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$teve Emery

Are You Really Managing Your Used Cars?

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For most dealers, the used car department is the biggest opportunity for increasing profitability. Unlike new cars, a dealer can stock any used car they choose. Most volume and gross issues are directly related to those choices and how the inventory is managed through final sale. No doubt, there is an “art” to managing used cars, and dealers who are getting the best results have added some “science” to it. This enables them to be proactive vs. reactive in managing their inventory.

What is the best Inventory for you to stock?

Do you know what have been fast-turning cars at your store? There are a variety of software tools that can look at your sales history and identify these for you. Any retailer knows this, down to the color, options, price point, etc. Once you know what these cars are, you can develop a core inventory. These are the cars that you want to make up the bulk of your inventory. They probably aren’t the ones you are currently buying by the truckload from the factory auction, so the majority of your inventory could be in slower-turning units, reducing volume and gross. Is your buyer guessing or knowing with your 7-figure checkbook? Proactive dealers use their core inventory as a shopping list for their buyers and track what percent of those units make up their current stock (goal 80%).

What are the best sources for these units?

Core inventory tends not to be auction program cars. Proactive dealers use these methods to increase their percent of core inventory:

  • Check the back door. Are you currently wholesaling core inventory?
  • These units come to you every day; just look at the Service drive! Many dealers spiff Service Advisors for letting them know core inventory is in for Service today. Managers do an appraisal and contact the customer.
  • Use direct mail to target current customers who drive core inventory. Invite them in for a special sale or service offer.
  • Who has the bigger house, you or your wholesaler? Develop a network of other dealerships you will buy from. Their non-core inventory could be your core inventory.

How can you improve recon time, cost and quality?

It makes no sense to buy great cars just to have them take forever in recon and come out in less-than-saleable condition. To proactively manage recon, many dealers have incorporated these processes:

  • When buying a car, fill out a 2-part recon pre-approval sheet. Check off what you already know the unit needs and set a dollar limit so Service isn’t held up waiting for approval. Place a copy in a dated folder 3-5 days out; review the folder every day looking for cars bottlenecked in the recon process.
  • Have ready cars pulled up to the front. Compare the approved recon with the actual RO for cost. Have someone in Sales test drive the car to ensure it’s in saleable condition. If the cost and quality are right, then close the RO.

How can we do a better job managing aging inventory and wholesale?

We all know that grosses tend to decline with the age of the car. Do you proactively manage units as they age to increase their chances for retail sale and avoid wholesale loss? When is a unit considered “old” to you? If 60 days is your turn policy, when do you take a look at the car? Answer: typically 45 days. Numerous studies have shown the highest gross peaking at 21 days. Proactive dealers are looking at aging units at 21, 42, and 63 days:

  • At 21 days, check the car for defects, re-clean, and park in the “hot spot.” Consider identifying the car as a “manager’s special,” spiffing it, reducing price, wholesaling it.
  • At 42 days, can we wholesale the car now? Put it on eBay? Trade with another dealer? Park in a “clearance zone” on the lot?
  • At 63 days, take it to the best place for wholesale. Depending on the unit, this may be a wholesaler, another dealer, or as a last option, auction.

None of these techniques are expensive to implement, especially when compared to what you may be losing in units, gross, and wholesale. Proactive dealers are managing their core inventory, taking their used car department to the next level of profitability.

For questions, reach out to $teve at 913-645-2915 or semery@ncm20.com.

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Permanent link to this article: http://blog.ncm20.com/2015/07/are-you-really-managing-your-used-cars/

Laura Madison

A Personal Brand: Why Automotive Salespeople Should Go For It

Personal Brand

A personal brand is an incredibly powerful tool for salespeople to increase visibility with prospective clients and increase sales, so why aren’t more salespeople taking action? Perhaps because automotive salespeople do not realize how creating and maximizing a personal brand can solve two important challenges they face. Here are two problems having a strong personal brand can solve:

Challenge #1 – Leads

A common complaint among car salespeople is there are too few leads to keep them busy. A number of factors can be blamed for this complaint; slow phone traffic, a quiet season, or minimal walk-in showroom traffic.

How a personal brand can solve this challenge:

A personal brand is an opportunity for salespeople to come out of obscurity. Salespeople can use social media sites like Facebook and YouTube to promote themselves and their role selling cars to begin to gain local visibility. Participating on social platforms allows salespeople to connect with prospective customers and ultimately motivate them through the front door. Social media is also a phenomenal way for salespeople to build and maintain relationships with previous customers, so they’ll never forget who to refer and work with on the next purchase.

Challenge #2 – Differentiation

Differentiation may be the largest problem a salesperson faces. Whether the challenge is an inability to differentiate their Toyota store from the one down the street, or the Toyota Camry from the Honda, or differentiate themselves from other salespeople on staff, differentiation is an enormous salesman struggle.

