PERQ announced Monday it launched Auto Website Conversion Course, a free series of online best practice tutorials designed to help dealers clean up their sites and create more potent conversion paths.
Decluttering dealership websites and directing attention to targeted messaging, along with personalized calls to action, can significantly increase click-through rates and lead data collection, according to the marketing technology provider.
“Most dealership websites are jammed with a cacophony of offers, messages and static lead forms that, more often than not, lack relevance to the visitor. It’s the equivalent of walking into a dealership and having multiple salespeople yelling offers and information at you all at once without bothering to ask what your name is, if you’re ready to buy or if you want a new or used vehicle,” Russ Chandler, PERQ product marketing manager, said in news release.
“It’s no wonder the average dealership website converts less than three percent of their traffic.”
PERQ’s analysis found that dealerships who declutter by offering a streamlined and interactive experience see a 42-percent increase in CTRs, a 15-percent profit lift and a five-fold increase of data collected on sales leads.
“These websites are not ‘bugging’ visitors with messages they have no interest in but, instead, target consumers based on their website behavior, dynamically adjusting what is pushed to them,” PERQ said.
Four declutter best practices PERQ advocates for dealer websites include the following:
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Entice visitors to seek more useful information. It creates an opportunity to gather data that will help provide a more informed and streamlined sales experience.
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Inventory CTAs and conversion tools to understand what works and what doesn't.
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Analyze how effectively a CTA is converting.
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Re-evaluate remaining CTAs and make informed decisions on which CTAs to display based on user behavior.
All data for PERQ’s analysis came from its FATWIN Web Engagement platform. It virtually trains dealership websites to have relevant, real-time conversations with visitors through dynamic interactions that change based on the consumer’s behavior.
Visit PERQ’s Auto Website Conversion course webpage for more information about its lesson plan.
Fortune magazine has released its 100 Best Companies to Work For list, and several companies familiar to the remarketing space made the cut.
CarMax, for one, was named to the list for the 13th consecutive year.
The used-car retailer ranks number 77 on this year’s list.
Currently, CarMax is looking to fill more than 2,000 positions — both full and part-time, and day and evening shifts — across the country.
“CarMax is unique and different because of our associates,” said Bill Nash, CarMax chief executive officer, in a news release. “Their dedication and drive to not only support the customer, but each other, is what makes CarMax a great place to work.”
ARI, others also on list
Global fleet services provider ARI was also named to Fortune’s list, for the fifth consecutive year.
Ranked at number 38, the company was recognized for its culture and family-like atmosphere, as well as its emphasis on wellness and work/life balance, and focus on employee development.
“Being named to Fortune’s 100 Best Companies to Work For list for a fifth consecutive year is an incredible honor,” Chris Conroy, president and CEO of Holman Business Services and president of ARI, said in a news release. “But make no mistake — the credit for this tremendous achievement belongs solely with our people.
“They are the ones who make ARI such an incredible place to work year after year,” he continued. “It is our people who devote themselves to ensuring our clients are not just happy customers, but rather become raving fans of our organization.”
Also on the list are Capital One (17), USAA (35), Credit Acceptance (43) and JM Family Enterprises (55).
The full list of companies can be found here.
Editor's Note: Updated to include JM Family Enterprises.
As president of Intellaegis, the software company that built masterQueue, and a founding partner in RepoRoute, I’d like to share some thoughts on the importance of field management software and where we see this new technology taking the industry.
We see this moment as one of the most critical times in the history of auto finance. Delinquency is spiking, repossession companies are breaking company volume records, and there are more dollars delinquent in auto loans over 30 and 90 days than there has ever been. According to the Federal Reserve Bank of New York, the industry just passed the previous high from the Great Recession of 2007-2008. Here’s what Bill Ploog, former head of collections in auto finance at Ally Financial sees as the entire industry is seeing a spike in delinquent dollars past due.
Before I talk more about the present, I’d like to take you a journey through the past, helping you understand why technology can make a huge difference for the repossession industry. Everyone is blogging and tweeting about FinTech, financial services technology. There’s a reason, and this article should shed some light on why that is in the auto finance industry.
My first job in auto finance was as a field rep for Chrysler Credit in Sacramento, Calif., in 1982. My main task was to collect delinquent customer payments in the field. If the customer couldn't pay, I repossessed their car. Pretty straight forward. No tow truck, just me, a Curtis Key Cutter, the factory key code from the invoice and the adrenaline of a 22-year-old. I worked almost exclusively in the field, and I built my own routes where I’d travel each day. It was a manual process, it took time and I made mistakes.
