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AutoSuccess Jul05
1. Read this month’s and previous issues online at www.AutoSuccess.biz
.biz
Getting and Managing
Leads - Success on
the Internet
a division of Systems Marketing, Inc. July 2005
2.
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8. BrianTracy
The 80/20 Rule In Selling
You have heard of the Set that income as a goal and work toward This strategy could save you years of hard
Pareto Principle, the achieving that level every day. work.
80/20 rule, which says
that 80 percent of the Second, go to one of the top sales people Brian Tracy is the chairman and CEO
sales are made by 20 in your field and ask for advice. Whatever of Brian Tracy International. He can be
percent of the sales advice you get, act on it immediately and contacted at 866.300.9881, or by e-mail at
people. Depending upon the sophistication report back, asking for more advice. btracy@autosuccess.biz.
of the industry and the level of training,
the ratio can be 90/10 or 70/30, but in large
national sales forces, the 80/20 rule seems
to hold true. Twenty percent of the sales
DEALERS MUST BE
people make 80 percent of the sales and
earn 80 percent of the commissions, while
80 percent of the sales people make only
20 percent of the sales and share only 20
percent of the commissions.
What this means in dollar terms is shocking!
If 10 sales people are making a total of $1
million in sales in a given period, this means
that two of the sales people are making
ON TELEVISION!
$800,000 dollars of sales and eight of the
sales people are making $200,000 dollars See why over 100 dealers nationwide have
of sales. This is a ratio of 16 to one. The
top sales people are out-selling the bottom INCREASED SALES MORE THAN 30% IN
sales people by 16 times! This difference in
sales results cannot be explained simply by
LESS THAN 90 DAYS WITH TELEVISION!
sales technique and methodology. There is
something else going on, and that something We produce nearly 4,000 commercials
else is the mind-set or psychology of the
sales person. a year from our studios. We give you
unlimited, high quality television campaigns
In every large company, there are sales and promotions FREE. With computerized
people earning $25,000 per year and there
are sales people earning $250,000 per year. media buying technology, we buy television as
They are selling the same product, to the much as 30%-40% more effectively than any
same people, at the same price, under the media buyer in the nation and give you
same competitive conditions, into the same
market and out of the same office. Yet, one UNLIMITED TV CAMPAIGNS
of them is selling and earning 10 times the
amount of the other. AND PROMOTIONS!
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Is the person earning 10 times the amount of
the other working 10 times as hard? Is he or
she putting in 10 times the number of hours?
Does he or she have 10 times the level of
education? Does he or she see 10 times the Larry John Wright, Inc.
number of prospects? Is it possible for the
high-earning sales person to be 10 times
better, in any area, than the person earning
Automotive Advertising
one-tenth as much? Of course not. “America’s Premier Automotive Advertising Agency”
1-800-821-5068
Here are two things you can do
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First, determine the income of a sales person
in your field who is in the top 20 percent.
8
9. RadWeaver
What It Takes to Increase
Your Sales From 40 to 500 per Month
In one month, Red many of the other industry Web site providers. • Number of visitors to your Web site
McCombs increased Still, we were failing to generate results. When • Conversion ratio (this is the percentage
sales from 40 to 500 by we made the switch, our conversion ratio shot of visitors that convert into leads)
utilizing a new digital up to 10 percent and even reached as high as • Closing ratio (percentage of leads
marketing strategy. 15 percent—which translates to a 500 percent that turn into sales. This is driven by
Gross profit increased increase in leads. The lesson here? Abandon other metrics including quick response
from $60,000 to $750,000 per month, and what has proven to be unsuccessful and sign times, high appointment and high show
closing ratio rose from 3 percent to 19 percent. with a Web site provider who’s capable of ratios.)
When dealers ask how we increased sales so converting visitors into leads. • Average gross profit drives the monthly
dramatically, we answer that we increased our and annual profits.
volume by changing the way we advertise, 5. Define your Internet Marketing • Cost per sale by lead source including
market and sell over the Internet. Strategy: To increase traffic to our virtual your Web site and third-party lead
dealership we built an Internet marketing providers.
The top 8 tips for extra Internet sales: strategy that includes high-end, animated,
1. Leadership commitment: The Dealer, bulk e-mail campaigns. We’re able to launch Conclusion
GM and entire management team must and execute a targeted marketing campaign We went from 40 online sales to 500 and
become involved and committed from the that is quick, easy, cheap and measurable. lowered our cost per sale after switching
beginning. We found it helpful to bring in an from a templated Web site. We have increased
outside consulting company to facilitate our 6. Recruit, hire and train the right people: gross profit from $60K a month to more than
initial strategy meetings. By studying the industry’s most successful $750K with our new digital marketing system.
Internet sales staff, we learned that it’s The best way to increase market share in
2. Define your Internet Sales Model easier to teach technology to a great sales today’s highly competitive retail environment
(Internet Department vs. centralized person or to someone who’s a superstar on is to implement an Internet marketing strategy
CRC) and support it: Depending on the size the phone than it is to teach sales skills and alongside a CRM program.
of your dealership or dealer group, you may phone skills to someone who’s a technology
find that a dedicated Internet department is the whiz. We then created a profile and a clearly Tips for eCommerce Success
best way to handle lead volume. Or you might defined job description for each position • Create a detailed plan for using
choose to set up a Customer Relationship within the department, so that when lead eCommerce and CRM to improve
Center (CRC) that handles all inbound phone volume increases, we’re prepared to bring business.
and Internet traffic. We debated the pros on additional staff. Fortunately, our digital • Invest in technology that attracts more
and cons of each model, made some tough marketing system automates much of the opportunities and encourages long-term
decisions, clearly defined our strategy, and process, which means that we can handle accountability.
moved forward. We support our decisions more leads with fewer people. • Increase marketing through advanced
every day with the right budget, the right search engine placement and bulk
people and the right tools. 7. Clearly define each step of your Internet e-mail marketing.
