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Will People Pay MSRP and Should You Feel Guilty For Selling It To Them?

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I get asked by non-automotive industry friends all the time about car salespeople. The questions typically pertain to the questionable practices that they perceive car salespeople as having. We all know the stereotypes and they exist very much today as they did in the past despite the fact that, in my opinion, many dealers have changed their business practices either because they’ve come to the realization that you just can’t rip people off or it’s been regulated out of them.

“Perception is reality” is the old saying. Holding gross on a deal is considered good business by the dealer while the consumer thinks they’ve been ripped off.
One of the more common questions I get involves MSRP. What is it? Do people really pay that? Why? Don’t you feel guilty selling it to them at MSRP?
When they ask me that, I tell them this story:
A few years ago, there was a knock at my door. This little Asian guy offered to clean all the flooring and furniture in my house free of charge. The carpet in my house was the original carpet that was in it when we bought it and having it cleaned had been on my “to-do” list for awhile. He said there was no trick involved nor any obligation. I agreed. 
I watched this little Asian guy proceed to vacuum my whole house. He then pre-treated the couches and shampoo’d and cleaned them. After that, he pre-treated and shampoo’d the carpet in my entire house – all 2500 square feet of it. I watched him scrub and put elbow grease into each part of this process. It took him 5 hours. He didn’t say a word the whole time.
Being a salesperson, I was waiting for a pitch. At the end, the house and furniture looked fabulous! I appreciated all the hard work and effort he put into it and told him that. I told him I was a salesperson and that I understood he was selling this machine and gave him permission to “pitch” it to me. 
He told me that he had been for the last 5 hours.
I thought about it for a minute. The vacuum we had actually had just broken. It was not the first time it had broken. The vacuum only cost about $200 but we’ve had to have it fixed at least 3 times over it’s lifespan at $50 each time. The vacuum he had used undoubtedly, in my mind, did a fabulous job cleaning the house. I asked him how much the vacuum cost and then proceeded to pay $1700 for it.
Now, since that day, I’ve had quite a few friends tell me that they owned a Kirby and had paid much less for it. They told me that this little Asian guy ripped me off.
I told them I didn’t feel ripped off at all. The salesperson that came to my door had met me for the first time. I was probably the hundredth door he had knocked on that day and probably the only one that took him up on his offer. I knew when I invited him in that he wanted to sell me the vacuum. After he was done, I thanked him and complimented him on his hard work.
Through his hard work and effort, he slowly and methodically, over the course of 5 hours, BUILT VALUE into his product. At the end, I FELT that the vacuum was WORTH $1700. To this day, I don’t regret paying that much for the vacuum (which still works great and runs beautifully). I’m sure that I paid MSRP. I didn’t haggle nor did it even cross my mind to do so.
You may be saying that you don’t have 5 hours to waste with a customer like that. Salespeople tend to pre-qualify and try to figure out whether the customer standing in front of them is going to “buy today” and then base the time and effort they spend with the customer on those perceptions. 
The customers that the salespeople think are buying today get all the attention from the salesperson and, at times, the salesperson will spend 5 hours with a single customer from contact to close. The difference is that most of that time is CLOSING and not BUILDING VALUE. 
If a salesperson spent more time building value with EACH customer without trying to figure out if and when the customer is going to actually buy something, I believe that the process would take the same amount of time (whether that is 2 hours or 8 hours) but, in the end, the gross would be higher, the close would be easier and the customer would be happier.

Salespeople wonder why the people that don’t “buy today” (but do come back and buy at a later date) don’t remember their name. It’s because not only did they do nothing to build value in their product, but they did nothing to build value in themselves.
The little Asian guy’s name was David. He is one of the best salespeople I’ve ever met and not once have I regretted paying MSRP.

On Facebook, Sometimes Less Is Better

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Social Media Marketing is not meant to be your businesses’ sole means of marketing but rather it’s meant to compliment your existing marketing.

