In a recent panel discussion with Todd Somerville from Cox Automotive, and DrivingSales.com members Guy Campbell from Marketcheck, and Eric Miltsch from Dealer Teamwork, we talked at length about how increased competition is driving a need for better data and a focused marketing strategy.

The context of the conversation was around the used car business.

While discussing predictions over CPO sales for 2020, Somerville brought up that customers can shop around and compare used cars against new with precision and while they’re on the lot. The result is increased competition among dealers and finance companies to win the consumer’s attention and sale.

During this research process, consumers are engaging with dealers directly on Google My Business profiles. But if your GMB profile for the dealership isn't verified and optimized effectively, your dealership is likely missing out on opportunities, which of course benefits your competitors who are properly verified and optimized.

Eric Miltsch from Dealer Teamwork was quick to point out the benefit of making the most of Google My Business (GMB).

“GMB is more than just a listing through the Google search engine,” explains Miltsch. “It’s quickly becoming the way many people find and evaluate local businesses.”

The impact of GMB can be seen in 10 leading factors affecting SEO search results, a handy list that Eric and his team put together coming into the webcast.

Top 10 Local SEO Ranking Factors

Verified and Optimized Google My Business profile

Google My Business categories

Google My Business photos

Bing Places

Online directories (YP.com)

Review site listings (Yelp)

Velocity of positive reviews

Reviews with keywords & locations

Responses to negative reviews

Facebook business page

With three of the ten factors directly impacted by the GMB platform, it’s easy to see why it’s become increasingly important for businesses. Eric shared the overall strategy for improving the GMB related factors.

1. Verified and Optimized Google My Business Profile - Verifying the listing with GMB allows dealers to create the content and control the data displayed. Without verification, Google scrapes whatever information it can.
2. Google My Business Categories - When data scraping is allowed to autofill categories, dealers can be mixed up or mis-categorized, making it harder for you to come up in a general search.
3. Google My Business Photos - Fuzzy screen grabs from Google Maps or stock photos won’t do your dealership any favors. “Any profile with more than 100 gets exponentially more engagement and traction within the search results. Bottom line - more photos are better.”

An online presence has always been important and now the GMB platform is making a diverse presence just as important.

As Eric stated in the discussion, “About 61-62% of all car searches are starting on the phone. You're probably winding up with at least 40-45% of all dealership traffic in some way or shape interacting with that Google My Business profile. It’s the new doorway to the website.”

People buy from people they trust and people trust someone with whom they have made an emotional connection.  This might sound like rhetoric, but there is a lot of truth to it.

So how do you create an emotional connection with customers in this noisy age of digital media?  

One approach can be with the use of video. Video can be a powerful tool for creating an emotional connection with customers.  Creating simple but tailored video content is easy to do and makes a huge impact with the viewer.  

DrivingSales member Lehel Reeves, Director of Partnerships and Business Development at Flick Fusion Technologies, points out in a recent video:

"Shoppers get emotionally attached to something they can see. There is simply no better platform to achieve this than that of video."

Send Your Videos via SMS

In a recent panel discussion, DrivingSales member Chad Morgan, founder of Quickpage, broke it down by the numbers, emphasizing the benefit of sending your videos to customers via SMS (text message). 

"90% of texts,” Morgan says, get opened up within the first three minutes." Now throw a video on top of that and you have a combination to start engagement.  If you engage with your customer within the first five minutes you're 10 times more likely to make a connection with them and 30% of the sale goes to those that make the first engagement.  So you come in with a video, you've got a really strong chance of getting them into the showroom."

With everything video marketing can achieve, you might think that means it is a difficult form of marketing to get into and develop.  And while video marketing can be a lot of work, it doesn’t have to be. Thanks to advancements in everything from hardware and software to hosting and distribution, getting started in video is easier than it has ever been.

Using video also gives you, as the creator and host, much more information to work with when it comes to future customer engagements.  We’re not talking about Big Brother style surveillance, either. This is data customers are only too happy to share since it gives them what they want:  tailored content.  

Video is a real Win-Win

Customers get to cut through standardized and general content to get the information they want, when they want it.  They’re at home, they’re comfortable, and they don’t feel like they have to be ‘on guard’. It makes the shopping experience easier and more pleasant from the beginning.  

And Retailers get to engage with customers when they are most receptive.  They also get access to an amazing array of information that helps them to engage with their customer now and track trends that can give useful insight for the future.

Connecting with customers through video creates an instant connection in a form that today’s customers are already comfortable using.   Many people today get news through video and also are more likely to video call friends and family. Video is, simply put, the way people want to engage today. 

Call tracking and analytics firm, CallSource, recently released their first Inbound Phone Experience Study. The goal was to determine the impact on customer experience based on how each brand handles inbound phone calls. What it revealed was remarkable, and provided insight for dealers to better understand callers and their process to the sale. Three scoring criteria stood out: answer rate, connectivity rate, and appointment set rate. How does each of these criteria affect CX?

