Traditional roles in dealership culture are changing rapidly, and current employee structures need to adapt accordingly. In the past, it was not uncommon for a dealership to foster a culture where most employees operated within siloes. For example, sales associates and finance & insurance (F&I) personnel traditionally were relegated to two separate departments with little-to-no interaction between them (except for the initial customer hand-off). If someone from the sales side didn’t properly prepare the customer for the F&I side, the process could seem overwhelming or uncomfortable and cause customers to walk away.

Pigeon-holing employees into one specific role in your dealership hierarchy can also cause riffs between staff members and create internal dissonance. The notion of separate departments and roles does little to establish synergy or teamwork within a business. Instead, it often leads to employees not fully understanding the importance of the work being done by each party and results in them blaming each other when a promising deal falls through.

The Evolution of the Dealership Employee

Recently, the auto industry has experienced the rise of the product specialist. A product specialist is a position that replaces the “old-school car salesperson.” Instead of pushing to make the hard sell, like dealerships commonly do, the product specialist instead is a resource for car buyers, providing in-depth information and insight about each and every vehicle line.

The product specialist is a great addition for customers because they can take their time to explain all the features and finer points of a vehicle instead of trying to push them to immediately buy. They serve as the first point of contact for customers and help create a low-pressure atmosphere, while coming across as both helpful and knowledgeable.

The role is an example of an employee being trained on all things related to the product and the dealership to help better prime customers to be sales ready. Since the product specialist is not only knowledgeable about the vehicle features but has also been trained on the entire buying process, they understand exactly how to present information to a customer.

The product specialist can introduce situations early on in the sales process that relate to the purchase of F&I products. For example, thoroughly reviewing the technology components of a vehicle plants the seed for a service contract. When it comes time for customers to weigh their dealership insurance options, they will already have vehicle technology fresh in their minds and not need to be overly convinced of its importance.

That can only happen in a cohesive and open work environment where employees are communicating with each other and employees have a thorough understanding of their roles in a certain process. Giving dealership employees a more in-depth understanding of what each role entails creates a smoother customer experience – not to mention more synergy among their co-workers.

The Next Step

As far as this new generation of dealership employees is concerned, cross training should be the new normal. Training staff to be well-versed in all aspects of the car buying process allows for the creation of a cohesive unit. Instead of just sticking to one aspect, such as sales or finance, training employees to take on responsibilities beyond their role is a way to encourage teamwork and make the most of your current resources.

The “traditional” structure has been proven to exhibit inefficiencies, and this has resulted in a growing number of dealerships around the country to implement a single-point-of-contact model. This new system effectively merges the sales and F&I roles together to create a consistent and more efficient process for car buyers. This new consolidated role allows one point of contact to show the car, run credit reports, review bank deal structures, and get customers in their new cars and on the road more quickly.

Finding the Right Talent

Dealership roles are constantly evolving; don’t let “tradition” stunt your business’s growth. The right model begins with the right employees and then educating and engaging those employees so they can grow beyond the defined roles of the past.

 

Dealerships love to compete on the amount of new inventory they sell. However, the best margins in auto sales come from used cars. The problem is that digital marketing techniques for new cars just don’t translate well to promoting used cars.

Used cars are completely unique, there is limited OEM marketing support, and sometimes they’re completely off-brand to your dealership.

So how can you market these high-margin vehicles effectively and increase your bottom line?

In this recorded webinar, DealerRefresh Contributor Ian Cruickshank explains how to increase your bottom line by connecting in-market car buyers to your pre-owned inventory.

The following points are discussed:

• Why your new car marketing doesn’t work well on pre-owned vehicles
  
• What new marketing techniques to use and to avoid when promoting your pre-owned inventory
  
• How these techniques can easily translate for used in new car marketing

Login to view embedded media View: https://www.youtube.com/watch?v=symGtvVzngI


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>> Attract In-Market Buyers, Sell More Cars <<
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Today’s shoppers expect a personalized experience. They respond to websites that address their individual interests, and are repelled by those that do not. In fact, 74% of customers express frustration at being shown website content not specifically relevant to their needs, demonstrating the new standard of personalization that has taken hold across industries.

