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1. 2010
AUGUST

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Susan Givens, Publisher Thomas Williams, VP & Creative Director Dave Davis, Editor & Creative Strategist Brian Ankney, Account Manager Susie Horne, Account Manager
John Warner, Sales-Improvement Strategist
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jwarner@autosuccessonline.com
feature solution
leadership solution
marketing solution
sales & training solution
DO SOMETHING DIFFERENT, THE SALES ARE OUT THERE
STEPS TO STRENGTHENING YOUR FINANCE DEPARTMENT
HOW TO RULE WITH STRATEGIC MARKET LEVERAGING
AUTO TRANSPORT BY RAIL SALES UP TO 30 PERCENT
THE DEATH OF THE TRADITIONAL DEALERSHIP PART 2
DARCARS Automotive
PERCENT OF ALL CONSUMER PURCHASES? WOMEN
Group Knows Owner
MANAGE YOUR ONLINE MERCHANDISING, PART 2
WHO IS THE ‘MINORITY’ WHO ACCOUNTS FOR 85
Retention...Do You?
WHAT IS (AND ISN’T) A ONE-SOLUTION SYSTEM
,
IDEAS, NOT GENDER, ARE KEY TO SUCCESS
CREDIT SCORE IMPROVEMENT PROGRAMS
LAUNCHING A POSITIVE REVIEW CAMPAIGN
Tammy Darvish, Vice President, speaks out on
THERE’S A GUY ON THE LOT...WHO’S UP?
THE VALUE OF A MANAGER’S MINUTE
A SMART, PRACTICAL, STEP-BY-STEP
OPTIMIZE YOUR MARKETING, PART 1
ACTIVITY BREEDS PRODUCTIVITY
FOR THE SERVICE DEPARTMENT
Learning the Art of the Old Give and Take
eLEAD and Automotive Marketing
INTEGRATION MYTH BUSTER
THE PATH TO PROFITABILITY:
An Interview with UPS’ Kristin DeBates
GUIDE TO CRM SUCCESS
LEGAL COMPLIANCE
A Call to Action for All Dealers
Who Taught You the Rules?
An Interview With TammyDarvish
NEGOTIATION 101:
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16
30
32
36
37
08
10
24
25
28
38
20
22
34
40
11
18
26
SteveBrazill
FranTaylor
JoeAbraham
JohnBrentlinger
HossDevine
JimRadogna
DalePollak
JodyDeVere
BillPhillips
TomHopkins
PeterBond
JeffGrandstaff
KirkManzo
JockSchowalter
RichardWinch
SeanStapleton
BryanAnderson
JoePollaro &
ShelleyMcBride
KristinDeBates
MarkTewart
pg 4
pg 7
pg 0
pg3
pg1
pg1
kristin debates dale pollak bryan anderson

8. DalePollak sales & training solution
THE PATH TO
PROFITABILITY:
A Call to Action for All Dealers
Recently, I received a note from a successful So who are the winners in these most highly poses challenges at multiple levels.
dealer stating in part that they’ve experienced efficient razor-thin margin markets? They
difficulty with appraisals of late. Part of it is are the companies that possess two essential First and foremost is the industry’s culture
that they are stretching so far to make new characteristics. The first characteristic is of pursuing fat margins in favor of moving
car deals, they’re often putting too much into the company’s ability to perceive the price directly to the equilibrium price. This cultural
a trade. His desk managers are really finding at which their products will sell at any resistance is presently allowing dealers to
a larger disconnect between auction values given moment and their willingness to offer significantly improve their market share.
and what other similar cars with respect to the products at that price point without Another significant challenge, however, is
miles and trim are selling for on the Internet. delay. The price at which the product will the restructuring of their businesses to create
transact at the given moment is called “the more efficient operations. Only some of
There is no question that the pain being equilibrium price.” this restructuring can be achieved through
experienced with respect to appraising conventional cost cutting and expense
vehicles for acquisition and the amount that’s The second essential characteristic of control. Fixed expenses such as land and
necessary to be paid at auction isn’t justified efficient-market winners is a highly cost- facility costs are prime examples of those
when you consider the retail market. I’ve efficient operation. Since the profit margin that can not be easily or quickly reduced.
