Archive for the ‘News’ Category

WHERE’S THE BRIEF

Your 30-second guide to the latest news, updates

 

040419 IL WHERE'S THE BRIEF Your 30-second guide to the latest news, updates

 

What’s happening to truck owners’ loyalty?

Losing deals without women sales staff?

First impressions key to women shoppers

Franchise dealers ‘euphoria’ of 2018 is gone

Shoppers beating a path to your showroom?

Connecting with motivated buyers

What you need to know about fraud risk

 

Still relevant

Two powerful words you need to know

Top 5 pitfalls to avoid on deal packages

Hiring for keeps survival guide

 

The party may be over: What’s happening to truck owners’ brand loyalty?

Brand loyalty makes a big difference in your business.

If you have any doubt, just imagine how difficult it would be to replace as much as 60 percent of the customers who return to your store when they are ready to purchase or lease a new vehicle.

Then apply that to the fastest-growing, perhaps most competitive, segment of your business – trucks.

 

Photo credit: Chevrolet via Newspress USA Is truck owners’ brand loyalty changing with the times?

Photo credit: Chevrolet via Newspress USA
Is truck owners’ brand loyalty changing with the times?

 

“Truck owners are perceived [to be] some of the most loyal customers in the automotive industry,” said CarGurus, an online automotive marketplace, in their 2019 Truck Sentiment Survey. But that appears to be changing as brands fight for market share with forecasts of leaner times ahead.

“As pickup trucks are impacting bottom lines across the automotive industry, brand loyalty is becoming that much more important,” reported CarGurus. “The survey uncovered that brand loyalty among pickup truck owners is down compared to one year ago. This becomes especially true when truck owners are asked about their brand loyalty in conjunction with increased price.”

Impact of truck prices

The survey shows that a significant price increase – whether that’s based on lower incentives or increasing technology – would cause 70 percent of truck owners to consider switching brands. That’s an increase of 6 percent over last year’s 64 percent, according to CarGurus.

The survey also reports that 68 percent of truck owners “believe that the vehicles are overpriced.”

While price is the No. 1 reason truck owners would consider other brands (54 percent), lower fuel efficiency also plays a part, with 47 percent of truck owners citing it as a major concern.

And the CarGurus survey isn’t the only indication of softening brand loyalties.

‘Flattening loyalty rates’

Data analytics firm IHS Markit found “a flattening of loyalty rates (overall) in the industry after years of increase” because of growing competition, based on an analysis of about 17.6 million new-vehicle registrations during the last model year.

IHS Markit annually recognizes brands and models with awards for the highest loyalty rates.

The truck sentiment survey may be especially important information for dealerships with Ford, Chevrolet and Ram representing far and away the top pickup truck models in the country. Ford F-series (909,330 units), Chevrolet Silverado (585,581 units or 825,125 total if you include the GMC Sierra) and Ram (536,980 units) were the top-selling vehicles overall in 2018, Car and Driver reports.

To pickup or not pickup?

But the results matter to Toyota dealerships, as well, with their No. 14 vehicle overall and No. 4 truck, the Tacoma (245,659 units sold) – beating out mid-size models from Chevrolet, GMC and Honda – which showed the greatest loyalty, “with 41 percent not willing to consider another pickup truck brand.”

“With pickup truck prices on the rise, many owners are reconsidering their current brand, or in some cases whether they will repurchase a pickup at all,” said a spokeswoman for CarGurus. “While truck owners still have strong brand and category loyalty, the challenge for car manufacturers and dealerships is that loyalty is less reliable as a driver of sales.”

About that there seems little doubt.

Toyota, Lexus, Porsche top J.D. Power, owner dependability ratings

Dependable cars make dependable customers.

That’s the bottom line in a recent J.D. Power survey of owners with three-year-old vehicles.

“Flawless dependability is a determining factor in whether customers remain loyal to a brand,” said Dave Sargent based on results of the J.D. Power 2019 U.S. Vehicle Dependability Study.

And while no brand literally is flawless, three fare better than the other 28 in both J.D. Power ratings and fewest problems reported by the original owners of three-year-old vehicles (2016).

Photo credit: Lexus via Newspress USA Lexus rated as one of the best used-car brands for 2016 by J.D. Power.

Photo credit: Lexus via Newspress USA
Lexus rated as one of the best used-car brands for 2016 by J.D. Power.

They are Toyota, Lexus and Porsche.

Toyota and Porsche came closest to flawless with 39 of 40 points in J.D. Power ratings of mechanical systems, exterior and interior, features and controls, and overall, each with three perfect 10s. Toyota’s luxury brand, Lexus, came in second with 38 of 40 points, including three 10s.

All three brands rated 10s overall, according to J.D. Power, a consumer data and analysis firm, but Toyota and Lexus received the overall J.D. Power awards.

