“He came in, asked for Mike Columbus, and someone pointed out where I was… and he says ‘I know where he is, I know what he looks like…I’ve seen him all over the internet.'” – Mike Columbus
That… is the POWER of personal branding.
In 2013, we officially introduced dealers to The Appointment Culture as an answer to the dozens of worthless activities we observed managers, salespeople and BDC agents conducting in some effort to appear as if they were truly setting and selling appointments.
In reality, they weren’t setting actual appointments, customers weren’t actually showing up on time, and virtually no one was actually closing “appointments” above the level that they closed their Traditional Ups. (Given this, why even encourage appointments if these won’t improve your close rates?)
For the most part, dealership employees were “box-checking;” that is, they were reporting and saying all the right things, but the needle wasn’t moving. Of course, in the growing market, it was hard for group executives, regional managers or dealer principals to know if their teams were really setting appointments that showed and bought, or if they were getting smoke blown up their backsides.
When you hire a new salesperson at your dealership, you are investing in the future.
Just like with any investment, you can predict when this investment will break even and, eventually, when it will become profitable. In fact, the cost of a new salesperson starts to negatively impact your bottom line the minute you hire them. Employees often take quite a bit of time to get themselves out of the red. The truth is that while your sales department is a major source of revenue for your dealership, the individuals in that department are a drain on your resources before they ever start becoming profitable.
To better understand where your money is going and if a new hire is on track to break even… [Read more…]
The word “Gravy” is used in sales when something extra happens that is a benefit to you. It’s something that wasn’t expected, or additional profit that was made beyond the structured deal.
In automotive retail, for instance, the majority of salespeople’s sold deals come from customers walking onto the showroom floor, being greeted, and subsequently buying a vehicle. If a customer is given to them from the Business Development Center or Internet team, it is considered Gravy. Likely a deal the salesperson wouldn’t have obtained otherwise.
If they conveniently catch a phone up and, with little enticing, that shopper ends up coming in and buying, they consider that sale – Gravy.
Here is a sales tip: Gravy should be your meal, not just the extra dressing you get on top of your monthly commissions. The moment a salesperson recognizes that their phone skills alone can single-handedly produce unlimited appointments and sales for them, they’ll learn that it pays much better than waiting on a random customer to step foot in the showroom. So long as they can take phone calls, the gravy boat is in their hands.
Same thing goes with Internet customers. The majority of dealers generate considerably more Internet leads than phone leads. As soon as a salesperson begins embracing these shoppers, putting an emphasis on how much work they should put into their online conversations, the minute more gravy will find its way onto their plate.
With enough Internet leads, phone ups, and chat opportunities, any well-trained salesperson can easily make a very filling meal on that gravy alone. When their skills on the phone and email supersede their abilities to be the first to shake a customer’s hand, their palate (and paycheck) will change completely. Their entire meal will be made up of gravy, and they won’t have time (or even crave) anything else.
Even in stores where leads and calls don’t make their way to salespeople themselves, they can still hone their proficiency at taking care of these shoppers’ in-store experience (which shouldn’t be too far off from their online shopping experience). Either way, it will strengthen their prowess to work with researched shoppers.
Much talk has been made about the mystical “Internet Dealership.” This nomenclature needs to be changed. Almost all dealerships now are “Internet Dealerships”, however, the term is meant to represent stores that distribute all leads, calls, texts, and chats to each and every sales agent on the floor. The concept is, if all shoppers are online, our entire team must have the expertise to handle them throughout the lifecycle of their shopping journey.
It is a noble cause, just one that I haven’t seen much success from without at least some discrepancy in profit leakage.
In the end, though, it is the direction dealerships must begin working toward, and it starts with improving the deftness of your sales team’s phone, email, and communication skills. Teach them the recipe needed to make the best gravy, and you’ll soon find you have the makings of a prosperous, thankful team.
Everyone loves new cars. They’re shiny, they smell great and the sales staff love making a big sale. It’s a huge part of how OEMs rate their dealers as well. I mean, who doesn’t want to be the “#1 Chevy dealer in the county”?
But once we scratch the surface, the bright sheen of selling these new cars starts to wear off. According to the NADA DATA Midyear 2016 Annual Financial Profile, dealers actually LOSE $227 on every new car they sell and PROFIT $228 from every used car they sell.
Now, I’m not suggesting that you don’t shoot for being the “#1 Chevy dealer in the county”, but if you’re looking to make a real profit, you might want to shift your emphasis towards more pre-owned inventory.