How a personal brand can solve this challenge:

By creating and using a personal brand salespeople are building value in themselves. They are introducing themselves to prospective buyers and utilizing a platform to speak with customers genuinely, on a human-to-human level. An opportunity for an automotive salesperson to speak with prospects about what differentiates himself, his store, and the product is invaluable.

A personal brand puts a salesperson’s face in front of a prospect and begins building trust and relationship. By the time that customer comes into the dealership, he will know how to ask for and recognize his automotive professional and online connection. Creating a quick video, for example, to follow up an incoming internet lead can be an extremely powerful differentiator. If the customer submitted leads to five stores, the salesperson maximizing personal branding will likely be the only who has used something like video to communicate, and begin to build trust with, this customer. Building this type of value can not only earn a sale, but also make a customer fiercely loyal in the future.

In summary, a personal brand can help salespeople create a pipeline outside the walls of the dealership and build value in themselves, their dealership, and their product. That should be enough motivation to begin encouraging salespeople to create a strong personal brand on social media, so get to it!

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Permanent link to this article: http://blog.ncm20.com/2015/07/a-personal-brand-why-automotive-salespeople-should-go-for-it/

Steven Banks

A Beginner’s Guide to Managing Data

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We all have our inadequacies, both as individuals and as businesses. And it’s no coincidence that a business’ shortcomings often parallel the shortcomings of the individuals behind it. For instance, a business atmosphere that is too fast paced and rushed is often the result of an impatient dealer or manager. (When my wife recently accused me of this unfortunate quality, I explained that I have more patience than anyone because I never use any. She didn’t buy it, in case you were wondering.)

On the flip-side, a carefree and lackadaisical business atmosphere could be the result of an unorganized and unenthused manager. To the same effect, strengths tend to overlap as well, and we often forget that our personal fortes can make a positive impact in the day-to-day operations of our dealership.

One strength that can always be improved upon in dealerships is Data Management. It is very easy to become intimidated by newer nomenclature, and in the automotive world, “data management” absolutely fits that description. It is new, it is intangible, and it is constantly changing. BUT, the dealerships that are embracing data management, and effectively using it, are reaping the benefits.

So what’s in it for you?

Here are three reasons you can benefit from improved data management.

1. Turning numbers into actionable intelligence:

Properly analyzing and managing relevant information can transition your CFO and team of controllers from the mindset of accountants to that of trusted business advisors.

According to a USA Today/Gallup poll, accountants are considered the most trusted business professionals over any other position. If one of your mechanics needs a wrench to perform a specific repair, a hammer in hand would be useless if not dangerous. Similarly, data is the tool that your accounting team needs to ensure they are performing at maximum efficiency, and without the right kind, things can become extremely difficult. When you combine the right data with a high level of trust, it enables them to move beyond traditional accountants and solidifies their role as trusted advisors.

2. Deepening the understanding of cause and effect:

How do you figure out the meaning behind poor performance or even revenue that seems to suddenly vanish? Knowing where to derive data and accurately dissecting it can literally make the difference between driving profit and losing revenue.

Example: Turn wholesales into a profit center by focusing on more than just the number of units sold and whether or not you made money from them. Instead, monitor how those deals impacted BOTH front and back end gross. If your actual comp percentage shows different from commission percentage, giving attention to this could explain why. If you pay 25% commission on front end gross but lose money on the wholesale, you could potentially be paying commission on a deal that already is costing you. If you use the right data, you can properly analyze each wholesale deal and adjust commission accordingly, which guarantees you aren’t throwing away additional cash.I would recommend that your dealership invest in a data management platform, as I’m willing to bet that your DMS system doesn’t provide data reporting this granularly.

3. Knowing what to improve at all times:

The most powerful data available, arguably, is having up-to-date industry trends. You should be monitoring your dealership’s pulse and comparing that with the beat of the industry. Leveraging this method is a great way to provide fast and easy dealership comparisons so you know where you need to improve and where you are maintaining a competitive advantage.

Data management is extremely powerful, but knowing what to look for and when to look for it can be overwhelming, so remember to keep it simple! Look at the big picture before diving into the details. As you can see, the question isn’t whether or not data management can be beneficial, but rather how it can benefit you. And hopefully this lays a foundation on where to start.


Learn More:

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Permanent link to this article: http://blog.ncm20.com/2015/07/a-beginners-guide-to-managing-data/

Alan Ram

Is Your Dealership in Conflict?

Chess

Here’s the problem at many dealerships: In our heads, we know what we want our people to be doing on a daily basis, but our actions and processes (or lack thereof) contradict what our heads are thinking, and we end up sending our staff conflicting messages. What do many of you see as you walk through your showroom? You might see five salespeople standing out on the point for three hours, waiting for one customer while discussing their upcoming fantasy football draft. As a dealer, that should make you crazy. What do you want to see? You want to see your people working the phones EFFECTIVELY and driving better quality traffic to the dealership.

Here are a couple issues I see at play at many dealerships:

First and foremost is your open floor. There is absolutely no benefit to you as a dealer in having an open floor. NONE!! All an open floor does is encourage your people to stand around and do nothing while they wait around for a floor up that was coming in anyway.

