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If You Can’t Keep What You Have, Getting Bigger Isn’t Going to Solve Anything

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There is little doubt in anyone’s mind that the millions of recalls are going to increase the demand for technicians while straining existing franchise dealer’s service departments. Manufacturers are desperately trying to convince dealers to take on expensive expansion projects in their service departments in an effort to avoid losing service business to independents. To this point, according to an article in Automotive News, FCA US announced that it will be launching on online analyzer that will allow dealers to calculate the potential revenue increases of additional service capacity and technicians. Dealers will be able to play with variables such as number of bays, technicians as well as toggle shift lengths to see whether the expenses involved will be fruitful. Of course, with the massive amount of available recall work in and of itself, my guess is that the calculator is pretty much going to show numbers in the  black in most instances. The one piece of this article that really got my attention wasn’t the fact that a manufacturer is trying to get its dealers to expand their fixed ops capacity… no, it was this:

“Now, almost two-thirds of customers who buy new vehicles from FCA US dealerships are no longer visiting the dealerships for service one year after purchase.”

Wait. What?

So, FCA US is telling us that 2/3 of their new vehicle buyers defect from their dealerships’ service departments with, at minimum, two years left under warranty? Now, they’re trying to convince their dealers that they should expand their service departments? Something doesn’t add up here.

Sure, it makes sense that with almost 10 million recalled vehicles since 2014, FCA US is concerned about wait times for consumers to get their warranty work completed. The more completed recall work, the less liability for the automaker and a chance at retaining some brand loyalty.

FCA US has made some great strides and breakthrough initiatives in our industry as relates to employee retention by offering free college tuitions to all FCA US employees and dealership employees. They recognized that employee turnover in dealerships is unacceptable and hurts customer loyalty and stepped up to the plate to help dealers retain more employees by offering this one-of-a-kind benefit.

Perhaps FCA US should now shift it’s focus to what I see as a huge problem right now – the fact that, by their own numbers, their dealers only have a 33 percent customer retention rate average in service. It would only be logical to assume that the retention rate naturally decreases as more time passes. Wouldn’t it be easier to try and retain the 66% of the customers they are losing within a year of a new vehicle purchase before asking dealers to spend millions to expand service operations?

So now the dilemma, do you focus on retaining the water in the dyke frantically placing fingers in the holes just to see new ones appear? Or do you build a larger dyke?

I would suggest that perhaps increasing the size of the dyke would only create more holes in the long run. There may be more recall work but if dealers expand the sizes of their service departments, have a great run of service revenue for 3-4 years taking care of these 10 million vehicles only to find empty bays once everything settles down, that might hurt financially.

Just as FCA US saw a problem in employee retention and took initiative to fix it, perhaps they should now shift their gaze on what I see as a huge problem in customer retention in service. I’m pretty sure that if they don’t they will eventually run out of fingers and be forced to watch as all of the water leaves the dyke.

Jim Radogna: Avoiding the Eye of Mordor in Social Media

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eye-of-sauron-lord-of-the-rings-return-of-the-kingJust like in the blockbuster series “The Lord of the Rings”, the Eye of Mordor is always open. Until now, its focus has been on larger battles and more interesting things. Then a Hobbit found a golden ring and slipped it on his finger. And the Eye started paying attention to this little being that had avoided the Eye’s gaze… until now.

The intersection of advertising, marketing, and compliance is not easy to navigate. It seems as if each week, rulings are being rendered from one of the myriad of regulatory bodies making it more difficult for dealers to know what they should – and should not – be doing in regards to social media in order to stay compliant. In an effort to bring clarity to an increasingly confusing and misunderstood topic, I sat down with Jim Radogna, the president of Dealer Compliance Consultants, to get some answers.

 

Arnold Tijerina: I believe dealers aren’t vigilant enough ensuring that social media performed on behalf of the dealership meets the same compliance rules and standards that all of their other advertising requires. It’s sort of like an afterthought to them. What are your thoughts?

Jim Radogna: Very true. First, many dealers aren’t aware that advertising regulations apply to social media every bit as much as traditional media. Advertising regulations don’t go away despite the fact that social media tends to be a low-key, casual type of communication. In fact, The FTC recently updated its document Dot Com Disclosures: Information About Online Advertising. The primary focus of the publication, which was first issued in 2000, is to inform advertisers that consumer protection laws and the requirement to provide clear and conspicuous disclosures applies to the online world in addition to the offline world.

