Is 2 Percent Good Enough for You?

Every dealer wants a nice healthy portion of their market share. But what if it was only 2 percent? Would that be good enough? Probably not.

Well, according to a recent interview in Automotive News, North American chief for Mazda, Masahiro Moro, thinks it is… However, in the article he states that there’s a difference between 2 percent and a “good” 2 percent, which mainly ties back into higher transaction prices and lower incentives. With a better customer experience, Moro feels Mazda can lower vehicle inventories and increase dealership profitability.

Of course, that’s not his ultimate goal. Mazda has seen brand loyalty grow from 30 percent in 2011, to 39 percent in 2016 – and that’s just the beginning. Moro would ultimately like to see it surpass 50 percent, but his current focus is on small milestones along the way, his ultimate goal being Mazda having the highest brand loyalty in the industry.

While certainly an admirable goal, it’s a steep hill to climb given Mazda’s limited models. That being said, he has the right idea… one which applies to any business seeking to increase customer loyalty, revenue or retention — and that is small steps. Setting any goal too high without a plan to accomplish it can overwhelm employees and will more than likely fail.

However, don’t misunderstand me, knowing the destination is important. But, if you don’t know how you’re going to get there, and lack plans for each stage, it will be hard to accomplish. Society is constantly changing, as are your customers. What may work to improve customer loyalty and retention today, may look different five years from now.

It would be great if we could all simply make a business plan that played itself out to completion — but life intervenes. So keep your mind open, your ears to the wall and eyes on the prize and be willing to change and adapt when and if it’s necessary. You’ll find that perhaps that 2 percent IS really enough… for the moment.

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Ad Blockers: If You Can’t Beat Them, Join Them

In the great wide world of online, display ads are everywhere. Top of the page, right, left, bottom – and, sometimes even popping up and floating in your face. Many consumers find these ads intrusive, especially when they are irrelevant. So, they simply ignore them – or, stop visiting the sites on which they appear

In fact, consumers have become so annoyed with these ads that some entrepreneurs created a whole industry around getting rid of them – ad blockers. And these software companies have caught on fire — as of the end of 2016 there were an estimated 615 million devices using ad blocking software to help consumers avoid seeing ads, according to an article in Business Insider.

While this is all well and good, it presents a huge problem for display advertisers. How do you know when your ad is being displayed or blocked? Well, Google, the world’s biggest web advertising company, has the answer. The company just announced plans to integrate a native ad blocker into its Chrome browser.

Wait! What?

Why would Google do that? Wouldn’t that hurt their advertising revenue? Actually… probably not.

Ad blocker software companies earn money in just a couple of ways. Most are free for consumers to download and install onto their browser of choice. Some also have a premium version that allows for increased functionality. However, most revenue comes via “extorting” or charging companies fees in exchange for white-listing their ads, which then allows them to be shown to users of their ad blocking software. Large companies, including the likes of Google, Microsoft and others, have paid money to ad blocking companies to do just that.

With their own internal set of ad standards, Google, on the other hand already controls which ads Chrome users see through their networks. By creating their own native ad blocker, not only do they eliminate the need to pay these ad blocker software companies to show these ads, but they also gain even more control of which ads are seen. It’s even possible (although not without a lot of legal battles) that Google could block all ads which don’t come from its display network — essentially forcing other companies to pay them in an epic 360 transfer of revenue and power over which advertisers and ads can be displayed to users.

What does this mean for display advertisers?

It means they’re in an epic battle — caught between websites hungry for revenue and the agencies that sell advertising. Metrics get skewed when the agencies SAY the ads are being served but in fact consumers don’t see them due to ad blocking software. Websites are fighting back by refusing to allow users to see their website AT ALL unless they disable ad blocking software. But, in many cases, consumers simply bounce from that website and head to another for the information they seek.
The battle continues between which display ads are, and are not seen, along with who is in control. This is something advertisers should pay close attention to. Depending on how the ad is being requested, and the method the particular ad blocking software is using, impressions can be recorded which were never seen by the consumer.