None of the 31 other brands rated 10 overall, although several scored 10s in other categories.

Following are the top brands based on a 40-point scale along with the number of 10s they scored: Porsche (3) and Toyota (3), 39 points; Lexus (3), 38 points; Chevrolet (2), 37 points; Audi (2), BMW (1), Hyundai (1) and MINI (1), all 36 points; Buick, 36 points; Infiniti, Kia and Volkswagen, all 35 points.

The full rankings are available on the J.D. Power website.

The J.D. Power ratings are similar to brand rankings based on reporting of vehicle problems over the last 12 months by nearly 33,000 original owners of three-year-old vehicles (2016).

Those rankings scored Lexus at No. 1, with 106 problems per 100 vehicles (PP100), according to survey respondents, followed by Toyota, the top mainstream brand, and Porsche at 108 PP100.

Here is the complete list of brands that scored at least the industry average of 136 PP100:

Lexus, 106

Porsche and Toyota, 108

Chevrolet, 115

Buick, 118

MINI, 119

BMW, 122

Audi and Hyundai, 124

Kia, 126

Infiniti, 128

Volkswagen, 131

Mercedes-Benz, 134

Subaru, 136

“Vehicle dependability continues to improve, but I wouldn’t say that everything is rosy,” said J.D. Power’s Sargent. “Vehicles are more reliable than ever, but automakers are wrestling with problems such as voice recognition, transmission shifts and battery failures.”

And here’s why the dependability of three-year-old vehicles matters to dealerships.

“The used-vehicle market is where dealers can see increased profits this year,” said Jonathan Banks of J.D. Power. “Stocking dealership lots with vehicles having strong dependability scores will help support new-vehicle sales in the future, create a positive brand perception and drive foot traffic.”

The owner survey results also are available online.

Are you losing deals without enough women sales advisers?

Maybe it should come as no surprise.

Women shoppers – who represent nearly half of car buyers and influence most purchases – would rather deal with women sales people.

What does that mean for your dealership?

 

040219 IL Are you losing deals without enough women sales advisers

 

A lot, probably.

You may be losing business if your sales team is typical of the industry, with only about 8 percent of front-line positions held by women, according to JoinWomenDrivers.com.

The conclusion was drawn from a national survey based on 3,013 car dealer reviews at the website.

“Almost universally, women rated their satisfaction scores higher when dealing with female sales advisers,” said the survey report. The analysis potentially has identified two major areas of improvement for dealerships in attracting and retaining women shoppers:

  1. Hire and place the right women candidates in an effort to diversify the staff.
  2. Train male employees in the behaviors and outcomes most desired by women shoppers.

“Ultimately, the results gathered by [the survey] illustrate the need for significant culture shifts to address consumer experience concerns that directly impact sales success.”

If perception, indeed, is the shopper’s version of reality, then the gender gap is significant.

“Women consultants were rated higher in each part of creating a successful relationship – trustworthiness, being respectful, likable and understanding,” according to the JoinWomenDrivers.com report. “Price is very important, but women rate that lower, because they believe they can buy the same car elsewhere for within a relatively narrow price margin.”

The ability of a sales adviser to listen and not apply sales pressure also are valued by women shoppers.

“If a woman feels the consultant isn’t listening, she will simply find someone who will,” said the report. And “an approach that is perceived as high-pressure will send most consumers off to another dealership before the deal is done. … A successful sales consultant with a high EQ [Emotional Quotient] understands their job is to assist and guide the shopper, not convince.”

And, yet, one of the simplest behaviors turns out to be one of the biggest problems, with more than four in 10 survey respondents expressing dissatisfaction with the way they were greeted in the first place.

“This is a clear indicator there is tremendous room for improvement and making a more personal connection with guests at the store level and online,” said the report.

It was the one area where women were “slightly more satisfied” with male sales advisers.

But that may be small consolation considering the stakes.

First impressions in showroom, online the keys to women shoppers

Women shop for cars where they feel comfortable.

That comfort level begins with the greetings they receive and the way they are treated afterward.

And the sales adviser holds the key to that encounter, according to the 2019 Women’s Car Buying Report from a survey of almost 5,400 women shoppers by JoinWomenDrivers.com.

032619 IL First impressions in showroom, online the keys to women shoppers

 

All of this is significant for dealerships because women now account for 45 percent of new-car purchases – about 7.75 million in 2018 based on NADA’s report of total U.S. sales of 17.2 million.

(The Women’s Choice Award website suggests women currently represent 52 percent of buyers.)

“Their [sales] consultant is the No. 1 influencer at a dealer,” said the JoinWomenDrivers.com’s report.