So in a nutshell, if inventory is posted or prices/payments are quoted on social media it’s likely that the posts will be deemed to be advertisements and will be subject to state and federal disclosure and truth in advertising regulations. Lack of space is no excuse either. Even if you’re advertising on Twitter and are limited to 140 characters, you must include a clear link to any necessary disclosures.

Next, even if the dealer is aware of these facts, it’s likely that dealership employees and/or vendors posting to social media do not have the same level of awareness.

AT: I’ve interacted with some dealers who operate under strict compliance conformity across all advertising – including social media – and others that don’t feel the need to adhere to the same rules when it comes to Facebook, Twitter, Pinterest, etc. It certainly wouldn’t seem to be unreasonable to assume that most dealers know compliance rules for their advertising. Why do you think they view social media differently?

JR: Until recently, virtually all enforcement actions for non-compliant advertising have been focused on traditional media, so this is a brand new area. In my experience, most dealers have a limited understanding of what constitutes “advertising” in the eyes of the powers that be. When dealers place an ad in the local newspaper, on the radio or TV, it’s pretty evident to them that they’re advertising and that they need to be diligent in following state and local compliance guidelines. But they don’t tend to think of social media as formal “advertising” because their intention isn’t to advertise their products and services on the social networks as much as to engage with customers, brand themselves and showcase their inventory. It really is an innocent mistake in many instances. The problem is that any time they mention prices, payments, interest rates, or the availability of financing etc. – anywhere – certain disclosure requirements are triggered.

So, a dealer or ad agency that is diligent about being compliant in their advertising may have their attorneys or a compliance consultant, like myself, review every one of their ads, mailers, TV commercials, and radio spots before publication, but not even think about having their social media posts reviewed because they simply don’t realize that these are considered “advertising”.

Another area where dealers are vulnerable on social media is transfer from traditional media. Here are a few examples: The dealer may have a full page print ad in their local paper that is fully compliant, but when they post a reduced-size pdf of the ad on Facebook, all of a sudden the fully-legible and compliant disclosure on the bottom of the newspaper ad is now unreadable. Instead of being 10-point type, it’s now 4-point type because of the size reduction. Another example is the TV commercial that’s posted on YouTube and shared on the social networks. Again, the disclosure on the bottom of the screen may be easily readable on TV but becomes indecipherable on a computer or mobile device.

AT: A recent FTC ruling regarding personal bias disclosure across all social media platforms seems to have lead some dealers into believing that simply adding a notation that the content is an “Ad” or “Sponsored” – whether in the ad or with the use of hashtags such as #ad and/or #sponsored – is enough to be compliant. To my knowledge, while the FTC ruling is certainly applicable when it comes to employees sharing dealership offers and specials on their personal social networks, it doesn’t negate obligation by the dealer to add necessary disclaimers. Do you agree? 

JR: Absolutely. Dealers may face liability if employees use social media to promote their employer’s services or products without disclosing the employment relationship. The FTC requires the disclosure of all “material connections.” These connections can be any relationship that could affect the credibility a consumer gives to statements, such as an employment or business relationship. So if employees, friends, family or vendors post on a dealer’s behalf, they should clearly disclose any relationship they have with the company. It’s all about transparency and full disclosure.

AT: As social media use by dealers grow, what are the most important things that dealers should be aware of in regards to how they use social media? 

JR: There are a number of legal considerations that every company should be aware of when establishing their social media policies and procedures, such as social media use in employment decisions; posting of online reviews, testimonials and endorsements; ‘fake’ and paid-for reviews; advertising on social media; potential overtime claims; harassment, discrimination and defamation claims; copyright and privacy issues.

AT: Should dealers be concerned by how their employee’s use social media and, if so, how do you recommend that dealerships protect themselves and/or decrease liability in this regard?

JR: It’s important for dealers to craft a social media policy that’s both practical and legally defensible. They can protect themselves by insisting that participants in their social media programs comply with the law and training them how to do it. The FTC specifically says these steps may limit potential liability and will be considered in any prosecution. According to FTC guidelines, “The Commission agrees that the establishment of appropriate procedures would warrant consideration in its decision as to whether law enforcement action would be an appropriate use of agency resources. The Commission is not aware of any instance in which an enforcement action was brought against a company for the actions of a single ‘rogue’ employee who violated established company policy that adequately covered the conduct in question.”