Only time will tell how this all plays out. With valuable real estate up for grabs, this type of trend typically yields higher prices and more competition for eyeballs. Buyer beware.

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Negative Reviews: How to Prevent, Improve, Resolve or Remove

Negative Reviews: How to Prevent, Improve, Resolve or Remove

Date/Time: June 8, 2017 at 2:30 PM ET

// Webinar summary

Getting more positive reviews is great; but would you rather have one more positive review, or one fewer negative review? Smart dealerships spend a lot of effort getting more positive reviews; smarter dealerships spend just as much or more effort dealing with their negative reviews. Come learn the best strategies to manage your negative reviews.

// Key takeaways

• How can I prevent getting negative reviews in the first place?
• What are best practices for replying to negative reviews? How can that help improve my scores?
• What can I do to resolve negative reviews and minimize their impact?
• When can I get negative reviews deleted?

Steve Pearson
Steve Pearson
CEO, Friendemic

Steve Pearson is the CEO of Friendemic, and he loves helping automotive dealerships connect with past and future customers through social media. Prior to joining the Friendemic team, he worked at McKinsey & Company, Vector Capital, and Google. His professional passion is using technology to improve customer experience. His other passion is mountain climbing; ask him about climbing Mt. Everest. Steve holds an M.B.A. from Harvard Business School.

// Webinar registration

Sponsored by:
Even if you can’t make it, sign up anyway!
We’ll send you the link to the recording.

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Hard Facts: Setting up a Facebook Event [VIDEO]

Planning an event soon? If so, creating a Facebook event can help you get the awareness and RSVP’s you’re looking for. Whether your event is for work or play, Facebook will be a key factor to make sure your guests show up.

There are a few different ways to leverage Facebook for your upcoming event. Find out how by watching this week’s Hard Facts!

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LotParty Quick-Tip 26 : Don’t Change A Price Just to Change A Price [VIDEO]

Jasen Rice explains why dealers should use flat pricing on their inventory to maximize exposure in searches on third-party listing sites.

Lotpop will provide the people and processes for automotive dealerships to be more successful in todays market. There are 100 times more customers searching online for their next used car, but most managers are so busy with their physical lot that whats going on online with their vehicles gets over looked. Lotpop will help consult you with your used car operation and manage/monitor all the right processes that it takes to be a successful used car dealership.

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OEMs: Give Dealers More Autonomy!

While the automotive industry has seen massive technology changes in the last 5 years, there is a continuing trend where some OEMs partner with specific vendors and then take away the freedom of choice for forward-thinking dealers. Mandates are enforced where franchised dealers must choose between 2-3 vendors for a particular solution.

This practice can be very frustrating for dealers – especially any that specifically wish to think outside-the-box, be innovative and try new things. I have heard of some dealers that have vendors they are forced to use as a packaged deal with multiple solutions, some of which they don’t wish to use. There are even dealers that pay twice. Once for the vendor solution they are forced to use, and once for another solution which they prefer for their individual dealership. This ties up their budgets and effectively handcuffs dealers to vendors, preventing them from trying new solutions.

In my opinion, things would work better if manufacturers would allow dealers to choose which solutions are the best fit within their marketplace and audience. I would rather OEMs set up benchmarks that need to be achieved with very simple measures, but with high standards.

Here’s a simple yet radical thought – get rid of the 15 questions you ask every customer in your surveys. How about just focusing on the Net Promoter Score (NPS) for the dealership? Set the bar high and ask one question, “Would you recommend the dealership to your friend or colleague based on your service experience?” I guarantee this would work better than the current situation where OEMs choose solutions which target different actions such as web-based appointments. Instead the focus should be on the NPS score.