After five years, I left Chrysler, and my wife and I started a skip-tracing company in 1988. We did this because the auto finance industry was growing, and we saw an opportunity. Lenders were taking more chances on making loans, which meant more repossessions, and that meant more skip accounts. Kind of similar to how it is now.
Before we understand why “good” field management software is a must have component of any repossession agency, we should first understand the assignment, routing and field management process, and how it’s evolved through the years.
Deterioration of the repossession process
One of the main reasons we we’re successful in 1988 in building one of the first skip companies was we started to see the quality of the repo assignment decrease from where it was when I’d started just six years earlier. It wasn’t that there were that many more skips, but collectors were creating skips because they weren’t putting in the fundamental work to reach the customer at an earlier stage of their delinquency. Bottom line, they weren’t verifying the address prior to placing the account for repossession as I was trained to do at Chrysler. The captive lenders also eliminated field reps, and while “door knock” companies started to come into the market soon thereafter, it wasn’t quite the same as having your own employee in the field.
We also noticed collectors were wasting repossessors’ time running bad addresses, and the customers were digging deeper holes for themselves as they went from three to four payments past due, which was creating more “skips.” The customer knew by then their car was out for repo, so they tried to hide it, and many customers avoided all contact. In a sense, we turned them into a skip but not being more efficient in the collection process at an earlier stage.
Once public records data became more accessible for collectors and skip-tracers in the late 1990s, the skip problem magnified with more unverified, bad addresses assigned for repo, and repo success percentages continued to decrease significantly. Collectors and even skip-tracers got lazy; they just saw a new address and “shot-gunned” it to a repo company. There were little to no consequences they thought, as it was a contingent assignment, so it didn’t “cost” them anything to have the agent check the address.
The problem was simple, and it still is simple. No one was (or is) making calls and verifying addresses before placing an assignment for repo. The “collectors” and “skip-tracers” just look for an address and they place it for repo without making phone calls to verify the information. Problem with this is it is not “free,” not even close. As Bill Ploog says, “Collections is a race against time.”
If you use this mentality, once the account is placed for repossession, every day is critical. Assigning an account for repo to an unverified address wastes valuable time, and while the “price” of a contingent repo is zero, if the car doesn’t get recovered, the “cost” of an inefficient assignment can be significant, especially when the loan charges off as a total loss.
So, when more and more bad addresses started getting assigned to the field, it opened the door for not only a skip-tracing industry to eventually be formed, but nearly 30 years later, its opened the door for field management software to be developed to help repo agencies, and specifically to allow repossessors to work more efficiently in the field.
More ramifications
In recent years, we’ve seen the percentage of successful repossessions decrease significantly. Today, it’s at a point where repo agencies have hundreds or thousands of “open” addresses to run, addresses the client expects them to check routinely. These are addresses where statistically, the chances of the car showing is slim to none. This could have been determined if the people placing the assignment had done the leg work of making calls to verify the address prior to placing it for repo.
Sounds simple right, just make calls, verify addresses, and place for repo. If you’re not doing this, you can sign up for a demo at www.masterQueue.com and we can show you how it’s done, but that's a different topic, so let me continue.
In 1990, we created Crown Auto Recovery, and we quickly became one of the larger repo agencies in Los Angeles. We did this not because we were having trouble finding the skips, but because we were having trouble getting them repossessed. The repo agencies were either so busy running bad addresses for others that my addresses weren’t getting run, or they were fabricating updates and saying it didn’t show when I knew it did, and they did that because they either we’re too busy and couldn’t handle all the work, or they had a repossessor in the field who fabricated an update back to the office, which then went back to the client. I know this because I was going out and repossessing my own locates when the agent said my car “didn’t show” and in most cases it was there, and I knew it would be there because I verified it.
By opening a repo agency, routing changed for me, as I wasn’t just routing myself as I did at Chrysler. Now I was routing a dozen guys every day and night. The order of each route and the decision to run, or not run each address that night was based on a variety of factors:
—Capacity: How many repossesors did I have versus how many addresses needed to be checked. Rarely did I have less work than I had manpower, and usually I had two to three or more times the work I could handle. It was my job to insure our company put out the best routes to insure my guys would pick up cars, and not run 15 addresses and get skunked. I quickly learned to remove the addresses that needed to be verified or skip-traced, so they wouldn't get mixed with verified addresses that should be checked.
—My intuition.
—The skill of a skip-tracer in my office.
—The skill of a repossessor versus the type of car he’s after and what is required to take it. Remember we didn’t use tow trucks back then.
—The number of hours he worked the night before. How many cars did he repossess? Did he get a full night’s sleep? Where is he on his weekly commission versus how much time is left in the pay period? Has he repossessed enough cars to pay his rent, or has he repossessed a bunch of cars and he may take the night off or worse, he may mail in his updates and say he checked an address, but really didn’t?