AT: The FTC has been increasing the attention it is paying to business and social media and has recently been vocal about their intentions to enforce compliance regardless of where the advertisement resides specifically mentioning social media. How do you believe this increased action and attention by the FTC will affect dealers in the future in regards to social media? 

JR: What’s become abundantly clear through recent federal and state advertising enforcement actions against dealers is that regulators are trolling through the digital world to find dealer violations. For instance, the FTC has cited many ads recently from websites and YouTube. It stands to reason that social networks are their next logical target. Let’s face it, it’s far easier for regulators to perform digital searches for violations than to read countless newspaper ads or listen to radio commercials.

My suggestion is to train every employee and every vendor that posts to the dealer’s social networks or may post on the dealer’s behalf on their own networks. Next, constantly audit all posts, either internally or by utilizing a qualified professional, to ensure compliance. Dealers are ultimately responsible the actions of their employees and any vendors they hire.

AT: Thank you, Jim. I appreciate your taking the time to help bring more clarity about this topic to dealers.

 

 

jim
About Jim Radogna

Before founding Dealer Compliance Consultants, Jim Radogna developed a strong background in dealership operations, having spent over 15 years in dealership management. His experience includes working in diversified roles including sales manager, F&I director, general manager, and training director. In addition, he served as compliance officer for a large auto group, where he developed and integrated a comprehensive compliance program. Being well-versed in all aspects of dealership operations, Jim and his team have used their knowledge and industry experience to develop unique, no-nonsense compliance and reputation management solutions for automobile dealerships of all sizes. These programs are designed to not only protect dealerships from liability but also greatly enhance the company’s reputation, increase profitability through consistent processes, and increase customer satisfaction and retention.

Jim is a sought-after speaker and frequent contributor to several automotive industry publications including Dealer Magazine, WardsAuto, Auto Dealer Monthly, DrivingSales Dealership Innovation Guide, AutoSuccess, and F&I Magazine.

Educators Need To Stop Acting Like They’re In High School

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Focus on Teen ProblemsIf you know me, you know that I know a little about conferences. If you don’t know me, just check out my LinkedIn profile and you’ll see that I’ve been involved in some capacity with 16 automotive conferences/events in the past 5 years. Some of them I was super involved in organizing curriculum and marketing the event for the conference itself and some of them I was working for vendors in one capacity or another – sometimes even multiple vendors at a single event. I believe that it is in the best interest of dealers to get the education they desire to take their sales and dealerships to the next level.

Favorites don’t matter to me. Sure, I have the events that I like to go to, as does everyone who has attended conferences. I personally don’t care which conference a dealer wishes to attend. The whole point is for the dealer to attend a conference that offers content that they feel will help them be more successful in our business. That’s why I created a list of every physical automotive event I am aware of and even included a form for people to submit events that I’m not aware of. This is an unbiased list that I hoped dealers would use to identify events that may be convenient for them to attend. Let’s face it. Only 5% of dealers actually attend events. Sometimes that’s due to budget. Sometimes it’s due to a lack of motivation. I thought it would be a valuable resource and have had a lot of positive feedback about it. In fact, I’ve heard feedback from vendors that they also use my list because there are so many events that it’s difficult to keep track of them and make decisions on where to allocate their budgets.

I’ve seen a lot of bickering and in fighting over the years between cliques (for lack of a better word) of people concerning events. I am certainly NOT innocent in this. In the past, I was definitely pretty blunt and not afraid to promote an event I was involved in even if it meant ruffling feathers. I’ve learned my lesson and I do my best to no longer get involved with these politics and stay as under the radar as possible. Hell, I’m not good at being PC anyways so why bother.

The genesis of this blog post is that I just attended an excellent educational event for auto dealers. At this event, I met a person who has only been in the automotive industry for TWO MONTHS. At one point, this person candidly asked me which event(s) they should attend. This person shared that as they connected and interacted with people on social media, they would get messages from people saying they shouldn’t interact with certain people; that they were not good influences; that they were bad people. This person has seen the insane hostile conversations in public between vendors. They have only been in our business for two months and it’s already apparent to this person that there are cliques of people; that they don’t like each other; that they bad talk each other… and it’s really turning this person off.