This would avoid the “one solution fits all” model for dealers, and would allow forward-thinking dealers to customize their approaches. A case in point, every manufacturer is going after tablets in the lane. Well, I know of a franchise in Santa Monica where on Fridays a car rolls in every 2-3 minutes and they only have space for 6 cars in 2 lanes. They simply cannot check people in using a tablet and allow the customer stay in the car while that is happening. Instead, they have to use porters to whisk the car away and then walk the customer over to their office to check them in. If you jam this dealer with a tablet, and if it does not keep the cadence of a 1-2 minute check-in per car, you are going to create a backup on the already jammed streets of Santa Monica.

Technology changes so quickly that an impenetrable partnership which forces dealers to use one vendor over another can restrict progress, growth and sales. Freedom of choice and outside-the-box thinking is what fosters innovation and then true game-changing can begin.

What do you think, should dealers be given more autonomy to choose their own vendors?

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How to Avoid Sales End-of-the-Month Catch Up

If you’re in dealership management you’re probably familiar with the routine. No matter how great your intentions are to keep a steady sales pace all month, it’s month-end and you’re playing catch up. Even worse, sometimes you believe it’s going to be a great month until a nasty number shows up on your balance sheet during the last week.

Ultimately it’s the General Sales Manager who is responsible for making sure there are no nasty end-of-the-month surprises. Fortunately, these days it’s pretty easy to track Key Performance Indicators (KPIs) to avoid last minute scrambles.

I suggest you review the following KPIs on a daily basis, not just to see where you are, but to find out ‘why’ you’re there. Knowing the ‘why’ behind the where allows the GSM to take immediate action, bringing greater consistency into the sales process and departmental success.

  1. Units Sold to Budget

    When you wake up in the morning, this is your basic scoreboard. Where are you pacing with both new and used? If you are behind more than your three-day, red alert. For example, if your goal is to sell 100 units per month, that means your average is 3.33 units per day. If at any given time you fall more than 10 units behind it’s going to be very difficult to catch up to goal.

    If this KPI signals a problem it’s time to light a fire under someone’s behind. To find out who’s behind, drill down to the following:

    • Salesperson activities. Is there a salesperson that hasn’t delivered a car in the last three days? If so, are they doing what they’re supposed to be doing? If not, they may need a friendly counseling session.
    • Total appointments. Is the store averaging two appointments per day, per salesperson? That’s a reasonable goal for any sales team.
    • Confirmed appointments. How many appointments were confirmed by a manager one day prior? This metric has been proven to increase shows and the goal should be at least 50 to 75 percent of appointments confirmed by managers.
    • 3-day ‘no sale.’ Which Salesperson has gone 3 working days without a delivery? Identify this individual and sit down for a one-on-one review of his/her CRM. The strongest move is to cull the CRM with the Salesperson and call active clients to get an appointment. Nothing is more motivating.
  2. Gross Profit

    Similar to units sold, this KPI should never fall behind your three-day average. So, if your monthly goal is $100K gross profit and you’re down over $10K at any given time, there’s an issue. To find out where the issue lies, drill down to the following:

    • Is the first pencil at maximum gross profit? Review your last 25 deals, see what the initial offers or counter-offers to your customers were. You may have a manager or salesperson who feels compelled to discount.
    • Is your trade appraisal process being followed? A lot of gross profit can be lost in trade appraisals, with missed opportunities in both under or over allowance. It’s very easy for salespeople to shortcut this process, especially if they are behind. Nine times out of ten if there’s a problem it’s only going to get worse. Dig in and watch an appraisal. Or, better yet, do an appraisal yourself.
    • At what point are managers getting involved in the deal? The earlier the introduction, the more likely the deal will close. Ideally the manager gets involved just prior to the demo/test drive, or just after. This should be recorded in the CRM, but if it’s not, it can be discovered by talking to the sales team, or by observation. Believe 80% of what you see, only 20% of what you hear.
  3. F&I Reconciliation

    If this KPI is greater than five percent less than your gross profit goal, someone is making some serious mistakes. For example, if you believe that you have $100K in gross profit but the F&I reconciliation comes in at $85K, that’s $15K in errors somewhere.