been speaking incessantly over the past year at the equilibrium price is razor thin, less-
about the rapid increase in wholesale values efficient operations cannot survive for Because the greatest cost efficiencies, and
without a corresponding retail price increase. long at that pricing level. If, and when, too to be sure the hardest ones to achieve, lie in
The effect is a highly compressed margin many sellers meet the equilibrium price, the dealership’s organizational structure and
environment. There are identifiable reasons the equilibrium price will drop and thereby processes, it is now time to take inventory of
for this compression; however, that’s another systematically weed out those sellers with all the necessary tasks and to eliminate all non-
discussion, and it will not likely change in marginally less operational efficiency. essential ones. This effort requires hard choices
the future. In other words, this is the reality Under such circumstances, these sellers will to be made between the “nice-to-have” and the
of the current and future retail automotive exit the market in favor of more profitable “must-have.” Moreover, the remaining tasks
environment. opportunities, which could mean soy beans must be reengineered to achieve effectiveness
instead of corn, compacts rather than SUVs, with lower cost. This, too, will require tough
Although the industry is struggling to or storage facilities instead of dealerships. choices involving employees and relationships
accept this margin compression, it’s clear with outside entities.
that it is the reality of all efficient markets. The good news is that, as the less-
Specifically, this reality begins with the efficient operations exit in favor of better The present moment in the industry is
recognition that profit margins will be much opportunities, the equilibrium price will then one between from where we came and
smaller than they were in the previously begin to rise. The profits of the most highly where we are headed. Although there is
inefficient market. This new reality sets up efficient operations will soar as a result of a growing trend of dealers characterized
two important questions. First, will there be a their extraordinary efficiency. Once the by this movement who are learning and
race to the bottom, where no one makes any profits for the most efficient operations climb executing the principles, there are many
money? Second, if not, who are the winners to a high enough level, the other less-efficient others who have simply adopted the practice
and losers in such an environment? competitors will again return to this sector of equilibrium pricing. The consequence for
searching for a share of the profits. At this such dealers who are willing to price at or
With respect to the first question, the answer point, the cycle repeats itself over and over. near equilibrium without attaining greater
is no, there will not be a race to the bottom operational efficiency has not yet been
where no one makes any money; in fact, The bottom line is that the reality of the realized. Without question, over time this
some will make plenty. The support for this ever-more efficient retail automotive market group of dealers will experience results that
position can be found by examining some of is lower margins. There will, however, will cause them to retreat from the market
the most efficient markets in the world. Such certainly be winners and losers. The winners by either reverting to non-equilibrium
markets include mercantile and commodity will possess the two essential characteristics pricing or pursuing other more attractive
exchanges — markets where everyone has of being able to move immediately to the investment opportunities.
access to relevant information with lightening equilibrium price and hang in there until
Dale Pollak is the founder of vAuto
speed. In these markets, there are certainly the less efficient are flushed out by the and an author. He can be contacted at
winners and losers; but to be sure, the profit inefficiencies of their operations. This new 866.867.9620, or by e-mail at
margins are razor thin. paradigm for the retail automotive industry dpollak@autosuccessonline.com.
08 autosuccessonline.com

10. JodyDeVere sales & training solution
WHO IS THE ‘MINORITY’ WHO
ACCOUNTS FOR 85 PERCENT OF ALL
CONSUMER PURCHASES? WOMEN
Women buy 60 percent of all new cars and 53 percent of used cars, and spend $300 billion annually The advent of the Internet has enabled women
keeping their cars repaired; and yet, a recent study of 200 Chicago car dealerships by economists to find the resources and information they
Ian Ayres and Peter Siegelman shows that women usually get higher price quotes than men. need to take charge of their own finances
and buying decisions, and give voice to their
Overall, most women liken buying a car to having a tooth pulled. It is not like most of her other retail needs and preferences.
shopping experiences at all, and many women do love to shop. With all that buying power, women
resent not being taken seriously at the dealership. One of the top complaints is that women hate high- In today’s competitive auto industry,
pressure sales tactics and the feeling that they are being manipulated or lied to by the salesperson. dealership owners and employees can no
longer afford to ignore the need to create a
safe comfortable experience for the female
car buyer. If anything, they should cater to
women and win their trust, or risk losing
market share to competitors who do recognize
the huge opportunity to grow their business
with these loyal customers.
Here are Some Facts on the
Purchasing Power of Women:
According to M2W.biz Fast Facts, women
account for 85 percent of all consumer
purchases, including everything from autos to
health care:
• 91 percent of new homes
• 66 percent of PCs
• 92 percent of vacations
• 80 percent of healthcare
• 65 percent of new cars
• 89 percent of bank accounts
• 93 percent of food
American women spend about $5 trillion
annually, which is more than half the U.S. GDP.
Reaching the Underserved
Female Majority
With the rising tide of the economic power
of women, car dealerships and automotive
retailers need to devote time, resources and
budget to gain a larger share of this huge
market.