Everyone wants to talk a good game of education for dealers as a primary goal. If that is true, let’s all focus on providing those opportunities for dealers. I’m not saying that everyone has to like everyone else or that we all need to hold hands and sing “Kumbaya.” All I’m saying is that dealers that are just entering our business are noticing all of this fighting. If newbies know about it, is it not very probable that veterans also do?

When this person finished telling me this, I felt ashamed. I am ashamed that dealers are being put in a position in which they are being pressured to “choose sides” and are being told that if they like X person, then they cannot be “friends” with them. This is unacceptable behavior from an industry full of professional experts who claim to have a goal of educating dealers. It is also detrimental to revenue and attendance at not only their events but all educational events.

Everyone is entitled to his or her opinion. Just realize that the opinions expressed in public forums are being noticed and absorbed by dealers and some of them are choosing not to get an education because of unprofessional behavior that they are being exposed to

To anyone holding educational events: Please don’t deprive dealers of an education. If you truly care about helping dealers improve and succeed, please let this be a wake up call.

In the end, the ones who are really losing are the dealers.

[P.S. I am NOT directing this towards anyone specifically. The dealership employee that expressed these sentiments inspired this blog. I don’t harbor any ill will towards any people or their educational events. Sure, I have my personal opinions and I’m not perfect and in no way am I trying to judge anyone. The purpose of this blog was to share this story. I sincerely hope that nobody takes this personally. I can only hope that the people that need to hear this message do so and take a moment to reflect on behavior that may be unbecoming of them as professionals and reflect poorly on them as educators.]

[P.S.S. Not only is it turning dealers off, it’s also causing vendors to second guess whether they want to be associated with an event.]

Social Media and OEMs: the Flaw in the Machine

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I remember a few years back when OEMs started pressuring their dealers to develop a social media presence. “You have to have a Facebook page.”, and “You need a Twitter account.” They sent their contracted digital marketing consultants to their dealers and beat them senseless until they complied. They started grading their dealers’ online presence and critiquing it’s absence.

On the flip side, manufacturers were developing and building healthy and thriving online presences. I get that. Their job is branding and promoting. That’s awesome. Some manufacturers were better at it than others. Some took their time joining the game. Some were ahead.

As most of you reading this know, one of the goals of social media is exposure outside your networks. That’s difficult to achieve for most dealers, especially dealers not paying attention and putting forth just enough effort to say they are “doing it”. Some are effective and others aren’t.

The thing that puzzles me is that, for the most part, many manufacturers have large audiences – some in the millions. Their public face is all about reassuring customers and branding. You hear phrases and messages that say things akin to we value you as a customer. Wait a minute now. Who, exactly, is a manufacturer’s customer? I don’t know any manufacturer’s that sell cars direct to consumers. The only people that buy cars from manufacturers are car dealers. In my opinion, that makes car dealers the manufacturer’s customer but that’s beside the point.

Many manufacturers spend a lot of time watching, learning and responding to consumers on various social media channels – which is awesome. That being said, if you are social media savvy at all, you understand the value of a retweet or mention from a “person” with a large following – whether that be on Facebook, Twitter or wherever. While I’m sure it’s probably happened at some point in time, I have yet to see any car manufacturer put any concerted organized effort into identifying tweets from their TRUE customers – the car dealers – and using their considerable online presence to retweet and mention those dealers. You’d think they’d want to support a dealer’s social media effort.

If a dealer is putting out great content and saying positive things, why wouldn’t a manufacturer want to spend meganbarto@gmail.com or skeetle@me.com and effort into assisting the dealer gain exposure and increase their networks to the relevant people within their audience? I mean, THEY are the ones that pushed dealers into the social media world.

If your customer – the dealer – is doing a great job, reward them by interacting with THEM as well as with the end buyer. It would be a great way to support your franchises, reward them for their efforts, which, for the most part, are also going to be promoting the brand itself, which is completely in line with your goals anyways. YOU want engagement. YOU want to be retweeted. Why is it unreasonable for to assume that your dealers do as well?

I challenge a manufacturer to devote as much effort into integrating social media support for their franchises into their operations as they do supporting themselves. There are less franchises than consumers so it wouldn’t take a lot to accomplish. A retweet here and there would be easy, appreciated, rewarding, and relevant.

Oh, and don’t try the whole “we don’t want to play favorites” excuse – even if you truly believe it might be interpreted that way by your franchises. If your dealers have an online social media presence, support it. Maybe that would encourage your dealers who do not to jump on the bandwagon.