Sales Process: The process is very important • Use referral services that track cost per
3. Track your cost per sale: Like most because if you have a lot of leads but you sale for all sources. Create a Web site
dealers, we rely on third-party providers for don’t have the process to turn those leads with leads that have a higher closing
some of our Internet lead volume. Because into sales the department will not succeed. ratio than other lead sources.
we use our CRM tool to track and measure To implement the right process, you first need • Recruit people with previous automotive
all of our performance results, we know that to define a process that incorporates proven sales experience who have great phone
our closing ratio for leads that come from our best practices. The second step is to train the and follow-up skills and proven CSI.
own Web site is 20 to 25 percent, compared process. The third step is to use reports to • Create an Internet process that turns
to 10 to 15 percent for leads that come from monitor and measure the process. The last leads into appointments and sales. Give
third-party providers. Therefore, our goal is step is to use the reports to identify problems your team more time to set appointments
to ensure that the majority of our leads are and opportunities to continuously improve and sell cars.
coming from www.RedMcCombs.com, and the process and the results. This approach will • Create a pricing philosophy that is
that we only use lead providers who give us help you make smarter decisions and target competitive that also preserves gross
a clear return and can keep our cost per sale your training to ensure positive growth. profit.
around $200 per vehicle. • Implement, measure and manage
8. Manage and measure your performance information needed: leads by source,
4. If you’re not getting results from your results: The best part about Internet marketing response rate and time, appointment
Web site, partner with a provider that is that everything is measurable if we use the percent, show percent, closing percent,
can deliver: The quality of a Web site can reports to which we have access. This has been cost per lead and cost per sale.
be measured by its conversion ratio, which key to our ability to grow our sales from 100 to
indicates how well a Web site converts 500. Fortunately, our reports are automatically
visitors into leads. Averages range from 1 to 3 e-mailed to us daily, weekly and monthly Rad Weaver is the director of eCommerce
percent, and before making the switch to our which makes it easier to identify issues before for RedMcCombs.com. He can be
new site, we struggled to improve our average it is too late at the end of the month. The most contacted at 866.210.2838, or by e-mail at
by improving our templated Web sites from important numbers are the following: rweaver@autosuccess.biz.
july 2005
9
10. DavidKain
Performance Criteria Takes
Internet Sales to the Next Level
The Automotive everything, except where it matters most Set a standard that each person in the
Internet as a marketing – the Internet sales specialist. department has to achieve certification
tool for dealerships from the manufacturers you represent,
started in the mid ’90s Performance criteria elevates the entire as well as ongoing knowledge of your
and has developed into Internet operation pre-owned inventory.
the preferred choice Assuming you have selected the right
for consumers to start the vehicle-buying people to work in your Internet department 2. Process knowledge proÞciency
process. you will find yourself having much better During a conversation with an Internet
results if you start out with clearly outlined customer your Internet sales specialist
It is no wonder customers prefer this method performance criteria. By having a bar set will be asked a number of questions
for car shopping. It gives them control and high for performance you will find people about the processes in your dealership.
allows them to decide when they interact with trying to reach the level you set and then How do you value my trade? How do
a dealership. Technology gains have come as some. Most of your sales staff needs you arrange financing? Having a script
a result of one-up-man-ship with everyone constant motivation to stay focused and goes a long way in preparing for these
trying to outdo the other in the quest for the setting standards of performance allows contingencies. But a better method is
customer’s attention with the ultimate goal of them to know on a continuum what it takes for your specialist to really know how
a request for price or information from the to succeed. Just like we have standards on things work. If the customer detects
customer. With multiple photos, 360 views, the sales floor for salespeople to meet, we your staff is not aware of how things
virtual test drives, trade evaluators, payment need to have them in the Internet department. work and, more importantly if, you have
estimators and so on, we have convinced When I work with dealerships I ask the floor not prepared your staff with scripts on
the customer that everything can be done salespeople what is expected of them and how to address process questions you
online. In fact, it has become so easy for they typically respond with “I need to sell at are likely not going to see the customer
customers to shop online, one could make least 10 vehicles a month with a close rate on your showroom floor. Set criteria for
a case that all goes pretty smooth until the of 20 percent from floor traffic to keep my your staff on how to address process
actual involvement at the dealership level by job.” If you only used this simple formula for questions and practice their responses
an Internet sales specialist. your Internet sales team you would be ahead each month to keep them qualified to
of many dealerships. However, if you really work with your Internet customers.
Could the Internet sales specialist actually want to make your Internet department rock
become an impediment to your customer’s you have to expect a great deal more. 3. “Kept” appointment objectives
online purchase? (percent of total leads)
To sell vehicles you have to get the
Imagine the customer cruising along Once the customer into the showroom. By setting
online, researching the vehicle he or she
wants, checking out available inventory, performance criteria a performance standard for this criterion
when you bring people in to staff the
determining the value of the trade in, are established, Internet department you clearly establish
checking out financing options and deciding set up your what is necessary for them to succeed in
the timing is right to submit a lead. When the
customer decides to click the submit button measurements, this position. Set a goal of 30 percent in
this area and measure their results. If
one can assume the customer would expect reward good they meet their goals then reward them,
the offline part of the process to match the performance and and if they don’t then evaluate their
ease and efficiency of the online process. At
least that is what is advertised on the site with adjust and train efforts, provide the necessary training,
tools and encouragement to stimulate
the “no hassle” and “easiest way to buy a to stimulate better better results. Most importantly, if
car” statements prominently displayed on the results. they don’t measure up after you have
Web sites of dealers, manufacturers and lead invested the effort in them, move them
providers. Unfortunately, once the customer along and bring in the next candidate
clicks the submit button, things tend to get a The following is an example of what high until you find one that fits.