—The quality of the assignment from the specific lender.
—The repossession percentage of the lender placing the assignment.
—The skill of a collector at the lenders office, to how many times we’d already been by the house, to the type of vehicle, did we have a key code, a color, etc.
—The chances of picking up a car in a general sense from this neighborhood. We picked up a higher percentage of cars in the San Fernando Valley as there are a lot of apartments with open parking versus in Arcadia where there are a lot of single family homes with garages.
For sure, intuition played the biggest part as technology was almost non-existent back then, so it was a lot of labor, knowledge, information, time and intuition going through my head to build routes.
Each assignment also brought a different thought to my head, from “That’s a Ford deal from Alice at XYZ Bank. That’s guaranteed money.” Or, “second placement, 7 Series BMW that’s 90 days past due from XYZ Finance Company at a house in Arcadia. That’s probably his mother’s house with a garage. That’ll never show.”
Next developments
Fast forward a few more years to 1993 and we’d now sold Crown. We moved to Sacramento, and we started another repo company — River City Auto Recovery. We also now had cell phones, computers and repossession software, but we were still receiving assignments and sending updates to clients through fax. We were also still printing assignments and manually routing them onto repossessors’ clipboards, paper assignments, based on where they lived, or what area we wanted to send them to that night.
We we’re doing it manually through all the process management we’d built to try and run an efficient repo company, and all the customers personally identifiable information was sitting on that clipboard every night.
That’s how I approached routing when I worked at Chrysler and when we owned our own repo companies. Routing was a manual process, and for many it still is, either manually in the office or manually by a repossessor, and from what I hear and see, it’s even manual for these people who use routing software’s other than RepoRoute, and even for some who use RepoRoute, but at least we give them an easy way to be “old school” and create manual routes.
When Michael Eusebio, president at Digital Dog Auto Recovery, approached me three years ago to have our company partner with them on building routing software, I knew there had to be a better way to manage this process more efficiently than everyone was doing. I quickly realized the repossession industry hadn’t changed much from when I was in it, except the job of routing usually got outsourced to the actual repossessors. It was rare to find a company creating routes for drivers as I’d done.
Some repossessors have great intuition and are proficient and some are excellent at routing manually. It’s an art that comes with a sense of pride and a badge of honor that's worn based on results, just like skip-tracing. The problem is, how do you teach intuition to a new employee who has never repossessed a car, or a guy who just doesn't have that skill, but maybe he’s a great employee and a great repossessor when he see’s the car, but putting a route together is not his strongest asset? Also, the real question is can a machine do a better job at routing than the repossessor, or can there be a way to combine the human skill with machine learning in a software platform to build an efficient way to route repossessors.
We believe this can be done, and after three years we’ve begun to prove this is the case, and it’s called RepoRoute.
I always knew there must be a better way to route than to spend hours manually doing it, but technology hadn’t advanced enough for me to come up with any ideas back then, and by 1999, we’d sold all of our companies; Skipbusters, ARS and River City Auto Recovery, and I was out of the repo industry, for a while anyway.
When Michael and James McNeil at Digital Dog were encountering the same manual route generation problems mentioned above, and given the advancements in technology, their rapid growth, and the need for a solution, the opportunity to build RepoRoute interested me and my partners so we jumped in. We kicked around some basic ideas, hired a developer and got started. We could have easily just put out software that met some basic needs, as many software companies do, but that’s not how we have learned to create a lasting product. To build technology that will really solve issues, software that’s “sticky,” you have to address all the issues, and in repossession routing that means much more than just putting pretty pins on a map.
Three years later, we’re seeing companies who use www.RepoRoute.com help us evolve the product into a game changing platform for their business.
If you are in the repo business and you aren’t already breaking records for more repossessions than you have ever done, then you are doing something wrong. The work is there. This also means those of us in the auto finance collection space better hold on, as we’ve just gotten busier by a great deal, and the trend is showing this will increase at a record clip. How do you solve the problems this type of high-risk growth causes? In my opinion and based on my experience; two words: better technology. If you are in the repossession industry, two more words: RepoRoute.
I have a tremendous amount of respect for repossessors, maybe more than for any other profession. I know first-hand how tough and how dangerous a job it can be. The reason I hesitated for so many years to have anyone but me do the routing was I always felt routing was the single most important job in running a successful repo company.
