- ■ Volume 22: November 19, 2018
It has never been more important to be diverse and inclusive. Help make your dealership a better place to work and shop by building a culture that values everyone.
Welcome to Tips & Tools to Do It Right, a project between Ally and the Automotive News Content Studio. On this page, we'll highlight news and insights from around the automotive world — information, research and insider tips to help you do it right at your dealership. Some of the topics we'll cover include F&I, training and innovative ways to help your dealership flourish. We'll feature industry experts to address real life situations that arise in the retail automotive environment, and recommend proven tools to lead your store and your employees on the path to continued success.
Look for new content in the pages of Automotive News every month, and frequent updates on this page.
It has never been more important to be diverse and inclusive. Help make your dealership a better place to work and shop by building a culture that values everyone.
Being a dealership with a diverse and welcoming workforce is not just the right thing to do; it fuels creativity and innovation.
Damon Lester, president of the National Association of Minority Automobile Dealers, puts it this way: "Diversity doesn't just mean hiring people from different ethnicities and not incorporating their experience, beliefs, and their background. Diversity means being inclusive and incorporating those experiences and beliefs to make your business better. Like minds think alike. Diversity equals growth. You can't grow unless you're being inclusive; being inclusive shows leadership and having diverse leaders in management will show growth to your bottom line."
According to Project Include, a non-profit organization that seeks to accelerate diversity and inclusion in the workforce, inclusion is the mechanism that activates the benefits of a diverse staff: "Employees who are included in every aspect of the company culture can contribute more, be more productive, and drive better decisions and results."
"Inclusion means involving all employees in all opportunities and activities, so everyone gets a fair chance to succeed while diversity means bringing all types of people to all parts of your company."
– Project Include website
Make A Choice:
"The most important first step sounds obvious: It has to be an intentional decision by the person at the top,” says Adam Robinson, CEO of Hireology, a talent technology company. Step two is taking inventory of what Robinson calls the dealership’s"employment brand” and making sure it sends a message of inclusion. For instance, management and human resources should evaluate the images used with any recruitment ads."Are they stock photos of white men high-fiving each other?” Robinson says. Similarly, Lester says,"We (the auto industry) need to do a better job of reaching out to the community as employers and actively recruiting at schools that are majority populated in diverse areas, to provide the road map on the various career opportunities that are available in this industry.” According to Jenell Ross, president of Bob Ross Buick-GMC and Mercedes-Benz of Centerville in Ohio, "It starts with taking a chance on someone who doesn’t necessarily look like you.”
Auto dealerships have long been pillars of their communities, supporting causes ranging from youth sports teams to nonprofit fundraisers and charities. Florida dealer Megan Bush Del Pizzo, vice president of the Jacksonville-based Tom Bush Family of Dealerships, has adopted a strategic approach to the company's philanthropy. This year, for the third in a row, the company wrapped one of its Minis in a rainbow to serve as the pace car for the local Strides for Pride walk/run supporting the LGBTQ community. "We want to make sure our philanthropy is something our employees can get behind, too,” Bush Del Pizzo says. "It's about being intentional and supporting a community with your whole heart in a creative way.”
One of the biggest obstacles to retaining high-potential and diverse employees is the typical pay plan, Robinson says. "We have tracked this across millions of job applicants: When the pay plan is weighted to more base or predictable pay, the number of applicants who are female, college-educated and nonwhite goes up," he says. According to Ross, "You can't just be flexible in this business – you need to be elastic. We must change with the times to keep our best people and attract a variety of talent. For instance, many of our techs are involved in dropping off their kids in the morning or picking them up in the evening. We're trying to create the flexibility to help them manage the situation while still taking care of our customers."
Information from Project Include's website used with permission under the Creative Commons Attribution 4.0 International license without modification. For more information please go visit projectinclude.org/community.
Auto retailing is facing unprecedented transformation, including shoppers with rapidly evolving expectations. Today, dealers must meet consumer needs that extend beyond product, process and price. Do it right in your community by leading with purpose.
According to the 2018 Edelman Trust Barometer, trust among the general population of the U.S. plummeted in 2018, resulting in the steepest decline recorded in the survey’s history. Amidst this ongoing trust crisis, consumers are increasingly looking to brands to lead their business with purpose, making impactful and positive contributions to the community in which they operate:
|Gen X: 83%|
|Baby Boomers: 89%|
Dealerships have a long-standing history of civic service. In fact, community involvement is often integral to becoming a leader in the retail space, and many top dealers attribute much of their success to their dealership’s community efforts.
As buyer demographics change and consumer trust plummets, it is imperative that dealers continue to define and commit to their role as community leaders.
Demonstrating commitment to your community requires more than just lipservice. Purpose should be clearly defined and boldly affirmed. It should convey what you stand for at every level of your organization.
Jeff Tobaben, a former dealership manager and now CEO of Evolve Performance Group, says “leadership has to make engagement a cultural imperative — meaning that it’s not something you do in addition to your work, but it’s how teams work and how managers coach and motivate their employees.”
This means top-down involvement and participation. When you define a mission, it should serve as a pillar for your dealership.
Develop and support a diverse, multigenerational team with mentorship opportunities that can benefit everyone — and your business.
Mentorship benefits everyone. Having a mentor can provide the career direction and on-the-job learning that millennial employees seek, help prepare members of the next generation to take over the family business and offer a sounding board or supportive network for the industry's underrepresented groups, including women and minorities. "We have to staff for tomorrow, and part of that is developing a supportive culture that will help propel the next iteration of the dealership and the next generation of leadership," says Todd Smith, a former dealer who's now CEO of ActivEngage, an auto technology company he co-founded. For a dealership, a mentorship program can keep team members–both new employees and veterans–engaged, connected and growing in their careers. Here are two dealers who found their professional footing through mentorship:
Karmala Sutton admits that last year, she was struggling to find her place within her family's dealership. While training to become a second-generation dealer principal at Honda of Kenosha in southeastern Wisconsin, "I was having communication problems with team members," Sutton says. "My dad suggested I get a mentor." After some initial qualms, Sutton took the advice of her father, Nate, and found a mentor in a family friend who works outside the auto industry. "His perspective is open and broad, and he helps me work out ideas and work through situations," Sutton says. "Working with a mentor, especially as a woman in a male-dominated world, has opened my eyes to see how to communicate better and to see situations from another point of view. It's been a great learning opportunity for me." Although Sutton also has a support network in the National Association of Minority Automobile Dealers' NextGen group of younger minority dealership leaders, she likes having a mentor outside the industry. "If I talk to someone who works at another store, there's a lot of noise in the conversation," she says. "Someone who doesn't work in the industry doesn't let the industry stuff distract from the real issues."
Judy Farcus Serra knows she was fortunate to have a boss who recognized her potential when she started her career in the automotive industry as an assistant controller. Judy's boss began assigning her projects and showing her new tasks. With each new challenge, Serra rose to the occasion, and continued growing in her career. Serra later followed her boss to Headquarter Auto in Miami, and when he left the controller's job in 2002, Headquarter Auto offered the position to Serra. "Phil Lynch was a mentor who kept giving me opportunities and was pivotal to my career growth," said Serra, now CFO of Headquarter and its four Florida dealerships. "Today, in order to retain high-quality thinkers in this business, we need to offer them support." Serra is trying to do just that. In addition to informally mentoring several people in her organization, Serra is part of a team at Headquarter that is working to develop a more formal program aimed at attracting and mentoring college graduates. "Our company is 28 years old and key employees are retiring, leaving very big shoes to fill," Serra said. "We need to keep an engaged and committed workforce and keep those key positions filled – the only way we will achieve that is through this type of mentorship program."