With 88% of customers starting their car shopping journey online, and 40% visiting only one dealership before purchasing, creating a personalized shopping experience is essential for dealership websites to reach customers and grow their sales.

What is personalization?

In the showroom, personalization is intuitive and natural. When a customer walks in, you ask them what they are looking for and guide them accordingly. When a return customer calls, you greet them by name and follow up on the previous conversation. When a customer is frustrated, you can address it on the spot.

Without face-to-face interaction, personalization is dramatically more dif cult. How can a dealership understand customers’ interests and answer their questions before speaking to them?

And yet, personalization is possible on dealership websites. Content, messages, and offers can be targeted to specifc website visitors based on factors such as location, device, and behavior onsite. Optimal times to reach out can be predicted. It is possible to give customers valuable, customized service even without ever meeting them.

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>> Download this free white paper from AutoLeadStar today to learn more <<

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Personalization is already happening, but not on dealership websites

Most dealerships already employ personalization in their digital marketing strategy by targeting and retargeting online ads and PPC. Ads are carefully placed online to reach the best possible audience, just as they are scheduled with precision on television, in print, and anywhere else they appear.

And yet, when it comes to dealership websites, content and lead forms frequently populate the screen at random, without being targeted to customers who will actually want to see them. This frustrates customers who see irrelevant content, and it wastes the dealership’s valuable ad dollars already spent bringing traffic to the site.



Personalization for the Dealership Website

Like a salesperson who asks the right questions, or hangs back and observes visitors’ behavior to understand their interests before approaching, a website with personalization technology can respond to individual customers in real time. It takes overlays, onsite messages, and offers, and shows them to the right people at the right time.

Real-time data about each site visitor, as well as predictive analytics, enable this high level of personalization for dealership websites.

Smart Targeting: The Key to Personalized Dealership Websites

Smart targeting refers to advanced machine learning systems that can “observe” people in real time– and then respond in helpful ways. These systems collect data, analyze it, use it to make predictions, deliver relevant content to site visitors, and measure their own success. They create what we refer to as the Smart Targeting Feedback Loop, a technology that creates a truly personalized dealership website.



Smart Targeting Provides Personalization that Typical Analytics Cannot

A dealership using a service like Google Analytics receives aggregated data, which is information combined from all site users. This data is crucial for gaining insight into how individual pages and campaigns are performing. However, because it does not track the behavior of individual users, this type of analytics does not allow dealerships to enable smart targeting for a personalized shopping experience. For personalization to be successful, a much more comprehensive data-tracking and analysis system is required in parallel to a system like Google Analytics.

Free White Paper - Creating a Personalized Dealership Website

A positive, customized experience drives an increase in leads – and ultimately brings in more sales. The process of data collection, analysis, and continual improvement is no small feat, but with the right people and technology, this level of smart targeting is achievable.

Dealerships run the gamut with respect to the technology they use for hiring and onboarding.

The trouble that many businesses run into is knowing where to invest their limited budget for HR software. In its 2015 research report, Key Interval Research highlighted 13 unique HR areas where dealerships can potentially focus their efforts – your HR technology stack. It includes:

1. Onboarding
   
2. Recruiting
   
3. Learning
   
4. Performance management
   
5. Payroll
   
6. Benefits administration
   
7. Time and attendance
   
8. Analytics
   
9. Compensation management
   
10. Wellness management
    
11. Total rewards
    
12. Success management
    
13. HR information systems (HRIS)

Your HR technology stack may include just a few or all of these types of software platforms. Furthermore, these tools range from individual purpose resources, like an onboarding platform, to an HRIS, which frequently includes all of the above. So, it’s critical to fully understand where your pain points reside and how these tools can reduce or eliminate them entirely.

What Are the Fundamental Pieces of Your HR tech stack?

At the very least, you must have some sort of payroll technology across the board. Legally and functionally, you need to ensure you’re paying your staff on time and compensating them accurately. Along with a payroll solution, a platform to manage benefits is critical to run your dealership. Again, you have a legal obligation to provide employees with certain benefits, such as health care insurance, disability insurance and paid maternity – depending on the size of your organization.