6 lessons learned
So building successful routes in 2017 starts with a few key tips:
—Less is More. Having a system to identify what addresses you shouldn't waste time working is critical. This is the key to valuable routing software, and to do that, the software has to help you identify this easily, and quickly, and when possible, automatically. It’s important to run less addresses to pick up more cars and that’s exactly what we’ve been able to do. This is a core value proposition we’ve built into RepoRoute. We do this better than any platform I’ve seen, and our users who embrace the platform attest to this.
—I always thought the repossessor shouldn’t have to waste their valuable time creating routes of where to go. First off, it can take an hour or more, and once you get a car or get a call with a rush deal, or something else happens, you have to either start over or spend time recreating a modified or new route. I always felt our repossessors should be home with their families, or getting an extra hour of sleep before going to work, not sitting at a table trying to figure out which deals that have never been hit should get routed, or which deals that were ran once before may happen to show that night. Push a button, create a route, that’s our goal. In some cases we’re there, in some cases we are still perfecting the algorithms as it takes time and volume and historical results to do this. We’ve done the same at masterQueue and now we run millions of pieces of data every year and that volume creates predictive analytics, which helps automate decisions of where to go, or not.
—Evaluate your clients, and stop working for the non-profitable ones. At RepoRoute, we wanted to insure that the deals being routed were the ones our clients wanted to be ran, and if we could help build technology to do that, we felt this would be a sustainable product others would get value from. If you have a client giving you work that’s resulting in a 70 percent recovery percentage and they gave you 10 deals, and the same day you received 10 deals from a client you’re struggling to make a profit from because the quality of their assignments is so low, do you want software that helps you decide what deals to run that night? Could we build software that can tell users that level of detail? Heck Yeah, and that’s what we have done with RepoRoute. If you are managing your repo company without technology like RepoRoute, you’re operating with one hand tied behind your back. Call Michael or James and let them explain how RepoRoute has made DigitalDog and DayBreak Metro, the two repo companies they own and operate, more efficient, and how margins have increased and their clients and employees are happier than ever.
—Build solid technology and a winning team. The next challenge in building RepoRoute was how could we leverage technology in the same manner we’d done in masterQueue. We started with quality first, partnering with industry leader Google for our mapping, industry leader Rackspace for Security, compliance and performance, and by hiring an experienced Full-Stack developer we could build a team around. He didn’t know anything about repossession or routing, but we did. We also knew we wanted to incorporate predictive analytics into the platform, creating automation when it was convenient, but at the same time allowing the repossessor the ability to create a route on their own if they wanted to. We also needed to measure which way was more efficient, and over time, as was the case with masterQueue, we were confident that we could build a blend of both to get the best results for the repossessor, the repo agency and the client, and the consumer.
The consumer? Yes, this is also important as now the Consumer Financial Protection Bureau tracks everything, so it’s important to not be making contact with the wrong person, or someone who already has been contacted and should not be contacted again. We’re also seeing preventable, senseless tragedies where technology can improve the background check and training process. In this case a Mom lost her life, and the question is would this person even have been there to repossess her car if proper background checks have been performed, and would he have acted in this manner if proper training been documented to have been performed?
Next we had to build a winning team, so we brought one of our lead trainers and support people from masterQueue to run the team, Polly Schumacher, and we hired a second developer from Apple, whose background was in mapping. Customer support at the highest level is mandatory, and we treat our customers as they would want to be treated, in a friendly and attentive manner. With the leadership of our president Michael Eusebio, and the product development skills James McNeil brings, a former repossessor who is now an executive in one of the largest and most successful repossession organizations in the country, we are 100% confident we have the foundation of a winning team.
—Integration. So many charge-offs could be saved, wrongful repossessions prevented and manual labor eliminated if the tools available today to gather and utilize data were more efficiently connected as it relates to the repossession assignment process.
Early on, we recognized the need to integrate data so companies didn’t have to do so much copy and pasting, and so when assignments closed or updates were entered, they moved between systems through real-time bi-directional integrations with RDN, iRepo, Prios and other platforms, without the need to work in two systems, or to copy and paste data between systems. This prevents wrongful repossessions and it eliminates a great deal of manual work. We’ve built integration partnerships with the two largest assignment patforms RDN and MBSi (iRepo and RCM) to make the workflow for repossessors more efficient, and we’re definitely seeing great strides now in this direction through these partnerships. We spent additional time building deeper and more thorough interfaces with these platforms than anyone in the industry, and the results are fruitful for our clients as it cuts down the need to work in two or more systems. This also made everyone more efficient.
—Security. Fast forward to 2017, and we’re now seeing clients starting to mandate what software their data can reside in, or what software they want the user to work in. We’re being told by lenders this is due to security and compliance concerns, as they are just realizing how many systems their customer data is residing in, and the fact many of these systems have not been audited and verified as secure is a growing concern. This is also a concern of the CFPB, and after meeting with them last week I can share they are concerned about how data is being shared, and how systems talk to each other, or not, how frequently are consumers being contacted, and how is the information not to contact a consumer, or a related party being addresses by the lenders and their vendors, and is it done in one system, or at least in connected systems?