I see this happen all the time; a dealership has my training and their people are excited to work the phones. A couple salespeople, who don’t necessarily think it’s part of their job to actually follow up or generate anything, continue to stand out on the lot…and wait. Luckily for them, they don’t have to compete anymore for floor traffic with all the salespeople who are doing what you want them to do on the phones. Let’s just say that one of the salespeople standing around happens to bump into a customer that buys a car. Pretty soon the salespeople who are on the telephone, doing what you want them to do, start realizing that they’re not having a chance to even get an up. Now human nature takes over and they start the migration back to the front door. They indirectly feel that they are being punished by doing what you asked them to do. Your open floor is hurting productivity and needs to go.

Have you ever had to bribe your kids to get them to eat their candy and ice cream? “Now Billy, if you don’t eat your ice cream, you’re not going to get any candy.” I doubt that’s a conversation that happens at anyone’s house. It’s more like, “If you don’t eat your Brussels sprouts, you don’t get dessert”. You don’t need to convince them to eat their candy and ice cream. They were going to eat that anyway. To me, spiffing your salespeople for selling your floor ups is the same thing. They’re going to take your floor ups whether you spiff them or not! If a salesperson that sold 25 cars off strictly floor ups was to leave tomorrow, how many deals would you lose? Probably none. Why? Because those customers would still come in. They would just be distributed differently. What about that salesperson that sells 20 cars a month off primarily their own efforts to repeat and referral clients? If that salesperson was to leave, how many deals would you lose? I would say all of them. Therefore, a salesperson that sells repeat and referral customers is far more valuable to you than one that sells floor ups. If you’re going to have a spiff program, let’s spiff them for what you want them to do versus what they were going to do anyway! A referral spiff for example. If it really is a referral your salesperson generated through their efforts, wouldn’t it make sense to spiff them for it?

We also all want our sales staff doing a better job at working (mining) their sold customer base. What if we spiff them for selling repeat customers or for turning service customers back into sales clients. Now you have your salespeople thinking, “I make more money by selling a repeat or referral client than I do a floor up.” That’s when they’ll start focusing on those things you want them to focus on. That’s when you’re using your spiff money to change their behavior and ultimately change the culture. You will not sell one less car by eliminating a unit bonus, but you’ll sell a lot more cars by instituting a repeat and referral spiff.

The key to this coming together and getting the results you want is obviously training. Your people need to be trained on how to get results on the phone. When they’re trained it gives them confidence. When they have confidence, they’re much more likely to be successful and they gain momentum. It all starts with training and having processes in place that are consistent with, and not in conflict with, what you want to see happening on your showroom floor.

Permanent link to this article: http://blog.ncm20.com/2015/07/dont-let-business-development-kill-your-business/

Robin Cunningham

Unrealized Opportunities in the Used Vehicle Department

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Forgive me for saying this, but from where I now stand, it is quite apparent to me that there is way more opportunity for improving profitability than most dealership managers are aware of. I certainly know looking back on my career (and I thought I was very pro-active) that there was so much more opportunity to be realized than I was able to completely grasp at the time.

Most people agree that there is more upside potential left on the table, they are just not aware how much there is or how to attain it. Today I’d like to share some of the upside potential that we see in relation to the used vehicle department. One of the primary opportunity areas in the used car department is in increasing the average ratio of used to new vehicle sales.

We work with a Nissan dealer, in a single city market, that three years ago was selling close to a 1:1 used to new ratio. They realized there were only so many new Nissans they could sell no matter how aggressive they got with pricing and marketing. So, they got very clear on what does and does not work in today’s used vehicle market. They made steady progress in the quality of their processes and accountability management, and today are selling a 3:1 used to new ratio.

One of their managers was in class a month or so ago made a comment during a discussion. He said that as a variable department, they “freak out if and when any used vehicle hits 21 days in stock.”  They so highly value the processes in place from each vehicle’s first day in stock, that at 21 days, they know something is going terribly wrong. That comment raised a lot of eyes in class, especially from the managers of stores with huge aging issues. To get to that 3:1 ratio took a lot of trial and error, and a high degree of trust in their processes. It was all made easier by beginning to see it adding up in more total used vehicle gross profit.

To realize that opportunity, especially if one is still struggling in the used vehicle department, a pretty systematic overhaul of everything is often needed. That would include such processes as:

  • Acquisition
  • Appraising
  • Stocking
  • Reconditioning
  • Initial Pricing
  • Internet Marketing
  • Re-pricing
  • Desking policy
  • Pay plans
  • Aging

For sure, the change in focus from the amount of gross per vehicle retail to total department gross is required. To clarify, we are not against getting as much gross per vehicle as you can; but you just need to know which market segment each vehicle you are stocking is in, so your pricing policy is not getting you into aging problems.

I have been saying of late that our initial pricing policy is our turn policy. If you are pricing above market average right out of the box, we rarely see the pricing come back in line before the vehicle has aging issues, because the above market price has kept it largely invisible to the shopping public on the Internet… where, of course, most shoppers are today.