I see businesses scrambling to create presences in the social media spectrum daily without any clue what their goal is. Seeing as I’m in the automotive industry, most dealerships that I see diving into the social media party believe that the “goal” of this endeavor is to “sell cars”. By their actions, it seems as if their true goal is “acquiring friends”. If you go into Social Media Marketing with either of these goals, you are wasting your time.
I’m going to focus specifically on Facebook here but this advice applies to pretty much any social media site.
When a business first dives in and creates a Facebook page, they concentrate on acquiring as many “friends” as possible. While it’s fun to see that you have lots of “friends”, the whole purpose of your Facebook page is to engage with your customers. 
Are these “friends” you’re acquiring customers (or potential customers) or are they a collection of other dealerships, vendors, employees, etc.? 
If your answer is the latter, your social media efforts are wasted time. Chances are really high that none of these people are going to buy cars from you, get their cars serviced at your dealership, or do anything that is income generating for your business. 
What you want to do is captivate an audience of people (ie. friends) that are potential income. You want to market your Facebook page to your real customers. Tell your walk-in traffic. Tell your customers who buy cars from you. Tell your service customers. Include your Facebook page in your other marketing. 
Acquire “friends” that are meaningful. 
I’d rather have a group of 100 customers that I can engage with that would potentially do (or have done) business with me than 5000 friends who will never buy anything.
This obsession with gaining as many friends as possible is counter-productive. The goal of Facebook marketing is engaging with and marketing to your customers, not acquiring friends. If you do it right, in a passive, non-intrusive way with meaningful content, your message will be heard by the right people (customers) and you will reap the benefits.
It’s the quality of your “friends” that count, not the quantity.

Your Virtual Lot Needs Attention, Too!

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[This post is also a reprint of an article written for an industry publication in May 2008 saved here for future reference. That doesn’t make it any less true. In fact, I would say it is even more important now than it was 2 years ago.]

In this digital marketing age with more and more consumers choosing to utilize the Internet to assist in making their automobile purchasing decisions, it is increasingly important to monitor the activity within your Internet departments.

Judging the effectiveness of your Internet traffic cannot be done solely by valuating its production. Whether you are using third-party lead providers or driving traffic to your own website or a combination of the two, you need to be aware of what’s going on with the leads. Just like you look at how your ups are being worked by your salespeople, closers, or sales managers; you should know what’s going on with your Internet ups.

What most dealers forget to include in evaluating their Internet departments and/or where the budget is being spent to provide leads are the most basic factors imaginable:

1. Are my Internet managers working the leads properly?

2. Do I have a process in place that I can use to hold them accountable?

It’s important to have processes just like any sales force has. Would you expect your salespeople to take a customer on a test drive before writing them up? Of course you would.

Internet leads are ups in the same way as someone that walked onto your lot. In fact, you may get more ups through your virtual lot than you do on your physical one. There are many dealerships that have Internet departments that account for 30-40 percent (or more) of their business but this is the department that is typically the most neglected and least monitored of all departments by sales managers. Dealers pay a lot of money for these ups yet fail to work them as hard as they would any customer that had walked on the lot because they don’t see the potential of turning these ups into sales today. The mentality that exists, and has existed, is that this is a today business.

While we would all prefer to sell a car today (anybody waiting for the be-back bus?),I think everyone would agree that selling a car eventually is better than  never.

Through my experience and observations, I’ve noticed that unsuccessful Internet departments tend to have Internet Managers that don’t continually work a lead. Maybe they call a few times over a week or so but then they just give up and restart the process on fresh leads. This circular pattern neglects the customer that’s not ready to buy today, but is a buyer. With most Internet customers being seven weeks out from initial contact to sale, no wonder you are losing business. I understand how frustrating it is for an Internet manager to call someone 18 times and never get a hold of anyone and never have any calls returned. That doesn’t mean these aren’t buyers, only that they’re not ready to buy or not enough of an impression has been made to earn their response. Just like any salesperson knows, you can give a customer every way to contact you imaginable: the dealership’s phone number, your home and cell phone numbers,your work and personal e-mails, etc., build great rapport and ask the customer in every way possible to call you when they want to come in and that you will be there to assist them and, despite all of this, the customer will still show up when they are ready to purchase without calling the salespeople. Knowing this, why is it hard to believe that a customer who nobody at your dealership has ever even met in person would do the same thing?

I’m a firm advocate of utilizing a business development center (BDC) to followup with your customers whether they are prospects or previous customers rather than entrusting your customers to salespeople who may or may not follow up with them. At least with a BDC, you can create a consistent process with dedicated people that follow up with your customers and prospect for your dealership.This simple addition to your business will increase your sales immediately and create greater customer satisfaction and a great first impression. Have you ever heard a customer say that nobody ever contacted after requesting information? How about feedback from a customer saying a salesperson never called them back after promising to?

By paying more attention to your Internet departments, Internet Managers and leads, you will be able to increase your sales within that department immediately, without any additional expense to you.