If 60 percent of new car buyers are women
and 85 percent of new vehicle purchases are
influenced by women, what percent of your
marketing and advertising budget are you
willing to devote to attract, sell, retain and
increase loyalty with this majority of the
American auto buying market?
Properly armed with the right tools and
training dealerships can increase their share of
the largest and fastest growing demographic
of new vehicle buyers — women.
Jody DeVere is the CEO and president of
AskPatty.com. She can be contacted at
866.849.9973, or by e-mail at
jdevere@autosuccessonline.com.
10 autosuccessonline.com

11. SteveBrazill leadership solution
THE VALUE OF A
MANAGER’S MINUTE
Time waste differs from material waste in that from sales. If you expect to produce $10,000 equipment and people (including yourself).
there can be no salvage. The easiest of all in profit and your expenses are $90,000, you
wastes and the hardest to correct is the waste must generate $100,000 in gross profit. If you You might begin by estimating how much
of time, because wasted time does not litter work 12 hours per day and 25 days per month time you spend on the various activities that
the floor like wasted material. in the process of producing that $100,000 gross make up your day. Find areas in which you
– Henry Ford profit, you will have worked 18,000 minutes can reallocate time for greater effect. Here’s
(60 x 12 x 25=18,000). Dividing the $100,000 a thought starter: If 20 percent of your people
If you are a manager in a typical dealership, gross profit you are expected to produce in a are producing 80 percent of your results, are
you (and your family) know you spend most month by the 18,000 minutes you will spend you spending more of your time with them
of your waking life there. The value of that working on that task reveals that you must or with the 80 percent who produce only 20
time to you is determined by a variety of produce $5.56 per minute you spend at work. percent of your results?
personal choices that only you can assess, but
the value of that time to the dealership is easy Now, $5.56 per minute may not look like Everyone’s situation is unique, and you will
to calculate. a lot of money, but remember: It’s equal to have to discover the solutions that work
$100,000 per month and $1.2 million per year. for you today, then adjust them as you go
We’ll assume the dealership purchases your forward. The only universal thing is that time
time with the expectation that you will use it I’m not suggesting that you take this analysis is wasted one minute at a time and, once
to produce a profit in your department. And, literally. You should not spend four minutes, gone, it can never be reclaimed. Tick, tock.
because the standard accounting period in 18 seconds helping a customer resolve a
dealerships is one month, we’ll consider the problem, then walk away thinking, “Wow!
profit you produce and the minutes you work That guy just cost us $23.91.” You can, Steve Brazill is the chair of automotive
however, be constantly aware of the fact that marketing for Northwood University,
in a single month. Using round numbers, we Texas Campus. He can be contacted at
can build a simple example. your time is a finite resource that is not free.
866.861.1515, or by e-mail at
You can identify and change those things that sbrazill@autosuccessonline.com.
Departmental profit is what’s left over after repeatedly consume more time than necessary
you cover your expenses with gross profit — streamline or eliminate processes, cranky
the #1 sales-improvement magazine for the automotive professional 11

12. Today’s auto dealers have technical advantages that no other generation of vehicle sales professionals could have dreamed of. With
these new tools, though, there are challenges, one of the biggest being the decision on which tools will work best with for a dealership’s
unique situation. AutoSuccess Publisher Susan Givens recently sat down with Tammy Darvish, vice president of the high-volume
DARCARS Automotive Group in Maryland, to discuss the steps she’s taken to make sure her people have the right tools for the job.
AutoSuccess: Everyone wants to know goal was to vet and select just a few partners in many of our stores just to keep up with the
how your stores continue to improve, that could integrate with each other to provide appointments that are made by the call center.
Tammy. What are some key factors? the most return on our investment. Eliminating We are comfortable knowing that while our
Tammy Darvish: Well, for one thing, we many technology sources was a risk, but one CRM provider is doing what they do best, our
have not and will not operate under the belief that has paid off well, in our case. teams can focus on the better managing our
that we are executing as well as possible. We business. How many appointments we have
really believe that if we are not improving After several CRM changes, it has been very at each dealership every day is no longer a
and looking for ways to better serve our productive to find a long-term approach and mystery. eLEAD helps keep us focused on the
customers and our communities, then we’re partner that works for our entire group. We many other tasks in our showrooms that we
not going to grow or sustain. At the same time, have experienced that there is no magical can have direct control over, while remaining
we think that internal accountability at every software system that’s not going to have issues as productive as possible.