    To find out where these errors are occurring, take a closer look at what your finance managers, salespeople and accounts receivable/payables are doing:

    • Is the finance and sales manager including items such as shipping and other chargebacks? If these aren’t added right away it can lead to large discrepancies when they are finally reconciled.
    • Are your sales managers submitting capped deals with all ‘We Owe’ items accounted for? Make sure all the “We Owes” and reconditioning charges have been included in the paperwork.
    • Is your AR/AP person posting all expenses on a daily basis? Two or three days of delays can make a big difference to your current gross profit.

Keeping a close eye on these KPIs helps General Sales Managers take care of problems as they arise so they can avoid nasty end-of-the-month surprises. As a result, your sales team won’t have to frantically play catch up to meet goals.

Which sales KPIs do you review on a regular basis, and how do they help your team stay on target?

The post How to Avoid Sales End-of-the-Month Catch Up appeared first on Digital Dealer.

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5 PPC Trends for 2017

Pay per click or PPC advertising is a money generator, but how can we maximize the latest trends in this form of advertising? It’s not just Google out there anymore! Increasing competition from Bing and from social media PPC are pushing everyone to excel in their PPC offerings. If you wish to take advantage of these improvements, here are some trends you need to be following in PPC advertising.

  1. Personalized Targeting Will Continue to Grow
  2. Audience targeting will require just as much consideration as keyword targeting going into the future. An easy way to get started with this is through device segmentation. We have tablets, phones, laptops, desktops, and even phablets. Age plays a big part in who uses these types of devices. Of course, there are ways to personalize ads that go much deeper than one or two demographic markers. Start gathering that data!

  3. Expanded Text Ads
  4. Any change Google makes to their PPC ads creates waves. With Google, you now have twice the space to use in text advertisements. More space is great because it allows you to write more descriptive ad copy. Of course, this may cost more due to higher click-through rates and CPC values, but with more real estate on SERPs you’ll have a shot at a higher conversion rate as well. If you choose to leverage a new feature, keep an eye on ad spend.

  5. Long Live the King(s)
  6. While Bing has improved a bit over the years, there are clearly two kings. Facebook and Google continue to reign supreme when it comes to PPC advertising. That is not to say that you should ignore other options, but you should definitely take advantage of the behemoths that are Google and Facebook first. In fact, with Google Shopping ads, expect ads to be bigger, bolder, and have more real estate on SERPs in 2017. Facebook is expected to continue its reign over social PPC ads for the foreseeable future. Look out LinkedIn and Twitter.

  7. Lookalike Audiences
  8. If you want to get your business out there and bring in the customers, lookalike audiences are going to be key. In the simplest terms, a lookalike audience shares certain common interests with your core target audience. By advertising to both your core audience and a lookalike audience, you can generate more sales and more clicks. Facebook excels at finding lookalike audiences but Google is catching up fast. Expect to hear more about this over 2017.

  9. Go Mobile
  10. Mobile markets are more than just emerging. They are growing fast. Everyone is on the go and they want information when they want it without having to wait. While you may have some mobile PPC already, how are your voice search keywords? Siri and Amazon Alexa are growing markets where people voice search for the things they are interested in. Aligning your PPC strategy with voice searches is going to be a top concern in the PPC field during 2017.

    These aren’t the only trends that are worth following for PPC advertising. However, across the board, these were the ones that insiders in the industry were watching as the five for businesses to be focused on. Paying attention to the above trends will help you go the distance in getting your company and services visible online in 2017.

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What is Brand Loyalty, Really?

The automotive industry is extremely competitive – not just locally, but also at the manufacturer level. Manufacturers spend truckloads of money on conquest marketing and brand loyalty – which you would think should be great for dealers – and, to some degree, it is.