It Begins with the Answer Rate

First and foremost, the phone needs to be picked up. CallSource determined the answer rate as a percentage of all the calls answered within a 24-hour period. On average, their study showed 95% pf calls were answered in dealerships. Not bad, but that’s still 1 in every 20 calls that goes unanswered, and there’s no reason that should ever happen. 

It’s extremely likely that a caller who doesn’t get picked up will abandon the dealership and try the competition. Simple as that. 

CX Continues with the Connectivity Rate

Of the calls that are received, you’d imagine the next hurdle would be setting an appointment. But that’s not the case - it’s actually in getting the caller connected to the right place. Only 83% of callers connect to a live person in the right department. That number sounds pretty solid, but nearly 1 in 5 calls goes to voicemail or to the wrong department. 

Picture yourself in the customer’s shoes. How satisfied will you be with your experience at this point? If a basic phone call isn’t handled properly, how do you project the rest of your interaction going? 

It Converts with the Appointment Set Rate

And finally, the whole reason you have a process for answering calls is to convert them to the sale. Sadly, the appointment set rate falls well short of expectations, both by customers and by dealers.

Stephanie Robbins, Senior Director of Strategic Accounts at CallSource, says, “On average, dealers are only converting 15% of sales prospects to a hard appointment.”

Callers punch those numbers into their device for a reason. Inbound calls are incredibly strong leads - potential buyers are reaching out to you! 17 out of 20 callers get off the line without committing to a firm date or time for a visit, and often they’re in the wind and unlikely to buy from you. 

What Dealers Can Do for Inbound Calls

What’s often understood as a basic skill, handling inbound calls is not as straightforward as dealers might think. Especially as younger generations take over the switchboard - generations that communicate primarily with text and DMs - training is the first step. Training in any role, even as routine as answering and transferring calls, is required before accountability can be commanded.

• Train your Director of First Impressions (receptionist) to comprehend the caller’s needs. Is it the service department or sales that they’re looking for? Are they searching for a new or used vehicle, or do they need help with a current car? Do they have a contact name they need to speak with? 

• Coach team members to field calls with open-ended questions. Learn more about the customer’s needs and build trust. Develop rapport to enhance the customer experience so they’re compelled to feel committed to the salesperson and dealership. 

• Train to ask for an appointment. The goal is to convert the caller into a shopper, then a buyer. Dealership staff need to ask for the first commitment - an appointment date and time. Anything less than asking for an appointment from a lead equates to turning them away at the door. 

Are dealerships working on an outdated model of success when it comes to profit with used cars? What, if anything, is squeezing profitability from dealers with used cars? With so much talk about margin compression, you’d think the future for auto retailers would be bleak. But is it?

That depends not so much on who you ask, but what you ask.

Margins from new car sales have all but disappeared. This has forced franchise dealers to rely on bonuses and incentives from the OEMs. It has also caused savvy dealers to focus more intently on used car sales, and fixed ops.

In a recent conversation with DrivingSales Member Chip Dorman from Torque Analytics, Dorman poses some tough questions to auto makers:

“Why would a dealer want to pursue razor thin incentives with new cars when the used market is more lucrative? If dealers are going to be able to fully engage with customers and promote new cars in the way OEMs want, then OEMs need to make products people want to buy, and make them profitable for dealers to sell.”

Make [products] profitable for dealers to sell. That is the KEY CHALLENGE.

Today's buyer is savvy. He/She knows there’s more value – and more wiggle room – in buying a used vehicle. Dealerships know this too, and try to work both ends, often pushing the more lucrative sales of used cars while treading water and doing the bare minimum new car business to keep the OEM happy.

It’s a tough line to walk and it’s one that doesn’t always make sense. It leaves dealers wondering if they’ll ever get the help they actually need from OEMs.

Chip keeps it simple, stating…

“OEMs need to show some discipline and understand that without the dealers, they’re toast.”

3 Ways to Increase Profitability in Used Cars

Looking ahead to 2019, I asked Chip what are the top three things he thinks dealers should be thinking about this year. Specifically as it pertains to profitability in used cars. He said…

1. Buy right: Used Vehicle Acquisition
2. Time-to-Line – Under 72 Hours
3. Dynamic Inventory Ads on Facebook and Google

Essentially, it comes down to working smarter, not harder, and utilizing the tools and resources that exist. Dealerships willing to change the way they approach profit in used cars at both the Big Picture and Per Unit levels will find ways to cut losses and improve inventory.

Related Link...

• PODCAST: What is squeezing profits from auto retailers?
•  

Customer loyalty is one of the most significant achievements for a business. It leads to repeat business, referrals, and word-of-mouth advertising. The best kind. 

Repeat business could be considered a form of loyalty. But repeat business can also be perpetuated by things like rewards and incentives. It can also be the result of convenience. 

