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071317 IL When You Want to Drive Business...

Why most customers are leery of your service center – and how to fix it

downloadTrust.

It’s a word that drives your business.

And, when missing, can drive your customers away.

Which is why findings of a recent AAA survey and other studies should make car dealerships nervous, especially about their parts and service centers.

The AAA survey showed that about two-thirds of U.S. drivers do not trust auto repair shops in general, while a study by Cox Automotive showed that more than 70 percent skip the dealership service department after buying a car, choosing instead to go elsewhere for repairs.

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AAA survey respondents most frequently cited these reasons they are leery of auto repair centers:

  • Recommending unnecessary services (76 percent)
  • Overcharging for services (73 percent)
  • Negative past experiences (63 percent)
  • Concerns that the work will not be done correctly (49 percent)

That’s bad for business considering the share of the average store’s revenue (about 40 percent) and profits (50 percent) that your parts and service center generates and the impact it can have on customer loyalty when it’s time for a customer to purchase another vehicle.

Making matters worse, a study by DEMautomotive showed that the longer customers own their vehicles the less likely they are to return to the dealership for servicing.

That’s a lot of revenue to leave on the table for someone else to scoop up.

Which brings us back to trust.

The AAA survey also revealed opportunity for auto dealerships, with nearly two-thirds of U.S. drivers singling out an auto repair shop that they do trust, “suggesting that consumers have prioritized finding a reliable mechanic in an industry with an imperfect reputation.”

Which, of course, means that the more your dealership can avoid – or correct – the reasons that customers are reluctant to bring their repair business to you, the better you are likely to fare.

“The quality of work – doing the job right the first time – can noticeably affect customer satisfaction and loyalty,” said Chris Sutton of J.D. Power, speaking of the company’s latest Customer Satisfaction Index.

It’s as simple – and as complicated – as that.

Our new hire is on board – now what? Four keys to an engaged employee

There’s more to onboarding a new hire at your dealership than what happens between the hire date and start date.

If you read Swim, don’t sink: Best practices for onboarding new hires at your dealership you now know how to get started down the right road, but the challenge will be to keep up that momentum.

“Beyond reviewing the employee handbook and clarifying the new hire’s job role and expectations, the onboarding process should engage employees early on and keep them interested in staying for the long haul,” wrote Adam Robinson, Hireology CEO, for Dealer Solutions Magazine. “Engagement builds company culture and rapport among new staff, in addition to directly driving your dealership’s growth.”

070617 IL Our new hire is on board – now what Four keys to an engaged employee

 

These are important with U.S. Bureau of Labor Statistics data showing turnover among automotive sales consultants annually at about 67 percent – and as high as 72 percent for non-luxury sales people, or about 1.5 times the 46 percent total turnover for the private sector overall.

Here are Robinson’s four keys to engaging employees early and making them more productive:

  • Encourage open communication
  • Build strong connections at all levels
  • Assimilate your employees
  • Offer opportunities for future growth

Hireology’s recruiting and hiring model has been adopted by 700 automotive dealerships in the United States and Canada and by more than 2,500 other companies worldwide.

Key No. 1

“New employees may often feel scared or intimidated to share concerns or feedback about their new role and surroundings,” wrote Robinson. “Newer employees may not feel comfortable asking questions or expressing their opinions, and that could negatively impact their work as well as motivation to stay.”

Robinson suggests providing a communications structure that helps new hires get answers to their questions about their new workplace without pressure.

Encouraging new hires to be honest “can do wonders” for making them feel like part of the team.

But that’s just the beginning.

Key No. 2

“With an average employee count at automotive [dealerships] of 70 employees, it’s easy for new hires to lose track of who their key points of contact will be once they get settled into their role,” writes Robinson. “Develop processes that help new employees foster interpersonal relationships with their new supervisors and understand what role their co-workers play in your dealership.”