I just referred to what “market segment” each vehicle is in. We break those segments into: A, B, C and W categories. CPO, of course, is another category and I am going to come back to that separately.

A Vehicles

An “A” vehicle is a one of a kind, mostly irreplaceable vehicle. It is generally easier to replace the customer than it is the car. These almost always come from a trade, either rare in the first place, with very low miles, or both. At most, this makes up 10% of inventory. These vehicles should have a much higher than average gross profit, so the opportunity there is for a higher PVR.

B Vehicles

The “B” car is usually our own brand and is still under factory warranty. These are the most available cars to us, through trade, auction or our service drive. This is the case for all dealers, so the day’s supply is high, relatively speaking. These cars have the highest potential for wholesale loss, largely due to over-pricing on the Internet. Because these are very nice cars with lower miles on them, it can be tempting to try to get “above market” prices for them. Without a doubt, most vehicles with aging issues come from this segment, especially the ones bought at auction.

Because this segment makes up 60+% of inventory dollars, it can have devastating effects when these dollars become aged. The strategy for this segment is to aggressively price them to market immediately, get the F&I turn and the gross profit from reconditioning, and then go get more just like it. These will have slightly less than an average gross profit per vehicle. But again, since this is where the largest dollar amount of inventory is, a faster turn will equate to more total departmental gross. Again, the focus and opportunity for total departmental gross profit has to be primary here.

C Vehicles

The next segment is the “C” car. These are cars that are out of factory warranty, though a warranty could still be sold. They have higher miles and don’t have to be in perfect condition. These are the vehicles everyone seems to be wanting and almost always come from trades. The opportunity is a gross per vehicle that can be at or slightly higher than average. The return on investment is higher because they have a lower average cost of sale. Fortunately, most dealers are keeping more of these vehicles for retail these days, because in the past many got wholesaled and were the key source of inventory for the independent dealers. I know I wholesaled a lot of those in my past, and I now realize how we were missing out on possibly the richest segment of the business.

CPO Vehicles

The other retail segment that gets uneven attention is the certified pre-owned category, or CPO as we all call it. The luxury brands are all strong in this segment, and those manufacturers play a key role in helping make sure it is viable by actively supporting the strategy. For most of the other brands we see a very spotty consistency of dealers taking full advantage of this opportunity. It truly is like a separate franchise and has to be treated that way.

I have seen dealers of almost any brand take full advantage of it and other dealers from those same brands try to play both sides off the middle. Those dealers end up not having many CPO vehicles and that likely leads to less total volume, less gross per vehicle, less reconditioning gross, less future service and parts gross — and ultimately less customer retention. The other thing I see happen with CPO vehicles is when a dealer trades or acquires vehicles other than their own brands that have a strong CPO compliance; it makes it harder for competing dealers to retail those vehicles successfully. One thing we see that can offset this are some of the third-party, certified pre-owned programs that are available in the market place, like the Motor Trend Certified Program.

I would be remiss if I did not mention the very big opportunities that often get untapped in F&I. The public groups, who are under the most scrutiny of all, are at about $1,100 per vehicle retailed net after chargebacks. Many dealers are well above that, but most are way off that number and it really seems to be a focus issue. Selling more financial products and less focus on rate has been the trend, and it really seems to be working. Many of the financial service vendors provide the training as well.

W Vehicles

The last used vehicle segment is the “W” car or wholesale. There are two levels of wholesale: The ones we decide not to keep at the time of acquisition for various reasons (too many miles,  poor mechanical condition, or too expensive to keep). This level of W vehicles is actually a profit center.

Then, there are the vehicles we got for retail and for some reason have not sold. Maybe we have kept them for too long and now believe we have to get rid of them, often at a loss. Our friend Dale Pollak says there are only two reasons that could possibly happen: We somehow could not find the right price that others were selling the same vehicle during that time frame or we were unwilling to put the vehicle on that price. Knowing this is a possible unrealized opportunity can allow you take advantage of this.

This of course was just a very brief discussion of some of the most BASIC OPPORTUNITIES available in the used vehicle department that are very often not taken advantage of.

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Permanent link to this article: http://blog.ncm20.com/2015/07/unrealized-opportunities-in-the-used-vehicle-department/

Tony Alessandra

Customer Service – The DISC Styles Way!

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Everywhere you turn today, you hear about the importance of customer satisfaction. From the bank to the phone company to the video store, every business seems to proclaim “The Customer Is King,” that “People Are Our Business,” that “Your Satisfaction Is Our No.1 Goal.”

 So, you might think that service is getting better with each passing moment. Surveys, though, suggest otherwise. In fact, one customer in four is said to be thinking about leaving the average business at any given time because of dissatisfaction.

What’s wrong? One answer is that that too many companies and employees view customer support as something that happens once and then is over. But true service focuses not on a one-time event but on building a sustained, positive relationship.