The biggest difference between repeat customers and loyalty clearly comes down to meaningful and tangible benefits. “I frequent a local gas station because it’s right across the street … so I’m a repeat customer to that.”

Rewards programs have become mainstream in recent years with retailers. From Starbucks to Sears, retailers are finding ways to incentivize and reward customers for their repeat business.

But do rewards and incentives create true loyalty to brands? How can auto retailers incentivize and reward customers for their business? How can they create loyalty?

To explore this, DrivingSales Members Bill Playford, DJ Snyder, and Myself had an extensive conversation about what drives loyalty for retailers, and how these ideas play out for dealers in auto retail.

Get the Complete Conversation

For the complete conversation, visit the article Customer Loyalty vs. Repeat Business in Auto Retail on our blog, which features the full podcast version. You can also catch the video replay of the original live stream on our YouTube channel.

Margin compression is more than a buzzword. It's a reality. Profits in new cars are effectively gone for good. And they have been for some time. Profits with used cars are compressing, as well.

But beyond the phrase margin compression, what can dealers do about it? You can’t make up for the difference simply by selling more cars. Dealers must optimize their process, and fine tune their strategy.

In this video, I talk with three progressive dealers who are tackling margin compression through where and how they source used vehicles, their disposition strategy, and by focusing on faster turn.

The video stems from a more in depth conversation, the complete version which you can find on my blog and podcast. 

Let's talk about it...

What are some ways you are combatting margin compression at your dealership?

This is a preview of my recent conversation with DrivingSales Members Amanda Ryan, Terry Lancaster, and Camron Moore. During the conversation, we reflect on Nike's controversial ad campaign featuring Colin Kaepernick and how it applies to the Auto Retail business.

In the video, Amanda points out, 

"[We all have to] gamble with our brands these days due to the fact that we have to narrow in so much of what our actual brand message is. In doing so, we actually attract those customers or clients that share the same message and in doing so we have more loyal customers and less turnover.”

Terry states,

“Nike could have sat back,” Lancaster points out, “and kept running pictures of Michael Jordan for the next 40 years until he was 180 year old man you know but eventually they would lose their audience.”

Enjoy the video. If you'd like to catch the complete conversation you can view the original live streamed recording or the on our podcast on our blog titled, What we can learn from Nike's Colin Kaepernick Play, or in the episode titled, Risk, Reward, and Consequence with Your Brand in Advertising.

Last month we welcomed Jumpstart Automotive’s VP of Marketing and Strategic Insights - Libby Murad-Patel on our live weekly broadcast to discuss at length some of the surprising statistics and trends in this year’s Insights book.

This collection of annual analysis on consumer shopping patterns spans Jumpstart’s portfolio of automotive websites representing 20 million in-market shoppers.

This video provides a good preview of the show, and if you would like to listen to the complete conversation then check out the podcast. 

To help marketers better understand the fast-moving nature of the automotive industry, Jumpstart Automotive Media released its eighth annual Insights Book—a yearlong compilation of online automotive shopping trends and industry insights.

New additions included this year...

• The consumer path to purchase with a spotlight on cross-shopping trends
• In-depth shopper surveys to identify what’s driving purchase decisions
• Excerpts from Jumpstart’s 2017 luxury study
• Why SUVs and CUVs continue to dominate the market
• 2018 Industry trends and predictions

Listen to the complete conversation on the podcast: ON AIR - Review of 2017-2018 Shopper Insights

The term ‘disruption’ is increasingly being applied in conversations about what lies ahead for automotive. From buying cars online to autonomous driving features and subscribing to vehicles, players and pundits are referring to these things as disruptive. But are they really, or is the term being overused and misused? 

In this video you get a preview of my discussion with DrivingSales.com Members Bill Playford and DJ Snyder about what these things really mean and how dealers can cut through the rhetoric to make educated and informed decisions that pave the way for a bright future.

Note: This is only a preview of our conversation that aired originally on our live weekly broadcast. For the complete conversation, visit the AutoConverse Podcast.

This is a preview of my conversation with DrivingSales Member Cliff Banks that aired live on May 9, 2018. To listen to the complete conversation visit the podcast. 

For the last 100 or so years, five fundamental aspects of the industry have stayed relatively the same: Product, Manufacturers Distributors/Dealers, Buying Experience, Ownership Experience.

However, all signs point to change, serious change, and disruption. But when, and how? Who will be the winners? Who will be the losers? 

Cliff Banks, from TheBanksReport.com and a well-respected industry veteran and insider, sits down with me for a discussion around the forthcoming Era of Uncertainty, how the franchise dealership model will be affected, and what the real meaning is of the idea of "disruption" in the automotive industry.

Enjoy!

*AutoConverse ON AIR is a live weekly broadcast that explores people, ideas, and technologies related to how we get around (mobility) and how we are connected (connectivity). Learn more.