However, if you plan on focusing more on pre-owned sales, you need to realize that the methods you’re using to market today aren’t actually optimized for pre-owned sales. Here’s why:
Between prepping for 20-Group presentations to serving our regular clients, we mystery shop scores of dealers each month – reading their emails (mostly templates) and texts, and listening to their voicemails – and while we’ve seen definite overall improvement over the years, one aspect of the internet sales process that is beginning to creep in the wrong direction is the automated email response.
It’s become clear that someone on your team is overthinking this whole “email thing.” [Read more…]
When interviewing candidates for your dealership, it can be tempting to only focus on their past experience or current product knowledge. While these topics have their advantages, they can also be taught on the job. However, a candidate’s basic character traits are not nearly as easy to cultivate.
As the interviewer, it’s up to you to use the brief time you spend with a candidate to assess whether he or she will be a great addition to your dealership. You can improve your dealership by adding great employees who exhibit the following 10 traits: [Read more…]
(Author’s Note: While the title of this post might lead you to believe this is all about AutoNation, it is not. The issues addressed here are common across nearly every large dealership group I encounter – publicly traded or private.)
Hey Mike Jackson, is it true you wrote the following memo to your stores?
Dear AutoNation General Managers:
It gives me great pride to know that many of you have absolutely no simple and repeatable sales processes you’re actively enforcing in your stores. Congratulations! It is also my understanding that sales turnover continues to be an issue and that many of your local “Mom & Pop” competitors are stealing your market share. This is great news!
You are truly living up to the AutoNation motto of “Let’s be Below Average!” and for this, I thank you.
Of course you didn’t write it; I just made it up.
Dealership owners are becoming more and more progressive and data-driven. Like leadership at Fortune 500 companies, they make executive decisions based upon internal results and exterior data to improve their stores’ fortunes. However, I’m issuing a stern warning when making changes to your policies, processes, and personnel:
Unlike my partner, Bill Playford, I don’t have the mind of a mathematician. I’m a marketing man, so I don’t analyze the statistics myself, but rather, use already-vetted statistics to develop curriculums and tactics. What I have learned from heeding the advice of the human calculator I have for a partner is that all data can be manipulated to prove a point, if no outside agency is overseeing the statistical analysis.
I myself was warned before posting this, that it is in my best interest to not start a war, and be somewhat anonymous in my finger-pointing. I’ll meet that warning only halfway because what I care about are my dealer clients, not my relationships with vendors.
Two training firms were “approved” by a certain OEM to assist in BDC performance nationwide for their brands. They have conducted many workshops in different cities to both educate the dealer attendees, and to inevitably sell their services to them. After all, isn’t that what a nod from an OEM is supposed to yield?
My clients that attended these workshops alerted me of the recommendations and benchmarks shared by these two agencies. They claimed “If your BDC isn’t setting appointments at an 80% clip, you’re doing it wrong.”
That is a reckless statistic to throw out.
Beyond the results our DealerKnows clients have achieved, which are both realistic AND that I’m very proud of, other phone trainers, sales trainers, and consultants we associate with all find that 80% metric to be the exception, not the rule. One of the main phone trainers in the nation stated he has only ever had a few dealers to reach that pinnacle. After 8+ years with DealerKnows, we’re proud to say we have had two clients reach that level. And no one stays there permanently.
So many variables affect that 80% set ratio figure that claiming it as the rule rather than the exception sets unrealistic expectations as a standard that should be easily met, when, alas, it is amazingly difficult. No respectable training firm should set a benchmark at what they likely only had a handful of dealers ever reach. They should take the aggregate median and set that as an average rate. They’re sending dealers back home to confront their high volume BDCs as to why they only exceed 40% appt sets across leads and calls and demand them to double production. It is a crime.
More realistic data analysis should be performed before any OEM buys in, let alone allows them to share it as a norm. They likely cost good BDC agents their jobs by shamefully blurting out the concept that every BDC should hit an 80% appt set ratio, for no other reasons than to make themselves look attractive to the blind.
A CRM that has a considerable market share released a study as to how dealers should engage with their online prospects/leads. I, being a process consultant and lead management junkie by trade, became ecstatic at the prospect of learning new information. After all, we’ve graded the lifecycle performance of over 20,000 leads, and analyzed over 100,000 in the last few years.