A second reason for poor service is that we often treat customers and clients as if they’re all pretty much the same. But only by honoring their individuality can we hope to build lasting rapport. Firms and people with a positive attitude toward service know that each contact–even a conflict or a complaint–is an opportunity that may never come again. Such encounters typically fall into three categories:

Moments of Magic: Positive experiences that make customers glad to do business there.

Moments of Misery: Negative experiences that irritate, frustrate, or annoy.

Moments of Mediocrity: Routine, uninspired service that leaves neither a strong positive impression nor a strong negative impression.

Moments of Magic might include a hotel clerk who greets you with a warm smile, uses your name, shakes your hand, and sincerely asks that you call her with any problems. You remember such experiences.

But you probably remember even more clearly Moments of Misery, such as clerks who won’t take responsibility for solving problems–personnel who don’t know what they’re doing-and worse yet, don’t seem to care–or salespeople who first ignore you, then act as if they’re doing you a favor by taking your money. We’ve all had those experiences, but usually not more than once at the same place. Because we don’t go back.

Exceeding Expectations

The key to creating a Moment of Magic is exceeding a customer’s expectations. Sounds simple enough. But because people’s expectations vary according to personality type, what works for one may not work for another.

Handling a complaint is one of the most common, yet difficult, service situations, for customer and employee alike. So we’re going to look at that process and how we can use knowledge of the DISC behavioral styles to create Moments of Magic.

As anyone who’s ever dealt with upset customers can attest, they can be a diverse bunch: some loudly belligerent, some agitated but overloading you with details, others low-key and almost apologetic. But if you respond the same way to the belligerent, the agitated, and the apologetic, you might increase the irritation for some of them. You might even produce a Moment of Misery.

That’s because each style shows different symptoms of stress and reacts in different ways. But if you can recognize and respond to these patterns, you can reduce stress, yours and theirs.

Dealing with High ‘D’ Dominance Styles

As complainants, High D’s can be aggressive and sometimes pushy. And they may become intrusive, perhaps saying something like, “I demand to see the president this instant!” or “If you don’t furnish me every last bit of correspondence in this matter, you’ll hear from my lawyer in the morning.”

High D’s may appear uncooperative, trying to dictate terms and conditions. But ask yourself: what do they need? You can help defuse them by providing:

• Results, or at least tangible signs of progress;

• A fast pace;

• Evidence that they have control of the situation;

• A belief that time is being saved.

The last thing you should do is to assert your authority and argue with the High D’s. They’re not going to be listening, and they’ll probably out-assert you. “Nobody ever won an argument with a customer” is an axiom of service. And that’s doubly true with High D’s.

Dealing with High ‘I’ Influence Styles

High I’s with a complaint may seem overeager and impulsive. “I need this settled right this moment,” they might say, despite your logical explanation of why this complex situation can’t possibly be cleared up for 48 hours. High I’s, usually skilled in verbal attack, may also come across as manipulative, perhaps saying, “I wonder if a letter to your CEO and chairman of the board would improve your attitude?”

Under stress, High I’s’ primary response may be to disregard the facts and anything you say. But you can address their needs by giving them:

• Personal attention;

• Affirmation of their position;

• Lots of verbal give-and-take;

• Assurance that effort is being saved.

You may think the best course is to sit there impassively and let the High I’s harangue you. But, actually, you’d probably be better off to give them a quick-paced, spirited explanation that shows you aren’t just brushing them off.

Dealing with High ‘S’ Steadiness Styles

High S’s are the least likely to be loud and argumentative. When they do come forward, they may appear submissive, hesitant, or even apologetic. Worse yet, they may not even complain openly but just internalize their dissatisfaction and then take their business elsewhere. So if you suspect a problem, you may need to draw them out.

High S’s hate conflict, so they just wish this whole problem would go away, even if it weren’t necessarily settled in their favor. “I’m sorry to make such a big deal out of this,” they often say.

High S’s will be made most comfortable if you:

• Make them feel they’re personally “okay”;

• Promise that the crisis will soon ebb;

• Guarantee that the process will be relaxed and pleasant;

• Show you’re committed to working with them to iron out the problem and save the “relationship.”

You might be tempted to think the diffident RELATER is not to be taken seriously and can be shunted aside with mere lip service. But, remember, they’re just as upset as High D’s are; they just express it in a much more low-key way. And they’ll quietly go elsewhere if their needs aren’t met.

Dealing with High ‘C’ Conscientious Styles

High C’s won’t loudly carp and cajole like High D’s or High I’s, but they won’t be submissive, either. And their complaints may have a sharper edge to them than will the High S’s.

High C’s tend to recite the chronology of events and the litany of errors they’ve had to endure. They’ll provide data and documentation and get quite involved in the details of the snafu.

Here’s how you can lessen tension with complaining High C’s:

• Suggest that they’re right

• Explain the process and details

• Show appreciation for their accuracy and thoroughness

• Help them save face”

You may see them as compulsives more hung up on the process and on showing they’re right than getting the problem resolved. But if you want to retain their loyalty, you’ll deal with them precisely and systematically, emphasizing your firm’s interest in seeing justice done.