Seeking a mentor? Think about what you want out of a mentorship. Do you want to learn things, or are you looking for someone who can introduce you to people? Dr. Rubina Malik, a strategic adviser to organizations, suggests finding "someone who has a successful track record – it doesn't matter if that's a dealership executive, a restaurant owner or a Wall Street executive. If they're successful, the relationship will be worthwhile to learn from." If you do want a mentor within the industry, Malik says: "Don't just go up – go horizontal and vertical and all around you. Also, just because someone isn't in your organization, doesn't mean they can't support you." She advises staying away from industry celebrities who might not have time to mentor you on a consistent basis. "Don't be star-struck," Malik says
Own or run a dealership? Consider establishing a mentorship program. "I think there's huge value in the tribe mentality – taking the older veterans and pairing them with the younger generation creates a mutually beneficial experience," says ActivEngage's Smith. "But understand that mentorship isn't a thing to dabble in. Make a long-term plan. A dealership should first decide what sort of mentorship program is appropriate for its culture – a strictly run business might have something more structured than a dealership with a more casual environment," Smith says. Says Malik: "Most individuals don't leave a company because of money. They leave because they don't feel appreciated and/or there is a lack of expansion. A formal mentorship relationship helps an individual feel recognized, engaged and that you are investing in their growth."
Although many of the fundamentals of the auto industry are shifting, how dealers approach compensation has been slower to keep pace with those changes. It may be time to rethink your dealership’s pay plans to help you attract and keep the best talent and set your business up for success in a changing marketplace.
In a 2018 survey conducted by MAXDigital, 90 percent of dealers said they pay salespeople with high-commission pay plans, and 42 percent said they offer no fixed or base salary at all.
“What dealers have liked about a 100 percent commission-based pay plan is that they have no risk at all,” says Ted Kraybill, CEO and founder of ESI Trends. “If someone comes in to work at the dealership and it doesn’t work out, it didn’t cost the dealer anything—or at least that’s what they think.”
However, the reality is reduced workforce tenure represents a major risk for dealerships. According to NADA’s 2017 Dealership Workforce Study, the median dealership tenure for 2016 was 2.5 years, a drastic decrease from 3.8 in 2011.
NADA’s research indicates employees require three years to reach full productivity, meaning increased turnover can result in reduced productivity, median and average earnings and dealership profitability.
In an attempt to attract and, most importantly, retain top talent, dealers are testing and instituting modified compensation plans. Consultants such as Kraybill offer four key reasons that dealerships should rethink their methods of compensating employees:
1.The emergence of millennials as the bulk of a dealership's workforce: NADA's 2017 Dealership Workplace Study reported that millennials represented 61 percent of new hires last year. And those employees, Kraybill says, "don't have the appetite for the risk that is involved in a primarily commission-based pay plan." In addition, he says, millennial employees are more driven by the promise of a career path–a path that can be created, for example, by establishing multiple tiers of salespeople, perhaps with different compensation plans. Hireology CEO Adam Robinson says millennials are also looking for work-life balance. Compensation plans might include a flexible work schedule, including some nights or weekends off. "They respect their free time more than any other generation," says Robinson, "it's just not worth it to them to work the extra hours."
2. The shift in how people buy cars: With the move toward digital retailing, ESI's Kraybill says: "Customers will come into the dealership having completed more of the sales process in advance. That's forcing dealers to rethink the nature of the salesperson's and the F&I manager's job." Car shoppers also say they dislike being transferred from a sales consultant to a manager or an F&I staffer to complete a vehicle purchase. Kraybill points out that automakers such as Lexus are promoting "one price, one person" models that eliminate handoffs. At Patriot Subaru in Saco, Maine, one salesperson handles a deal all the way through placing the customer's business with a lender. F&I managers are paid on commission, strictly to sell additional insurance and warranty products. The customer gets fewer handoffs, and Patriot Subaru's customer satisfaction scores have gone up, says General Manager Brian Beattie.
3. Improving business processes while times are good: Both new- and used-car sales have been strong for several years. Conventional wisdom says now is the time to examine and tighten internal processes. General Manager Tim Hlavenka wants managers to have a stake in the overall success of DCH Montclair Acura in Verona, N.J. This year, he began incorporating department expenses in the managers' pay plan. "Managers have the opportunity to make more if they save on expenses," Hlavenka says, including controllable expenses such as overtime, delivery costs and damages on the lot. "If a recession comes and business is down and we need to lower expenses, this gives us a chance to get ahead of that," he says. "I don't want to wait and react after it happens."
4. Low unemployment rates: Hireology's Robinson says that with unemployment historically low, job seekers are in the driver's seat. Besides offering incentives to encourage behaviors that a dealership wants more of, he says: "A pay plan's job is to market the position or the career path as a desirable one. I'm on my soapbox to get dealers to understand that they need to market their jobs like products and consider job applicants like consumers of products. The consumer base for a full-commission pay plan is very different than the consumer who is attracted to a base-pay-plus-bonus plan." Robinson advocates more base pay. "It comes down to this: Do you want to be able to hire the best talent in the market? Or do you want to choose from all the people who couldn't find something different?"
For more on doing it right, visit Autonews.com/allydoitright
Building your dealership’s brand means more than presenting a beautiful showroom experience. It’s ensuring that your dealership looks great online as well. Help your digital brand be the best it can be with these tips from industry experts.
These days, many customers will fi rst "meet" your dealership online. But that doesn't just mean your website or even an automaker site. Fift y-six percent of car buyers said they started their online search at third-party websites, and 18 percent started on search engines such as Google, according to the 2018 Car Buyer Journey study. Prospecti ve customers can interact with a dealership's digital brand everywhere from social media sites to search ads to rati ngs and reviews–and it's up to the dealership to look good and consistent in all those online locati ons. We asked marketi ng experts to each off er one key thing a dealership needs to do to stay on top of its digital brand.
These days, many customers will first "meet" your dealership online. But that doesn't just mean your website or even an automaker site. Fifty-six percent of car buyers said they started their online search at third-party websites, and 18 percent started on search engines such as Google, according to the 2018 Car Buyer Journey study. Prospective customers can interact with a dealership's digital brand everywhere from social media sites to search ads to ratings and reviews–and it's up to the dealership to look good and consistent in all those online locations. We asked marketing experts to each offer one key thing a dealership needs to do to stay on top of its digital brand.
"Dealers need to rigorously follow their ratings and reviews online and, if there's a problem, respond credibly and transparently every single time. We find that some of them do and some of them don't. Even worse, you'll read online comments where a customer has an issue with a dealership–and the dealer will contest the comments in that forum. You cannot do that. We know there are too many instances where customers will post a negative online rating with comments, and the review will sit with no answer. It requires a lot of time and effort, but today it needs to be considered part of the investment in the business."
- Chris Sutton, vice president, U.S. automotive retail practice, J.D. Power
"Dealers need to know the importance of search. If they haven't mastered a search strategy, that should be the core focus of their efforts online. Search is where people are starting the research for a car purchase. A dealership needs to pay attention to both paid ads and organic search. There is a lot of power in search–and everyone can and should be active in optimizing search, whether you're a mom–and-pop retail shop or a Fortune 500 company."
- Kyle Jackson, senior vice president and group director, performance media, Spark Foundry
"We point out that a dealership needs a consistent brand voice across social media and any site online where the dealership appears. In every place, it should sound like it is coming from the same entity. And it needs to be distinctive. Too often you can take what's on a dealership website, change the name of the dealership and the city and throw it on another dealer's site and it works. That's not good. You need to have something that is really about you."