Building and operating masterQueue for 10 years, I can attest that these audits are becoming more comprehensive than ever. Lenders are now requiring full code reviews by external third parties, extreme levels of encryption of the data at rest and in transit, even non PII data must be treated like personally identifiable information (PII) and internal and external third party penetration testing to insure every means possible is being used and verified to prevent anyone other than those intended to see the consumer PII stored in any system containing the lenders customer data. I’ll write more about this new trend in another blog soon, as I believe it will shift the industry in a similar manner compliance started to do in 2011 when the CFPB was formed.
In the meantime, if you’d like to see a demo of RepoRoute, visit www.reporoute.com and fill out the demo form, or send us an email to [email protected] or give support and sales a call at (916) 800-1010 and they can set it up.
Remember, in business, sometimes you have to change your direction, and we give you that option in a simple to use, affordable platform with RepoRoute.
Be careful out there.
John Lewis is the president of Intelleagis and can be reached at [email protected].
Dealership compliance auditing firm Total Dealer Compliance on Wednesday launched what it’s calling a Certification Badge in an effort to give customers piece of mind that they will not fall victim to deceptive trade practices or subjected to aggressive sales tactics.
By certifying dealerships, the firm said consumers will know that a certified store will have undergone a rigorous TDC audit that covers all departments.
Following an onsite audit of each dealership, TDC will review all findings and provide a detailed action plan. This action plan, as well as the code of ethics, will be implemented within each department and will be tested each quarter by follow up audits.
This certification will be awarded by TDC once all modules are complete and tests are passed. TDC president Max Zanan explained this independent auto certificate means that customers will no longer rely on an individual’s word. TDC will control the entire certificate issuance, management and revocation process.
“With car sales moving to online, there is an urgent demand for car dealers to regain the customer’s trust by becoming more transparent and fully compliant with federal regulations,” Zanan said.
“This certification ensures that the dealership adopted a code of ethics and adheres to the federal advertising guidelines, reinforcing a dealers' personal commitment to quality service and high ethical standards,” he continued.
To be awarded a certification badge, dealerships will need to ensure the following:
• A robust policy to safeguard customers’ non-public information through means of physical and electronical security
• Written policies and procedures that instill a culture of compliance
• Respects customers' privacy and does not resell the information to third parties.
• Robust identity theft prevention program
• Adopted and adheres to a code of ethics
• Does not engage in deceptive trade practices
• Adheres to advertising guidelines
• Does not practice aggressive sales tactics
• Conducts regular compliance training for all employees
“As the nation’s leader in auto dealer compliance solutions and services, we are so proud to finally be able to provide such confidence to customers when they are looking to make such an investment,” Zanan said.
“Auto dealerships should proactively seek this certification, while customers should be looking for that badge on the dealers' website,” he went on to say.
On New Year’s Eve, I was lucky enough to ring in 2017 in Athens, Greece. It was the trip of a lifetime: watching spectacular fireworks over the ancient Acropolis and the Parthenon, and experiencing the flavor of modern-day Athens.
But, of course, the car guy in me had one big question: What’s it like to buy a car here?
I asked a few locals about Greece’s automotive economy, and they showed me what a showroom in Athens looks like.
To my surprise, other than display vehicles, these showrooms had no inventory at all! When an Athenian buys a car, it has to be brought in from a storage facility an hour or more away — which can take more than two days.
Clearly, Greece has developed a system that works for the culture, pace and space constraints of Europe. But could you imagine selling a certified pre-owned vehicle that way in the U.S.?
We haven’t had consumers willing to wait days for their vehicle to be delivered since the 1980s! Americans have a mindset of “better, faster, more efficient,” and it’s up to dealers to develop a buying process to match.
Here’s how you can leverage American expectations to sell CPO vehicles more efficiently and make 2017 your most profitable year ever.
1. Understand what you’re selling
CPO is the fastest-growing segment of auto sales for a reason. Today’s consumers want more car for less money, and they demand that technology and luxury are included. Oh, and did I mention they don’t want to spend a lot of money?
To create an efficient path to the CPO sale, clearly convey the benefits of CPO to consumers. Remember, CPO vehicles offer the safety of a like-new vehicle, a compelling warranty, the latest technology and the reduced rate of a used vehicle. What could be more compelling than that?