If your salesperson were burning ups, you’d stop the behavior. Why allow your Internet managers to do the same thing?

If you don’t pay attention, you only have yourself to blame.

E-Mail Strategies in Internet Sales (Revised)

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[Note: My original intent on posting this blog post was to preserve this article. It was originally published in June of 2008 in an industry publication. They restructured their website so that the URL to this article no longer works so I wanted to have an easy place to find it. While reading it again, keeping in mind that this article is 2 years old, the only piece of advice contained within this article that should be changed is that providing a quote to the customer is imperative. I’ve edited the article in bold with updates.]

Every Internet sales department involves e-mails either to the customer or from the customer. Having a strategy in place for the e-mails you send to customers is necessary. Many of your customers will be receiving automated e-mails from your CRM but do you have a strategy in place to maximize the results from those e-mails? You cannot sell a car without establishing a dialogue with the customer first, whether through a phone contact or an e-mail response. Reality is that you’ll have many customers who choose not to respond to you and/or respond at their leisure. The lack of response and inability to get a hold of customers is frustrating to many Internet managers and many choose to stop following up with these leads. A well thought out e-mail strategy can increase your responses, thus creating more dialogue with customers, which will translate into more sales.

Many Internet CRMs come with “canned” auto-responders and e-mail templates that most Internet departments alter with bare minimum changes (typically the addition of the customer’s name and contact information). You should scrutinize these e-mails and tailor them to your dealership’s Internet sales strategies whether you are focusing on price or value. These are really the only two things you have to sell at this point. You can sell customers on the fact that they should buy from you because you have the lowest price. Or you can sell customers on why they should do business with your dealership (value) avoiding price as much as possible. If you can get customers into your dealership without quoting them a price, you will increase your grosses in your Internet department. There are conflicting mindsets towards the best sales strategy to use with an Internet customer – quoting versus not quoting – and the research shows that neither method works better than another. Of course, this is a generalized statement and depending on what your competition is doing, you maybe forced to use one strategy over the other.

[In today’s market, providing a quote to your customer is mandatory. If you’re not providing quotes, you are losing business. The information available to consumers today is such that they can get pretty much any information they want, if they look. By not “helping” them, you are only alienating them from your dealership. They will get the information. Do you want to be the dealership they remember as “helpful” or the one they remember as “typical”?]

Most Internet managers are concentrating on selling a car way too early in the process. You cannot sell a car to someone you have no dialogue with. What Internet managers need to realize is that your first goal in your process should be to sell the customer on an appointment, not a car. Without contact with the customer and/or getting the customer to come into your store, you’ll be hard pressed to sell them anything.

Internet customers tend to be more educated and less spontaneous. Some of them go on the Internet because they are intimidated by the typical sales process and/or have had a bad experience in the past. Some simply don’t have the time to shop several dealers looking for the best deal. Internet customers should be treated with a soft approach at first. Once contact is established, you can tailor future follow-up and/or your approach on an individual basis, but until you figure out why your customer went on the Internet in the first place, why do anything that would hurt your prospects of establishing contact?

An effective e-mail strategy will include some, if not all, of the following elements:

• Always be polite and courteous in your e-mail’s tone.

• Make sure your e-mails look professional and do not have grammar or structural errors.

• Always give more to the customer than they’ve asked for. If you’re a quoting store,give them quotes on more than just the vehicle they’ve asked for a quote on. Show them a model up and, perhaps, a similar pre-owned vehicle with low mileage.

• Ask how you can be of service in every e-mail. Always over-deliver. You need to stand out from your competition.

• Never be aggressive in your e-mails! You’ll turn off your customers, reinforce that you are no different than any other salesperson and you’ll only hurt your chances of getting a response from an uncontacted customer.

• Do not bombard your customers with e-mails. The more and more frequently you send e-mails, the more likely your e-mails will end up in trash folders unread and/or get tagged as spam.

• Use standard e-mail etiquette in all your emails (no all caps, etc.).

In my opinion, an effective e-mail campaign strategy should look like this:

1. You should have an auto-responder acknowledging your receipt of their information request that promises only what you can deliver. If you can respond within five minutes consistently, then tell the customer that. If you cannot, do not promise them that, as you’ll only accomplish instilling a first impression that you cannot deliver on your promises.