“Price is still important, but not a differentiator, since women know they can find a car elsewhere within a narrow price margin.” In fact, that was true for all seven top brands – Chevrolet, Ford, Jeep, Honda, Nissan, Subaru and Toyota – represented in the buyers’ survey.

Impressions matter

“It is the consultant’s attitude and impression that makes all the difference. The initial contact and the creation of trust is critical to establishing credibility and making an outstanding first impression.” Dealer reputation is the second-most-important reason for buyers of four brands.

“While dealership culture has seen a shift, more must be done to [attract] and retain women buyers and for dealers to meet their unique expectations and needs,” said Anne Fleming, president and car buying advocate for JoinWomenDrivers.com.

A welcoming atmosphere

“Creating an atmosphere where the buyer feels welcome, understood, and has the experience of being in control of their buying experience are the ingredients to a successful sale.”

So what’s a savvy dealer to do to adapt to the changing marketplace?

“Dealers need to re-examine the one-size-fits-all approach to marketing and better tailor to an every-growing base of [women] customers,” said the report. “Valuing these buyers – through effective and creative marketing strategies – will increase dealers’ overall sales.”

“Training and coaching the frontline team to adopt attitudes and greetings that women consider trustworthy, engaging and respectful is paramount.”

First impression online

But creating a good first impression online also is important, the report said.

The report points out that dealership websites are either the first or second destination for six of seven of the manufacturers included in the website’s survey. Nationally, however, women shoppers graded dealership websites a “C” in being helpful and informative. “Collectively, OEMs, Web providers and dealers have work to do to bridge the gap to add value.”

“Most dealer websites continue to be pictorially product-centric,” said the JoinWomenDrivers.com report. “[But] consumers engage more fully when they feel welcomed by lifestyle images from various cultures, life stages and demographics. Informative content about car buying and the ownership experience draws viewers in and establishes credibility.”

Combined, these firsts leave powerful impressions on the consumer experience. Indeed, “Research shows the first engagement is the only one that matters – there are no second chances.”

Franchise dealers appear optimistic, but ‘euphoria’ of 2018 is gone

Auto dealers are an optimistic lot, it seems, even though sales for the first two months of 2019 were at their lowest level in five years.

And the outlook that new-car sales will fall short of recent years.

While describing a relatively “weak” market – 48 on a 100-point scale – in the first-quarter Cox Automotive Dealer Sentiment Index, those same dealers anticipate an uptick in business within the next three months – rating prospects a 63 on the same scale.

A slow start to 2019 has dealers pondering the future.

A slow start to 2019 has dealers pondering the future.

The overall expectations were about the same for franchise dealerships (62) as they are for independents (63), according to the Cox survey.

Both numbers were significantly higher than expectations reported last quarter.

But “gone is the euphoria we saw this time last year,” Cox reported, especially for new-car sales, which exceeded 17 million for the fourth consecutive year in 2018 despite earlier gloomy forecasts. Franchise dealers rated the current used-vehicle sales environment “good” at 66 on the 100-point scale, but the new-vehicle sales environment as pretty middling at only 53.

Still, franchise dealers were more positive about the current market than independent dealers, who anticipate used-car sales to be on the “poor” side of middling at 48 points.

Some caution would seem to be in order, though, as franchise dealerships are seeing inventories grow for both new and used cars creating pressure to lower prices, based on results of the Cox survey. Independent dealers indicate they also are feeling pressure to lower prices.

In fact, dealers are saddled with the most inventory since the Great Recession – more than four million new vehicles, a 79-day supply – Automotive News reports.

The quarterly survey is conducted online, with dealer responses weighted by dealership type and sales volume to reflect the national dealer population.

Nearly 1,200 dealers participated in the survey, which was conducted Jan. 28 to Feb. 8.

When was the last time that shoppers beat a path to your showroom?

It’s all in the numbers.

The Preapproved Direct Mail Program from Santander Consumer USA is making an impact for participating dealers across the country.

Results include a higher-than-average response rate, strong incremental sales and outstanding ROI.

“My store runs a 6,000 Santander direct mail piece every 30 to 60 days,” Jeff Belsky of Benson Hyundai in Spartanburg, SC, said recently. “Lead generation has been through the roof, with unprecedented numbers of leads and prospects increasing with each run.”

“The mailer was extremely successful and profitable for the store,” said Timmy Dickinson of Lia Hyundai in Enfield, CT. “It generated 63 leads, which resulted in 38 shows, 14 sold and a profit of around $30,000. It was our best used car month in a long time!”

The direct mailer is not a “weekend barn burner,” because leads will continue to come into your store for up to 90 days after the mailer drops.

There’s a lot to consider, including additional results, so we created the following infographic to help:

 

030719 IL When was the last time that shoppers beat a path to your showroom (1)

The RoadLoans advantage: Connecting your dealership with motivated buyers

RoadLoans is all about helping dealers maximize sales opportunities.