- Greg Gifford, vice president of search, DealerOn
"Dealers need to consider how to back up the in-store experience to be a match with what the customer does online. Consumers' expectations today are being adjusted by Amazon and other online retailers. You don't want your customers to research your dealership, vehicles and staff online, then come into the store and experience a disconnect."
- Nick Gorton, vice president of product innovation, Edmunds.com
"Hire a Millennial who gets it. Every dealership needs a marketing manager who grew up in the digital world and understands how it works and who understands how to get the sales team to understand it as well."
- Sam Slaughter, owner, Sellers Auto Group
"This business of digital marketing and digital transacting has changed more in the past five years than the 100 preceding it. You have to understand the technology and the data. You have to align yourself with agencies and collaborators who can help facilitate that learning. I spend a third of my time on a learning agenda to understand how digital is disrupting marketing and changing the consumer shopping experience. Improving your digital brand is all about understanding what digital marketing is about–and then applying that knowledge."
- Andrea Brimmer, chief marketing and public relations officer, Ally Financial
The oldest millennials turn 37 this year—they’re not kids anymore. That means a new generation is on the horizon: Generation Z, whose oldest members are in college or just entering the workforce. Learn how your dealership should think about and start preparing for these new customers—and employees.
In research terms, a new generation pops up about every 15-20 years. Those born near the beginning of the 21st century represent the newest cohort. Although an inexact science, Pew Research has established that those born in 1997 and after will be considered part of this post-millennial generation, also called Generation Z—or the centennials, depending on whom you ask. According to the U.S. Census Bureau, this generation is estimated to represent 25 percent of the population and be about 80 million strong.
"A generation is characterized by the events going on in the world during their childhood," says Kate Turkcan, vice president and head of youth insights for Kantar Consulting. For the centennials, as Kantar calls them, those events were the Great Recession, the war on terror and the invention of the iPhone. "People think of this generation as toddlers and children, but the oldest of them are entering college and the workforce," Turkan says. Here are 10 things a dealership should know about Gen Z:
1. These kids pick up a mobile phone before getting out of bed in the morning. "This is the first generation that didn't transition from analog to digital. They have never known a day without the internet," says Jane Cheung, global leader for consumer products at the IBM Institute for Business Value. For centennials, it's not a desktop computer or even a laptop but a mobile phone that is their constant companion. That means it's imperative that your website work on a mobile phone, says Jason Dorsey, president and co-founder of The Center for Generational Kinetics, a research firm. "The digital experience has to be completely seamless," he says. "If it's not, nothing else matters."
2. This is the most diverse generation in history, and they think it's important for brands and businesses to be inclusive and diverse in hiring. By 2019, Turkcan says, this generation will be majority minority; that won't happen to the U.S. as a whole for 25 more years. "They're light years ahead of the rest of the country in their attitudes toward race, gender and sexual identity," she says.
3. They are the most open generation we've seen. "This generation's three core values are openness, realism and resilience," Turkcan says. "They believe everyone is allowed to be different... The one thing they won't tolerate is intolerance."
4. They will have a more flexible idea about getting around. "They are coming of age during the sharing economy," Dorsey says. "For them, an Uber was always available," Dorsey says. "We suspect they will also be most open to leasing and to using vehicles as they need one."
5. Their grandparents' coming-of-age ritual was getting a driver's license on their 16th birthday. Centennial kids don't view it that way and often delay getting a license. Because of their phones, they have the world at their fingertips and don't need to drive somewhere to be with friends. In addition, these overscheduled teens don't have time to squeeze in driver's education classes and are impatient with state graduated-licensing programs.
6. Safety is supremely important. Their parents were the first to equip themselves with devices such as baby monitors and car seats. And these kids grew up surrounded by volatility, uncertainty and ambiguity in terms of world events. As a result, when Kantar asked teenagers what they care about in a vehicle, "The things they listed first were safety, reliability and value for the money," Turkcan says. "The two things at the bottom of the list are prestige and ‘lots of bells and whistles.' "
7. They are realistic and pragmatic. "What surprised us the most in our research was how practical this generation is," Cheung says. They're fiscally conservative–23 percent think personal debt should be avoided at all costs, according to 2017 research by The Center for Generational Kinetics.
8. You'll have to work harder to get them to see ads for your dealership. Not only do they not watch traditional TV or read magazines and newspapers, but they also have a short attention span. "Gen Z is willing to watch ads as long as they find them entertaining," Dorsey says. "But if you don't move them fast, they'll move on." Social media platforms–for the moment, that's Snapchat, YouTube and Instagram–are the places to reach them. And social media influencers including well-known bloggers and internet personalities are more powerful endorsers than celebrities, Dorsey says.
9. As employees, they are going to demand more flexibility than millennials did. A fun work environment and flexible schedule excite them most about a job, according to The Center for Generational Kinetics study.
10. They have an entrepreneurial spirit. In a 2017 study by the IBM Institute for Business Value, one-third of Gen Zers said they already were working for themselves or making money online–as reviewers or bloggers, for instance. "Because they grew up during the recession, Gen Z expects they are going to have to work longer and harder than the Millennials did," Dorsey says.
Sales of used vehicles remain strong, and a surge in off-lease cars and popular crossover models entering the marketplace should make pre-owned vehicles even more attractive to shoppers. These suggestions from the experts can help maximize your used-car profits.
NADA has predicted that while new-car sales will slip, used-car sales will rise for a ninth consecutive year, exceeding 40 million sold. And the nearly 4 million vehicles expected to come off lease will create a pool of low-mileage cars.
But dealers say used-car profits are being squeezed by competition in acquiring vehicles and by price transparency online. Successful dealers and consultants offer suggestions for making the most of the used-car market.
1. It's all about speed. Every morning, Allan Eagles, general manager of Gault Auto Mall in Endicott, N.Y., meets with his staff to grade the previous day's trade-ins. If a car is headed to the lot, the reconditioning department cleans the vehicle, while photos are uploaded to the internet. The service department works on the mechanicals the next day.
Consultant Jasen Rice, founder of Lotpop, says the best-performing dealerships turn up to 70 percent of their pre-owned inventory within 30 days. Adds Patrick McMullen, senior vice president of MAXDigital, "Customers are suspicious of a car that's been online too long, and it's stale to the salespeople, too."
2. The online experience is critical for today's used-car shopper. "A dealer needs to be willing to build a great website," says Todd Caputo, president of Sun Auto Group in New York state.
Eagles has a photo booth and an internet staffer who posts 40 photos for each car. Rice recommends doing a weekly "virtual lot walk." Examine how your inventory looks online. Are photos up to date? Are there cars missing? Are the photos all high quality? Are the descriptions accurate and appealing?
Rice tells the story of a $40,000 car listed with a photo of the dashboard clearly reading: "Brake pads low."
3. Specialize, but offer variety within your brand. "The guys doing a killer job are 75, 80 percent core product," says former dealer Adam Tobias, co-founder and COO of DealerCue.
"A consumer is more likely to go to a GM franchise if they're looking for a used GM car. So if you're a GM dealer, provide them an ample selection of GM vehicles."
Dealers and consultants agree: If you decide to put an off-brand car on your lot, make sure it's not a "commodity car" but in high demand and low supply in your area.