But think for a just a second here, does your OEM really care whether your customer stays loyal to your dealership? If you answered “No,” you are 100% correct. While manufacturers like dealers to treat their customers well, and build a loyal base, it really doesn’t matter to them whether your customers buy and service their vehicles with you, or any other franchise store, as long as that customer stays loyal to the brand.

That’s reality, folks. Those CSI surveys are only important to the manufacturer because they want to ensure customer stays loyal to THEIR brand, not yours. And there’s a critical difference between the two.

Think about all the initiatives manufacturers have implemented to make every dealership look and feel the same to every customer. Why would that be important to them? Imagine if every McDonalds restaurant looked different. You might not realize it was a McDonalds.

So, if every dealership is destined to look exactly alike, what will compel a customer to come to YOUR dealership over the one that looks exactly the same as yours just 5 miles away?

Step up efforts to differentiate your dealership from any competitors. The problem is that many attempts at unique value propositions are, sadly, exactly the same as the competition. So most dealerships end up not only looking the same, but also broadcast exactly the same messages. It’s time to stop marketing messages that state such things as, “family-owned, “low prices,” “large inventory” and “fast service.” These should no longer be part of your dealership’s marketing vocabulary! They are meaningless to a customer and, for that exact reason, don’t have any impact on achieving your marketing goal, which is to differentiate your dealership from its competition.

Take a minute to truly analyze your operations and pinpoint things your store is really good at. Then use those as your unique selling propositions. Maybe you have an efficient quick lube service set up and can get someone in and out in 30-minutes. That would be something a time-pressed consumer would care about. Perhaps you have loaner cars for service, or a pick-up and delivery service. Those are also very attractive to most customers. BUT, before you run out and start broadcasting your newly found selling propositions, there is one thing that MUST be present in order for your marketing messages to succeed:


Customer experience is all a matter of perception. For example, let’s say you advertise a 30-minute oil change. Customer ‘A’ comes in and it takes you 45 minutes to complete the work. Customer ‘A’ leaves disappointed as it took longer than you advertised and they expected a 30-minute turn around. However, what if your message advertised a 1-hour oil change. Customer ‘B’ comes in and you complete the work in 45 minutes. In this case the customer is very happy as their vehicle was serviced faster than they expected. The exact same work was done in the exact same amount of time. But, because the promise you made through marketing was different, one felt the experience was mediocre, and the other felt happy.

Consistency is king. If you are advertising something that differentiates your dealership, be sure you live up to your promise and frequently review processes to ensure that every customer finds that to be true every time they visit.

Differentiating your dealership should be a priority in your marketing. Without offering a unique experience, customers won’t care whether they visit your dealership, or the one 5 miles away.

If you don’t differentiate yourself, you could quickly find consumers deciding which dealership to go to in the same manner they decide which Wal-Mart to shop at that day… and that would not end well for your dealership.

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Network Problems? IT Assessments Offer Relief and Guidance

Are information technology (IT) problems slowing your business down? If your dealership experiences frequent network crashes, slow Internet or complaints from employees about technologies that don’t work properly, it’s time to do an assessment of your IT infrastructure.

The world of technology evolves at a rapid pace, so if your dealership hasn’t been keeping up it’s likely that your IT infrastructure isn’t adequate for current business operations. We recommend that IT assessments be performed on an annual basis, or any time you are considering purchasing a new technology or software for your dealership.

Annual IT assessments provide dealers with the following benefits:

  • Identify the cause of recurring problem(s) so they can be fixed once and for all
  • Provide forward guidance so you know exactly how much to budget for IT in the coming year
  • Reveal unnecessary fees and areas where you can take advantage of economies of scale, reducing recurring monthly charges
  • Ensure that your other technology investments, such as your DMS, CRM or shop tools, perform optimally so you can maximize your ROI
  • Keeps your business and customer data safe from both external intrusions and internal thieving

IT assessments can be conducted internally, or you can choose to hire an outside IT company to do them for you. If you choose to do it yourself, here is a laundry list of items that should be included in your annual review.

