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Digital Dealer’s Hidden Learning Opportunity

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As we get ready to attend the 9th Digital Dealer Conference & Exposition in Las Vegas, I wanted to talk about a hidden learning opportunity.

Over the past weeks, I’ve seen plenty of blog posts and articles from people with advice on how to get ready for and efficiently attend the conference. All of these articles offered great advice such mapping out your sessions and bringing proper supplies. I agree with all of them. 
One thing I haven’t heard, however, is one of the most beneficial things I used to take advantage of at the conferences and that is the ability to check out all the new technology and services available within our industry that could help me sell more cars.
I was an internet director working for large automotive groups for a long time. I was constantly bombarded – as I’m sure you are – by calls from vendors. Some days it seemed like I appeared on every vendors “to-do” list and, at times, I just stopped taking their calls. We’re all busy and we’re all focused on selling cars. Nobody wants to be “sold” something when you’d rather be doing the selling.
One of the most attractive things for me, at the conference, was the opportunity to visit with all the vendors in the exhibit hall if only to check out what solutions and technology are available. Whether you are in the market for a new solution or not, the knowledge of what’s out there is invaluable because the one thing in our business that is constant is change. 
When your dealer principal, GM, GSM or whomever comes to you with a problem and asks you to fix it, would you rather know what solutions exist and be able to make some suggestions RIGHT THEN, or have to start hunting from scratch. I guarantee you it will waste more of your time hunting for a new vendor for whatever your needs are if you don’t already know what’s out there.
This also gives you the opportunity to ask other DEALERS about their vendors. Every vendor is going to tell you that their product rocks, that they are the best at it, and that they will help you sell a ton more cars than you already are (if you use it properly, of course). So how do you weed out the good companies from the GREAT companies? How do you find the “diamonds in the rough”, so to speak?
Look, we all know that post-conference sales pitches, phone calls, and e-mails only INCREASE – as they should. You can’t blame the vendors. Say you sold Fords and you went to an auto show. At that auto show everyone was educated on the benefits of driving a Ford Explorer. Everyone left with some level of knowledge that maybe I should be driving a Ford Explorer. Now, say the conference decided to give you a list of all of those people who were interested in a Ford Explorer. Would you call them? If you are any type of salesperson you would. 
Just like you get irritated when you call someone that you got an internet lead on because they’re irritated that you called them, so do the vendors. If you took the time to educate yourself about the technology products and services that are available WHILE YOU”RE AT THE CONFERENCE, you would be able to tell the vendors when they call you post-conference that you took the opportunity to check out their service already.
I’m not saying you have to spend your time watching everybody’s demo. Just set aside a block of time to make a quick trip around the exhibit hall to check out what new services and technology products are being offered by companies – both new and old. 
I guarantee you’ll discover something that you didn’t know existed.
You have all the notable vendors within our industry in the same place at the same time. Use that to your advantage. Learning what is available to help you sell more cars is just as important as learning new techniques and processes to do that via the seminars. The vendors are an intrinsic part of what makes the Digital Dealer Conference & Exposition POSSIBLE. They’re at the conference because they want the opportunity to meet you and talk to you. 
Be the go-to-guy (or gal) at your dealership with the solutions and you’ll make yourself that much more invaluable. 
…and pick up some free swag and enter their contests for prizes while you’re at it. We all like free stuff and they like to give it out.
Here is the list of vendors that helped make the 9th Digital Dealer Conference & Exposition possible.
I hope to meet everyone at the show. 

Carpe Diem

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“Progress always involves risk; you can’t steal second base and keep your foot on first” – Frederick Wilcox

People like comfort and fear change. In today’s economy, people are afraid to take risks whether in business or in their personal lives. In our industry, change is continuous yet nobody wants to do it.
A new sales manager comes in and forgets the fact that his predecessor was probably terminated because he/she did not perform yet they are afraid to do something new to change that cycle. The definition of insanity is doing the same thing over and over and expecting different results.
Since dealership turnover of sales personnel is considered a normal part of the retail sales department in a dealership, new managers feel that the solution is changing personnel. Why? Because that is a change that conforms to expectations.
Whether the change involves processes or vendors, I guarantee that success doesn’t come without risk. If you, whether in your personal or professional life, are unwilling to take risks to achieve different results, you will fail just as the person before you did.
Our country was built on change. Most successful people in business made a change, whether that was by doing things differently or thinking outside the box.
If you’re not achieving the results you need and/or are being demanded of you, the worst thing you could do is maintain the status quo.
Be open to change. Embrace it. Think outside the box.
If you don’t know what to do, learn. If something isn’t working for you, change.
If you live in fear, you will never achieve success. Whether that is increasing sales, employee morale, or getting better results from vendors.
Do what you want to be doing, not what you are being forced to do because you are living in fear.
Carpe Diem.