4. If you can afford it, devote a staff member or team to pre-owned inventory. ""It used to be that whoever showed up at the lane got the cars," Rice says. "But now dealers from all over the country are buying cars online and at auctions and shipping them to their lots.
"The average dealer with one to three stores might have one used-car manager who is responsible for everything: appraising trades, hiring and training staff, approving deals, making sure trade-ins and acquired cars get through service. It's hard to stay on top of the bidding and auctions when your time is so limited."
5. Create and adhere to a process to stay on top of used-car sales. Says Caputo, "We don't believe we have to be the lowest price because we offer a fantastic buying experience online and in the store and get a little extra because of that."
Process also means managing inventory. For instance, dealers anticipate strong pre-owned sales in the spring, as drivers get tax-refund checks and start shopping for a vehicle. But to maximize sales, dealers need to anticipate that demand, cleaning up inventory in January and February.
Says McMullen: "The dealers I talk to who are process-oriented, who put good processes and policies in place and stick to them are seeing the greatest success."
Numbers a Dealer Could Get Used To
Besides accounting for more than half of U.S. drivers, Women-Drivers.com reports that 45 percent of all new vehicle purchases are made by women shopping solo. No matter how you look at it, doing it right with women shoppers is smart business for your dealership.
More than a decade ago, Jody DeVere created AskPatty.com and its certification to help auto retailers provide a better shopping experience for women. DeVere notes that "women are typically more loyal customers" and offers three suggestions to build that loyalty:
1. Employ women in your dealership. Women shoppers pick up cues about a dealership based on advertising, social media posts and whom they see when they walk in the door. "It doesn't take a woman to sell to a woman," DeVere says, "but think about this: If you wouldn't want to work there, why would you want to shop there?" The presence of women on your staff also helps change the culture, she says.
2. Commit to training to help your staff learn how to communicate more effectively with women. "It's not just about hiring the right people," DeVere says. Training can include helping staff with body language, listening skills and eye contact-areas where women's preferences and styles often differ from those of men.
3. Look outside the dealership world for best practices. "Women are big online shoppers-look at the online shopping experience for ideas," DeVere says. "Speed up the car-buying experience. Offer things like concierge service." Dealerships, she says, can't appeal to women "simply by supporting breast cancer organizations once a year and say, 'We got it covered with women'."
Mabel Peralta fell in love with cars-and specifically Volvos—when she was a girl. Today she's the internet manager for Volvo Cars Glen Cove in Glen Cove, N.Y., one of the brand's top U.S. dealerships.
As a saleswoman and one of the dealership's manager, Peralta has learned a great deal about working with women customers. "It's essential to train the staff about the right words to use with a woman," she says. "Things like 'Do you need to talk to your husband?' or questioning their knowledge of cars-that's so wrong. Women know what they want; just listen."
Peralta also recommends being attentive to the way women want to communicate. Send emails to confirm appointments or to thank them for their time. And having women on the sales floor, and not just in the office or as a receptionist, "makes a difference," Peralta says.
What do women shoppers appreciate about their car-buying experiences? CDK Global examined 64,000 customer reviews. "Ultimately, men and women want the same thing out of the sales process," says Grace Wepler, a CDK senior market research analyst. "What constitutes a good experience is that it's fair, helpful and honest."
Positive reviews from men focused on technical elements of the product or service. In contrast, women more often related to the interaction with the dealership staff, the sentiment they felt or way they were treated.
"Women are looking for someone who shows compassion, focusing on their needs by acting as an adviser rather than someone just making a sale," Wepler says. "It's important for a dealership to maintain consistency in interactions, across departments-to make women customers comfortable and empowered with knowledge."
Women share their positive car-shopping experiences more often than men:
|After purchasing a vehicle....||Men||Women|
|Recommended the vehicle to friends and family||61%%||69%|
|Recommended the dealership to friends and family||50%||59%|
|Recommended the salesperson to friends and family||39%||45%|
|Posted a photo of the vehicle on social media||30%||39%|
Auto dealerships often are very personal, family-run businesses. If you’re thinking of bringing your children into the car business, consider these insights from consultants and established next-generation dealers.
Family ties run strong in auto retailing. Consider that three-fourths of the 2018 Time Dealer of the Year nominees either took over dealerships from parents or grandparents or currently work alongside their children. Two of those third-generation dealership leaders share their stories.
Aris Hudgins says working in the family dealership was “always something I wanted to do, something that we planned for. My dad has always wanted me to do it, and my grandfather wanted me to do it.” Hudgins' grandfather founded Hudgins Holiday Chevrolet-Cadillac in Williamsburg, Va.; and her father, Art, is a 2018 Time Dealer of the Year nominee.
After Aris graduated from Virginia Tech, Art Hudgins suggested his daughter work at other companies to gain real-world experience. "He said people respect you more when you get experience and then come into a dealership job later on," she says.
Since joining the dealership, Hudgins' strategy has been to learn as much as she can about the business. She is marketing director but also manages payroll and human resources. "Down the road, it will benefit me to have dabbled in everything and understand it all," she says.
"My biggest advice to others is to get to know everyone at the dealership and respect what they do. I hope when it's my turn, they will respect me because they know I've learned it all."
As for dealers looking to turn the business over to children, Hudgins says: "Expose them to everything you can. Let them learn to be a jack-of-all-trades while you are still in the business. For instance, while my dad is superfocused on sales, it makes sense for me to be focused on service."
Hudgins also says attending the NADA Academy gave her the opportunity "to make relationships with people you can use as a sounding board—people who can be straight with you and give you honest feedback."
Brady Peterson says he knew that if he wanted to be part of his family's Boise, Idaho, dealership, "I needed to start as a service porter and work my way up. Sweeping the floors and stocking parts shelves, I rubbed shoulders with a lot of people who are still working here. They trust me, and I understand where they are coming from."
Peterson says his father, Mark, and his grandfather let him make the choice on his own to join the dealership.
While pursuing a business degree, Brady found he loved accounting—and also loved cars. "It hit me at some point that I could combine the two things by working at the dealership," he says.
Peterson ran Peterson Lexus for six years and now is general manager of his family's Peterson Chevrolet-Cadillac-Buick store. He says the best part of his career is "working with family that I get along great with."
But that also presents certain challenges-as it did when his younger brother was his used-car manager at the Lexus store. "My dad wondered about us working together, but we figured it out," Peterson says.
He has learned that despite running a family business, "We have to earn the loyalty on our own, especially with customers. Sometimes older customers who were closer to my dad have had a harder time trusting me." Peterson gets calls and letters from longtime customers who ask about changes at the dealership and takes the time to answer one.
He suggests that if dealers are interested in bringing their children into the business, "Have the kids start working at the dealership as early as possible, doing all the positions possible." Peterson also recommends the NADA Academy, which "required me to do things I had not done before. It put me ahead of the curve."
Seventy percent of family-owned businesses fail or are sold before the second generation can take over, according to the Harvard Business Review. Some reports say only 10 percent to 12 percent remain successful into the third generation. Having the same CEO for 20 or 25 years can pose challenges when it's time for a daughter or son to move into the top spot.
The Harvard Business Review and consultants offer a few suggestions for families working together:
The dealership business faces enormous changes from many directions. Hone your leadership skills with tips from the experts, and help your business be ready for change by ensuring you have the right talent in place beside you.
Headlines reveal the full challenges for dealerships-transformative vehicle technology, a shifting group of consumers and employees, and new competitors in auto retailing. How can dealership leaders tackle this overwhelming pace of change? Dealers should look inward, says Camron Wilson, director of instructor-led training and business development for NADA's dealership operations.