2. Your second e-mail to a customer should be personalized and sell your Internet department and why they should do business with you. Why should the customer come and see you and/or the Internet department versus the normal sales department. You should be selling an experience at this point and be telling the customers how doing business with the Internet department will make their buying experience hassle-free and convenient.

3. Your third e-mail should be selling the customer on why they should do business with your dealership. What benefit would the customer get from buying from your dealership rather then your competition?

4. The preceding three e-mails should be within the first 48 hours of the receipt of the lead. After that, you should have different e-mails being sent on days four and six, with follow-up e-mails twice on week two and once per week every week thereafter.

Keep in mind – your dealership can tailor the messages in each of these e-mails. Just like you have a consistent sales process for your salespeople (meet, greet, needs/wants, etc), you should have a consistent process within your Internet departments.

Keep in mind that I’m mainly talking about uncontacted leads although I feel that the elements I mentioned above should always be used. These e-mails are the only impression an uncontacted customer has of your dealership. You wouldn’t want a dirty car on your showroom floor so why have a “dirty” e-mail?

Perception is reality. What perception are you giving your customers?

Listening When Your Customer Says Nothing (Raving Fans)

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I recently finished reading “Raving Fans” by Ken Blanchard and Sheldon Bowles .

I was familiar with the concept of a “raving fan” both as a business ideal and as a consumer prior to reading this book.

One thing that really hit home was the concept that you’ve got to listen hardest when the customer says “Fine” or is silent and that silence in itself is a message.

Their point is that people have been so disappointed with businesses that they really don’t expect you to change and/or fix the problem so, when you ask them, they simply say “fine” or they say nothing at all.

I thought back to all of the cars I’ve sold and the manufacturer surveys that have been sent out. We all thrill at the great ones and are disappointed with the bad ones, especially the bad ones that we feel are undeserved. All dealerships want great surveys returned by customers and want the bad ones to get lost in the mail. We completely focus on the returned surveys.

What about all the surveys that aren’t returned?

What message does that send to us?

In my perspective, there are only a couple of scenarios.

The first is apathy. The customer simply doesn’t care or feel like taking the time to complete the survey, whether good or bad.

The second is that perhaps the customer had a bad experience and is just polite and/or doesn’t see the point in returning the survey as they don’t feel anything will get fixed.

We all know the idea that satisfied customers tell 3 people while unsatisfied ones tell 3,000. It’s easy to identify these two camps through returned surveys but….

In which camp are the people who didn’t return the surveys? Do you know?

An unsatisfied customer who does not return the survey is still an unsatisfied customer and, if you subscribe to the above idea, will tell just as many people about their bad experience as the one who did give you feedback via a survey.

We act on the bad surveys because we are motivated to act. We are motivated to act because we don’t want the manufacturer to get involved. We don’t want bad reviews on the internet. We don’t want our managers to get angry with us. We want to protect our CSI. Maybe we truly want satisfied customers. There are a lot of reasons for this motivation.

What we do not have is motivation to act on unreturned surveys.

To create raving fans, we have to pay attention not only to the customers that said something but also to the customers that didn’t.

I’m a big Tommy Bahama fan. I’ve always loved their clothes for their comfort and quality. Yes, they are pricey but, in my opinion, worth it. Recently, I went to a conference. After the conference, I visited an amusement park and proceeded to go on every water ride in the park effectively drenching myself. Seeing as the day was young and I had planned on going out that night for some networking and fun, I went to a shop nearby and bought an outfit consisting solely of Tommy Bahama items including a pair of Tommy Bahama flip-flops (since my shoes and socks were also soaked). The next day, I visited Disney World wearing the flip-flops and, after three hours, literally could not walk because the flips flops were tearing up my feet. I was walking around the park barefoot. Inevitably, I just left as my feet hurt so bad.

Upon my return home, I emailed their customer service and told them of my horrible experience. They emailed me back asking some questions (what model of the flip-flops, etc.). I didn’t have the tags since I wore them out of the shop (and the shop was across the country) so I emailed them a photo along with photos of the sores on my feet created with their flip-flops. To make a long story short, they told me I could drive 100 miles to return them and that, in the future, I should probably break the flip-flops in before walking in them for too long.

What?!?! Break in flip-flops?!?!?

Needless to say, I was a raving fan but I am no longer.

In this case, I chose to say something because I had just read this book and wanted to test the theory out. I was disappointed.