Fall 2010 Automotive Conference Schedule

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I’ve been asked by some people about all the conferences coming up this fall so I thought I’d compile a brief list of the ones I know about.

(Note: These are listed in chronological order, not order of importance.)

Please let me know if I’ve missed any and I’ll add them.

September 8, 2010

Innovative Dealer Summit
Denver, CO
More info: Innovative Dealer Summit

September 14-15, 2010

F&I Management & Technology Conference and Expo
Las Vegas, NV
More info: F&I Management & Technology Conference and Expo

September 20-22, 2010

Leedom Group 16th Annual Buy Here Pay Here National Convention
Las Vegas, NV
More info: 16th Annual Buy Here Pay Here National Convention

October 12-14, 2010

9th Digital Dealer Conference and Exposition
Las Vegas, NV
More info: 9th Digital Dealer Conference and Exposition

October 18-20, 2010

Driving Sales Executive Summit
Las Vegas, NV
More info: Driving Sales Executive Summit
Use coupon code “mjh100” to save $100 on registration

October 20-22, 2010

J.D. Powers 2010 Automotive Internet Roundtable
Las Vegas, NV
More info: JD Powers Automotive Internet Roundtable

November 2-5, 2010

SEMA Show
Las Vegas, NV
More info: Sema Show

February 5-7, 2011

NADA Convention and Expo
San Francisco, CA
More info: NADA Convention and Expo

Sales Training And The $20,000 Over MSRP Internet Price

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In our crazy world that is the automotive industry, at one point or another, you have to begin.

In retail sales, the typical training for a new salesperson used to be “This is how you do a foursquare. Now go get a customer.” 

In today’s world of technology, we’ve added only one thing. “Here’s how to use our CRM.”

In the case of OEM and product training, most OEM’s have some sort of certification test and/or required product knowledge tests. These OEM certification tests are great – in theory. In reality, however, many salespeople don’t ‘really’ learn anything. They do them because they have to, not because they want to.

Many OEM’s today require a certain level of completion by a dealerships’ sales staff to qualify for CSI-based factory incentives. Some OEMs that have ‘spiff’ programs for salespeople will also require a salesperson to have completed product training before they are eligible for individual sales spiffs.

I cannot count how many times I’ve seen salespeople rush through these certifications just to make sure they (or their dealership) qualify for whatever. They share test answers. The sales managers give them the answers or even take the test for them.

The sad part is that you don’t really need any product knowledge to sell a car. Most industry veterans can do a walk-around on any car even if they know nothing about it. Most ‘green-peas’ follow the leads of the industry veterans (and we wonder why dealership turnover is so high).

If you can sell emotion, you can sell a car. Everyone knows that even the worst salesperson at a car dealership can sell a car if they are just at the dealership enough. Our basic sales process is designed to do just that – sell emotion. Get them in the car. Touch it. Smell it. Drive it. Chances are they wouldn’t be on your lot if they weren’t interested at all in what you were selling.

We concentrate so much on losing a sale that we don’t create a customer.  I would bet that the phrase “Don’t let them leave.” has come out of every sales manager’s mouth at least once.

Why are we so afraid of the customer leaving?

If the salesperson did all the things he/she was supposed to do: fact-find, build rapport, properly present the product, effectively demonstrate it and truly attempt to create a financing strategy that worked with the customer (versus for the dealership), the customer will do business with you.

Make training your sales staff a priority in your dealership. If your dealership will not provide any training, get it yourself. It’s important and you WILL make more money. Guaranteed.

Now onto other news:

Plastered all over yesterday’s news and blogs was the story of a dealership in California that responded to an internet lead for a Chevrolet Volt with the following e-mail:

Hello *****

Thank you for your online request, as you know the Volt is going to be a very limited production vehicle for the first 2-3 years. Demand is going to far exceed supply for this vehicle, initially our asking price for the Volt is going to be MSRP plus $20,000, we are expecting only receive 9 Volts all of next year.