Practice what you preach and support the hand that feeds you.

 

The Game-Changing Google Program Auto Dealers Can’t Afford to Ignore

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Google’s online ventures are usually anything but under the radar. Yet recently, in what may be a game-changing play, the search engine giant quietly entered the third-party lead provider business for car dealerships.

The beta version of Google Comparison Ads for Autos (which is unofficially being referred to as “Google Cars” within the industry) was launched to very little fanfare a few weeks ago in the San Francisco Bay area. The service invites participating dealers to send their inventory to Google, allowing consumers direct access to inventory, price comparison, and the ability to request quotes from within Google search results. As shown below, the program—and associated inventory—is prominently displayed on page one of a relevant search.

While the program is currently limited to dealers within the San Francisco Bay area, program-specific search results are available throughout the state of California, not just for people located within the Bay area—contrary to what others are reporting. As evidenced by the above screen-grab, I did not have to change my location to get Comparison Ad results, and I live almost 500 miles away, in Southern California.

Google is currently testing a number of similar Comparison Ads programs for other products, including credit cards, CDs, and checking and savings accounts. Results have been controversial, with many advertisers in these industries reporting dissatisfaction, especially since Google is not obligated to play by its own rules and is, in effect, competing with its own advertisers. In November 2011, Google temporarily suspended its Comparison Ads service to the mortgage industry with plans to reboot the program after revamping it.

While specifics of the program for auto dealers have yet to be announced, Google is promoting the new service with the following program highlights:

“Higher-quality leads: Our leads come directly from motivated, purchase-ready consumers who have specifically chosen to contact your dealership. Leads are unique, never resold, and delivered immediately to you.

Free inventory listings: You can have your inventory shown to consumers on Google for free, even if you decide not to receive leads.

More than just inventory: Consumers can choose to connect with you even when you don’t have a specific car in inventory. We know that you can order the car, dealer trade, or find other solutions to help consumers get the cars they want.

Greater control over leads: You choose how much you’re willing to pay for a lead and target consumers based on distance and specific type of car, so you get the leads that are most valuable to you.”

This is all the information that Google currently has publicly available about the program. However, the operational processes used in the suspended Comparison Ads program for mortgages may offer additional insights. Here’s a run-down of how the program functioned:

1. Google looked at maximum bids placed by each competing bidder and then set a reserve price based on those bids. Once set, the reserve price was the minimum fee bidders would have to pay to appear on a desired search results page.

2. Anyone bidding below the reserve price was dropped from the auction. Google also dropped the bottom 10% of bidders who bid at or above the reserve price.

3. Results were then displayed (in this industry’s case) from lowest to highest APR. This leads me to believe automotive results would be displayed with the lowest prices first.

Furthermore, this is how, in an unlisted video, Google described the highlights of the program to the mortgage industry:

• The ads were included in the “Sponsored Listing” section but are not counted in the AdWords auction.

• Pricing was pulled directly from the companies’ “pricing engine product feed,” which would presumably be the equivalent of a dealer’s DMS or pricing tool, and updated multiple times per day.

• Bids could be highly targeted to reach the consumers most likely to convert, and an advertiser could place different bids for each targeted criteria.

Google mentions that they are working on a different ranking system for the mortgage program (one of the reasons provided for its suspension) in which Google will reward high-quality advertisers using factors such as:

• Accuracy of offers as determined by mystery shopping

• Turnaround time on lead follow-up

• Customer satisfaction as measured by surveys

It is probably safe to assume that Google will eventually apply these ranking criteria across all industries serviced by their Google Comparison Ad program.

Google is promoting the Comparison Ads for Autos program as a way for dealers to source fresh leads from consumers’ Google searches, but given the above information I have several concerns regarding how beneficial the program will really prove to be.

First and foremost, Google claims that the leads generated by the program are “unique,” yet in the final step of a lead submission, the program offers the consumer the choice to contact other dealers who may have similar cars available. A single person inputting a lead and requesting contact by multiple dealers would hypothetically generate multiple leads, a complication Google does not currently address.

On a related note, Google is telling consumers that even if they are interested in a particular vehicle that has already been identified by VIN, they may be able to get the same vehicle from another dealer. As Google puts it, “if you see a particular car (specified by a unique VIN) showing in a dealer’s inventory, you may be able to get that car from other dealers as well. Dealers often times trade inventory with each other, so you can buy from the dealer that you prefer.” Thus, Google is negating the edge a dealer may have in winning the consumer’s business simply by having the exact vehicle they are looking for in stock.