In another, similar experience, I bought a pair of Maui Jim sunglasses in 1999. A couple of years ago, I dropped them and managed to break the lenses (they were glass). Keeping in mind that these sunglasses were almost 10 years old, I went to their website, got their warranty/department address and sent my sunglasses to them with a blank check to have them repaired. (I really love those sunglasses.) Not only did they fix them for me and send them back, but they included a note thanking me for my business and returned my check. I will never buy another brand of sunglasses again. In fact, I still have those same glasses and have since bought another pair of Maui Jims. Needless to say, I am a raving fan of Maui Jim.

In the automotive industry, it is said that a customer is worth $290,000 over their lifetime to your dealership.

How many customers have you lost simply because you didn’t pay attention to your customers when they didn’t say anything?

By asking questions of customers that you have no feedback from and then acting to fix any problems that may be the reason for that lack of feedback, it’s possible to create a raving fan the fastest and with the least amount of effort. That customer who may have seen no point in telling you anything because they didn’t want to be disappointed could be made into a raving fan instantly with a sincere inquiry followed up by proactive solutions to any issues that may exist.

While the value of a customer to Tommy Bahama is most assuredly smaller than that of a car dealership, considering that the outfit I bought that day which consisted of a pair of shorts, a shirt, and flip-flops cost $300, it certainly cannot be insignificant.

Tommy Bahama lost a raving fan and gained a bad review posted to the internet for anyone in the world to see…. over a $65 pair of flip-flops.

The Right Stuff (Identifying Great Internet Sales Managers)

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What skill set makes a great Internet Sales Manager?

It’s not as easy of a question to answer as you may think regardless of where in your organization’s hierarchy you have this position. I’ve seen so many types of people in the Internet Sales Manager position and many that have failed. I’ve seen excellent salespeople “promoted” to the ISM position just to see them fall on their face and have that confidence and cockiness they had shattered and I’ve seen that person who couldn’t“close” a door, succeed beyond everyone’s expectations.

So, how exactly do you decide who the “right” person is to make your department successful?

Some dealerships choose their top salesperson with the thought that he/she can pump out even more units given more people.Some will actually put the person who’s NOT selling cars in there with the hopes of a turn-around. Some go the “experienced fleet manager”route. Some put their new (or green-pea) salesperson in there. For the most part, NONE of these are the “right” person for the job.

Am I a mystical guru that can foresee the future? No, of course not and my forthcoming opinions will certainly have exceptions. (Keep in mind that the ability to communicate and use a computer is assumed.)

The top five personality traits of successful Internet Sales Managers are as follows:

  • Excellent phone skills
  • Persistent
  • Customer-Service Oriented
  • Aggressive
  • Organized

You notice I didn’t include “good sales talent”. There’s a reason for that. In this industry, everyone’s used to looking for that person who has sales talent – whether it’s as a liner or a closer. When looking for a good Internet Sales Manager, sales talent is certainly important but it’s not in my top 5.

Why?

What qualities does it take to get a person from an e-mail or phone call into your store?

Phone skills are a MUST. If they cannot talk on the phone, they should not be in your Internet Department. I would consider this to be THE most important attribute that an excellent ISM can have. If you have any call-monitoring services, you know who those people are. They’re the ones you are consistently letting your OTHER salespeople listen to as examples of how to properly make/receive a phone call.

You need someone who’s persistent and doesn’t give up on that lead that they’ve called 6 times and emailed 4 times who’s never responded. This happens way too much. Persistent is definitely a key to success. Do you have someone who always makes their phone calls and follow-up to the point that customers are calling you asking you to please have “Joe”stop calling me? That would be someone to start looking at.

You need a customer-service oriented person. You can’t stick your closer in there and label it as a promotion because they inevitably try to“close” the person over the phone and that will only alienate the customer. Remember,many customers have chosen to shop for a vehicle and/or gather information via the internet because they are intimidated by the retail sales process. By mimicking the retail sales process within your internet sales department, you will reinforce the experience that the customer is trying to avoid in the first place. You need someone with a pleasant phone voice that can transmit through phone lines sincerity and genuineness.

Of course you need an aggressive person. One of my “strategies” if you will (and I’m sure many salespeople also do this)is that I start making calls until I get that person whom I get a feeling I can sell a car to“soon”. I liken this to the fish nibbling at the bait. Once I get that nibble, I’ll work all day to “reel” in the fish,focusing on that one nibble to create a sense of urgency (“Hey fish, I have more worms in the boat.”). The “aggressiveness” that I am talking about here is the ability to know when there is genuine interest and being able to identify and cultivate a sense of urgency within a particular customer, not the ability to be pushy.