Key No. 3

Assimilating new employees is more than just giving them a desk and turning them loose to sell cars and learn about the culture of the dealership by doing something wrong.

“A defined approach can serve to assimilate new staff members and provide them with clarity regarding their roles, responsibilities and team goals,” Robinson wrote. “This will help a new team member effectively work with other departments to help them all reach the same page and best work together.”

Key No. 4

And while you’re at it, make sure your new hire knows there’s room to grow.

“Their career path should be clearly mapped out, with skillsets or requirements needed to be promoted to the next level,” wrote Robinson. “There should also be a clear review timeline in place. The more systemized your processes for promotions are, the better the response will be from staff.”

Combined, these actions just may help you win the “uphill battle” for retention most dealerships face.

How your ASM can help you make more deals with Santander

Santander Consumer USA area and regional sales managers want you to make more money.

It doesn’t take long to see that there are a number of ways they accomplish that, according to some of the company’s top-performing ASMs around the country.

Problem-solving. Demonstrating the Extranet. Explaining products. Building relationships. It’s all part of the job of Santander Consumer USA’s well-trained, knowledgeable ASMs and RSMs, and it’s all aimed at helping dealerships accomplish their business goals.

dealer-matters

“My overall objective is to seek and build strong relationships with all personnel streams within the dealership – sales, finance, accounting and service departments,” said BILLY BURLESON, ASM in North Texas. “This allows me to have multiple contact points, so if any critical issues arise that need special attention I can navigate through these streams to solve the problem.”

“I work diligently to keep the doors of communication open so dealers understand they have a partner they can trust that will be there when they are in need,” added Burleson.

Invaluable partners

“My overall goal is to make doing business with Santander easy, efficient and profitable,” explained ASHLEY QUICK, Senior ASM in East Atlanta, GA, who also cited spending as much time in the management “tower” as possible. “I want to help my dealers sell more cars and make more money.”

And it’s not just the field sales team that takes this approach.

“My mission is to help my area managers’ and inside sales managers’ dealers grow their businesses,” commented YOLANDA AVALOS, a Santander Consumer USA regional sales manager of inside sales. “I want those dealers to see my ASMs and ISMs as an invaluable partners in their dealerships that is a value add, not just another rep.”

Your area and regional sales managers are dynamic resources in putting deals together with Santander.

Boosting results

You also can boost numbers and build business with help from your ASM on things like:

  • Educating your team on any new programs or products offered by Santander.
  • Advising you on current inventory that holds auction value and equates to strong deals.
  • Showing you how to structure the best deals using our Dealer Extranet and Rehash Tool.
  • Answering any questions you have about the SAF platform.

“My goal with all my dealerships is to educate them on all aspects of Santander program and provide as much value to their bottom line as possible,” said DAMIAN CANTU, an ASM in Santander’s South Texas region.  “I also like to provide assistance during those instances when a dealer of mine needs help and is having a tough time finding closure with an issue.”

Something extra

“One of our greatest assets is our dealer Extranet, especially for high-volume dealers,” said STEPHEN RIVELLI, an ASM in the Bronx, NY. “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.”

“Helping them use the Extranet is crucial to a dealer’s success,” added Quick in East Atlanta.

Building value

“I try to build value with my dealers on every visit,” said BILL SMITH, the ASM in Allentown, PA. “Some of the tactics I implement are showing dealers recent approvals. This shows dealers in black and white exactly what we are doing from a credit standpoint.  The more value we build and the dealer see from Santander, the deeper our business relationship will grow.”

“I look for ways to help my ASMs and the dealerships in Florida continue to grow in their success and partnership with SC,” said NANCY BLOOM, regional sales manager.

“My team and I look for ways to increase applications and contracts, to improve portfolio performance and to be up front with the dealerships, who need to see Santander as a top lender with leading technology and a strong focus on customer service.”

Obviously, Santander’s sales managers know the ropes when it comes to closing deals, so don’t be afraid to use them as a resource to help you reach your goals.