"The more dealers focus on their people, the stronger their organizations are," she says. "The more consistent dealerships are with hiring and onboarding and training employees, the more likely people are to stay." According to Wilson, this is especially true with women and Millennial employees, who may be more comfortable in a job with more flexible hours and less dependence on commission pay.
67% of sales consultants fail to reach the 3-year tenure milestone (source: 2016 Workforce Study, NADA)
27% of dealership terminations occur within the first 90 days of employment (source: 2016 Workforce Study, NADA)
According to Wilson, this is especially true with women and Millennial employees, who may be more comfortable in a job with more flexible hours and less dependence on commission pay.
52% of employees who turnover within 12 months are Millennials (source: The State of Retail Automotive Hiring Q3 2017, Hireology)
90% 2017 annual turnover rate for female automotive professionals (source: The State of Retail Automotive Hiring Q3 2017, Hireology)
Karen McKemie was working in information technology in the energy business when AutoNation–then in its early years under Wayne Huizenga–"found me," she says. Today she is regional VP for Sonic Automotive. "When you look at all the market factors, there could not be a more important time for strong strategic leadership," McKemie says. "The leadership we need today has got to be so much more nimble than it was a few years ago." She offers a few key tips to being a strong leader in an era of dramatic change.
"Leadership is about having the courage to influence positive change and transformation," says Martha Rader, a Northwood University alum, industry consultant and professor at Keiser University. "The way the auto industry is changing, leaders that embrace change will be the winners."
"We need to approach this from a 360-degree perspective," Rader says. "We have to be customer-centric and embrace diversity. Developing and respecting employees can create a 360-degree positive experience and inspire higher performance."
Find out more about Ally Academy's leadership courses for dealers at allytraininginfo.com
Hurricane Harvey hit the Houston metro area during the last week of August. Twelve of the Houston Automobile Dealers Association's 175 member dealerships were damaged by the storm's winds and torrential rains. But even the worst-hit dealerships were open within a week, HADA Vice President RoShelle Salinas reports–some even providing fresh water to local residents.
The NADA Foundation's Emergency Relief Fund acted as a collection point for contributions from local and state dealer associations across the country. More than $1 million was donated by those associations, including $100,000 from the Houston and Texas association, and more than $50,000 each from state dealership associations in Georgia and Arizona, plus regional associations in Austin, New York City, Oklahoma City and Tulsa, Salinas says.
The donations went to support Houston-area dealership employees, who received checks ranging from $500 to $1,500. Another $120,000 effort by Dallas-Fort Worth dealers provided an additional $850 check to 140 dealership employees.
"You hear a lot about the family and small-business nature of dealerships. It was impressive watching that family culture really play out in a crisis situation, seeing the care and support dealerships all across the country have for each other," Salinas says.
The National Association of Minority Automobile Dealers, which has dozens of members in Texas, felt the disaster in a personal way. NAMAD asked its member dealers to contribute $2,000 per dealership to help hurricane victims; President Damon Lester reports that NAMAD members have pledged more than $400,000, $250,000 of which has already been sent out in the form of checks to directly help dealership employees.
"We're very proud of the membership for stepping up and helping each other," Lester says. "We may be small in numbers but we are a close-knit family."
NAMAD also is collecting donations for Puerto Rico, affected by two major hurricanes.
Ally team members in the Houston area found very hands-on ways to help their dealership partners. Ally staffers took lunches to dealerships that were busy cleaning and trying to get back to business; some brought their grills to dealerships to cook meals. Another Ally team ripped ruined drywall and carpet from the flooded homes of two local dealership finance managers.
"The experience is one that I would not wish upon anyone, but if I had to go through any type of disaster again, I would want these people with me. Everyone worked hard and did things that we definitely do not do during the course of our normal business day. It was a true testament to people working together to make the best of a horrible situation. I had one lady pull me aside and say, 'I never thought I would meet real angels in my lifetime, and then y'all showed up.' That's what helping others is about to me, and I won't speak for everyone else, but I believe they would agree."
–David Cullins, Ally account executive
The modern car buyer spends the majority of their time online, which means it has never been more important for dealers to build tailored experiences that engage prospective customers before they step foot on the lot.
Andrea Riley, Ally's chief marketing and PR officer, says to look to other industries to anticipate what customers expect from dealerships. "Technology has changed the way we interact with every product and segment a consumer comes across. In an online world, the consumer is not comparing experiences within a category. I'm not comparing dealer A to dealer B to dealer C. I'm asking, 'How was my experience at Amazon? What did I do when I paid my cable bill? How was my experience on Zappos, or interacting with my bank?' And then, 'How was my experience at that dealership?'" Riley says.
Pay attention to tactics adopted by retailers that excel in providing top-tier consumer experiences. "Consumers are framing their mindset about brands and interactions based on comparisons across categories. Innovation is the lifeblood of staying relevant in terms of that customer experience. For dealers, being cognizant of what's happening in technology, of how consumers' interactions with other brands are changing, is critical."
Forward-thinking dealers must look at trends across categories to find opportunity for retail innovation. Courtney Hennessey, marketing director-dealer products and services for Ally, shared three tips from Ally Academy’s Innovative Selling course that can help dealers work more effectively with today’s consumers.
1. Embrace a holistic social strategy.
51% of millennials describe themselves as running their lives from their mobile devices, reports a 2016 Salesforce study. Dealers now have the ability to subtly build trust with customers upfront and drive shopper loyalty through continued engagement. Hennessey suggests dealers focus on "leveraging the social space to become and stay relevant for your customers and potential customers–using your online reputation, Facebook page, customer reviews, your LinkedIn profile."
2. Recognize the importance of a personalized approach.
KPMG's 2017 Global Online Consumer Report says customers today, especially millennials, appreciate any sales approach that customizes promotions, recognizes customers across communication channels and uses customer profiles to anticipate needs. A 2016 Salesforce study reveals that 66% of consumers are likely to switch brands if they are treated like a number instead of an individual. "It's about what you do throughout the transaction to create 'surprise and delight' moments that go beyond the typical purchase experience," Hennessey says. "You want to make a connection with your customer."
3. Create memorable experiences that your customers will share.
According to a 2017 report by KPMG, 55% of consumers go online to find product or service reviews when making purchasing choices. The same report also states 92% of reviews consumers share online are positive. Shoppers want to brag about their positive shopping experiences to their social networks. "It's important to stand out from the clutter," Hennessey says. "It's about creating an experience for customers when they come into your dealership–and even before they hit the lot... But it's also after the purchase, making delivery a moment they will remember. So that when they post a photo on social media, they let their friends know this was the best transaction they ever had."
Both employees and owners say the best dealerships in the country offer regular training in order to help employees grow and develop–and stay invested in their jobs. These are dealerships where supervisors are in close communication with the staff, and work to keep employees engaged on the job. Ally Academy's Situational Leadership II course provides dealership leaders with tools to identify an individual's development level, and suggestions for more effective conversations with team members. For more information, visit AllyTrainingInfo.com.
The modern car buyer spends the majority of their time online, which means it has never been more important for dealers to build tailored experiences that engage prospective customers before they step foot on the lot.