An Important Head Start

Knowing and using The Platinum Rule to deal with complaints gives you an important head start toward creating a Moment of Magic. It allows you to collaborate with your customers in solving the problem, reducing the likelihood that they’ll make outrageous demands, become abusive or take their business elsewhere.

In fact, studies show that customers who feel that a business has responded to their complaints are more likely than non-complainers to do business there again. They actually become more loyal than if the problem never happened.

So look at your complaints as opportunities to show much you really care about the customer. Remember: Your customers aren’t just part of your job; your customers are the reason you have a job!

 

Permanent link to this article: http://blog.ncm20.com/2015/07/customer-service-the-disc-styles-way/

David Spisak

Is Your Dealership Ready for an Automated Data Management Solution?

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Dealership data management systems collect and maintain mountains of data about your operation, your customers and your market. There is no doubt about the value of the information contained in those systems in enabling you to make the best possible decisions for improving your sales, retaining your customers, and increasing your dealership’s profitability. But what confounds many dealers today isn’t an issue of having data… it’s how to ensure the data is accessible, accurate, and is presented in such a way that it allows you to focus on the areas of your operation that need your attention. No dealer would willingly give up the data his dealership holds, because he knows it is absolutely vital to knowing what’s going on in the dealership and how effectively that activity is driving the sales it needs to sustain the operation.

But if you can’t get to the information you need, when and how you need it, it’s not going to help you drive maximum sales, efficiencies and profitability in your dealership. When you consider the implications of this across multiple locations with multiple systems, the problem seems almost insurmountable without hours and days spent compiling all this data into useful reports.

So you’re hearing about automated dealership data management and think this may be the solution to a big chunk of your problems. And just so you know, I’m a huge proponent of using smart systems to get a handle on all this information, especially when it gives me an out-of-the-box reporting solution that will help me spend my time managing intelligently, rather than creating spreadsheets and seeking out and inserting the data I need to put into them. But how do you know if you’re ready to take that leap? Here are a few thought-starters to help you determine if you’re ready… and to consider the risks if you don’t.

Does your data give you complete transparency to your operation?

If you’re one of the few dealers who feels very confident that the information you are using to keep your finger on the pulse of your operation is as timely and accurate and gives you the information you need to make immediate adjustments in the daily operation, you’re one of the lucky ones. However, most dealers do not have the confidence that they are seeing everything that’s happening in the dealership. What’s more, many worry that the information they do use is not accurate, either because it’s been filtered or because the data in the DMS or other systems from which they are being pulled isn’t as “clean” as it should be. The risks? The worse scenario is that you’re dealing with manipulated data and the possibility that someone is intentionally trying to misdirect you. At best, you don’t have a complete picture because you or your managers haven’t thought to bring some of the most critical pieces of information into consideration.

How easy is it to access the information you rely on?

Even more troubling is that while dealers and general managers do not have formal training in information systems or database management, they take it upon themselves to acquire, maintain and utilize their systems resources to the best of their ability. In their defense, for many years, the basic functionality of most DMS platforms hasn’t changed that much. And thoughtful dealers will study reviews, talk with their peers, and sit through hours of features and benefits presentations where they are shown all the bells and whistles of this system or that, with the expectation that the vendor knows what they need and will deliver on its promises. What do dealers need from their systems? They want easy-to-use systems that will collect the data they need and present that data in useful reports that will help them make great decisions. It’s a simple, straightforward objective, but what we’ve found to be consistently problematic among all DMS platforms is the part about getting the data out of the systems in usable formats for making great decisions. It’s your data, but there is a risk that the vendor does not offer you complete access to the information you need. And decisions made on incomplete information can be worse than making decisions with no information at all.

How confident are you in the accuracy of your data?

“Garbage in, garbage out” is another common problem business owners and their managers deal with continuously…the information you get out of your systems is only as good as the data that’s going into them. I’m sure there have been many times when you found yourself questioning whether the information in your reports was correct. It’s frustrating, but essential that the information you’re using is “bullet proof,” so you find yourself going back and forth with a manager questioning, discussing, and reviewing the data until you’re eventually satisfied that the information is accurate enough that you can make a good decision. That could take several hours or several days for each report you question.It’s a real drain on your time and energy, and the kicker is that you probably still don’t have complete confidence in the information you’re using! In terms of your time and attention, your manual reporting processes could be costing you much more than you realize.

Can you get updated information quickly and as often as you need it?

