Conference Goes into Overdrive

The Driving Sales Executive Summit presented with WardsAuto offered cutting-edge presentations in Las Vegas last month. Here are highlights.

For complete coverage, go to www.WardsDealer.com

Dealers Should Develop Social-Media Business Plan

Social media is a great way to drive sales at a dealership, if there is a clearly defined plan in place.

So says keynote speaker Jeremiah Owyang, partner of consulting-firm Altimeter Group.

“Focusing on tools and technologies is dangerous and unfruitful, especially since they change every few months,” he tells dealers. “Go back to your business goals and structure your social-media goals around them.”

When outlining social-media goals, it's important to stop and think about how deep a dealer wants to delve into the strategy. The more involved he is, the more time and effort it takes. The first step in building the best strategy is to determine who his customers are, where they are and what they care about, Owyang says.

Also key is understanding what vehicles customers have purchased in the past and why, and how they use social technology by following what Owyang calls an “engagement pyramid.”

The bottom tier is watching consumers online to see what content they are reading. “It may be reviews or ratings about your dealership,” he says. Next comes sharing, such as Twitter tweets, Facebook postings, emails or anything consumers use “to pass information on to each other on a trusted network.”

This is followed by monitoring comments, especially consumers who give feedback on particular experiences or opinions. The Baby Boomer generation is heavy into commenting, Owyang says. “They love to leave their opinion to show others.”

The next stop is monitoring consumers who blog, upload videos or create other original content on the Web. While smaller in number, this group is more influential than others.

The top tier is fan forums, dedicated to particular brands such as GM, Ford or Toyota. Although they represent only 1% of the online community, consumers who conduct forums are considered “super influencers,” Owyang says.

Monitoring the different tiers is tricky but can be done in a number of ways, including signing up for Google Alerts, a free service that identifies certain keywords and sends correlating content via email. Paid services provide more thorough details on consumer activity.

Once a strategy is developed, Owyang says dealers should engage consumers in dialogue. It's important to listen to what car buyers have to say and reply to them on a personal level.

Dealers' first instinct “is to use traditional marketing to spew out content on social channels,” Owyang says. “I'm here to warn you they'll tune you out if you only do that. You have to act like they do.”
— By Byron Pope

‘Dominate, Don't Compete,’ Hard-Charger Tells Dealers

Hard-charging Grant Cardone disputes the adage that competition is healthy for business.

“It's only healthy for the customer,” says the no-nonsense CEO of Cardone Enterprises Inc., a business-training firm.

“Dominate, don't compete,” he tells dealers here at the Driving Sales Executive Summit presented with WardsAuto. “Own the sector. Take from the weak.”

Cardone admits the latter bit of advice sounds bad, but he thinks it helps win marketplace greatness. If that has a survival-of-the-fittest ring to it, so does the title of his book, “Sell to Survive — Why Your Life Depends on Selling.”

“If you are not first, you are last,” Cardone says. “If something is worth doing, it is worth doing every day. Do you love your kids twice a week? Do you eat every day?”

His hang-tough approach extends to employee relations. “Push people,” he tells dealers. “You are in a position to do that like never before. There are millions of unemployed in the U.S. right now.”

Sales people with winning outlooks go far, Cardone says. He cites a LinkedIn survey in which 60% of dealership customers rank a salesperson's attitude as the No.1 reason they bought at a particular store.

Anyone looking to work for him can skip sending the standard resume. But a video might do wonders.

“I don't want to sort through 250 resumes,” Cardone says. “And I don't want to sit through interviews when I know after 30 seconds I'm not going to hire that person. I want a 60-second video on why you want to work here. It's a great way to use technology.”

A woman recently sent him a slick hire-me video, containing quick camera cuts and an appealing pitch. He got it on a Saturday, met and hired her on Sunday. To see video, got to http://wardsdealer.com/latest/expert_tells_dealers_101022.
— By Steve Finlay

Dealer's Modern Marketing Effort Pursues ‘Perfect Prospects’

Sean Wolfington's wife asked him a simple question: “Aren't all marketing messages integrated?”

His response: “You'd think so, but they're not.” At least they aren't always in the auto industry, where messages in a single campaign can be as mixed as nuts in a bowl at Christmas time.

Wolfington, head of the marketing-firm Wolfington Cos., says he helped Paragon Honda in Queens, NY, develop an ambitious 10-tier marketing campaign. He lays out his case-study presentation for dealers.

The Paragon Honda effort is strong on digital, but includes print advertising, direct mailing, point-of-purchase material and video messages. “They should all share the same message and imagery,” he says.

Among the pitches are customer lures such as employee pricing, teacher-appreciation specials, end-of-lease incentives and VIP treatment for repeat customers.

The campaign resulted in Paragon hitting record profits, despite the bad economy that particularly has affected the auto industry, dealer principal Brian Benstock says.

The dealership was “rolling along” until September 2008, when the nation's financial sector tumbled, he recalls. “I admit I was slow to react. I was holding out for November.”

False confidence also came from the thought that as a seller of a popular brand, “recessions don't hit Honda.”

Ultimately, Benstock had to make operational cuts. But he realized he couldn't cut to the bone nor “play defense forever.” So he hired Wolfington and went on the offensive. That included using computer technology to find, by zip code, “perfect prospects” sales-and-service customers who most likely would buy.