bit off track. achieving Internet departments establish for
their Internet sales specialist performance Measure, reward and adjust
In the last decade we have seen a great deal of criteria: Once the performance criteria are established,
technological advances that have propelled set up your measurements, reward good
the automotive Internet business forward. 1. Product knowledge proÞciency performance and adjust and train to stimulate
Dealerships are more prepared than ever to Online consumers consistently express better results.
greet the customer electronically and service disappointment when they interact
them in a manner that meets their every need with a sales professional who does not
with one exception: A well-prepared Internet know their products inside and out. To David Kain is the automotive Internet
sales specialist! For whatever reason we spent address this issue an important criterion training specialist at Kain Automotive Inc.
time, effort, energy and money developing for working with Internet customers is He can be contacted at 800.385.0095, or
better Web sites, better lead handling tools, to be a product knowledge “expert.” by e-mail at dkain@autosuccess.biz, or
better lead providers – just about better This means both new and used models. visit www.kainautomotive.com.
10
11. Are you tired of struggling to train salespeople?
Burned out from chasing untrained salespeople around?
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endlessly training new salespeople how to sell or retrain old dog’s new tricks?
every day and our sales and
gross proÞt keep going up If you’d like to have complete control over your training process, regardless of your
schedule, how much business you do or don’t have or any other condition and put
because of it.” an end to the endless grunt work of training, keep reading.
Chad Hawkes, Dealer Do you get tired of sending salespeople to the latest and greatest feel-good, rah-
Hawkes Motor Co. rah seminars that give your salespeople the Sunburn-Effect? You know what I’m
Pryor , OK talking about, the salespeople get hyped-up but it wears off after two weeks stuff
that leaves their heads and their wallets empty.
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simple, THIS WORKS!” you to hold the salespeople accountable for when and if they did the training!
Ernie Parisi, Manager
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888 2 Tewart / 513 932-9526
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web: www.tewart.com
12. AnthonyHall
Your Only Real Competition
The only competition with feeling uncomfortable and doing what mental barriers that were preventing him
you truly have is hasn’t been proven yet. from engaging in the activities that yield the
yourself; in other greatest return. Steve put together a routine
words, your beliefs To illustrate this point, let’s look at the story of that outlined the measurable activities he
or outlook, your Steve. Steve is a sales person at a dealership needed to engage in on a daily basis. Such
mindset and way of in a competitive northeastern market. He as 20 minutes a day committed to sales
doing things are your competition. Some of had a hard time with consistent sales and training, attitude development and product
you may already embrace this notion. Let’s profit on a monthly basis. Like many sales knowledge. He also set up daily goals and
explore it on a deeper level. people he would have inconsistent grosses things to do to track his productivity.
and unit volume. He didn’t really have a
There are several words synonymous with specific sales process laid out. He wasn’t The result? Steve increased his unit volume
competition. They are struggle, resistance, organized and didn’t adhere to any type by 30 percent and his grosses by 50 percent
disagreement and conflict. “Competition” of daily routine. Sound familiar? “Sales in just a few months.
implies one side working against the other. are tough,” he said. Steve felt his vehicles
were just like any other vehicles. As such, So the question is, did his outside
The two competing sides that I’m referring his typical approach was to try to sell on competition change during this period of
to as it relates to each of us are as follows: price, rather than value, making it even more time or disappear from the market? Did
That which you are comfortable doing challenging to produce the results he and his the economy dramatically turn around? Did
and that which you haven’t done or tried dealer wanted, especially since they weren’t his vehicle demand suddenly skyrocket or
consistently yet. the least expensive option. become more unique?
In truth, you are really competing against Steve spent a few weeks in training and put Steve accelerated to a higher level of
what you did yesterday. You’re competing together a process he was comfortable with productivity because of the work he did
against the status quo; you’re competing based on new knowledge and a solid process. and the focus on things that he can control,
against feeling and doing what’s predictable He upgraded his mind set and removed some which is the path he chose to take as it relates
to his development and daily activities.
Steve embraced his biggest competitor
which was himself. He turned this adversary
into his greatest ally. For example, he
Keep your customers started bringing in new business through
prospecting, and instead of thinking that
every prospect you meet with is a potential
for just pennies a day. sale for you to win, consider that every sale
is already yours for the taking. Therefore,
each sale is yours for you to lose; not to your
competition but to yourself based on how
well you develop and manage your selling
process.
Loyalty DriverTM by . The next time you run up against some
is email marketing made resistance when selling, remember Steve.
Remember who your competition really
easy. Your own customized
is and embrace this as an opportunity to
e-newsletter with profes- refine how you approach selling and your
sionally written content prospects. Compare your progress today
and sophisticated report-
against what you did yesterday, not against
what others are doing. This is the only
ing including our unique accurate measurement of your growth and
buy signal allowing you to evolution. After all, once you get yourself out
know when your customer
of your own way, that’s when extraordinary
things start to happen!
is ready to buy.
CONTACT US TODAY
Anthony Hall is a training consultant
at 866-964-NEWS (6397) ext.214 at Ziegler Supersystems. He can be
or email us at loyaltydriver@imninc.com contacted at 800.610.9047, or by e-mail at
ahall@autosuccess.biz.