In October, Automotive News will reveal the rankings for this year's 100 Best Dealerships To Work Forthe top employers in the retail automotive industry. Dealerships are evaluated in
eight focus areas: Leadership and Planning; Corporate Culture and Communications; Role Satisfaction; Work Environment; Relationship with Supervisor; Training, Development and Resources; Pay and Benefits; and Overall Engagement. We asked leaders from these 2017 award-winning stores to share their thoughts about what makes a dealership a great place
Dealership: Faulkner Organization, Trevose, Pennsylvania
Key executive: Harry Faulkner, VP-western operations
Why do employees consider it a great place to workand why does it matter? "When you take care of your employees, your employees will take care of your customers... We spend a lot of effort in long-term employee retention. If a customer can go back to the original salesperson or finance manager, you have to work much less hard to retain customers. Loyal customers make for an easier way of doing business."
What can a dealership do to make itself a Best Dealership "There is nothing worse than changing pay plans. We keep our pay plans very stable and simple. If an employee can't explain to a spouse how they're paid, that's a pay plan we don't want. You can incentivize employees without making it exclusively commission basedso they can make a steady income."
Dealership: Prime Ford Mazda & Prime Volkswagen, Saco, Maine
Key executive: Zac Casey, general manager
Why do employees consider it a great place to workand why does it matter? "We try to make this difficult profession fun. We just shut down our stores for the fourth annual company picnic for 3,000 employees at an amusement parkwe took everyone plus spouses and children and grandchildren. We buy the whole dealership lunch every Saturday. We give every employee three days a year to volunteer at their favorite charities. It's all about creating a culture where your employees are empowered, honest, have fun and can grow in their jobs."
What can a dealership do to make itself a Best Dealership "We focus on the three-legged stool: customer satisfaction, employee satisfaction and profitability. We run our organization understanding that if our employees are not satisfiedaren't happy with their jobs, their income and potential for growthit's going to funnel down to our customers."
Dealership: Kelly Honda, Lynn, Massachusetts
Key executive: Joe Gerbino, general manager
Why do employees consider it a great place to work–and why does it matter? "You know when you get bad service at a restaurant, it usually feels like no one there likes their job? Or when you walk into some dealerships, you can cut the tension with a knife? It's always positive here, very upbeat and full of good energy. Customers sense it. It makes them comfortable because it feels like a better place to buy a car. It starts at the top, but the staff does the work and gets the credit. They take care of each other."
What can a dealership do to make itself a Best Dealership "TrainingI think that's one of the most important things you can do. We train our staff constantly, every single day, to stay on top of what we do. It also helps because in training sometimes people can voice things they might not normally say out loudthings that are on their minds, things they think we can do better. And when they leave, they feel better about what they do."
As you consider training programs and process improvements, think about investing in fixed ops, along with your sales department. It's more than just selling service contracts in the service lane. Jennifer Falada, Ally director of fixed operations consulting, offered several suggestions for enhancing fixed ops:
Calculate your "fixed absorption" rate. That's the gross profit in fixed ops divided by the overall dealership expenses. Although Falada typically sees average fixed absorption rates around 50%, dealerships should aim to be as close to 100% as possible. "If you hit 100%, that means the gross profit in service will cover your dealership expenses and pay the bills–so that every car and F&I product you sell is profit," she said.
Stay on top of the correct metrics. In addition to the fixed absorption rate, monitor repair order counts to make sure they are steady or increasing, month over month and year over year. Quantify service department performance by examining measurements such as hours per RO, technician proficiency and effective labor rate.
Invest in technology and keep it up to date. Provide the appropriate technology to serve your customers. "Offer a texting platform that can keep customers posted on their repair status, if that's what your customers want," Falada said. "Equip service advisers with tablets, so they can write up the vehicle at the car. Not only is that the customer's comfort zone, it's also a place where a service adviser can build rapport with the customer." Finally, provide transparent pricing and give customers a chance to make appointments online.
Focus on the customer, not the vehicle. Service advisers like to say they are in the car business, Falada said. "We need to change the mindset of advisers to be in the people business, not the car business," she said. "And then work to wow customers every time they come in. Remember that fixed ops is a relationship holder for the dealership." Things to consider: What does the service department meet-and-greet look like? How do advisers present the menu of services to customers? How do they keep in touch with the customer during the repair process? How does the department deliver the finished vehicle to the customer?
Educate and communicate with customers. "The perception is that dealership service departments are high-priced, although that often is not reality," Falada said—and that perception often sends car owners to third-party service providers. Introduce every car buyer to the service department, give each customer a tour and perhaps even make the first service appointment. List service department prices on the dealership website. Use social media, YouTube or Facebook videos, posts and ads to promote the expertise of the service department and what services are offered.
Ally's experts assess missed revenue opportunities, process opportunities, and manufacturer's warranty compliance at your dealership, as well as opportunities to create exceptional customer service experiences. Consultants create a customized program based on your needs, as well as provide training and follow-up based on their recommendations. Contact a consultant at firstname.lastname@example.org for more information.
As part of its yearly New Autoshopper Study, J.D. Power asks new-car buyers to evaluate how their dealerships rated in five F&I areas. The past three years show improvement across the board:
Gabe Garroni visits dealerships on his travels around North America as VP-sales, U.S. and Canada, for Ally Insurance. We asked him about marketplace trends affecting F&I, and how dealers can prepare for what's ahead.
1. Move F&I information online. Many manufacturers and dealers are studying selling a car online, from beginning to end. "We think the dealer network and OEMs are going to figure out the right way to transact F&I online," Garroni said. "My first suggestion is finding the right F&I partner to help you figure out this space. Some feel it's taboo to give away too much information online, but when you give customers control and access, you can build their trust. Post information online about the F&I products you offer, the ability to prequalify online. Offer video content about what the customer's F&I process will involve."
2. Shift with the market. "As drivers begin to think they might keep their current car longer, Garroni said, "There's a shift in the ownership thought process. Dealers can tap into those customers who might have passed on things like a service contract or a warranty extension three years ago. Be strategic–stay in contact with your customers, in the service lane or while they're online, and keep them up to date on the types of products that are available if they're keeping their car longer."
3. Stick to what you know best. Some of today's most successful companies–think Apple and In-N-Out Burger–are those that master what they do, but also keep it focused, Garroni said. He thinks there's a lesson for dealerships in that. "While the economy has been good and credit cheap, dealers found they could be incredibly successful almost in spite of themselves. But over the next three to five years–or however long the trough lasts–the successful dealers will be those who have tightened their operations, are students of their craft, and have their people, processes and procedures right," he said.
Much has been written about millennials and driving, including that they delay getting driver's licenses and are less interested in owning and taking care of a car. But more than half of millennials are currently saving for their next vehicle purchase, and 24% have a specific vehicle savings account, according to exclusive research conducted for Ally by Jason Dorsey of The Center for Generational Kinetics. When it comes to F&I, 33% of millennials have had a family member cosign on a car loan–significantly higher than other generations, Dorsey said. Dorsey offered two tips for dealing with millennial customers in the F&I office:
Millennials are now the largest generation among consumers and workers. In 2016, millennials overtook baby boomers as the largest generation in the U.S., at 75.4 million people, Pew Research Center reports. According to the 2016 NADA Dealership Workforce Study:
This month, Automotive News and Ally will announce the newest group of 40 Under 40 honorees—bright, young stars working at dealerships around the country. We asked three former 40 Under 40 honorees who have gone on to further success in the auto industry what dealerships can do to help younger employees thrive.
Current Position: Director of Marketing, Sheehy Auto Stores
Her recommendation: "It's something we see younger employees want, to support work/life balance. That's one of the biggest challenges dealerships have, balancing the desire to give employees flexibility with the productivity of the dealership. But I believe if you give flexibility to people who have a strong work ethic, it will work out for everybody."