They can make a big difference.

Swim, don’t sink: Best practices for onboarding new hires at your dealership

Does your dealership have the right stuff to onboard new hires successfully?

Onboarding. You know. The process that occurs after you’ve made the hire and he or she is ready to start a new job with your dealership.

It’s not as simple as just assigning your new hire a desk and starting with administrative paperwork. The idea is to get that new hire up and running – and producing – for your business. And that may mean doing things differently than many dealerships are accustomed to operating.

062717 IL Swim, don’t sink Best practices for onboarding new hires at your dealership

“I think dealers and management teams are realizing that … if you invest in the people side of your business, you have a better, more profitable business. And all sorts of benefits accrue to the dealerships that get this stuff right,” said Adam Robinson, Hireology CEO, in a recent webcast produced by DealerOn, a website, optimization and digital advertising services company.

Hireology’s recruiting and hiring model has been adopted by 700 automotive dealerships in the United States and Canada and by more than 2,500 other companies worldwide.

U.S. Bureau of Labor Statistics data show that turnover among automotive sales consultants annually is about 67 percent – and as high as 72 percent among non-luxury sales consultants. That’s about 1.5 times the 46 percent total turnover the Bureau reports for the private sector.

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And a lot of that, according to Robinson, has to do with the way dealerships onboard new hires. For obvious reasons, the topic is especially important for onboarding sales consultants.

Here is Robinson’s advice for car dealerships who want to start – or improve – their onboarding process:

Customize onboarding for each position – The process and content will differ for a sales consultant versus a service technician, for example. “Nothing says value and respect more than a personalized onboarding program. Sixty-two percent of companies that have a solidified onboarding program experience faster time-to-productivity with 54 percent claiming to have better employee engagement.”

Eliminate your paper-based process – “There is no reason [with] all the technology at your fingertips, not to go completely paperless with employee onboarding.” On average, the dealership onboarding process takes around four hours via an offline, paper-based system. “Make it really easy for them to [provide] what you need from them and do it before they show up.”

Create a form-free first day by having new hires fill out all forms beforehand. “Eighty-three percent of high-performing organizations begin their onboarding prior to the new hire’s first day. … It makes sure their first day is a learning experience and moving forward and not doing administrative work.”

Set clear goals for new hires on Day 1 – Set expectations for 30, 60 and 90 days. “Sixty percent of companies fail to set any milestones or goals for new hires … [Setting expectations] changes this from an emotions-driven, un-transparent process to one that is fact-based, rational and fair for everybody.”

Make Day 1 great – “If you do nothing else, making that [new hire] feel great on Day 1 is the highest impact thing you can do, because when new hires take part in a structured onboarding process, 66 percent of them are likely to remain with a company for longer than three years.”

“A whopping 28 percent of all terminations happen within the first 90 days of employment,” said Robinson. “If you’re turning people over in 90 days as a manager, that’s on you. Consider who you’re hiring, or consider how you’re treating great people when they walk in the door.”

To hear more, listen to 5 Onboarding Best Practices that Save Time & Money at DealerOn.

We’ll have more soon about other practices that can help reduce turnover and associated costs in our series of blog posts, “Hiring for Keeps,” on the Inside Lane blog.

 

Don’t rush to judgment when you’re hiring for keeps

Nine of your dealership’s sales consultants quit in the last year.

And that cost your average-sized dealership more than a half-million dollars over those 12 months, based on calculations using several turnover cost calculators.

Not only does that mean your dealership will spend more money than you would like on hiring, onboarding and training, but it creates continual pressure to find consultants so your team isn’t left shorthanded, costing you sales opportunities.

And your hiring process may be exactly where the trouble starts.

062217 IL Don’t rush to judgment when you’re hiring for keeps

“It’s no secret that employee turnover rate for certain positions in the auto industry is high,” David Druzynski, director of human resources at Auto/Mate Dealership Systems, wrote recently in Dealer Solutions Magazine. “Auto dealers keep making the same hiring mistakes over and over. When you hire the wrong person, chances are that person won’t stay long.”