2. Adapt to how consumers buy
To appeal to today’s consumers, it’s critical to use the channels and methods that resonate with them. Most consumers, millennials especially, are looking to connect and identify with your dealership online. They crave online content, and creating a useful online presence for your CPO program is necessary to earn their trust.
And a static online presence isn’t enough, either. Today’s consumers expect high levels of engagement from the companies they do business with, and that engagement should span both physical and digital channels. If you meet their needs in these areas, they’ll be primed to connect with you, streamlining the road to the sale.
3. Improve the operational experience
Whether they’re looking at your CPO inventory online, reading a consumer review, walking onto your lot or interacting with sales personnel, consumers demand a high-quality experience — and they won’t engage with dealerships that don’t deliver. In fact, today’s consumers are considering fewer dealerships than they were even two years ago.
To make sure your CPO vehicles are on consumers’ radar, it’s critical to create the smoothest operational experience possible. To do this, start by focusing on personnel.
Multiple personnel handoffs and inadequate communication between sales representatives and managers extend consumer wait times, creating a less efficient, more frustrating experience.
To reduce the number of handoffs, make sure your frontline salespeople are well trained. This will also free up more of sales managers’ time, making them more efficient. Also, be sure to hire effective salespeople in the first place! Use formal, consistent talent-management practices to find them, such as structured recruiting processes with multiple interviews per candidate.
4. Enhance the in-store consumer experience
A recent Autotrader study shows that more than half of auto buyers experience frustration during the vehicle purchase — and they grow more frustrated the longer the process takes. The first sign of declining consumer satisfaction occurs at the 1.5-hour mark, and dips below average after 2.5 hours. To improve consumer satisfaction, it’s important to account for potentially the most time-consuming variable in the sales process: negotiations.
At most dealerships, negotiations take an average of 21 minutes and a maximum of 41 minutes. The more you can shrink that time, the better. Providing more transparent CPO pricing, both online and on your lot, will reduce the need to haggle, increasing consumer satisfaction and building trust. Additionally, allowing consumers to perform administrative aspects of the sale upstream will reduce the time they spend in the dealership.
5. Make the most of technology
There’s no shortage of tools that can help you reduce inefficiencies in your dealership. For example, since using both paper forms and software to perform sales functions can extend cycle times, going wholly digital will help you move more quickly. Choose an e-contracting platform that will integrate the contracting phase, increase efficiency at the point of sale, and make it easier for your dealership to receive payment.
Technology can increase your efficiency long-term as well. As I’ve written in previous articles, your CRM is full of consumers who could be ready to buy.
Either maximize queries within your system to find and market to consumers likely to purchase CPO, or outsource these tasks to a specialized third party. This is an efficient way to increase sales, since consumers prefer to make repeat purchases from known, trusted retailers. Make that trusted retailer you!
6. Connect with consumers’ motivations
At the most basic level, any company can learn about consumers’ emotional motivators and conduct experiments to leverage them. When a consumer buys a CPO vehicle, task your sales manager or F&I manager with finding out why. And when a consumer doesn’t buy, find out why as well.
Following up with each consumer about their purchase motivations should be a consistent part of every T.O. performed at your dealership. The more you know about the “why” and the “why not” of each sale, the better you can tighten up your systems, processes and training, making your overall dealership more efficient.
As consumers expect an ever-faster and more efficient experience, you can’t afford to stay as steadfast as the Parthenon. By following these quick and easy steps, your dealership will exceed consumer expectations and enjoy a more efficient, profitable CPO program in 2017.
Editor's Note (from February 23): This is a revised version of a story that ran on February 6.
It happens every year. In January, the gym is full of people making New Year’s resolutions to lose weight or get in shape. But by February or March, the crowds have died down. Those who are still plugging away are committed to their resolutions. And their efforts have become a habit, making it easier to achieve their goals.
Making New Year’s resolutions are a great tool for achieving your business goals as well. Did compliance slide off your radar last year? Are you paying the price today, as you try to get those deal folders in order and send reports to lenders? With the 2017 business climate in question, now is a good time to make a few New Year’s resolutions. Let’s put compliance at the top of the list.
Upping your compliance quotient is a very achievable resolution. If you follow a few simple steps with each sale, then compliance will become a habit. And once it becomes a habit, your dealership will be in a better position to build profitability — both with customers and your lender partners.
Let’s start at the beginning by building a compliance culture. Compliance does not reside solely in the F&I office. From the moment a customer sets foot on your lot, calls your receptionist or researches a deal online, each team member who engages with the customer owns a piece of the compliance pie. Make sure every team member clearly understands their compliance roles. And make it a part of your employee reviews, weekly team meetings and quarterly sales goals. The more your team demonstrates good compliance behaviors, the faster it will become a habit.