In addition, while Google says that dealers can list their inventory on the program free of charge, it is unclear what would happen to any leads generated if the dealer chose not to “pay to play.”

For those who are willing to pay, Google allows dealers to “[choose] what [they’re] willing to pay for a lead.” According to Automotive News, the price-per-lead is determined via a bidding model, with dealers competing for prominent positioning within search results for their inventory.

The final component of the program is that Google emphasizes the protection of consumer privacy. There are three ways in which a consumer can contact you as a participating advertiser:

1. Inbound Phone Lead: This comes via a Google-generated phone number; the consumer’s phone is blocked from the advertiser’s phone system.

2. E-mail Inquiry: The advertiser is given the consumer’s name and the details of the product they are interested in, but the consumer’s e-mail address is masked.

3. Request a Call-Back: The advertiser is given a masked phone number with which to call the consumer.

Google states that lead delivery is compatible with CRMs, but how those leads would actually populate is unclear.

The fact that Google commands such a large percentage of internet searches means that this program is a potential game-changer. Google’s ability to position this program wherever it likes, regardless of its other ad programs, may mean that dealers are forced to participate to remain competitive. Because Comparison Ads currently appear just above the first organic search results, these results will likely divert a portion of traffic that would otherwise have gone directly to dealers’ websites.

Not only will Google’s Comparison Ads for Autos impact many components of your online marketing efforts, including search engine optimization strategy and pay-per-click campaigns, but it may also even affect the lead quantity that your current third-party lead providers are able to offer you. Obviously, dealers would be well-advised to pay close attention to the program as it develops.

via the July 2012 edition of the 3 Birds Marketing newsletter

Google Cars Encourages Dealer Trades

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Yesterday, Brian Pasch posted a great article with the first examples of a new live Google product called Google Cars – Google’s entry into the 3rd party lead provider business for car dealers.

Other than all the obvious tactics that other third-party lead providers employ to maximize revenue from a consumer lead (as illustrated by Brian), I did some digging and found another component of their program that I thought was very interesting.

In Google’s support article explaining the program exists this piece of advice for consumers:

“If you see a particular car (specified by a unique VIN) showing in a dealer’s inventory, you may be able to get that car from other dealers as well. Dealers often times trade inventory with each other, so you can buy from the dealer that you prefer.”

What?!?!

The only way Google could have a dealer’s inventory is via the dealer feeding it to them. If you’re a dealer sending your inventory to Google, be advised that Google is telling consumers that if they find the exact car they’re looking for (down to the specific VIN) in YOUR inventory, that a consumer doesn’t have to buy it from you.

In my internet sales career, there were many times that myself and a competing dealer were working with the same customer online. One of the things I always had to look at was if the exact car the customer was looking for was available and who had it. There were plenty of occasions where the only convenient place that had the exact car the consumer wanted was my dealership. One of the strongest value propositions I had when quoting and/or trying to convince a customer to do business with me versus my competitor was that I had the car.

Since Google doesn’t release the consumer’s information to the dealer, it’s going to be much harder to identify the cases in which my competitor is working the same customer and trying to sell them a car that I have in stock with the intention of dealer trading with me for the vehicle.

One has to assume that only dealers providing inventory and/or participating in this program have the “Contact Dealer” button available as not every dealer does (as illustrated in the image below).

cars

As you can see in the example above, it appears that dealer C and F are participating in this program while dealer D and E are not based on the existence (or absence) of the “Contact Dealer” button. So, as a consumer, I’m guessing that only inventory from dealer C and F would be available for a consumer to view. However, using Google’s own advice, I now know that since dealer D is closer to me, I could hypothetically buy dealer C’s car from dealer D.

I don’t necessarily want a provider that I am paying telling the consumers I am paying to attract that they can buy MY cars from my competitor.

My other thoughts on Google Cars:

Not only is this new program by Google hijacking dealer’s SEO efforts by making Google Cars the “most relevant” result in searches but the inventory itself is hosted on Google’s own site which could also eliminate the need for a consumer to visit your own website.

Google is also considering the vehicle results delivered via search as “Sponsored” versus organic results so now they are also competing with you for your PPC ad placement.