12
13. SeanWolfington
Leadership
www.getacar.com
Amid Change
1-888-Get-A-Car
Leadership is about When a clear vision has been communicated
dealing with change. throughout the dealership, employees on the
As the automotive front line can take initiative in situations,
industry becomes without the fear of reprimand. Furthermore,
more competitive and when everyone’s vision is aligned, one
&
complex, leaders that person’s initiative is less likely to come into
can thrive in an environment of change, conflict with another’s initiative.
stand out from the pack. In our rapidly
evolving world, the true leader thrives in an Motivating and Inspiring People
environment of change. Leaders motivate and inspire people.
They keep people moving toward the
The leader proves his or her worth by: organization’s vision by appealing to basic
• Creating a vision human needs, values and emotions.
• Aligning people
• Motivating and inspiring people If leadership is dealing with change, then
• Creating a culture of leadership being able to motivate people is crucial. It
is important to cope with inevitable barriers
Creating a Vision
Leaders develop a vision of the future and
create strategies to fulfill that vision.
to change. Successful motivation ensures
that people will have the energy to overcome Only One Dealer
Per Market
obstacles.
Vision and strategy are not the same as Leaders motivate people in a variety of
planning. Planning is a management process ways. They articulate the organization’s Call Now for
Exclusive Rights Details
designed to bring about order, not change. vision in a manner that builds on the values
Planning should be a compliment to creating of the audience they are addressing. Leaders
a vision, not a substitution for it. regularly involve people in decision-
Vision does not have to be original. However,
making processes on how to achieve the
organization’s vision. Leaders recognize and
View TV Spots at
what is crucial is how well it serves the needs reward success. Through these methods, the www.getacar.com/dealer.htm
of customers and the dealership team. The work can become motivating.
Programs Include
success of the vision depends on how well it
can be translated into a realistic competitive Creating a Culture of Leadership
strategy. If a leader lacks the skill, time or Some organizations develop their employees
know-how to plan a realistic and competitive into leaders by providing training, challenging
strategy for implementing his or her vision, goals and objectives along with a wide range
Leads, TV Spots, Lenders,
that’s OK as long as they have a partner, a of opportunities for new employees as well Advertising Assistance, Training
team of managers or a consulting team that as seasoned “veterans.”
specializes in planning for results to bring the for your Special Finance
leader’s vision to life. A solid recruiting, hiring and training process Department, Bankruptcy
can provide a great start to your dealership’s
Aligning People
leadership development program and Mailer Software
Leaders align people. They communicate
encourage growth. In order to develop people
vision so that people understand and are
for higher-level leadership positions, current
committed to it.
leaders might make the successes of others
A central feature of the modern dealership more visible to senior management and the
is interdependence of each department, and dealer. Companies that create a culture of
an individual’s success is increasingly tied leadership also recognize and reward people
to the work of other individuals. Aligning who successfully develop other leaders. STOP Paying per Lead!
people to move in the same direction is a
challenge of communication and credibility. If we need more leaders in the increasingly One Flat Rate For
The message must be communicated to complex and competitive automotive
industry, we need our current leaders to UNLIMITED LEADS!
all involved: general managers, sales
managers, BDC managers, used car develop cultures that foster leadership.
managers, service and parts managers, Creating a culture of leadership is intrinsically Get A Car, Inc.
business managers, service writers, sales an act of leadership. 800.790.1212
people, BDC specialists, receptionists, Joe Perot - President
greeters, etc. After the team understands Sean WolÞngton is the owner of
the message, they must believe in it. BZResults.com. He can be contacted at email: perot@getacar.com
866.802.5753, or by e-mail at www.getacar.com
Successful alignment empowers people. swolÞngton@autosuccess.biz.
july 2005
13
14. ChrisHanson
Prove It
Why is it that some What should you have in your evidence Letters, Thank You Cards and Customer
of the easiest things manual? Surveys
to do are the most Anytime you receive a letter or card from
overlooked? I think Articles a customer put it in your evidence manual.
it’s because they are Gather up articles from Motor Trend, Car & When you have customers that give you a
so simple that we Driver, Road & Track, newspaper articles, 100 percent on your CSI and write a few lines
don’t think they would make a very big etc., that talk about your product. MSN has about you, put it in your evidence manual. I
difference. a great Web site, click on Auto and read the have a bunch of letters and cards I put on my
ratings and reviews and print them to put in bulletin above my desk and customers are
Take, for instance, an “evidence manual.” your manual. Then create separate sections always reading them. They’ll say “That’s
Have you ever noticed how someone can for each make and model you sell and put my neighbor “or” that’s my relative. I didn’t
forward an e-mail and it can travel around all the articles you can find in each section. know they bought a car from you.”
the world and hundreds of people will take Take the time to read every article and as you
it as fact? Why is that? Because they read read, highlight the parts that you want the Information about you
it. When it’s in print, it always seems to be customer to read. “The most powerful truck Here you can put in pictures of you and your
fact. Let’s talk about how we can use that on the market...”. Also, make sure and talk family, pets, etc. awards you have received
to our benefit. Let’s gather information that about some of the things that the magazine and any community activities you are
involved in. A brief bio on yourself is a good
we can use to prove what we have said. is talking about so when they read one of the
idea, too. What do you like to do, and what
Information that will put the customer at articles later, they say, “Look, just like Chris
are you involved in for fun?
ease. An evidence manual is a powerful was telling us, this is the most powerful
sales tool that must be used every time you truck on the market.” Always look for new
When should we use our evidence
talk to a customer. articles to add.
manual? Anytime the customer says he or
she is going to look at a competitive model,
flip through your manual and show them the
facts. Whenever you go out to find a vehicle
to pull up for the customer to look at, open
the manual to the section for the car at which
they are looking and say, “I’m going to find
that truck and pull it up for you. Here’s an
CONSIDER THE IMPACT article that I know you would be interested
WLS Lighting Systems in.” What about when you are driving the
Manufacturing poles and fixtures since 1969. trade-in? Wouldn’t it be nice if they were
WLS is the only COMPLETE SERVICE MANUFACTURER serving auto reading an article that told them they were
dealers nationwide with the finest technology and services available in making a smart decision? Or how about
the lighting industry.