“We wanted to find more customers for less cost, drive them to the dealership website, get them to the store for a world-class customer experience and then retain them as customers,” Wolfington says.

He now subscribes to a service that monitors dealership phone conversations and sends customer-complaint alerts to his mobile cell so he can take appropriate action.

Paragon's goal no longer is to sell the more cars, per se. “It's to create the largest data base,” Benstock says. “We like gross profit, too. But gross is easily attained by having 10 customers wanting one car.”
— By Steve Finlay

Auto Makers Wrong to Ask Dealers to Build Fancy Stores

An impending “train wreck” seems possible as auto makers pressure their dealers to build costly facilities at a time when the financially stressed retailers can hardly afford to do so.

So says Dale Pollak, a high-profile figure in the dealership world, author of two books and considered by many as an industry thought leader.

“What is the logic of manufacturers asking dealers to build multi-million-dollar facilities when dealer margins are being squeezed as much as they are?”

Because of their compressed profit margins of late, dealers need to look for ways to reduce structural costs, not increase them by building elaborate and expensive facilities at the behest of the auto makers.

Pollak is a former dealer and founder of vAuto. Its inventory-management software, crunching real-time supply-and-demand data for specific markets, has revolutionized the way dealers stock, price and sell cars, particularly used vehicles.

Not only is it unfair to ask cash-strapped dealers to invest in Taj Mahal-like facilities, buying trends indicate consumers prefer to do most of their car-shopping online, rather than at the dealerships themselves, Pollak says.

More and more consumers go to the dealership only to finalize the deal and take delivery of the purchased vehicle.

“Why are we pushing dealers to build bigger and better ‘experiences’ when technology is making it more efficient to buy a vehicle without going to the dealership?” he says. “The market is not now supporting the selling of cars in these behemoth dealerships, today and the market won't support it in the future.”

After eliminating thousands of dealerships as part of their post-bankruptcy reorganization plan, General Motors Co. and Chrysler Group LLC are pressuring surviving dealers to upgrade facilities in return for not getting axed.

And, with the impending demise of the Mercury brand, Ford Motor Co. this month told its Lincoln-Mercury dealers they can either close or invest in their stores to create a true “luxury experience” for the Lincoln brand.

The reduced profit margins and additional structural costs threaten to put a lot of dealers out of business, especially family-owned operations that are cash-short, Pollak says. “It's like the family farm.”

Much was made last year of the number of dealerships forced to close. “That won't be the real story, he says. “Long term, I see a major consolidation of the ownership base.”

This includes big dealership groups scooping up family-run stores. “I don't think it will be tough for a consolidator to walk in with a pile of money” he says.

It may not be as much as it would have been before the recession, when car sales were rolling along at 16 million-17 million units a year. But “it won't take a lot” for some dealers to sell their stores, Pollak says.
— By Steve Finlay

Texas Dealership Wins Innovation Award for Mobile App

A top prize for dealer innovation goes to a Texas dealership for developing mobile technology that highlights vehicle inventory for after-hours lot browsers.

Marc McGurren, general manager of Durant Toyota in Weatherford, collects the $3,000 prize for the first-annual Dealer/Vendor Innovation Cup.

In separate contests, five dealership and six vendor representatives presented their innovations to a panel of judges.

McGurren developed jerrysdirect.net with his store's website provider. The system allows consumers to use their mobile devices to shop for specific cars they see on the dealership's lot.

Affixed to vehicles is a sign saying, “Find out more about this car at jerrysdirect.net,” followed by an individual code number. Mobile users can punch in the code and get specific information about vehicles of interest.

“What we have always known is that once the lights to our dealership are turned off and the doors locked, customers come out of the woodwork to shop for a vehicle without being hassled by sales people,” McGurren says.

He sought a way to engage them on the spot. “I wanted the customer to get where they wanted with one click. No searching, no hunting. Just immediate results.”

The Cobalt Group put up the contest prize money. The four runners-up in the Dealer Innovation category each won $1,000. They are:

Marlboro Nissan, Marlboro, MA, for incorporating a marketing strategy using Facebook. The site is now one of the most visited for dealerships.

Gary Crossley Ford, Kansas City, MO, for developing a mobile-compatible customer-relationship management system, featuring targeted emails to sales and service customers.

Suburban Auto Collection, Troy, MI, for enhancing its search-results rankings by posting press releases for individual cars. “We asked, ‘Is there a better way to get on Google's page one?’” says Internet Director Dan Boismier.

Rairdon Auto Group, Kirkland, WA, for landing a Fiat franchise from Chrysler Group LLC by creating a website touting the U.S.-bound Italian brand. “We wanted to make it very hard for them not to give us a franchise,” says Jon Sherrell, Rairdon's e-commerce director.

Winner of the Innovation Cup in the vendor category is eCarList for its mobile-based True Inventory Management system.

Runners-up are Goso for a “dashboard” gauging a dealership's social-media efforts; VinSolutions for both its VinLens customer-tracking system and website performance dashboard; Cobalt Group for a digital-advertising package; and ResponseLogix for developing content-rich email replies to car-shoppers' inquiries.
— By Steve Finlay