here’s what we saw in the Philly top ten last month:

The top two dealers both improved over May ‘17s numbers.  Hamilton Honda sold 37 more cars and Open Road Honda sold 2 more cars than they did in May a year ago.  Reedman - Toll Subaru sold 30 cars more than the previous May but that’s pretty much the end of the good news.  Top dealers DCH Toyota sold 115 less units, Burns Honda sold 96 less units, and aside from smaller players like Porter Chevrolet, Freehold Chrysler Jeep, and All American Subaru of Old Bridge which improved their lot, most did not.   

DFW New Car Sales A Little Bit Good, A Lot of Bad (Down Approximately 26.28%)

Let’s talk about the cup being half full. Vandergriff Chevrolet sold 162 more cars than they did last May.  That’s a 114% increase in sales for you mathematicians. They sold just 4 cars less than Clay Cooley Nissan who also was up 43.4% in sales.  At the top of the list was Classic Chevrolet with 322 sales, down 21.27% from last May’s numbers. Chevrolet is strong in Texas and El Dorado Motors another Chevy dealer, also saw a strong month up 18% over May 2017.  Overall, DFW new car sales are down 26.28%. The DFW market is big on Lexus with two dealers in it’s May ‘18 top 10, but neither did well comparative to May ‘17. Park Place Lexus Plano was down 16%, and Sewell Lexus was down 37%, while Park Place Lexus Grapevine was down 11%.

The data crunch we performed takes a look dealership specific numbers with certain data sets simply not available to us, but would not have skewed numbers all that much.  There are 4 brands not reported in the spreadsheet and that makes this incomplete. Still, most of the major sellers are on the list and until we see how June pans out, we can’t make any rash judgments or definitive statements, but there is something odiferous emanating from the fan.  The big disclaimer is that we are basing all of this not on sales month, but calendar month.  This doesn't take into consideration 11 other months, but with new car loans (at decent rates) tougher to get, interest rates rising, and off-lease inventory glutting, how can it get better?  You never know.

For the National Dealership Standings, check us out at each week.

1. Identify Keywords That Under-Perform or Perform Incorrectly (Negative Keywords) –  Google Analytics will give you insight into which keywords are working, which are not, and which broad matches are pulling traffic you aren't specifically intending to draw.  An example of this could be words that have multiple meanings or are demographically undesirable. Knowing which keywords do not work is just as important as knowing which ones do.  A quick example would be "Dealer near me".  This could be any kind of dealer right?  "Car dealer near me" would be the more specific (exact match) phrase.  Adding a modifier like "used car dealer near me" would be even more strategically sound.  I would assign "dealer near me" to the negative keywords list in my campaign. Check carefully in the "search terms" section and you'll see which terms are being used to find your site. For terms that are confusing or not relevant, make sure to add them as a "negative search term", and you'll no longer pay for them again.  Meanwhile, you'll also find keywords and keyword phrases that you never thought of that you can add as keywords and assign to the specific Ad Groups in the campaign with the push of a button. 

2. Your Landing Page and PPC Campaign Need to Jive – If your PPC ad is about your dealership's wide selection of used cars, when shoppers click on that ad, it better take them to your used car section.  Furthermore, the use of keywords in that ad better match the copy of the page the ad clicks to. Failure to do so is met with Google's wrath!  Ignoring Google Best Practices will saddle you with low quality scores, and that means increased ppc costs, and lower ranking of your website and overall visibility. On the flipside, good synchronization means high quality scores, better organic ranking, and lower ppc costs and consistently higher positioning. *Remember, match keywords in ad copy with the same keywords on the landing page at the very least. 

3. Adjust Your Bid Strategy Accordingly – Along the lines of experimenting with your campaign ideas, targeting methods, and keywords, adjusting your bid and campaign budget during a campaign is crucial.  Always check out your impression share and see if you're spending enough to make your ppc campaign worthwhile.  If your pulling a 48% impression share, you may not be spending enough to keep your ads up all day long - although there are other reasons as well why your ads aren't being shown (see above).

Depending on what your products or services are, you may or may not want to allow Google to default Max CPC which means you're willing to exceed your competitors max bid by a minimum of 10%.  If a keyword fetches $3.28 a click, and you set to max bid at $6.20, it will only charge you $3.28 plus 10%, not $6.20.  If your website is tight and you have a high quality score and abide by Google Best Practices, you'll rank consistanty higher at a lower cpc than some guy bidding the same way you are.  This is why SEO ES MUY IMPORTANTE!

I believe in being #1 in all searches because it's been proven that you get the best ppc traffic, and although it's not the most cost-effective means of running a campaign with a limited budget, I rarely take on those kinds of budget-limited clients. For smaller budgeted concerns, Google Analytics will tell you when you're getting the most traffic, so you can always adjust your ad schedule accordingly. 

At times, you may want to pause an account and activate it during the busiest hours based on your GAs. I have to plug Tracie at DealerAnalytics.com for providing a great agnostic service that helps dealers make heads or tails out of how their vendors are truly performing based on what Google Analytics clearly and sometimes not so clearly suggests...at a fair monthly price.  For those who need help on the ppc campaign front, CarDealerppc.com has a good grip on Google Best Practices soooo, you may want to check them out as well as some of the great marketers that post on this platform.

4. Know Your Market – The most important thing for all businesses advertising online, especially dealerships, is knowing who your customers are, and tailoring the content towards them.  If your city or town is comprised of middle-class families, target those who are looking for leases on SUVs, mini-vans, or used, off-lease cars and trucks that you may have in stock. Just like television or radio, when you pay to advertise online you want to maximize your investment. Test your PPC ads and see which ones are most effective.Test and learn is every marketer's mantra.  NEVER assume in marketing.  Companies that build PPC campaigns for dealerships have the tools to make the most of targeted advertisements online, and Google makes it easier.  Work with your AdWords campaign manager by providing them with as much info about your client base as possible. It's not a bad idea to point a bird dog towards the bird. 

5. Do Not Be Afraid To Experiment – When you are creating an effective PPC campaign, you need to be comfortable with throwing different things at the wall and seeing what sticks. As I mentioned before, test and learn.  Experiment with keywords, experiment with ad copy, targeting and bidding strategies. I know more than one dealership that dumped all of their classified ad budget (AutoTrader, Cargurus.com, and Cars.com) and put it back into traditional ads on TV, and radio.  They went from #6 in their market to #1 in one month.  It was an experiment that paid off in a big way.

It never hurts to engage in multiple trial campaigns and observe the results. Dump the bad ads, and under-performing AdGroups, and stay creative with fresh ad content and video, see what delivers and what doesn't.  It's called A/B testing and surprisingly few actually do it.  You should be as creative and engaged in this process as you can be. Don't rely on any one vendor's word or opinion.  There's a lot of hot gas out there in the consulting world, the kind of gas you hear before you smell it.

PPC is an extremely effective way to drive legitimate, bottom of the funnel buyers into your dealership. Make sure you have a certified Google AdWords, and certified Google Analytics personnel on your team to make sure your SEO and PPC (SEM) campaigns are fully optimized, else you'll be overpaying like someone driving a flaming pie (Ford Taurus) on a subprime loan at 11.75%.  There is virtually NO difference.

Kelly Kleinman