It’s going to be pretty difficult for dealer’s to NOT participate in Google Cars. Unlike other third party lead providers who rely on organic result positioning and PPC ads, a dealer can combat this if it has an aggressive SEO strategy. Google, on the other hand, is always going to deliver their program at the top of the search results, right above the first true organic search result.

Does anyone truly believe Google is going to bury their income-producing program in search results?

On top of this, Google’s recently formed automotive division has been invited to (and spoken at) many of our industry’s educational events in the last year or so giving advice and “assisting” dealers when all along they were preparing to bring to market a product that would compete with those very same dealers for not only their money but also in their search engine marketing strategies.

Google is the new Honey Badger. They don’t care. They’ll just take what they want.

Amazon Now Competing With Dealers

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Amazon.com announced the launch today of a new store AmazonSupply.com

The site, as reported by Mashable, is “aimed at buyers in the business, industrial, scientific and commercial spaces”, however, anyone can order from the site.

Being that I buy pretty much everything from Amazon (including my daughter’s loft bed and, most recently, a refrigerator), I was curious as to what this was all about.

To my surprise, they are offering a wide variety of auto parts, car care items and even wheels and tires. (See the Fleet & Vehicle Maintenance category).

As you can see, they have quite a large inventory of items. Unlike Amazon’s Marketplace, it’s unclear whether these items are being sold by Amazon directly or through third-party sellers.

amazon

How, or will, this effect your parts business?

Amazon has typically made sure they are the lowest price in any market. With free 2-day shipping on orders over $50 and no sales tax (in most cases), I’d say they have a distinct advantage from the get-go.

How long before they try their hand at selling cars or listing dealer inventory (at a cost, I’m sure). Amazon is increasingly trying to be a consumer’s one stop shop for everything. I’ve bought everything and anything imaginable on Amazon and have yet to find something NOT on Amazon.

Consumers may always need someone to install and service the vehicles but it just became a little easier and more attractive for them to not spend money in your parts department.

NADA 2012: Day Three Recap

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Sunday saw a lot of meetings, and running into (and trying to connect with) people. The exhibit hall was in full swing and jumping. The day was destined to be short because the Super Bowl started at 3:30pm here and all the parties were starting at 2:30pm.

We went to what, in my opinion, was the best Super Bowl party ever! eBay Motors set up the classiest, most intimate Super Bowl party I’ve ever been to. It was so classy celebrities were asking to come just so they could have a place to watch out of the general public. Not only that but all of them were super nice. They rented out the whole Seville Row bar restaurant… hell, I don’t even know what it was. It was a private area that is part of the LAX nightclub. Max capacity was only 125 people. Every place to sit was a freaking couch VIP area. Lots of room. Great wait service with an open bar and lots of great food. We even had home-made cupcakes made, and hand-delivered, by Robyn and Taryn of The Food Network’s Cupcake Wars TV show.

I met Roy “Big Country” Nelson from the UFC as well as Greg Hendrick who is the Director of Event Operations for the UFC. I also met Coolio .. yeah.. that one. We were living in Gangsta’s paradise. Roy Nelson joined us at our table for a while as did the girls from Cupcake Wars. Lots of great conversation (and pictures). Oh, and Coolio gave me his cell phone number and the club manager gave me a UFC t-shirt and an autographed Roy Nelson action figure. Yeah, that’s how I roll. Talk about making connections, how is a partnership with the UFC for digital marketing and social media sound? Money, baby. That was only one of many connections that I, and people I know, made.

eBay Motors delivered a first-class Super Bowl experience. I couldn’t have improved it in any way. In my, and other people’s, opinions, they pulled off both the best party of NADA (Vanilla Ice) and the best SuperBowl party of NADA.

After that party, we headed to the DealerTrack party at the XS nightclub. We got there and, swear to God, the line looked like people were at Disneyland waiting to ride Space Mountain. Serious.

That party was OFF THE HOOK. HUGE place, great layout and tons of people. You could party inside or by the pool. Nice. Well played, DealerTrack.

After DealerTrack, it was off to a nice dinner then bed. Brilliant day at NADA.

It was so brilliant, this is what I felt like at the end of the day:

That’s right. The Honey Badger doesn’t care. He takes what he wants.

This year, I’m going to be the Honey Badger.

Stay tuned for more tomorrow! Thanks for reading!