Current Position: Co-founder, automotive technology company Singlethread
His recommendation: "The old school idea–coming in at 8:30 in the morning and working until 9 p.m.–is based on the old retail idea of being available if someone comes in the door. But today, most people will email, call or text to set an appointment. Why not adjust your sales staff to be there at peak times? Twenty years ago, for dealership employees it was all about the money; today, it's all about work life balance."
Current Position: Managing Director, automotive consultancy Maryann Keller & Associates
His recommendation: Invest in technology
"Many dealers have installed technology that allows salespeople to work and perform many functions remotely. This includes checking inventory, delivery status or even credit. With the advent of digital retailing, more of the customer's transaction can be completed online, thus also saving the salesperson time."
Millennial expert Jason Dorsey of The Center for Generational Kinetics conducted exclusive research in conjunction with Ally. His findings may improve your interaction with this generation of customers.
As the National Association of Minority Automobile Dealers prepares for its annual conference starting July 11, we asked Damon Lester, NAMAD president, about the outlook for African-American-owned dealerships, and why the next generation is so important.
"The count is challenged; there are only 263 African-American-owned dealerships out of the country's total 18,000. We lost 40% of our dealer body as a result of the recession. Today the average African-American dealer is over 60 years old, making important family and business decisions, and some are selling their dealerships. We are trying to put a lot of energy and focus on convincing the sons and daughters of those dealers to stay in the business," Lester said. "Our NAMAD NextGen brings these young people together to talk about their future in the industry. In addition, we as an industry need to do a better job of going out to communities and schools where minorities are, to expose folks to this industry's career opportunities."
People shopping for cars are doing more of their research online-and social media platforms have become a regular part of the process.
Five experts offer suggestions about what dealers can do to get the most out of social media.
Build your reputation.
Advice from: Allison Musante, general manager
Kuhn Honda, Tampa, Fla.
"Social media has become more and more relevant, even if just for referrals. Consumers go to social media to see not just what should I buy, but who I should buy from. You need to have a good reputation online. The buzzword this year is trust: We all sell the same car for mostly the same price–how do you win the consumer's trust? Family and friend referrals and consumer reviews matter. Facebook now has a recommendation feature, where people can ask for dealership names. And in terms of marketing campaigns, social media is targeted and the cost per dollar is a lot lower. You need to be there. It's an efficient spend."
Get expert help.
Advice from: Trace Przybylowicz, autos lead
"Leverage a third party's expertise. It's become too big a job to imagine that you can take care of it on your own. But the common pushback I hear from dealers, internet managers or media managers is, 'Hey, if we hire someone it will put me out of a job.' But if you hire a third party to do all the heavy lifting, then in turn it's your team's job to manage the vendors and agencies. The juice is worth the squeeze; the third party can provide tools, optimization, teams, measurement, the ability to test ads in a 24-hour environment. They can help you understand a platform that's incredibly powerful."
Advice from: Emal Noor, general sales manager
Biggers Mitsubishi, Elgin, Ill.
"Social media is one of the most difficult things for car dealers and even manufacturers to wrap their heads around. Remember that it's something a lot of people hold near and dear–you have to respect the news feed. You don't want to be intrusive. Some dealers will be pretty aggressive with content. You don't want to be constantly peppering people with your inventory or coupons. Sometimes it's better if you don't talk about cars at all–just be conversational."
Advice from: Elizabeth Primm, director of automotive
"Auto shoppers tell us they want more video content about the features of a car. Dealers should be thinking about making their messaging more visual and specifically video-centric. They should think about all the visual assets they have. That might be walkaround videos, interior tours or assets coming from their OEM's content delivery system. There also are always a slew of photo assets of inventory. Dealers should think about how they can bring those visuals to complement their messaging."
Measure—and measure the right things.
Advice from: Beena Kalaiya, VP/ director of social media, Mediavest | Spark Performics
"For a lot of dealerships, the first thing they do is run a generic photo or video ad on Facebook, and measure their success based on engagement. Many don't think about doing lead-generation ads or geo-targeted ads, and measuring the effectiveness. You shouldn't be satisfied with an engagement rate. You should be asking your partners and agencies or whomever is running social media, 'OK, I spent $5,000 on social media ads, how many people did that bring into the dealership? How many cars did it sell?' Social media can do that; it is more than a post that gets 100 likes. But that's still sometimes how it gets sold, unfortunately."
For more insights about social media and dealerships, look for Ally's special digital, online, social marketing Supplement in the June 19 issue of Automotive News and online at AutoNews.com/bestpractices .
These leading dealers have become believers in the value of extended training for themselves and their employees.
"Professional training is an investment in your business and your people that can help equip your team with the practical knowledge and tools they need to succeed in today's dynamic business environment," said Jim Whiteford, executive director of learning and development at Ally. "Ally Academy's comprehensive dealer training programs have reached more than 32,000 dealership employees, driving education and engagement at all levels of the dealership."
Name: Richard Herod III, general manager
Dealership: White Bear Mitsubishi, White Bear Lake, Minn.
His training investment: Two years ago, Herod participated in an intense, five-day off-site workshop that allowed attendees to simulate managing five months of a dealership's retail operations. He then committed to sending the rest of his management team to the workshop, and five have attended so far.
The payoff: "It was an eye-opening event for me. Each day we were given a month's worth of data and it really demonstrated how every part of the dealership works together. Now when I see one of my management team taking a moment to step away from themselves and consider how a decision- like ordering too many parts or stocking too many used cars- might impact the rest of our business, I see a real-time impact from this training investment." Why training matters to his business: "The fifth tenet of our company is a commitment to ongoing improvement. We believe that's the real measurement of a dealership's success. These days, if a dealership isn't getting better, its position is getting worse."
Name: Markus Kamm, director of sales
Dealership: Tynan's Nissan & Volkswagen, Aurora, Colo.
His training investment: Kamm attended a lunch-and-learn session on legal awareness and compliance for dealership managers, then two months later decided to bring the lessons in-house, providing legal awareness training to all customer-facing staff at his dealership.
The payoff: "What a lot of people don't think about is that legal awareness isn't just about what happens in F&I or in negotiations, but it starts out on the lot, with the conversations you might have with a customer. We've already created a rate markup cap that our owner signed and is put into every deal. In today's climate, you want to make sure every employee is aware that we are committed to doing the right things for the right reasons." Why training matters to his business: "It's great to relay information to our team, but it's invaluable to have a third party come in and conduct awareness training for us."
Name: Billy Mullinax, general manager
Dealership: Rockie Williams' Premier Dodge Chrysler Jeep Ram, Mount Juliet, Tenn.
His training investment: This year Rockie Williams moved into a new facility more than four times as large as its previous footprint, and the sales staff nearly doubled in size, including several employees new to the car business. Mullinax brought in an outside trainer for a class on innovative selling for the entire team.
The payoff: "Part of the class was about how to communicate with customers on the phone and in person–and how sometimes it's not so much what you say but what you don't say. I've seen an improvement in them being able to keep control of the sale, how they use the qualification process to figure out what's important to the customer, and how they really use the walk-around to emphasize what's important to that customer." Why training matters to his business: "Unless you have a dedicated person for training in your dealership, typically training can be a haphazard thing. If you are going to have professional, successful people, my advice is to bring in an outside source to do this type of training."
Training often sets top-performing dealerships apart from their peers. According to McKinsey & Co. research, of the top-performing dealerships, 57% provided formal training, including talent management, formal recruitment processes and training for employees.
The Ally Automotive Leadership Academy offers dealers a chance to experience a variety of Ally's leadership, F&I management, compliance and retail operations training classes in one four-day educational event.