The WLS Installation Program provides the auto dealer with all the
when they are waiting for finance and might
construction services required for a complete site lighting system. Our be a little nervous about their decision and
comprehensive program from design to completion is the most cost-
effective approach to your site lighting.
read an article about how this is the best
Services Include: Construction Services:
truck on the market.
• Site & Interior Lighting Design, • Project Management
Photometrics & Engineering
• City Approvals and Permits People are always reading and researching
• Direct Sales to Dealerships
• Concrete Bases, Wire Conduit, to find the facts. They are swayed by many
• Free Site Surveys For Upgrading Controls and Asphalt Patching
Your Existing Site Lighting • 3 Year Lamp Replacement Warranty
medias, so take advantage of that. You can
• Turn Key Installation Program
on All WLS Installed Systems either provide it for them or let someone
• Service, Maintenance, and else - its up to you. These articles are the
Extended Lamp Warranties
experts so let them tell their story. Make up
WLS can make a difference an evidence manual today and let the experts
in your overall construction
budget and we guarantee help you close the sale.
complete satisfaction.
If you want to see what mine looks like, just
e-mail me and I’ll send you a video e-mail
that shows you how I have it set up.
4150 International Plaza Fort Worth, TX 76109 Chris Hanson with Hibbing Chrysler can
1.800.897.9517 www.wlslighting.com be contacted at 800.901.2862, or by
e-mail at chanson@autosuccess.biz.
14
15. RandyBarone
Optimize Sales ...
Just A Click Away
It’s a Saturday well. Overall, these tools boost reduction
afternoon and a couple of wholesale loss, thereby increasing gross
comes in looking for a profit and producing faster inventory turns,
4WD Ford Expedition enabling the dealer to gain more customers.
with leather, 2001 or
newer, with less than 40,000 miles. You A dealer also can research how much the
don’t have one, but you’ve got a Durango dealership would have received from selling
and you know a Tahoe is coming in. Nope, a vehicle versus how much the vehicle would
they’re not interested. You lose the sale have sold for at a local auction. Dealers are
because they’re ready to buy and you don’t now armed with data that helps them know
have what they want. which vehicles make the most money so
they can keep them in stock. The same data
Wouldn’t it be nice to say, “Let me see what alerts the used car manager of vehicles that
we’ve got in the pipeline.” You then type in historically have not performed well in his
their specifications and ask, “Would you like inventory.
that in black, beige or silver?”
The system especially works for dealers
That’s where the Internet is taking used who want to sell their used vehicle inventory
car wholesaling. The primary reason is online. Cars often can sit for weeks before
greater availability of Internet access at the next auction, losing money. On the Web,
the dealership level, as well as advances in cars generally can be sold in seven to 10
digital photography that allow dealers to days -- more quickly than the traditional
receive detailed images of the vehicles that auction process.
are up for sale.
The way to maximize the channel is for a
At any of the cyberlots, you’ll get three to five dealer to put a couple of computers in the
perspectives. It’s the next best thing to being used car department and give associates the
there. In particular, the auction-supported access and training required to supply the
sites require that sellers have close-ups to dealership with optimal inventory every day.
disclose damage. Those are technological Tools now are available that assist dealers
advances that cause the audience to be more in driving intelligent inventory decisions,
comfortable. Buying on the Internet is a resulting in optimum profits across the
cost-saving, efficient way to buy cars that dealership sales operations.
have guarantees, arbitration, pictures, and
well-described condition reports. Search auction Internet sites when traffic
is slow. The knowledge that a manager
In many ways, the business-to-business gains by researching his or her market is
used-vehicle market is a tremendous demonstrated through increased turns and
opportunity for dealers who want to leverage better inventory mix at the prices his or her
technology. Today, dealers are faced with the customers demand. Some dealers will bid
challenge of listing the inventory in the most on cars while doing a walk-around with a
optimal sales channel. These channels range customer. With proxy bidding, a buyer can
from line ads in newspapers to Internet sites indicate what he is willing to pay, and the
and straight lot inventory. There are now system will automatically make his or her
software applications that allow subscribers bids. This enables a buyer to get the best
to determine which inventory will produce possible price without exceeding his or her
the greatest profit if offered for bids online. price ceiling on a vehicle. You can’t do that
Such packages allow dealers to determine on a lane.
the amount of profit that they can expect,
based on real-time sales data. These systems
also can suggest a listing price to post on the Randy Barone is the executive vice
president of sales at American Auto
auction site, and dealers can easily manage Exchange, Inc. He can be contacted
their listings throughout the auction process. at 800.901.3017, or by e-mail at
Tracking sales and profits is simplified, as rbarone@autosuccess.biz.
july 2005
15
16. TonyDupaquier
The Art of the Business Manager
Every customer of scoring customers, so all information themselves to be up sold by the sales people.
who walks into a needs to be precise. For the customer’s Armed with the customer’s information, you
dealership presents the employment history, provide the years and may have to suggest a different vehicle.