NADA 2012: Day One Recap

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Here I am at the National Automobile Dealers Association, yesterday was the first day of the conference. Registration opened at 10am and sessions didn’t start until around noon. I got to connect with a lot of people I hadn’t seen in awhile. It seemed like yesterday was just kind of a “catching up” day for vendors without booths while others were getting booths ready for today.

Today is the “real” kick-off in that the exhibit hall opens and the mass scramble for dealers’ attention begins. There will be more iPads given away in the next few days than I think the Apple store stocks. I’m looking forward to visiting and plan to take a lot of pictures.

It’s a big weekend here. On top of the convention, there is a UFC fight tonight (UFC 143: Diaz vs. Condit) and the SuperBowl. I think there are 37 Super Bowl parties tomorrow.

As a prologue, pre-NADA events have been great. I got to catch up with the VinSolutions team rockstars, hang out with Jeff Collins of Peters Chevrolet CJD, Dan Moore of SmartWebConcepts, Rob Fontano of 3BirdsMarketing. Ended up in a suite which, unbeknownst to me, eventually turned into a reception suite for Car-mercial (part of the DMSC) then transitioned to a fabulous dinner at Il Mulino courtesy of Scott Falcone (super smart and VERY passionate guy) and PrestoReviews, then on to the VinSolutions party afterwards.

Monday morning saw many in-real-life meetings with Twitter friends, industry friends and even some vendors I work with who I had never met, like Mike Fitzpatrick of DealerTrend. Ran into Grant Cardone. Caught Todd Smith (CEO of ActivEngage) session. He’s crazy brilliant. People were asking him questions well into the next session.

Eventually it was off to the Mandalay Bay for some non-conference, non-drinking, non… well, you get the point.. a break. Went to the weigh-ins for UFC 143 and then saw Joe Rogan doing stand-up. Met a TON of fighters (way cool) then called it an early night at 1am (yes, people, that’s an early night at ANY automotive convention but especially NADA).

Getting ready to begin Day 2 of NADA with coverage of the exhibit hall. It may, or may not, be live in the morning but it will be live eventually. Thanks for reading!

“Why We Don’t Need Car Dealers”

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I found this article in “The Week” magazine (July 17, 2009) reprinted from The Washington Post and thought I’d share.

“Why We Don’t Need Car Dealers” – Charles Lane, The Washington Post

“Why, in this day and age, should I have to haggle with ‘grinning salesmen’ when it’s time to buy a car? asked Charles Lane. The short answer is that car dealers are protected by state laws that give them exclusive sales territories and bar online competitors. Such laws might have made sense once upon a time, when dealers needed an incentive to invest in showrooms and inventory. But this ‘old business model has been obsolete for decades,’ and is completely anachronistic in the age of the Internet. Were it not for those laws, I could browse a manufacturer’s website, choose my model and equip it the way I like it, and then take delivery a few days later. The bankruptcy filings by Chrysler and General Motors offer a chance to move to this more efficient, lower-cost distribution model and break the stranglehold of the dealers. But powerful congressional Democrats are backing a federal bill that would preserve the dealers’ unfair advantages. If they prevail, the dealers will once again be ‘exercising political clout at the expense of the car-buying public.'”

It’s interesting that, at the very least, this person has this viewpoint. I submit that car dealers provide a valuable service to the car-buying public. Without car dealers, where would one test drive cars? Where would one go for factory service or warranty repairs? How would you trade-in a car? Who would help with financing?

This person’s viewpoint seems like a two-headed snake to me. While this columnist can whine about the injustices forced upon him by car dealerships, he would whine just as loud when he had a problem with this car (that he bought online sans dealer) but nobody to listen to him or help him with it.

In our industry, it’s the trend that we are making it easier and easier for people to not only communicate with us in whatever means they feel comfortable – in person, email, phone, chat, etc – but we make it as easy as possible for them to buy a car from us.

I believe this person is simply – uneducated. He could just about accomplish what he wanted to RIGHT NOW. There are many dealers that would facilitate just such a transaction and do so on a daily basis. I believe this person is simply just unaware that this option exists for him.

At the very least, I’d be willing to bet that the dealer that could show THIS consumer that he COULD buy a car this way FROM THEM would probably get at least one more sale and a customer for life.

As more people get enlightened to the internet car buying experience, it will be increasingly important for car dealerships to adapt to maximize their opportunities with EVERY consumer.

The most successful dealers will be the ones who cater to all shopping consumers – not just the ones walking in the front door….right now.

Originally published on ADM

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