You definitely need someone organized, as they need to keep up with every lead and know what’s going on as they juggle replies and phone calls. It doesn’t matter how good your CRM is (assuming you have one), if your Internet Sales Manager cannot sound like they know that EXACT customer’s needs and wants when they do make contact, it will be that much harder to build rapport.

Sales skills are secondary to all of this because getting the customer into your store is their primary job.

Once the customer is in your store, you have a whole sales staff that can make sure they leave in a vehicle if your Internet Sales Manager cannot accomplish that. 

Sales skills and processes can be trained, personality traits cannot.

Find that “eagle” with the above abilities and you have the makings of an excellent Internet Sales Manager.

Sometimes, The Solution Isn’t Change

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Many dealerships attempt to solve poor sales by either replacing people or by replacing services. It’s my opinion that, in most cases, neither of these will necessarily solve your problems. People may just need training and/or supervision. Services may only need to be properly utilized.

Case in point: Internet Departments.

An Internet Manager sits down with a GSM or GM to look at why the department didn’t sell as many cars as management (or the owner) would have liked. They look at the cost per sale and the ROI of their internet services (sometimes). From this they determine that X service isn’t working for them and decide to cancel and replace it with this magical new service that will fix everything.

Here’s what they usually don’t look at:

  1. Are we implementing the service (and its processes) as they were designed to be?
  2. Are we properly working the program?
  3. Is there accountability for it’s implementation and use?
  4. Are we doing the work?

Say we’re talking about internet leads. You can’t solely base decisions on whether you’re selling cars from them if you haven’t determined that whatever process you have in place to work those leads… works.

If your employees aren’t calling the leads, I guarantee that you won’t sell any cars from them. Does that make them bad leads? Of course not!

There are two parts to any service… the tool and the work. If you haven’t analyzed both, you could be canceling the best service you have and the one which would provide you with the most ROI… if it were being used properly.

The internet departments of dealerships are the least monitored departments in most dealerships with the highest income potential.

You see, any service you subscribe to takes work. I have yet to run across any service that will magically sell cars for you without any work on your part. If it’s an internet lead, you have to make the phone calls. If it’s a video product, you have to take the videos. If it’s a consultant, you have to listen to them.

You get the idea.

Do you replace the driver if the car isn’t working properly?

Do you replace the car if the driver doesn’t know how to drive?

In the first scenario, fixing the car is the solution. In the second, you teach the driver how to drive. It could also be both.

You have to know what the problem is before you can solve it.

The next time you consider canceling a service (or replacing an employee), make sure to know what the problem is before you try to fix it.

If you don’t, you could be trading in a Ferrari.

Using foursquare to Bring Customers to Your Dealership for FREE!

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I know some people think foursquare is stupid and that’s OK.

Some people also think playing video games is stupid but that hasn’t stopped consumers from spending almost $8 billion dollars per year.

As a brief summary, foursquare is a location-based game in which people use their GPS-enabled cellphones to “check-in” at locations. Checking in earns them points, badges and mayorships. It’s all fun and, for the most part, you don’t get anything but bragging rights out of it with your friends. I explained why I thought dealers should pay attention to foursquare in a previous blog post.  I also briefly touched on the idea I go into in this blog post.

It has been exploding with new user registration now boasting about 1 million users and adding about 50,000 per day. This, of course, is attracting major brands such as Starbucks, Pepsi, Macys and more to see what they can do to use it for their benefit.

According to a New York Times article today , Pepsi just worked out a deal with foursquare to offer “live notification(s) when customers are near stores” that carry Pepsi products. Pepsi relies on stores to sell Pepsi products so their interest is in directing customers into those stores. They’ve also combined their foursquare campaign with their Pepsi loyalty campaign so when people check-in at those stores, they actually earn Pepsi points for their loyalty account in addition to the points they receive on foursquare.

I’m waiting for an automotive manufacturer to start a similar campaign since they are pretty much in Pepsi’s shoes and rely on dealerships to move vehicles. Why not have an OEM campaign designed to drive customers to dealerships? (I wouldn’t be surprised if Ford is the first OEM to try this. They’ve certainly embraced social media marketing.)