opportunity to make a months, and if employed less than five
deal. If the customer is years at the current job, get a minimum of What is the right car? The best vehicles are
on the right car, then five years of employment history. The same current-year models, pre-owned vehicles
the right amount of initial investment and the goes for the customer’s residential history. If that the lender will use like an invoice
correct structuring will ensure a deal. That for some reason the person moves around a to determine the amount financed. Some
is the art of the business manager: to make lot, you must find out why and if the person lenders will only allow 90 percent of this
deals for customers who may not otherwise stayed in the same job field. Every lender invoice amount; however, anything is
be approved. is going to verify employment. With larger better than standard book values. Also, new
businesses and corporations, this verification vehicles with larger incentives are always
The two major challenges securing a deal process can be time consuming. Do some of good choices. You may have to switch a
with a lender are credit and negative equity. the legwork for the lender. Call and speak to customer from a pre-owned vehicle to a
If it were not for these two elements, it would the HR director, and inform the director of new vehicle that the lender will accept.
be possible to deliver 80 percent or more of what will transpire. Find out the best time for Some customers think they need to find
the people who walk into a dealership. the lender to call and maybe even coach the a very inexpensive vehicle to receive
director on the questions that will be asked. financing. These inexpensive vehicles
Many customers will have some form of may have too many miles on them, or the
credit challenge. Identify the challenges and Income is another important factor. Even year model may only allow for short-term
then find good explanations for every one if the lender does not require a verification financing – raising the payment so high, it
of them. Do not rely on the credit score to of the income, it is highly recommended blows the payment-to-income ratio, which,
tell the story; you want the story from the that you provide one for every customer, in turn, blows the deal.
customer. regardless of the person’s credit. Ask for a
paycheck stub, especially from customers Based on your experience, the information
This leads to the credit interview, which who receive an hourly wage. In most cases, you received during the credit interview and
is essential for every business manager to customers make more then they realize due the loan value to ratio of the deal, you are
master. There are three primary goals in the to overtime and their specific rate of pay. then able to talk initial investment. Lenders
credit interview: to find out what happened, In the event the customer does not have a look at the equity in a deal, regardless of the
what has changed and why it will not happen paycheck or it does not accurately portray customer’s credit. With credit-challenged
again. Bad things happen to good people. the income, look for other avenues. Many of customers, the further back of book or
The story you receive from the customer today’s lenders will look at bank statements invoice you are, the better the chances are of
can make a big difference when talking to for customers who are paid in cash or for receiving an approval. Even when the sales
the lender. You want this story up front so those who work for tips. However, the people tell you the customer has no money
you can inform the lender. Otherwise, the customer must have money in the bank for to put down, customers generally will put up
lender will turn down the deal, and you this to be work. Debt to income and payment something when you explain the benefits of
will have to call back to re-hash it. Get very to income are two major factors lenders look a cash investment.
specific when it comes to past due accounts at when considering a deal, and they may
or accounts that have gone bad. If you see also determine if the customer is buying the Now that you have a story from the customer,
collections on the credit bureau, find out right vehicle. you have the customer on the right vehicle
if they have been paid and if they have and you have secured some form of initial
been, that the customer can prove it. The Is the customer buying the right vehicle? investment, you should be able to structure
same goes with tax liens and child-support Some customers attempt to purchase a the deal so you can receive an approval or
issues. Make sure to make copies of any vehicle that is too expensive, considering the at least some form of condition. The old
supporting documentation the customer may initial investment they are willing to make fashion “throw it against the wall and see
have. In some cases, you may have to send and the status of their credit. At this point, the what sticks” works every once and a while;
the customer to find this documentation. business manager has two options: submit however a good business manager will find a
Does the customer have credit references the deal and have it turned down or inform way to put deals together, not just send them
that do not show on the bureau? If so, do a the customer on what is realistic and put the in and see what happens.
direct check and send documentation to the deal together. You may need to start the car-
prospective lender, allowing them to do a buying process all over again with a vehicle-
direct check, as well. needs analysis to find out what the customer
really needs from a vehicle. Lenders will Tony Dupaquier is the director of
F&I training for American Financial &
Verification of all the information on the look poorly at a deal if they think the Automotive Services Inc. He can be
customer statement is equally important. customer’s choice is unrealistic. Sometimes, contacted at 866.856.6754, or by e-mail at
Every lender has a slightly different way customers just want a new vehicle but allow tdupaquier@autosuccess.biz.
16
17. Secrets of
Dealerships Who
Overachieve –
No One Else
Will Tell You:
• What the best “response generating”
ads all have in common.
• The three most important goals you
will ever set for your dealership.
• How to condition your current
customers to buy from you
more often.
• How to create advertising that
attracts quality customers who
negotiate less.
• How to out-market your competition
and dominate your market.
• What the ultimate goal of marketing
should be today.
• How to create advertising that actually
increases your closing percentage.
Special Free Offer: Call 866.856.6782 now and ask for Sarah to receive your free copy of the J&L Marketing
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move the crowd. crush the competition. count the money.
18. fs feature solution
BrianAnkney
Getting and Managing Leads
- Success on the Internet
In the nineties it was said that the Internet on his providers. Ben Freeland, owner of “We have a dedicated Internet department
was going to change the way cars were Freeland Luxury Cars says, “To measure that handles all of our leads. They are
sold in the United States. Everything was ROI very simply look at the total number of equipped to respond to customer requests
going to be different. That is what the appointments set, number of appointments instantly and provide them with enough
retail automotive industry braced for in the that show, and number of vehicles sold. Next information to set the appointment”, says
early nineties. Many were afraid and many divide the bill by the number of vehicles sold Freeland who feels a separate Internet
thought it would not happen. Many today for the average cost per sale.” department is important.