Impress upon your team that compliance is not some fluffy HR strategy designed to boost sales by working harder on needless tasks. There are serious consequences when a dealership — and its employees — are found to be out of compliance. While not intended as a scare tactic, team members should be well aware of the repercussions to being out of compliance.
Now granted, there are a lot of details involved when it comes to compliance requirements. Not every team member needs to be an expert — nor do you want them to neglect their primary responsibilities. Consider designating a compliance officer — or compliance lead if your dealership has less than 10 employees. A compliance officer’s role is to have an intimate knowledge all of the requirements. And to serve as a guide for the other team members.
Habits are easily formed when tasks are performed the same way every time. Work with your compliance officer to create processes for each department that clearly guide team members through the necessary tasks. Allow a short period of time for each department to review those processes. Encourage team member feedback during the review period. Team members are more likely to establish good compliance habits if they have input on how each task is performed.
Processes also ensure that all tasks are performed the same way — regardless of which team member is performing the task. Make sure everyone is establishing the same habit.
Now that you have good processes in place and everyone is in agreement, document those processes. Remove any ambiguity or confusion by listing each task and the steps required. This step is critical – not only for longtime employees but for any new employees who join the team. Keep everyone on the same page by creating those documentation pages. And once the documentation is complete, don’t put it in a drawer to be easily forgotten. Out of sight-out of mind does not support a good habit. Keep your documentation visible and accessible.
As with any new habit, team members may forget or slip up every once in a while. Get back to the task by enforcing compliance. Remember, establishing compliant practices protects consumers, the dealership, and individual employees from any potential legal repercussions. During the process review period, discuss appropriate actions for process violations. Be sure to include those actions in the process documentation.
And speaking of new employees, a compliance discussion should be part of your hiring process. Is the candidate detail oriented with strong ethics and a team-focused mentality? Or are they willing to cut corners to make the sale — and boost their commission? Do they have a working knowledge of compliance criteria or will you need to provide training before they assume full responsibility for their job function? Do they support the spirit of compliance?
Do they have good habits? These types of behavioral questions can be invaluable when hiring new staff. Including compliance in your hiring process also demonstrates to your existing employees that you’re serious about the dealership’s compliance quotient.
So make some New Year’s resolutions for your business. Set some attainable goals. And make compliance a habit in 2017. For more information on creating a culture of compliance, watch my video series here.
Steve Roennau is the vice president of compliance EFG Companies.
All too often, marketers count on passive digital marketing strategy when they could be taking a more proactive approach that is more efficient, says Eric Brown, president of LotLinx Media Holdings.
“The Internet itself is evolving, that’s opening new doors for marketing execution for the local dealer and allowing for a more proactive strategy versus a more passive strategy where dealers can highly target the best prospects in the market, as well as their databases,” said Brown.
Brown said dealers need leave their showrooms and “start knocking on the doors around the neighborhood in a digital sense.”
“With or without sales decline you’re seeing already sort of the evolution of the internet being reflected in digital strategy available to automotive dealers,” he said. “The Internet of Things is tying together the data in a way that allows auto dealers to take a more proactive approach to their ad budget as opposed to a passive approach.”
A lot of media, particularly traditional media in addition to some traditional internet media, such as automotive portals are passive in their approach, according to Brown.
“They do a lot of marketing through their general audience and hope that audience will show up in their virtual showrooms,” he said.
Additionally, Brown points out that with the internet of things, there is an abundance of data to understand who is precisely in the market and what they are showing greatest consideration for in terms of vehicle purchase — allowing dealers to target shoppers with much more specificity and greater cost efficiency.
“The Internet of Things is changing the landscape for a dealer in terms of the capabilities that are available to them,” said Brown. “The efficiency and cost effectiveness of those techniques are dramatically greater than the more passive traditional media.”
Brown predicts that the market will soften in 2017, but it’s not going to be substantial.
“The trend line is pretty consistent and we still have a fleet that’s more than 10 years in age so there may be some softening as you see a climb in interest rates,” he said. “I don’t think it’s going to be dramatic, certainly nothing like we lived through in 2008, 2009, 2010. We are pretty much where we were in 2006.”
Brown also spoke of the impact of the new Trump Administration.
“What the new administration does from an import/export scenario can have some influence,” he said.
Additionally, he acknowledges that there’s potential the new administration might have a positive impact as well, depending on what they do from an infrastructure investment standpoint.
In light of the Consumer Financial Protection Bureau indicating an interest in looking at how repossession agencies charge consumers for items such as vehicle storage and personal property, Vendor Transparency Solutions (VTS) contends mistakes can lead to investigations, financial penalties or worse actions.