Pete Shaver sent his son, a fifth-generation member of the family dealership business, to the inaugural AALA conference two years ago. He came back so enthusiastic that Shaver himself decided to attend the second AALA meeting last December. "Exposure to what's going on in different states, with different manufacturers, and with professional trainers, is great for our business," says Shaver, owner of Huntington Beach Chrysler Dodge Jeep Ram.
He brought back a personality assessment tool from AALA that he now uses with all his employees to improve leadership and management at his California dealership. He says he also implemented a recommended idea to sell post-warranty service contracts on the service line. “It is a simple thing, but it's been well received, a profit center for us and also a customer satisfaction tool,” he says.
Shaver, whose dealership also participates in NADA 20 Group programs to "keep a finger on the pulse of market conditions," says industry training and leadership experiences are important. "One of our eight core values is being innovative and being proactive towards all 8 Values that require constant adaptability. We think keeping people fresh can offer a sense of self-esteem and can convert trends into improved employee and customer experiences," he says.
Designed to help dealers optimize business performance, AALA features training classes, elective modules, guest speakers and networking opportunities.
The fourth AALA conference is planned for early fall. For more information, contact your Ally account executive or visit ally.com/leadership.
Individuals need both knowledge and budgeting skills to make good financial decisions. The Financial Industry Regulation Authority (FINRA) reports these findings:
The various financing options can overwhelm customers. Exclusive research from the Center for Generational Kinetics shows that 28% of consumers overall and 35% of millennials don't know the interest rate on their current auto loan. Many don't understand the merits of leasing versus buying. But dealers can help car shoppers become financially literate:
You can play an active role in Financial Literacy Month by reading "Planet Zeee and the Money Tree" to grade-school students. This book, published by Ally, uses a fun storyline to teach kids about money.
The idea for the book came from the Ken Garff Automotive Group, a Utah-based dealership group. "At Ken Garff, our business is about more than just selling cars. It's about helping consumers make a big purchase decision that can impact their lives," said Rick Folkerson with the Ken Garff Automotive Group. "That's why financial education is so important–it empowers customers to make better choices, which strengthens families, communities and certainly the business from my perspective. We hope 'Planet Zeee and the Money Tree' will help spread financial education and awareness for kids and families."
To help Ally achieve the goal of reading the book to 10,000 kids in April, contact your local Ally AE, who can help you find or set up a local reading event for first- through third-grade schoolchildren. Ally will provide copies of "Planet Zeee" for children at each event, and also make a $250 donation on behalf of the participating dealership to Junior Achievement.
For a sneak peek at "Planet Zeee and the Money Tree," visit AllyWalletWise.com, where you can download a digital copy.
Giving your salespeople the right technology can make all the difference to your bottom line. Today's car shopper often arrives at a dealership looking at one or two specific cars, and with more information in hand than the salesperson–especially if it's a used car that is not one of the dealership's core brands.
Providing your sales team with platforms that instantly display details on any car on the lot–including options, trim level and comparative pricing–can help turn a salesperson into an instant expert on any car.
"It levels the playing field with that internet customer; you're not at a disadvantage because the customer knows more than you do," says Patrick McMullen, senior VP of MaxDigital, whose Digital Showroom is one platform that instantly displays details on any car on the lot, delivered to a tablet or mobile phone. This helps salespeople hold the price and gross profit t by giving customers details on why a car is priced a certain way.
At the 2017 Automotive News Retail Forum, Automotive Compliance Consultant President Terry Dortch headlined a panel discussion about the evolving regulatory environment. One key message: Though changes may becoming, dealers need to stay on their toes.
Here's what Dortch suggests to keep your dealership ready for whatever changes may come:
To hear more for Dortch, listen here:
First, compliance improves customer perception of your business – Automotive News found that 73% of customers are more comfortable with a dealership that has a certificate on display indicating it has completed some type of compliance training.
Second, staying compliant can help you avoid costly fines and penalties (nearly $800,000 a year, on average). Ally Academy’s Legal Awareness training keeps you up to date on laws and regulations. It helps you easily understand how to stay on top of compliance in daily routines, and make it an advantage for your business.
Hiring and keeping the best team members is a priority for dealers around the country. Dealerships reported 67% turnover among car sales consultants in the 2016 NADA Workforce Study. "Keeping employees is unfortunately getting more challenging," said Adam Robinson, co-founder and CEO of Hireology, a Chicago-based consultancy. He shared ideas for hiring and keeping the best:
1. Have a pool of candidates large enough to allow you to find a good hire. "Don't hire out of desperation. It's just like the customer side of your business–if you're starting with better leads, you'll get better results," Robinson said. If you don't have good candidates to interview, go back and recruit more.
2. Establish a defined process to interview and hire new staff. "Don't just wing it; don't use random interview questions," he said. "Hiring people should be a structured process, just like any other part of the business." Start by generating a standard list of questions to use with every job applicant, and create a scorecard to record the hiring team's reaction to each candidate.
3. Double your three-year retention rate by making employees' first week on the job a positive experience. Focus on the experience each new employee has in his or her first week. "We've all seen it: A new employee shows up for the first day of work but no one is expecting him. His desk isn't ready; his business cards aren't printed," Robinson said. "But the single greatest factor in an employee's job success can be that first week on the job." Three-year retention rates for employees who experience a good first week are double those of employees who didn't have a good first week, he said.
4. Think of your online brand as a recruiting tool. Robinson recommended paying attention to your dealership's "employment brand," remembering that the person visiting your website or looking at your online ratings could be looking for a job, not just a car.
Listen below for another hiring tip from Robinson:
NADA reports 60% of new dealership hires are millennials. We asked millennial expert Jason Dorsey what managers need to know about working with those aged 21 to 38. He offered two pieces of advice:
1. Position employment as a career, and not just a job. When recruiting, play up the dealership's culture and local connections. Millennials tend to be visual learners and respond to graphics featuring people.
2. Provide frequent feedback. "Older generations were taught that if the boss is talking to you, something's wrong. Millennials don’t think that way," Dorsey said. "Take a minute to talk to them in the moment."
When Carl Swope accepted the 2017 TIME Dealer of the Year award earlier this year, he told the crowd, "None of us get up here by ourselves." He then asked 20 of his company's associates–"We call it the Swope family," he said—to stand up and be recognized with him.
Swope, President-CEO of Swope Toyota, Elizabethtown, Ky., was honored for excellence in managing his business as well as for his extensive community service. "What set Carl apart was the amount of impact and the real contribution he has been able to make across every facet of his community," said Jon Grice, one of the judging panel from the University of Michigan's Tauber Institute. "The words that came up in describing his community involvement were breadth, depth and longevity."
The other three Dealer of the Year regional finalists were Tyler Corder, Findlay Automotive Group, Henderson Nev.; Bryan Gault, Wind Gap Chevrolet Buick, Wind Gap, Pa.; and Keith Kocourek, Kocourek Chevrolet, Wausau, Wis.
Grice said the judges had a tough job selecting a winner from the 49 candidates. "The two pillars of our criteria are excellence at the dealership and involvement in the community," he said. "Almost more than any other year, we saw excellence in both of those pillars across the candidates as a whole…. It was awe-inspiring."
Listen to Swope’s acceptance speech below:
Do it right for your team by providing the tools to succeed. Ally Academy classes cover everything you need to know to run a successful dealership, from hiring and interviewing to effectively managing your team. Hiring a new employee costs an average of $16,000; Ally's Hiring Winners helps you find the right people the first time.