may think that it did not happen, but industry
statistics tell a different story. 2. What do you look for in a lead provider? According to AutoTrader.com’s Chip Perry,
“Total Internet immersion seems to be
Dealers have reported that the Internet “A lead provider should provide a customer attracting more and more interest around
accounts for 25-35 percent of car sales, also for me to contact, nothing more. I do not the country. This model has an Internet
agreeing that the Internet is driving phone- want them to contact my customer,” says manager with a staff handling e-mail leads,
ups to the tune of 30+ percent. This puts the Perkins. merchandising online listings and doing
Internet ahead of newspapers, television, careful reporting about what leads come
direct mail, and radio. For this article the According to Freeland, ”My ideal lead in and what results in sales. Customers
following dealers and providers have agreed provider is the one that keeps it simple! coming to the dealer through the Internet
to help us see what makes them so successful Provide me with the number of leads are introduced to the floor staff for sales
with leads and the Internet; requested fed directly into my CRM system. and follow-up. The dealership’s entire staff
Ben Freeland, Freeland Luxury Cars, Allow me to control my settings for mile is thoroughly trained in handling Internet
Ralph Perkins, Patomkin Auto Group radius and lead volume. Finally, have quality customers, in particular their tendency
Don Graff, Flemington Car and Truck support personnel that will assist me in to do research before visiting the store.
Country Family of maximizing my ROI.” This approach helps dealers serve all the
Dealerships customers who contact them as well as
Anonymous Southeastern Dealer Group Graff wants his customers to be kept understand what advertising works best by
informed; ”I would like to see it made clear clearly identifying the customers brought to
1. How do you determine the value of to customers that they will be solicited. the store through the Internet.”
leads from third-party providers? Do you Some customers are unaware that they will
calculate an ROI? be contacted and think they are signing up to Three common themes were apparent in the
win something.” processes of all those asked; consistency,
The only thing that every store agreed measurement and training. Dealerships
on was that calculating an ROI for each 3. How does your Internet sales process that are successful on the Internet develop
provider is important. Ralph Perkins, VP work? process for selling customers and follow
of Sales and Marketing at the Potamkin these processes consistently. They measure
Auto Group, relies on his lead management ”First, the customer receives an auto their results and continuously work to
system to provide him with daily reports that response and a call within 3hrs. The improve their processes. All employees
track what sold and what did not. Each level customer will receive 7 or 8 calls in the first are trained to be effective in maximizing
of management and department uses reports week and e-mails with specifics about their results.
to measure their success daily. Don Graff of desired vehicle. We will attempt 20 contacts
Flemington Car and Truck Country Family in the first 30 days”, says Graff. 4. Has the timeline shortened? Do you
of Dealerships warned that while monthly think that Internet leads are buying faster
statistics are valuable to reward employees Perkins feels it is important for all customers now than Þve years ago?
and set goals for departments, measurement to receive the same service, “We give all
over a greater period is required to evaluate customers the same great experience, not According to Freeland, “I think they were
a lead provider or Internet advertising just Internet customers. Customers have no always buying faster, the best Internet
placement. Graff feels that the market hoops to jump through to get the Internet departments are just now catching up to the
fluctuates too much month-to-month and price. We don’t shy away from our Internet customers and increasing their closing rates
uses a six-month measurement to decide pricing.” and sales volume because they are more in
18
19. 5. Have Þlters improved the quality of thing is finding the right person.”
leads?
7. What has been the greatest obstacle to
Perkins feels as though filters can make or success on the Internet?
break a deal with a lead provider, “I like
filters. We have cancelled providers in the ”Finding an Internet sales person that has the
past due to junk leads. Filters have greatly ability to understand his daily plan and work
improved the quality of leads today.” it. A different work ethic is required for an
Internet sales person,” says Graff.
Depending on the size of your store and
location, filter use can vary greatly. “At The anonymous Southeastern Dealer group
our larger stores we like to buy all the leads feels it’s more, “Budget decisions about
we can get. At our smaller stores we like to where to spend money on the Internet, good
filter the leads. There is no question that the ROI management, and finding the right CRM
contact ratio goes up with better filters”, says system are the greatest initial obstacles.”
the Anonymous Southeastern Dealer group.
For Freeland the obstacle was more mental,
The work and quality of the filter has also “Our largest hurdle to overcome was
changed over the last few years. According believing that you could close sales via e-
to Graff, ”Yes, 4 or 5 years ago leads were mail and over the phone. We provided way
filled with bad information. Nearly 30 too much information. You still need to get
percent had some bad information. Today if the customers into the store and provide
we get 5 -10 percent with bad information, them with an exceptional experience.”
that’s a lot.”
8. What gives your store an edge over
Freeland feels as though the few bad leads others on the Internet?
are worth it when it comes to the cost, “It
tune with what the Internet buyers want, a depends on the source of the lead, but in “Our People! It always comes down to good
fast response with service.” general, Internet leads are strictly a numbers people”, says Freeland.
game that should only be measured at the
Perkins feels differently, “The timeline has end of the month with the bill divided by Perkins feels it is all about consistency,
gotten longer. Five years ago there were the number of sales. A few bad leads should “Dedication to the Internet, not an “Internet
fewer customers using the Internet, but not frustrate dealers when the cost per sale is person” or a separate department in the
they were serious and ready to buy. Now still much lower than traditional advertising. corner of the showroom is what’s required.
there are more and more people that are Plus with Internet leads it is easily measured The Internet is a part of each and every
submitting their information that are in the compared to traditional media.” department. We have the same process for
shopping stage. Accessibility to the Internet every customer, Internet or not.”