I will keep you in my customer base for when the Volt comes out and I will contact you with any information as I receive it. We are taking orders right now for the Volt, if you would like more information, please let me know and I will be more than happy to help you. Thank you.

***** *****, Internet Specialist
******* Chevrolet
********, CA

I don’t know what dealership that was nor whether that employee was responding per the direction of his/her managers. I can tell you one thing, however. There is no chance that that particular customer is EVER going to entertain the thought of going to that particular dealership to do business whether it is to purchase that, or any other, vehicle.

I understand that dealerships have the right to sell their vehicles for whatever price they want to. I’m not at all saying that a dealership shouldn’t make money selling a vehicle. All I’m saying is that the strategy of this particular person, even if the dealership really will only sell these vehicles at $20,000 over MSRP, should have been very different.

If you’re confronted with a situation in which your dealership has made the decision to mark up any particular vehicle over MSRP, you’re better off not giving the customer any price whatsoever for the vehicle, in my opinion, especially online.

Why do some dealerships and/or sales managers still insist on handing out in-the-box-scraping-them-off-the-ceiling prices to their internet departments??

You have a better chance of selling a car with a customer in front of you than with no customer at all. Most customers don’t even buy the vehicle they came in to initially look at anyways. Why scare them off?

This resulted from either a lack of training, apathy from the internet ‘specialist’ or pure stupidity.

Only one can be fixed.

The sad part is that the $20,000 over MSRP price is probably in the dealerships’ DMS that way because the sales managers don’t want to have to manually add the addendum. Because of this, not only has the dealership potentially scared off THIS customer, but that $61,000 price tag may very likely be populating their website and all the third-party websites they subscribe to.

Now they’ve scared off everyone.

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.

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.

Digital Dealer Conference . Orlando, FL. April 20-22, 2010

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As I talk to dealers, I am amazed at how little they know about the resources and training opportunities available to them. Today, I just want to talk about one such opportunity.

In 2003, I went to my first Digital Dealer Conference. I can tell you that attending that conference was one of the best things I ever did. Since then, I’ve been to just about every one. This conference is invaluable for dealership personnel and has excellent training opportunities. If you are a General Manager, Sales Manager, e-Commerce Director, or Internet Manager, this conference is a must attend. Not only will you learn cutting edge techniques and best practices from industry leaders but you will have the opportunity to network and learn from your peers.

One area that is sometimes neglected by attendees is the vendor hall. I understand that you get hit up by vendors all day every day. Visiting the vendors (and not just the ones giving stuff away) is valuable in the sense that you know what solutions and technologies exist rather than trying to discover and identify them when the need arises. Be prepared for a problem with a solution. Visit the vendors. Ask them questions. See what they have to offer. You never know when you may need them.

This conference gives you the opportunity to learn practical techniques and things that you can take back to your dealership and immediately implement to sell more cars.

Registration is still open. Don’t miss out on this great opportunity.

(This may sound like a shameless plug but I can promise you that this is
sound advice and was not solicited.)

Don’t Judge A Book By Its Cover! (Prejudging Customers)

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“Don’t judge a book by its cover.”

If you’re in the car business, you’ve heard this before. Most dealerships will tell their salespeople not to do this but I still see it all of the time. Salespeople are notorious for prejudging a customer when they drive up on the lot whether it’s based on what the customer is driving or how they look.

In my first job at a high-line dealership, I had an experience that ingrained this into my head and I learned never to do this.

At this dealership, we worked on an “up” list. For those not familiar with this, it’s basically a turn-based system for salespeople designed to distribute opportunities equally and avoid the mass of salespeople accosting the customer upon their arrival. This dealership was brand-new and, frankly, we didn’t get a lot of customers at that point. You could easily work all day and get one or no opportunities.

I was “on-deck” (meaning there was one salesperson in front of me) when a customer pulled up. The salesperson took one look at this customer, turned to me and asked me if I wanted to help them (essentially switching positions on the list with me). Given that this might be the only opportunity of the day for me (or for him for that matter), I was certainly willing to assist the customer.

I go out and do all the right stuff, bring the guy in to my desk and we promptly customize a vehicle and place an order for a car for him – at MSRP.

My desk was right near the receptionist. She kept looking over at me the whole time while I was with this customer. After the customer left, she asked me what the guy’s name was. I told her and she proceeded to freak out.