In fact, U.S. Bureau of Labor Statistics data show that turnover among automotive sales consultants annually is about 67 percent – and as high as 72 percent among non-luxury sales consultants. That’s about 1.5 times the 46 percent total turnover the Bureau reports for the private sector.

These are the some of the “common” hiring mistakes Druzynski says dealers to often make:

  • Hiring too quickly to fill a need. “Dealers may associate an empty seat with lost revenue, but it’s important to realize that the wrong person in that seat could cost you much more.” Hidden costs of making a bad hiring decision may include losing vehicle sales, alienating customers, hurting employee morale, damaging your reputation, etc.
  • Believing what is on a candidate’s resume is true. “It’s hard for many dealers to believe, but candidates lie on their resumes, and they lie during interviews. They lie about their abilities, achievements and experience.” But there’s a lot you can do: form a hiring committee, formulate interview questions, require your top candidates to take pre-employment aptitude, skills and/or personality tests, and require a unanimous approval from the hiring committee.
  • Not properly vetting a candidate. “In a survey of 3,100 hiring managers, 49 percent said they caught a job applicant fabricating their resume. Ask every candidate for at least three references and state that two of them must be previous managers.” Then make sure they are actual managers at legitimate companies, and call to talk to them on the phone.
  • Overselling the job opportunity. “It’s critical not to oversell the opportunities in your dealership. When you exaggerate to convince a candidate to take a job, that employee will feel duped … [and] chances are they will immediately begin looking for a better opportunity.”

But avoiding these mistakes in the hiring process is just the beginning of your efforts to reduce turnover on your sales team and bring more money to the bottom line.

We’ll have more about other practices that can help reduce turnover and associated costs – onboarding, communication and training – in a series of blog posts, “Hiring for Keeps,” on the Inside Lane blog.

Calculating the cost to your dealership of high employee turnover

Employee turnover costs are a burden, costing the average dealership more than $1.5 million a year in replacement costs alone.

That doesn’t count the dollars associated with leads (or customers) burned by inexperienced employees.

And the biggest hit comes with your sales team.

More than one-third of the total, or about $500,000, is what it costs the average dealership with 25 employees to replace nine sales consultants in a year, according to compli, a workforce compliance automation company that specializes in automotive dealerships.

062017 IL Calculating the cost to your dealership of high employee turnover

In fact, U.S. Bureau of Labor Statistics data show that turnover among automotive sales consultants annually is about 67 percent – and as high as 72 percent among non-luxury sales consultants.

That’s about 1.5 times the 46 percent total turnover the Bureau reports for the private sector.

(Turnover among luxury vehicle sales consultants is just slightly higher than the national average, while overall car dealership employee turnover was more than 6 percent lower than average at 39.6 percent.)

What these numbers also mean is that the average dealership must sell about 473 additional cars a year to cover that cost of sales team turnover alone, and nearly 1,300 to cover all turnover, compli says.

You can calculate your turnover costs, based on the number of employees and number of sales people in your dealership, approximate turnover rate and average salary, using compli’s calculator. Of course, the numbers probably will go up if your dealership is larger than average, down if it’s smaller.

So what’s a dealership to do to reduce turnover, the associated costs, and impact on the bottom line?

The answer to that seems to boil down the following practices:

  • Interviewing job candidates
  • The onboarding process
  • Communication
  • Ongoing training

It should be no surprise that your dealership’s approach to hiring can have a big effect on the results, both in terms of meeting sales goals and reducing turnover.

So, avoiding these five mistakes identified in Dealer Solutions Magazine can make the difference:

  • Hiring too quickly to fill a need
  • Believing what is on a candidate’s resume is true
  • Hiring someone because you like them
  • Not properly vetting a candidate
  • Overselling the job opportunity

We’ll have more on avoiding the five mistakes and about onboarding, communication and training in a series of blog posts, “Hiring for Keeps,” on the Inside Lane blog.