Carrier Bills
Carrier bills include your monthly bills from your phone carrier, Internet Service Provider (ISP) and network maintenance from your DMS provider. If you’re not paying attention to these bills, you may be paying hundreds more than you need to every month.

When was the last time you talked to your ISP to see if your dealership is getting the right amount of broadband for optimal productivity? Due to recent deregulation, a fiber optics solution is now an affordable option for many dealerships. Additionally, your dealership should have redundant Internet with two separate ISPs in the event of a network outage. Ask your ISP to test your broadband connection and make recommendations based on data usage and speed.

When was the last time you shopped around for a new phone carrier? Sticking with the ‘tried and true’ carriers like AT&T, Verizon or Centurylink isn’t always the cheapest strategy. Smaller, competitive providers can sometimes offer a better deal. Does your dealership have more than one location? If so, make sure you’re getting discounts for economies of scale. Additionally, review bills to make sure your carrier is not charging you for extra phone lines you don’t need and other errors.

If you’re paying your DMS provider for network maintenance, you’ll really want to scrutinize their bills for unnecessary charges. Do you know how many IP addresses your dealership has? Are you paying to maintain equipment you no longer own? Charges on these bills should be closely monitored and negotiated.

Are you 100% confident that your IT network is secure and all your data is safe? Not many business owners are. Conducting annual risk assessments for your network’s security is highly recommended.

Start by reviewing your existing security policies, guidelines and procedures. Are there any new threats or vulnerabilities that should be addressed in the coming year? Include any new government laws and regulations that pertain to security requirements.

Next, review the configuration and usage of your network architecture, remote access systems, servers, firewalls and external network connections. This should include a list of all your security systems in use such as antivirus, spam control and network monitoring. Ideally you will have a map or network diagram showing how all your security assets are configured and interconnected.

If you don’t have an employee who is knowledgeable about security protocols, you may want to hire a data security consultant to conduct a risk assessment for you. This is an area that’s too important to overlook.

Wireless Coverage
Does your dealership have adequate wireless coverage for all of your employee devices and technology tools? If you’re considering any new technology in your dealership, and particularly for your service department, be sure to understand the impact it will have on your wireless network.

More than likely you’ll have to add several new enterprise-grade routers. Many manufacturers are now requiring the installation of Cisco/Meraki routers in dealership service departments, which is helpful. Having adequate wireless coverage is critical for many systems to work correctly, as well as for employee buy-in and productivity.

Review the configurations of your server(s) on an annual basis. If your dealership doesn’t have any servers, you may want to consider transitioning to a centralized server setup.

When employees use standalone PCs with local administrative rights, you have no control of what your employees can install on those PCs. This poses a huge security risk. A centralized server is more efficient and allows one person to control admin rights for every employee.

If a PC is older than five years or is crashing repeatedly, it’s time to replace it. Keeping track of PC installation dates allows you to accurately forecast how many PCs will have to be replaced every year. A brand new PC costs less than $1,000 now, which is a minimal investment that quickly delivers ROI in the form of increased employee productivity.

If your dealership has more than four employees you should be using enterprise-grade, managed switches. Sometimes I see dealerships using consumer grade, unmanaged switches that a staff member purchased from a place like Best Buy. These are completely inadequate for the high levels of data usage in business.

An inadequate number of switches, or switches older than three years old, can significantly slow network speed. If your ISP is telling you that your Internet speed is good and your wireless coverage is adequate, but your employees are still complaining about slow Internet, it’s likely you need new switches. Also 100 Mbps switches are obsolete now; make sure all your switches are 1 Gigabit.

Conducting annual IT assessments provides a number of benefits to dealers that directly impact the bottom line. Instead of viewing your IT budget as a cost to be controlled, you’ll quickly realize it’s an investment that can deliver significant ROI.

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