Foursquare has also started catering to businesses and offering businesses the opportunity to offer their customers specials, coupons and freebies. It includes with it analytics of your business (as related to foursquare check-ins). You can see more about their program here (Foursquare + Your Business ). Here’s a sample image (from that page) showing you kind of what you “could” do when people check-in:

Without  going into too much detail, the one thing that foursquare users love is badges. People go to places and do things just to get badges. The badges don’t really “do” anything. They’re just cool and, well, it is a game after all.

Whether you like foursquare or even know what it is, there’s at least one immediate thing you can do to drive traffic to your dealership, cater to the game.

There exists a badge on foursquare called the Swarm badge. This badge can only be unlocked when 50+ users check-in at the same place and at the same time (within an undisclosed time frame). This is particularly hard to get, for obvious reasons.


Dealerships use promotions all the time designed to bring people to their lot. Radio station promotions, Gas card and movie ticket giveaways, free food, live entertainment, etc.

Why not hold a “Swarm” event?

It’s not hard and it’s free. Worst that could happen: nobody shows up. Best case scenario: you have people on your lot. Accompanied with an appropriate Twitter campaign, you will generate interest and you may even get foursquare to help market your event. They’ve been known to do that. If foursquare tweeted just one tweet about your event, 60,000+ people would get exposed to your store. I guarantee that consumers in your market will also re-tweet this event as they will have a vested interest in ensuring that as many people show up as possible.

Consumers get barraged with all the “typical” dealership events and they tend to tune them out, in my opinion. We have so many “sales” that a customer probably feels like there’s a sale every week so the “sense of urgency” a sale is designed to instill is negated by the fact that we have them so often and, in some cases, all the time.

Do you know why Nordstom’s sales are so popular? They only have them twice a year. Really. Only twice. They never deviate from that and customers know it. That’s creating a true sense of urgency.

A Swarm event would create a true sense of urgency, even if only for foursquare users. They would have to come on a specific time on a specific date and they will come, I promise.

You never know, you may even have such a great turnout that the people on your lot at your swarm event earn the even more coveted Super Swarm badge where 250+ people have to check-in.

All I know is anything that’s free and will bring 50+ people to my dealership on a specific date and time would definitely be something I would try out. 

Just having 50+ people on your lot at the same time would bring non-foursquare users onto your lot. Why? Humans are curious beings. If they’re shopping for a car (or even just driving by), they may stop to see what’s going on. Heck, people also like attention. I could very easily see someone buying a car right then just to show off!

Having people on your lot is never a bad thing. This could help them get there.

After that, what you do with them is up to you.

Avoid Making Dealership Turnover A Self-Fulfilling Prophecy

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We’ve all heard the importance of a dealership providing the proper tools for a new sales employee to be successful. Some are very basic like a desk to work at with a computer (hopefully) and some are more involved like training.

Almost every dealership experiences high employee turnover in the sales department. Some dealerships don’t, however, and my hat is off to them because, while every dealership will tell you they value their employees, not many actually show you they do.

I read a book titled “The Three Signs of a Miserable Job” by Patrick Lencioni . In brief, it discusses the importance of management truly getting to know their employees on a personal level and showing interest in them as people. Done properly, this increases a person’s job satisfaction because they feel like they matter and that what they do makes a difference. (I absolutely recommend this book!)

If your new employees don’t really feel part of your organization, they will not have the internal commitment to your business. Just as employers impose 90-day probation periods to scrutinize employees and see if they will conform, fit-in, and produce, employees have a probation period for employers also, whether conscious or unconscious, where they are evaluating you as an employer and making a decision on whether they want to continue working for you and, in cases of green-pea car salespeople, whether they want to remain working in this industry.

Personally, I never understood the whole “probation period” thing anyways. Most dealerships have migrated to an “at-will employment” model anyways so what does it matter if you terminate an employee pre-90 or post-90 days? With such an agreement in place, you can terminate an employee at any time and for any reason.*

The point  is, in my opinion, by having a “probation period”, you are telling your new employee that you like them enough to hire them but you don’t like them enough to commit to them – yet.

One thing that bothers me and I still see in practice today – the procrastination on purchasing your new sales employees business cards. This is probably one of the smallest expenses you could (and probably will) make in a new employee. Business cards nowadays cost less than the pre-employment drug screen and the training you’ll (hopefully) provide for them.

This small expense does something that nothing else you can do at the start of their employment will accomplish – tell them that they are part of your team and that you have made a commitment to them. You don’t know how many times I’ve heard (and experienced personally) from salespeople that, once they got their business cards, they felt like they really had a job and were accepted.