level is vital. We place a lot of emphasis on at times, but front-to-back we believe that
targeted strategies, not only on attracting more we have found the most complete option out AS: What types of targeted marketing
customers but, more importantly, retaining there. More importantly, eLEAD has resources strategies consistently work well for you?
them. By offering our customers the right available to move forward and keep up with TD: With a well-established customer base
incentives and providing them with the level the advancements of technology and our in each of our dealerships, we work with
of service that they expect and deserve, we’ve other partners. I think it’s a great advantage our CRM provider to coordinate all of our
been fortunate enough to see meaningful to partner with a company that is focused electronic efforts related to all sales and
increases in our sales and service retention on retail, owner retention and continual service campaigns. They often provide us with
percentages. While it’s tough to get out of the improvement. We have grown together in the credible recommendations based on our traffic
comfort zone of traditional advertising, we industry for the past few years. and timing. Whether its e-mail, telephone
have placed greater focus on our customers’ calls, recalls or direct mail, we believe in
digital experience. AS: Do you employ an internal professional communication with a clear call
BDC or call center? to action for all of our customers to maximize
AS: What’s the biggest technology TD: A lot of my peers are customers of every sales and service opportunity. Using
point you rely on? eLEAD and successfully combine both, but external marketing to attract new customers
TD: One of the biggest operational decisions our stores do not staff BDCs. We do use their is not only much more expensive, but is often
we made a couple of years ago was to partner call center as a safety net to measure how more unreliable than marketing to our own
with eLEAD as our CRM tool and to create effectively our managers and sales consultants databases. Creating and maintaining long-term
a sense of credible accountability across the are following up. Our CRM makes sure our positive relationships with our customers has
board. Until we defined how our CRM was leads and unsold opportunities don’t slip always been our goal, and eLEAD is a tool that
going to measure accountability, we never through the cracks. It’s not realistic to expect certainly advances our efforts towards that goal
really utilized it fully. Although we don’t let our front-line players to complete all the calls, while providing real value for our customers.
CRM serve as an excuse or focus every day, all the time, as well as managing everything Vehicle sales and repair orders generated
eLEAD is one of the very few digital strategic else. We’re realistic about the number of calls from true prospecting calls are tracked with
partners that we have. Like many dealers, we that really get made out of a retail point each accountability, just like other key metrics.
felt technologically challenged and had to day versus the optimum number that should
learn that partners like this were about much be made. There is no way any store could AS: What types of marketing calls
more than technology; they were more about execute the number of calls and appointments do you find most effective?
delivering an experience to our customers. Our that the call center averages. It’s a challenge TD: We use eLEAD’s GoldDigger Agents

13. to strategically mine our databases on customers to come back to the showroom when AS: Many people wonder how you
schedule with professional sales and service they are ready to buy, but also to learn more manage it all? Any words of advice?
prospecting calls to point our managers in the about their experience in our showrooms on TD: Being a part of every “team” in our
right directions. Most of our sales campaigns their initial visits. We want to follow-up until dealerships is important so that, as decision
target customers who are in positive equity, the appointment is set or they have bought makers, we have first-hand experience and
warranty expiration or can lower their monthly elsewhere without aggravating or offending our knowledge of the challenges that are faced
payment. The service campaigns assist us customers. If nothing else, we want to create each day. Having thorough knowledge of
in securing the first service visit from our a friendship with every customer so that even all of the tools available to us through our
customers after the sale and help retain them if we missed an opportunity today, they would partnerships is key to the success of our
throughout their lifecycle. There are many consider us again in the future. Regardless of relationship with our partners. And personally,
tools and “menu” items that are offered by the type of prospect, we insist on CRM usage although its difficult at times, I’ve found that
eLEAD, all of which work in tandem with our to capture the customer’s information, track the more listening I do, the easier it is for me
other operational business partners. daily follow-up tasks and give our management to manage more effectively.
team quick access to missed appointments and
AS: What can you tell us about your uncompleted tasks. While the workday of a
follow-up process with prospects sales consultant is typically very unstructured,
who do not buy immediately? we now have professional daily work plans For more information about Tammy Darvish,
TD: We tend to believe there is really no such that provide them with a clear road map to or the DARCARS Automotive Group, visit
www.DARCARS.com.
thing as too much follow-up in the car business. managing all of their opportunities on a daily
The cost of generating new opportunities is basis. Most beneficial are the follow-up calls For more information about eLeadCRM,
high, and customers don’t have time to waste that eLEAD makes to our unsold customers contact the owner, Hugh Hathcock, at
at dealerships. It is important to have consistent that, more often than not, would have ended up 866.347.6160, or e-mail him at
follow up not only to try to encourage falling by the wayside. hhathcock@autosuccessonline.com.