When you want to boost results …

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There’s nothing idle about live chat for dealerships that are in the game

Live chatting online isn’t new.

But that doesn’t mean you’re doing it right.

There’s more to live chatting with prospects on your dealer website than, well, simply chatting. And that’s where Tom LaPointe’s “Four critical tips to boost sales without killing them” might help.

033017 IL Time to move on from tax season and plan for May-hem (and summer)

“Even though there is great potential to increase sales,” LaPointe, a digital marketing consultant, wrote recently for Dealer Solutions magazine, “there are virtual landmines that can derail your deals, as well.” Here are a few tips LaPointe said will “ensure chat is a profit booster and not a deal killer” …

Make mobile chat your highest priority, “because mobile traffic now accounts for more than half the visits on most dealer websites. It’s critical for that experience to be seamless for shoppers … from page load speeds to the interface tabs on the website, to the chat windows, to the server technology.”

Use the popup, but not on every page. “It’s the digital equivalent of a sales person greeting a shopper on the lot. You want to greet them and offer assistance but not smother them. Too many invites will turn a potential buyer away from your site” and potentially kill the deal.

Ensure operators have a quick response time. “Five to six seconds is ideal, but not more than 10. There’s nothing like delayed response from a chat operator to bound a customer out of a conversation.”

Respond quickly to live-chat customer leads. “More than any other Internet lead, shoppers expect a timely response [from the dealership], since a live person told them the dealership would be in contact, whether the chat conversation took place at noon or midnight.”

A growing number of dealerships have found the opportunity to “power up” to win the sales game via the online live-chat channel, according to digital marketing consultant, because “website leads typically close at the highest ratio and with the higher profit margin.”

Still, fewer than 40 percent of the dealerships we surveyed in or near a major metropolitan area offered live chat to website visitors, which means the rest aren’t even in a position to take LaPointe’s advice.

And raises the question: Is your dealership live-chat channel part of the conversation?

Edmunds sees strong new-car sales if infrastructure program happens

Sales of more than 1.8 million cars.

That’s what a proposed $1 trillion infrastructure commitment would generate in its first year in the most optimistic scenario suggested by Edmunds.com’s chief economist.

The program, which would “give a face-lift” to the nation’s road and bridges and fund projects such as water systems, veterans hospitals and low-income housing could generate 15 million jobs over 10 years – 125,000 jobs per month on average – wrote Larry Plache of Edmunds.com.

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“Based on Edmunds’ analysis, new-car sales could increase at a rate ranging from 1 percent to 3.75 percent in the first year of the program alone,” wrote Plache.

“These estimates do not take into account the multiplier effects of the new jobs throughout the economy … that could generate even more new-car sales. For example, the Bureau of Economic Analysis has estimated that 1.8 jobs are created for each job added in the construction industry.”

Based on last year’s new-car sales of 17.5 million, the highest percentage growth rate, and the BEA estimate on the jobs multiplier, sales would increase about 1,837,500 the first year.

“The high-growth endpoint takes into account the strong likelihood, based on survey evidence, that new job holders will purchase a car,” the economist wrote. “Adding fleet purchases by businesses to accommodate additional employees from job creation would further increase growth in new-car sales.”

A lot still has to happen before an infrastructure program could move forward, including agreement on who will pay for it, although both major political parties agree that something needs to be done. The Edmunds economist rates the chances of implementation as “reasonably high,” although the impact likely won’t happen soon enough for what has been a lackluster year so far.

“Assuming the parties can come to an agreement over funding,” Plache wrote, “we expect to see a plan approved later this year and projects (and jobs and increased car buying) beginning in 2018.”

Until then, Plache wrote, “growing new-car sales poses a challenge for a market that appears to be at equilibrium.”