From the online dealer Lead Exchange Program to the direct-to-consumer lending program, RoadLoans’ mission is to connect dealers with motivated buyers.

The Lead Exchange Program (see infographic below) provides your dealership the opportunity to bid for approved-customer leads that are 100 percent exclusive to your business, giving you the opportunity to get more ready-to-buy shoppers through your doors each month.

No subscription is required to participate in the RoadLoans Lead Exchange Program – your dealership can turn it on and off at your discretion.

Through the direct-lending program, RoadLoans – and parent Santander Consumer USA (SC) – provides full-spectrum lending with competitive rates for qualified buyers: The typical RoadLoans approval has an average FICO of 577, income of $61,000 and is approved for financing up to $18,000.

RoadLoans also recommends to approved customers a qualified dealer in their area, and the dealer immediately receives an email notifying them of the approval and providing contact information. Direct-lending customers, however, are not required to take their voucher to the recommended dealership, so dealers should be sure to work their leads promptly.

For more details on RoadLoans programs and maximize your results through the busy tax season, contact your SC Dealer Relationship Manager.

022819 IL The RoadLoans advantage- Connecting your dealership with motivated buyers (1)

What you need to know about fraud risk and ‘Driving a New Model’

Fraudsters never rest.

And they may be headed to your dealership.

But Santander Consumer USA (SC) is committed to providing the information you need to fight back.

Our series, Driving a New Model, should help dealers spot the red flags for identity fraud, application misrepresentation, straw buyers and elder abuse, and includes actionable checklists.

“Awareness of fraud and elder-abuse red flags will allow you to take steps to reduce these risks and will result in a number of benefits,” says the SC pamphlet, Driving a New Model | A dealer guide to recognizing the warning signs of fraud, identifying suspicious buyers and taking action to reduce costs.

Driving a New Model suggests those benefits could comprise:

PART 6

  • Improvement in the overall customer experience
  • Reduction in consumer harm and risk to the dealer’s reputation
  • Reduction in credit stipulations on an application
  • Reduction in funding delays to dealership
  • Reduction in post-funding disputes and potential unwinds

“Establishing a partnership with lenders is the best way to fight fraud,” wrote Frank McKenna of PointPredictive consulting firm in a separate Digital Dealer Magazine report 5 Reasons Car Dealers Should Be Concerned with Fraud. “Since lenders have more tools to diagnose and detect fraud, they can help you understand the impact to you before it ever happens.”

“Good collaboration on fraud is the key to winning the war on fraud,” according to McKenna.

And, as far as SC is concerned, “We actively seek your feedback and your insights into trends and concerns related to the risk of fraud or elder abuse,” says Driving a New Model.

Here are the first five parts of our series:

Part 1: What you need to know about fraud risk – and why you should care

Part 2: Identity fraud can take ‘enormous toll’ on your dealership profits

Part 3: How to change the odds in your favor against application fraud

Part 4: What straw buyer fraud could mean to your dealership and how to avoid it

Part 5: How to recognize elder abuse if your dealership is targeted

But the fight against all types of vehicle-purchase fraud doesn’t end at the dealership door.

If you notice unusual behavior or information by applicants, please contact your SC Dealer Relationship Manager who can direct these concerns to the appropriate team to review.

Fraudsters never rest, and neither should you.

Together we can stop fraud.

Two of the most powerful words every dealer needs to know

Dealer Extranet.

They are two powerful words in making deals with Santander Consumer USA (SC).

From the Rehash Tool, which provides the quickest possible turnaround time on new deal structures, to a customized dashboard that offers daily stats, notifications and reports on your deals with SC, the Dealer Extranet is a competitive tool that should be part of your everyday routine.

Those aren’t the only reasons, though.

“One of our greatest assets is our Dealer Extranet, especially for high-volume dealers,” said Stephen Rivelli, a dealer relationship manager (DRM) in New York.

“The ease of use and the multi-functionality of it, from rehashing an application to funding, allows my dealers a fast, user-friendly experience from application to funded. I stress the importance and use of the Extranet with all my dealers … [and] they usually see the light.”

In fact, thousands of dealership sales associates already have recognized the value of the Extranet and use it to maximize their results with SC and to manage their businesses better.

You can make the site an integral part of your dealership’s routine by asking your DRM to set up a new user login – or logins for multiple users at your store. Your DRM also can help you discover – or rediscover – the many features the Extranet provides your activated account. Your DRM also is available to answer any questions that might arise or to reset your password.

When you’re set up on the Dealer Extranet, you can log in here and use it whenever you want. And put the power of the Dealer Extranet in your competitive arsenal.

 

10 tips for using the Extranet