Even if the data going into the dealership’s systems is as accurate as it can possibly be, there is yet another problem that some dealers may not admit they have: They simply don’t have an effective data analysis discipline. Relying on standard reports and what’s always been done, some don’t know that other information will give them better insights to make the critical adjustments that can result in the most net profit by month end. And they don’t know how often they should be watching that information. And even if they wanted to keep their finger on the pulse of the dealership’s daily operations, they quite likely wouldn’t (or couldn’t) be able to get to the most up-to-date, reliable information as quickly as they’d need it. In fact, our data suggests that the average dealership report usage is 800 report views a month. When you consider the average time managers spend preparing and updating a report is about 15 minutes, that’s a lot of manager productivity lost to manual reporting. A more efficient and effective discipline would be to have all the updated information you need in a matter of seconds…not hours or days. The risk associated with the reporting lag-time described here is that you aren’t effectively making the adjustments you need to be making to have the greatest impact on the month-end net profit of the dealership.

Does any of this resonate with you? Are you feeling called-out a bit?

You are not alone. In fact, you’re in the majority. As I said, most dealers we talk with about data management best practices are experiencing one or more of these problems, and most are feeling the pain of all of them. Want to do a quick gut-check on the wasted productivity your dealership may be experiencing for lack of an automated solution?  Check out the Productivity Calculator to see what manual reporting may be costing you. Then schedule some time for a demo with a data management solution provider like NCM axcessa today.


Learn more in this upcoming course, taught by David Spisak:

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Permanent link to this article: http://blog.ncm20.com/2015/07/is-your-dealership-ready-for-an-automated-data-management-solution/

Tom Hopkins

The Greatest Destroyer of Business: Fear

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Fear is the greatest enemy you’ll ever encounter as an automotive professional. Fears appear on both sides of most sales situations so you really need to understand them and master how to overcome them.

Hopefully, you’ll learn to recognize and conquer your own inner fears. Those common fears most salespeople have of not getting enough business, making mistakes, or losing face will be conquered with knowledge and experience. Being educated and well-prepared to perform in this industry brings about self-confidence.

Fear is also what builds that wall of resistance you so often run into. The toughest job you’ll encounter in sales is when you have to help others admit to and overcome their fears so you can earn the right to serve their needs.

There are skills you must master in order to climb over or break through that wall. But, first, you must understand what the fears are.

What are the most common fears you’ll have to overcome with buyers?

Your prospective client is initially afraid of you. You are a salesperson. I think you’ll agree with me that salespeople are not generally accepted with open arms—even by other salespeople. Even if you are going to help someone you already know — a friend or acquaintance or even a relative — when you enter their lives in the role of a sales person, certain fears will arise. It’s bound to happen in 99 percent of your presentations. (I’ll give you a one percent non-fear situation with your parents or grandparents, simply because in most cases they’ll believe in you and trust you no matter what role you play with them.)

What you need to do to conquer the “salesperson fear” is to master the skill of putting people at ease. Learn to use a relaxed manner and tone of voice. Use rapport-setting comments and questions that show them you are interested in them, not just in the transaction. You need to come across as warm, friendly, and inviting. If you truly believe in your products and the quality of service you and your dealership can deliver, it should show.

Smile. Give the client a sincere compliment. Thank them for the opportunity to serve their needs. In other words, treat them as you would a guest you are honored to have in your home.

The next fear you’ll encounter is their fear of making a mistake. Hey, we all have that one, don’t we? We’ve all made decisions we’ve later regretted. Since you’re working with one of the larger investments average people ever make, you must take the time to talk them through every aspect of the transaction very carefully.

You are the expert. You know this business. You may have knowledge about aspects of it that they hadn’t thought of, and if they had, their decision may have been different.

You must go into every demonstration with a very curious interest in the who, what, when, where, and why of the transaction. When you’ve satisfied yourself that it is in their best interest to proceed, then it’s your obligation as an expert to convince them that this decision is truly good for them.

The next fear is a fear of owing money. People may make irrational statements or ask questions that seem out of place. They may even mistrust what you have to say. They may want to negotiate.

Please realize that it’s simply a symptom of the fear they are feeling about the transaction. When you notice something along these lines, pause in your presentation. You might want to do a brief summary of what’s been discussed thus far to be certain they understand everything you’ve covered.

This challenge may appear in many variations, depending upon the negotiating skills of your clients.

They may stall making any decision to go ahead and you’ll have to draw them out.

They may be point blank about it and you’ll have to sell them on the value of the vehicle and the service your dealership provides.

A good way to handle most fears is to confront them head on, but gently. You might simply say, “John and Mary, I feel you have some hesitation about going ahead with this purchase. Would you mind sharing with me what it is?” Then, be quiet and wait for their reply. It could be that they’ve had a bad past experience and are sitting there fearful of having another. They’re waiting and watching you for signs that you’re not like that other salesperson.

Get them talking about their fears so you can determine something concrete to work with. Help them to see how different you and your dealership are. People won’t do business with you if they don’t like you, trust you and want to listen to you. Learn how to get fear out of the way.

 

Permanent link to this article: http://blog.ncm20.com/2015/07/the-greatest-destroyer-of-business-fear/

Dustin Kerr

Do You Have a Business… or Just a Job with More Risks?