So to help agents get going on the right foot this year, VTS is sponsoring a free webinar featuring a pair of legal experts who will share their insights and perspectives to help agencies develop processes and procedures that will not run afoul with the CFPB. The presentation also is designed to help auto finance companies better understand how to monitor the work of their service providers.
The webinar will be held on Tuesday at 1 p.m. ET and will feature Arnall Golden Gregory partners Tom Pahl and Sean Sullivan.
“A growing number of repossession agents have expressed concern about how to proceed in the wake of the CFPB’s comments, so hopefully this webinar will provide some meaningful insights into how the industry can move forward,” said Mike Gibb, administrator of RepoPulse who will be moderating the session. “We’re excited to have Tom and Sean to share their expertise and legal advice.”
Interested participants can register for this free event by going here.
According to VinSolutions' CRM Usage Report, a study co-released by DealerKnows on Tuesday, the average dealer struggles to use their customer relationship management effectively in several key areas.
The recent survey on the automotive industry's overall CRM usage and its impact on dealership performance showed that CRM usage is closely tied to overall dealership success.
DealerKnows surveyed what it called “best-in-class dealers,” a group of stores that recently evaluated its CRM usage and implemented a plan to improve performance, along with a representative sample of dealers nationwide and compared the results.
The analysis found that average dealers substantially trail behind the best-in-class dealers.
Only 44 percent of average dealers received regular automated reports from their CRM, while 83 percent of best-in-class dealers did, according to the study.
Additionally, the study shows the average dealer set four fewer appointments per day, and they report an 11 percent reply rate for emails sent through the CRM, compared to 18 percent for best-in-class dealers.
"At VinSolutions, we've always believed that the CRM is the most important piece of technology for the modern dealership," said Mark Vickery, senior director of performance management. "This study proves that using the CRM well is essential for dealers' success. Although many dealers still have some work to do to get the most value out of their system, we hope this research will be the inspiration they need to start using their CRM more effectively."
CRM usage was judged in three categories: utilization, reporting and lead process.
The full study can be downloaded at www.vinsolutions.com/whitepaper.
On Monday, Helion Automotive Technologies announced a list of five technology priorities for auto dealerships looking to improve operational efficiencies in 2017.
The provider of information technology solutions for auto dealers said appropriating budgets to address the areas of internet bandwidth, wireless, incoming call flow, security and software licensing will help support the upcoming year’s new business and technology initiatives.
"Dealers often view IT as a cost of doing business, rather than as an investment that can help them become more competitive," said Erik Nachbahr, president of Helion. "In this industry, time is money and an outdated IT infrastructure can result in downtime, lost revenue, reduced customer retention and loss of employee buy-in."
Helion's top IT priorities for dealers in 2017:
1. Internet Bandwidth
Fiber optics is the future of Internet connectivity, says Helion. Cloud-based, third-party and OEM applications require greater data throughput than a T1 can handle.
A fiber optics connection carries data at rates ranging from 100 Mbps to 1,000 Mbps (1 Gbps), while a T1 connection carries data at a rate of 1.544 Mbps.
2. Wireless
More wireless is needed for dealerships heightening their use of OEMs and third-party location-based technologies and programs, according to Helion.
The company said the average dealership with six to 10 high-speed wireless access nodes needs to increase their wireless capacity by three to five times, to have a total of at least 25 wireless access nodes per location.
3. Incoming Call Flow
According to Helion, up to 30 percent of incoming phone leads don’t connect with an employee who can assist them.
"Dealers are losing a crazy amount of leads due to something they probably don't think much about," said Nachbahr. He recommends creating a new call flow designed to support dealer processes and to follow it each day with no changes.
4. Security and Regulatory Compliance
Nachbahr's highly suggests that dealers get cyber liability insurance and have security policies established to best evade harsh financial consequences associated with security breaches.
Seventy-five percent of businesses with fewer than 500 employees reported a security breach last year, according to a July report titled IT Security at Small to Mid-Size Businesses (SMBs): 2016 Benchmark Survey. The study is a topic of an August Auto Remarketing article about how dealerships can minimize the risk of costly security breaches.
5. Software Licensing
Nachbahr says dealers need to be sure that their employees are not using unlicensed copies of software.
In the last two years, approximately 45 percent of auto dealerships have been audited by Microsoft, according to Helion.
"One dealership I know of got caught using unlicensed copies of Microsoft Office on over 300 computers, and had to pay a fine of $1.5 million," said Nachbahr. "This is something that dealers cannot afford to mess around with."
Nachbahr suggests dealerships try Microsoft’s cloud-based subscription program, Office 365 Business, if Office 2016 is too costly.