One specific metric this corporation shared stated that the best time to get a customer to open an email from a dealership is in the morning. I found this interesting as our data shows otherwise. After some digging, it turns out that their technology ONLY ALLOWS AUTOMATED EMAILS TO BE SENT IN THE MORNING! How corrupt is that data when the ONLY data point they have regarding email SENT VS READ rate is broken at the outset by their antiquated technology? How many dealers have read this study and incorrectly altered their lead management process to accommodate this data, only to find it harmed their contact percentages? Why…because a CRM with older software shares information that is faulty from the get-go, just for the sake of covering their own ass?
Until a vendor’s technology allows data to be analyzed in an A/B testing phase (or multi-variant phase), then there is no way they should be allowed to share “option A” as the gold standard of lead management. Again… reckless.
As dealers concern themselves with web traffic, they rely on Google Analytics, but few are GA certified. So they lean on their website providers or, gulp, a SEO/SEM agency to improve their search performance. We catche far too many of these digital marketing scoundrels playing three card monty with the dealers PPC money, not attaching their Adwords account to the Analytics account. Moreover, the “performance report” (phrase used loosely) that they send to dealers as a means to justify their pay is nothing more than the dealers’ very own Google Analytics account, or maybe their website analytics in a slightly prettier format.
They’re re-gifting factual data and sharing it with you, but not providing any details regarding work performed, GA ads purchased, keywords used, etc that they could correlate to traffic.
If someone is handling your SEM, they better have sophisticated tech showing CPC, multi-variant keyword strategies, retargeting, display results, and more – and follow it through down to the conversion.
If someone is “handling” your SEO, you should require they share with you every piece of content they created, every link they added on and off your site, and every title tag they changed to improve performance. Otherwise, they’re likely just sitting back, letting your website work as it was initially built, and propping up your own Google Analytics results as if they were a contributing factor to any positive growth, when they weren’t.
A large automotive marketplace that dealers pay to place their inventory on offers to perform a sourcing study for their dealer clients (usually as soon as the dealership asks to drop them). They use this sourcing study as a means to justify their worth to the dealership organization.
While they use a 3rd party agency to conduct the study, garnering dealer DMS/Sold data and contacting customers from your store, they don’t ask all of the right questions. To paraphrase, they’ll ask a subset of your recent sold customers…
“Did you peruse (insert automotive marketplace name here) when researching for your car?”
“Did you go into (insert dealership name here) to buy your vehicle?”
That does NOT show correlation.
Just researching vehicles on a site doesn’t predict a value to your dealership. Why wouldn’t they ask, “Did you find the exact vehicle you purchased at (insert dealer name here) on (insert automotive marketplace name here) and choose the dealership because of this finding?”
They don’t ask, because more than likely the customer never saw your vehicle on the marketplace. They saw a lot of vehicles, but maybe not the one they bought. Maybe not even one from your store. Maybe other research led them to you. Any well built conversion goal path built in a GA account will tell you that it is rarely a direct click path for the customer. If I take an elevator from the 1st floor to the 3rd floor, get off to use the water fountain on the 3rd floor, and take the elevator back up to the 5th floor where I need to be, what deserves credit for getting me there?
The 3rd floor where the water fountain is? Or the elevator?
Per Google, customers are researching 18.2 difference resources before transacting on a vehicle. Why should you have to pay a significant percentage of your digital advertising budget to a website/inventory marketplace if they can’t correlate the customer’s unique interest in your specific vehicle with the sale of said vehicle?
You shouldn’t. It doesn’t compute.
Every decision you make should be supported by data. Every new tactic or policy change you enact should have vetted information supporting it. Or, at the least, make sure the company analyzing the data doesn’t have a benefit in the outcome. It is far too easy for data to be massaged in an effort to sell you on an ideology, belief, or, more likely, service. Do your homework. Predict outcomes. Verify findings.
Everyone loves a massage, but not when what is being shifted is the data, and what is being greased is their palms.
As I wrote in 2015’s Self-Driving Cars: the Winners and the Losers, new car dealers will be among the “Obvious Losers” when, not if, self-driving vehicles become ubiquitous.
However, I also predicted that this evolution wouldn’t likely begin impacting new car dealers before 2025. My timeline has actually contracted a little in the last year and the objects in the mirror might be closer than they appear.
Self-driving vehicles are here. They arrived sooner than most people thought; and they will eventually be extremely disruptive to the automotive retail model we know today.
The “when” they become extremely disruptive is the multi-billion-dollar question.