This customer’s name was Kerry King. He’s the guitarist for a little band named Slayer. I was never much into heavy metal but they’re a pretty well-known band. Here’s a picture of him (and this is pretty much how he was dressed when he came in):

The point is that not only did I make a sale, but I made a friend. The guy is nothing like you would “expect” him to be from his appearance. Everything you see is for an image. Hollywood incarnate.

I’m sure that any other sales managers or industry veterans have similar stories and we all share them with our salespeople and/or co-workers. We all like to hear interesting stories and experiences from fellow industry professionals.

Some people just don’t get it though. Whether its seeing that person and immediately thinking “bad credit” or not assisting a customer because they’re cherry-picking, this practice continues to this day.

The sad part is that typically someone has to have an experience similar to this before it really sinks in.

Managers that see this behavior should immediately take action. This behavior not only hurts the salesperson by affecting his wallet but it can also hurt the dealership by upsetting a customer and losing business.

Do not make light of this behavior. It is contagious and will cost you deals.

Who Are the Real ‘Suckers’? (Stereotypes and Car Sales)

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I remember my first car sales job. I don’t know what specifically drove me to take that job other than the fact that I was good at sales, needed a job and they hired me. I’m really not a gearhead and I didn’t know much about cars but I figured I’d give it a go. It was a multi-line straight-sell store. I didn’t get any training other than the basic – Say Hi. Land them on a car. Take them for a test drive. Do a four square. – type thing. This “training” still exists within our industry, believe it or not.

One of my first sales managers (and I swear this is true), told me to watch this movie called “Suckers” and that it was a good training video.

Here’s a short clip for those who have not seen it so you can get an idea of what I’m talking about. (Caution: Rated R)


So, now you get the idea. (If you haven’t seen this movie, the story sucks but the cars sales-bits, which account for about 1/2 the movie are hilarious).

There are very few dealerships that have transitioned away from this mentality. The wrappers have changed but the candy bar is still the same. I see sales managers (and salespeople) acting this way all the time. It truly is special when I meet someone who sincerely cares about their customers aside from how much money they will make off of them.

How many times have you offered a customer a screaming deal to move a unit, maybe even at a loss in profit, and they don’t believe you? Why?

Do you treat the person with excellent credit differently than the customer with challenged credit? Why?

This stereotype still exists because this type of behavior does.

I challenge you to truly reflect on your staff and identify the individuals that exhibit these types of behavior. I guarantee you have some. Chances are, you already know who they are. Is this acceptable behavior? If not, will you let it continue?

Before this perception can go away, a true change needs to happen. We can tell customers how great we are and how much we care about them all day long but until all of our processes (and employees) that further this stereotype truly change, the customer perception of us won’t. 

Perception is reality.

A Dream Is A Wish Your Heart Makes

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I have a wish.

I contact the people, companies and resources that I believe will help make my wish come true. They, in turn, tell me all the tools they have that can assist me in my quest of wish-fulfillment. They tell me that this will work and that will work. They offer  training and support and say you can call me anytime.

Then, they give me the blueprint. They give me the manuals and instructions. They give me the hammer. They give me the nails. They give me the lumber and all the necessary tools needed to fulfill my wish.

I take their blueprint and instructions and I start building. I follow the instructions. I end up with a house.

I wished for a car.

This is what I see happening all the time in the automotive industry. Vendors call upon dealers to “pitch” a piece (or all of the pieces) of the puzzle. They say this is what you should do. This is how you should do it. These are the tools that you need. This is why you should buy them from us.

What they fail to find out is what your wish is.

Make your wish first.

Then find the right tools, companies and resources to make your wish come true.

If you’re doing it the first way, you’re doing it backwards and you will fail.

Failure in this fashion is the easiest option. If you fail, you can blame someone else (ie. Their instructions were bad. Their tools don’t work. etc.)

The solution I inevitably see involves some sort of phrase similar to this.

“Hey boss, let’s just get some different tools!’

Then you fail again.

“Insanity: doing the same thing, over and over again, but expecting different results.” – Albert Einstein.

Make your wish, then make it come true.

If the tools don’t exist, create them.

If nobody else knows the instructions, write them.

If you don’t have the tools, get them.

If your boss(es) or company won’t let you fulfill your wish, find a company that will.

Define your wish, then make it happen.

Don’t wait for someone else to do it for you.

Don’t let other people tell you what your wish is.

If you don’t know what you are wishing for, nobody, not even yourself, can make your wish come true.

Not even the Blue Fairy.

Contact Me