14. MarkTewart leadership solution
THE DEATH OF THE
PART 2
TRADITIONAL DEALERSHIP
Do you feel like you are missing out on expectations, value perceptions and lessening relationship building strategies, and sales to
something? Are you confused as to what of brand loyalty are all things that have service continuity programs and retention.
the next step is in making your dealership changed dramatically. Dealers will learn that many advertising
successful? It’s a different ballgame than it agencies do not understand any of these things
was even just a few years ago. The traditional Every dealership needs to review their process and simply create lousy to mediocre production
dealership is dead and you must bury it to based upon TLC – Think Like a Customer. and buy the media. Without a well-thought
prosper in the future. What are you currently doing in your strategy, using intentional congruence with all
dealership process that lessens customer trust of the above-mentioned factors, you cannot be
For years, the car business could be a or ease of shopping/buying? Most dealerships successful in this and future marketplace.
forgiving business. There was room for a lot are living in the stone-age when it comes
of error in a dealership, and yet a dealership to something as simple as the meeting and In the last year, I have asked hundreds of
could still be profitable. Those days are gone. greeting of the customer. Nothing in your dealers the following questions:
Dealerships cannot be run in only a “seat of current process is sacred, and the mantra for • What are your overall sales to service
the pants,” entrepreneurial fashion anymore. many things should be “just let it go.” retention numbers and percentages beyond
To be successful, dealerships have to be a free first oil change?
measured intensely in four areas: people, Product • What are your number of inactive
process, product and positioning. The days of “Stack’em deep and sell them customers, and what percentage is that to
cheap” are over. Your new and used inventory your overall customer base?
People must be monitored daily using analytic • What is your planned and executed strategy
You must choose a path that works for your systems and technology that measures not for a continuity program to keep your
dealership philosophy. You must recruit only your inventory but others and market customers for sales and service?
people on a full-time basis based upon want, conditions. Many dealers have fought using
not need. The leadership of a dealership must any type of turn system, even though simple Here is the sad result: Out of hundreds of
have a written and executed game plan for mathematics proved you would be better dealers, only one knew the answer to these
recruiting that utilizes online services, job off doing so. Well, the tide has turned again. questions. I continually find that dealers and
fairs, colleges, tech schools, high schools, Web Turn systems themselves are now outdated managers do not really know what is going
sites, micro-sites, social media, newspaper, and can even lower your dealerships ROI on in their own dealerships and are not doing
mass media and more. without other factors involved. Each vehicle anything to educate themselves to change that.
is an investment — just like a stock or mutual
A dealership needs a detailed plan that includes fund — and must be analyzed, bought, priced, The reality is that the future belongs to dealers
interview questions, a number of interviews, marketed, sold and eliminated using several who educate themselves more, execute better
personnel trained to interview, testing methods conditions. Just saying that you have a 45-day and understand the value of speed in today’s
for potential job skills match, screening turn system is not good enough anymore. marketplace. The marketplace of today and the
methods, follow-up methods, and initial and future will continue to be very unforgiving,
ongoing training methods for new hires. Positioning with little room for margin of error, inattention
Gone are the days of running display or being slothful. The traditional dealership
Process newspaper ads and waiting for traffic to is dead, but the exciting news is your new
Each dealership should have a written arrive. Your dealership must have a dealership dealership is waiting to be born.
and executed process for every part of the strategy that combines market positioning.
dealership: sales process, Internet lead Selling vehicles based upon price only will not For a free special report titled “10 Things
process, marketing process, service process, create long-term success. Successful dealers You Must Do At Your Dealership To Be
parts process, manager process, used car will no longer be able to delegate all of their Successful” e-mail me at the address below
inventory process, etc. As an example, the marketing to an advertising strategy without with “10 Things” in the subject line.
selling process must be reviewed to make educating themselves on the marketing and
sure it is up to date and matches today’s positioning aspects of their dealership.
marketplace. Most sales processes being Mark Tewart is the president of Tewart
used today were created in the 1950s and 60s Dealers will have to massively educate Enterprises, and the author of the best
seller, How To Be A Sales Superstar. He can
and have changed only slightly. Meanwhile, themselves on things such as direct response be contacted at 866.429.6844, or by e-mail
for the customer, everything has changed. marketing methods, copyrighting, multi-step at mtewart@autosuccessonline.com.
Information gathering, overall knowledge, campaigns, integration of online and offline
shopping process, volume of choices, methods, social media, continual customer
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