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When I was operating dealerships in Northeast Oklahoma, there was a little hamburger joint that had some of the best hamburgers and fried squash I had ever eaten. At the expense of my girlish figure, I would attempt to eat at this burger joint about once a week. The odd thing about that burger business is that some days it would just be closed for no apparent reason. Sometimes, it would stay closed for a week or two at a time before opening back up.

We had one of the employees as our customer, and one day, I asked her what the deal was with the restaurant being closed at such odd intervals. She informed me that the owner was elderly and when he was sick or had medical procedures that he would just shut the restaurant down because he had never taught anyone else how to run the day-to-day operations. It struck me that this gentleman appeared to have built a great business with a great product, but in reality, he didn’t have a business, he had a job with more headache and risks.

You may be asking yourself what this has to do with the car business.

Well, since you asked…I recently had the opportunity to attend the NIADA convention in Las Vegas and had the pleasure of meeting a lot of independent car dealers and talking with them about the 20 Group peer collaboration concept. Many of the dealers had no idea what a 20 Group was and were very excited to potentially join a group and learn from others going through the same challenges. Everything was great until I told them we meet three times a year for a day and a half. I heard the same objection over and over again and it went something like this: “It’s all I could do to get away to this conference. I’m scared to death about what’s going on while I’m gone. There’s no way I could commit to three days, three times a year to attend meetings away from my dealership.”

Albert Einstein once said, “The definition of insanity is doing the same thing over and over again, but expecting different results.” The question is: can your dealership afford to continue facing the same challenges without viable, proven solutions?

Just like the gentleman that owned the hamburger joint, these used car dealers did not have a real business, they had a job but with more risks and a lot more headaches. As business owners or upper management, you put in a lot of hours, have a lot of investment at risk, and must overcome never-ending challenges from customers, competition, and regulators. Some people think the best way to manage all those obstacles is to just do everything yourself. It’s not. In fact, trying to manage it all yourself is a recipe for disaster. It is critical to the success of your business and, more importantly, your health, to find or identify people in your organization that can help you run your business when you need to be away, whether that is for a 20 Group meeting, illness, or simply taking a vacation.

Remember, your primary job as a manager or leader is to train and manage activities. If you are scared of what might happen if you had to be away from your dealership for a few days, you might ask yourself “Do I have a business or just a job with more risk and more headaches?”


Learn more from Dustin Kerr:

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Permanent link to this article: http://blog.ncm20.com/2015/07/do-you-truly-treat-this-as-a-collections-business/

Laura Madison

Humanize Your Online Presence

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The use of social media is becoming mandatory for dealerships. Prospective clients are looking for local dealers’ Facebook pages; they’re searching YouTube for product comparisons and even asking friends across social platforms for recommendations. The problem in the automotive world is: the vast majority of dealerships and individual salespeople are using social incorrectly. Simply being active on a platform does not mean that platform is being effectively used. The key to an effective social media presence is creating human connection.

To illustrate the importance of human connection, have a look at how people in Japan buy and sell cars. Japanese salespeople go door-to-door trying to sell vehicles, rather than waiting at the dealership for the next ‘up’.  Once they find a prospective buyer, face-to-face meetings continue in their home with few Japanese car buyers ever even setting foot in a showroom. Paperwork is drawn up and signed in clients’ living rooms. When the sale is complete, a relationship has been formed that will last far beyond the delivery of the new vehicle; salespeople maintain constant contact with sold clients by calling, writing handwritten cards, even taking their clients to dinner.

What this demonstrates, I believe, and what the Japanese have remembered and we have forgotten is that commerce has always been personal. It has always been about people doing business with other people. This is where we have run into trouble in the digital world. We spend so much money on well-organized websites and so much time attempting to sell using social media but what we’re missing is connection. We’re missing the most critical element of relationships.

Consider for a moment what keeps a customer loyal, it’s not an oil change punch card or a fancy website; it’s relationship. It’s human-to-human connection.

Real connection is key to winning business.

There is some science behind the power of human connection in persuasion. Humans are born with a special part of the brain whose sole purpose is to recognize faces.  It is called the fusiform area and is located near the brain’s emotional center. The fusiform area makes us hard wired to use the human face as a centralized point for information and believability. So, in the case of faces: seeing is believing. In other words, an image of a salesperson’s face posted on social media is infinitely more powerful than a stock image of a new truck.

Fewer people are setting foot in dealership showrooms in 2015 than ever before, which provides a bit of a disadvantage in trying to create relationships. Social media, however, can fill this void by giving us a way to still create human-to-human connection with potential clients who already do all their research and shopping online.

Use this information to begin to dominate with a social media presence. Before your next social media post, consider human connection. Instead of touting an upcoming sale or a low, incentivized lease payment, introduce your followers to one of your salespeople. Keep personal relationships and human connection in mind with your dealership’s social presence—and always remember the power of the face.


Want to learn more from Alan Ram’s Proactive Training Solutions?

We’re hosting Management by Fire in August. Watch this video or call 866.756.2620 for details.

Permanent link to this article: http://blog.ncm20.com/2015/06/humanize-your-online-presence/

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