I understand that it is because of the high turnover in sales that makes an employer wait to order them. The justification is, of course, monetary and justified with some phrase similar to – “If we ordered business cards for every new salesperson, we’d have a bunch of business cards for people that don’t work here anymore.”

My point is that the simple act of providing business cards to a new employee shows them that you want them there, not that you are still trying to make up your mind. By not “walking the walk” and making a commitment to a new hire, you allow them to do the same.

I know of dealerships who do not provide business cards to any salespeople…. ever.

In addition to this, it looks really unprofessional to a customer when a salesperson either cannot provide a business card and/or they have to write their name on a blank one or on top of an ex-employee’s crossed-out name.  Customers don’t expect your salespeople to be around long anyways. This just reinforces that feeling and detracts from your dealerships’ message of stability and trust.

This is just one way with which you can show an employee that they matter …. not just that they may matter later.

By making this small expense and showing your commitment to them, you may just get them to commit more to you.

* (Disclaimer: If your state does not allow “At-Will” employmentagreements and/or there are some other employment laws that mandate sucha policy, then, of course, protect your business. I am not anemployment attorney.)

Why Social Media Marketing is Important For Any Business

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Recently, I attended the Digital Dealer 8 conference in Orlando, FL. I was working most of the time but did get an opportunity to have an interesting conversation with Ron Morrison – the “ron” in ronsmap.

If you have not heard of ronsmap , start looking into it quickly. In my opinion, it could absolutely be the next Craigslist but for cars. This video explains what it is better than I ever could.

If you don’t have your inventory there yet, call whatever company is handling your inventory feeds and/or ronsmap and get it there.

Ron and I started talking about the future of internet departments. I told him it was my opinion that, in the future, there wouldn’t be any. I expressed why in a previous blog post . I expressed my belief in the importance of building your internet sales and that, in my opinion, a good internet department would account for 40-60% of any dealerships inventory with that percentage increasing in the future.

He countered with the following question:

“If my dealerships’ internet department accounts for 40% of my dealerships’ business, why would it be important to me, as a dealer, to focus on increasing that departments’ sales versus focusing on increasing my retail departments’ sales?“

I answered with what I thought were the obvious answers:

  • increase units sold
  • increase website traffic
  • increase exposure
  • lower cost per sale in internet vs. retail
  • be where the customers are
  • etc.

Other people threw some answers in there also. While none of these answers are wrong, none of them really “hit the nail on the head” of the importance of social media marketing.

After all of our attempts at answering his question, he countered with a question that, in my opinion, summed up, in its entirety, why it’s important for any business (not just car dealerships) to embrace and engage their customers utilizing social media.

“How much would it be worth to you, Mr. Dealer, if every customer that bought a car from you went home and told 130 of their friends?“

He also asked me what the first call to action on any businesses’ website was and, again, the obvious guesses (contact us form, quick quote, and other forms of engagement) were not what he was looking for.

“The first call to action on any businesses’ website is a “Share” button.”

The reasoning he gave was that, if a customer that visits your website sees, and clicks, the share button, he just offered you free advertising. He’ll get the name, number and the opportunity to speak with the customer if they’re willing to share your website with their friends, family and colleagues unsolicited.

I’ve been hearing, both in our industry forums and in feedback on conference sessions, that social media is overrated and that too many vendors and companies are focused on it when their efforts would be better focused elsewhere.

While it may be a little over-kill to have EVERY session and vendor focusing on that while neglecting all the other aspects, tools and best practices for you to learn about, that doesn’t make it unimportant.

Statistics don’t lie. Facebook may become the search engine of the future. Right now, SEO is focused on Google Page One management. It’s very possible that the future will bring a different focus – Facebook search results. SEO and SMM may become synonymous. With all the integration happening, they will, at the very least, become symbiotic.

The real power (and value) in social media marketing lies not in being there for your business’ sake, but in being there for your customer’s sake.

Why would you not want to make it easy for your customers to “spread the word” about your business to their friends?

What I don’t understand is why people differentiate between SEO, SMM, Reputation Management, etc.

They are all the same thing.

It’s like having a Happy Meal in front of you and saying that you think the fries are the most important part and that you’re only going to eat those. The rest doesn’t matter.

I know that if you ordered a Happy Meal, and they only gave you fries, you wouldn’t be happy.

Eat the whole Happy Meal, not just the fries.

I promise your belly will be fuller and you’ll be.. well.. happier.

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