is greater now and we see a larger number of 6. What types of training do you use to
financially challenged people as leads. The improve your Internet sales? Graff partly attributes their success to the
overall demographic of the Internet lead has customer service foundation that has already
changed.” According to Freeland, “Again we keep it been laid down. “Our advantage comes from
simple. It’s primarily phone skills. Treat the way we do business. Flemington Car and
According to Perry, “We find that nine times every lead as a phone up and provide just Truck Country Family of Dealerships has a
out of 10 people will still pick up the phone enough information to set an appointment. reputation for great customer service. We
and call a dealer rather than e-mail them Better appointments = more shows, more carry this reputation on to the Internet. We
about a car – since what they want to know shows = more sales.” have a huge customer base that trusts us.”
is if the dealer still has the car. Consumers
are using the Internet more than ever to “We have a training manager on staff but Please let us know topics you would like
search for a car before buying – 89 percent sometimes it is necessary to bring in outside for us to interview successful dealers about
of people with an Internet connection use the help. Scripts and e-mail writing can be taught in the future. You can submit ideas to Brian
Web this way according to J.D. Power” to people that already have the character and Ankney at the contact information below.
phone skills”, says Graff.
An anonymous Southeastern Dealer
group feels as though, “ heavier use by Like Graff and Freeland, Perkins feels it
immediate shoppers has quickened the important to keep it simple and use the great
process. 30 percent of our deliveries from employees you currently have. “I look for in-
Brian Ankney is a sales-improvement
the Internet take place within the first house people as a first option and give them strategist at AutoSuccess. He can be
week. Our average buyer requires only additional training myself. They already contacted at 866.318.1360, or by e-mail at
seven contacts to get them in to buy a car.” know our processes. The most important bankney@autosuccess.biz.
july 2005
19
20. PaulAccinno
Maximize Your Internet Sales
In order to maximize deliver vehicles and pay the ISM to sell Web site. This will improve your closing
your Internet sales, appointments. If your ISM is taking photos ratios, since these are your best leads, and
your ISM must be of the used cars, consider hiring a third party cut down on the number of leads you need
allowed to focus on provider to complete this task. Your ISM to purchase from a third party lead provider.
his or her primary should be responsible for the vehicle content So here’s your total estimated cost for the
responsibility, which on your Web site, but you should delegate month:
is to sell showroom appointments. Most the marketing content to your ad agency.
Internet customers have submitted leads You always want your Web site content to • Third Party Leads $2,000 (100 x $20)
to multiple car dealer Web sites and other leverage your other marketing efforts. The • Web site Cost $500
lead generators. So the dealership that gets objective here is to give your ISM more time • Photos/Window Stickers $750
to the customer first with the information to respond to leads (in less than an hour) and (50 units x $15)
they requested usually wins. Your ISM sell more appointments. If an ISM has a 10 • LMS $250
must be organized, know their way around percent closing ratio, that usually means he • SEO $150
a computer, be Internet savvy, and above all, or she is scheduling about 20 percent of the • Total $3,650/month
have great phone skills and be a closer. This valid leads for appointments and closing
requires focus. 50 percent of those. What if the ISM, only If your ISM can sell 40 percent of the valid
focusing on selling appointments, could leads an appointment, then you sell 30 units
Leads that are responded to quickly have the double the appointment ratio? at a cost of $122 (200 x 75 percent x 40
highest closing ratios. A Harris Interactive percent x 50 percent) / $3,650, which is less
Poll showed that 70 percent of Automotive Here are some of the marketing costs than half your normal advertising cost per
Internet Users (AIU) that purchased a associated with running this model: Let’s vehicle retailed.
vehicle did so from a dealer that responded assume you receive 200 leads a month, half
to their Internet request in less than one of those come from your Web site and OEM Industry experts say that an ISM shouldn’t
hour. The study also showed that the longer and the other half come from third party lead handle more than 100 leads a month. But
it takes to respond to a lead, the less likely providers at a cost of $20 per lead. Let’s that model assumes that the ISM is also
the customer is to buy from you. In fact, also assume that 75 percent of those leads doing other tasks and not focusing on just
the likelihood of them purchasing from you are valid leads. The used car photos and selling appointments. And if you’re thinking,
drops to 18 percent after 36 hours. Which window stickers will cost about $15 per unit. “I don’t get enough leads to have an ISM
means that 82 percent of them bought from You will definitely need a Lead Management that only sells appointments;” then buy more
your competition. System (LMS) to run this model properly. leads; don’t give your ISM more jobs to do.
If your ISM can
<1 70%
sell 40 percent of
1-5 60% the valid leads an
6-12 56% appointment, then
13-24 45%
you sell 30 units at a
cost of $122 ... which
25-36 36%
is less than half your
>36 16% normal advertising
0% 10% 20% 30% 40% 50% 60% 70%
cost per vehicle
Source: Harris Interactive retailed.
Try this for 90 days. Let your ISM do You can’t rely on Outlook to manage this If you’ll allow your ISM to focus on the
nothing but sell appointments. When the process because there are many tools in the process of selling more appointments, you’ll
appointment arrives at the dealership, have typical LMS that streamline and automate sell more cars, your cost per vehicle retailed
the ISM greet the customer and for the the follow-up process. Using a LMS also will go down, and you’ll improve your
purpose of continuity, introduce them to a cuts down on the time devoted to sending overall Internet ROI.
sales person. Then let the sales person take e-mails and allows your ISM to use their
it from there. Make sure the ISM clues primary tool for selling appointments, the
Paul Accinno is the preseident and CEO
the sales person in on all the particulars of phone. Next, consider a Search Engine of WorldDealer, Inc. He can be contacted
the deal so they are knowledgeable. Pay Optimization (SEO) program to maximize at 866.429.6826, or by e-mail at
the sales people to close customers and the number of leads you receive from your paccinno@autosuccess.biz.
20