According to the Key Interval Research report, the majority of dealerships rely on Excel spreadsheets and similar types of databases to keep track of data related to applicants and employees. It should go without saying that most of the more reputable HR software vendors provide technology that improves on spreadsheets by offering a way to aggregate, organize and analyze data in a user-friendly format.

So, your HR tech stack should also include a platform that helps automate and streamline recruiting and onboarding. A common misconception that many dealerships have, with respect to their hiring strategies, is that job boards are the answer to all of their recruitment problems. In reality, simply posting a job opportunity to a site like Indeed or LinkedIn will only increase the flow of applications you receive online. The critical component is your response to – or management of – an increasing number of job seekers coming through these channels. What’s next?

With an automated solution for recruiting and hiring, you’re able to let technology do a lot of the manual labor that has traditionally fallen on the shoulders of hiring managers and other dealership staff. At Hireology, we’ve found that our processes enable dealerships to automatically filter out more than 90 percent of unqualified applicants before they’re even considered a candidate. So, the dealer principal or HR manager is able to focus their time and efforts on the right candidates instead of those who are qualified for a specific role.

At the same time, pre-screening surveys help separate those who are serious about applying for a position within your organization from those who are simply “kicking the tires.” In fact, we’ve found that roughly 6 in 10 applicants actually take or complete a survey. On top of helping eliminate time spent on unqualified candidates, dealerships can also use surveys to gauge the job seeker’s cultural fit.

In another way, your approach to your hiring process isn’t much different from your approach to sales, ranging from lead generation to customer relationship management. It’s all about how you organize your applicants in the first place, keep track of their information, score them based on specific criteria and maintain the relationship through in-person and digital touch points. If you have a bunch of electronic applicants coming in you need something comprehensive to bring them together.

What Do Best-in-Class Organizations Focus On?

Beyond applicant tracking software and payroll and benefits management systems, dealerships have to focus on productivity. In fact, recent research from Aberdeen Group found that best-in-class HR organizations are 21 percent more likely than other businesses to place a high priority on boosting productivity when they consider business objectives.

To achieve this goal, it’s important for dealerships to ensure they have developed the right processes – that are supported by effective technology systems. Having a way to attract, qualify and organize candidates is a good starting point. However, the true test of the value of your HR tech stack is whether your software enables new hires to become high-performing employees. Onboarding is fundamental to this effort. Effective onboarding software allows dealerships to structure:

• Collecting personal details
  
• Filling out the required tax forms
  
• Distributing training materials

Effective onboarding aligns with ongoing training that dealerships provide new staff. The best platforms make onboarding resources accessible from anywhere at any time. So, new hires can fill out documentation at work, commuting or at home, which frees up their time at the office to focus on adjusting to the new setting and learning the processes. Meanwhile, onboarding software gives the dealership a clear view into the how a new employee is progressing throughout the process.

Where Should Dealerships Begin?

Your applicant tracking system should be the foundation of your HR tech stack to help you organize all prospects within a single, user-friendly platform. Included in this must be your payroll and benefits management system to ensure you fall in line with any state or federal regulations.

To keep pushing your dealership to outperform your competitors, it’s increasingly important that you invest in tools that help you keep track of new hires as they transition from candidate to employee. By doing so, you’re in a better position to track performance and productivity – helping you build a stronger business.

Despite changing consumer behavior patterns, many if not most dealers continue to evaluate third parties only on “hard lead” measures and discount others forms of influenced purchase behavior. Consumers want to be in control of their experience and they are reluctant to provide their contact information because they fear the repercussions of unwanted marketing and solicitation.

These influential experiences appear anonymous to the dealer looking through the lens of a traditional hard lead, and even when a flow of hard leads is provided, many dealers struggle to ascertain their value when they can’t attribute them to immediate sales, even when the leads are proven to have made a purchase elsewhere.

As competition in the automotive space increases and sales plateau, dealers will need a continually better way to understand the complexities of consumer shopping behavior and refined data to help cut through the clutter and focus on their marketing spend,

A Strategy, Goal, and Framework

After months of research and analysis, Cars.com has launched an attribution strategy that begins to resolve the conflict between how consumers shop and how advertisers measure and differentiate valuable data. While slow to adopt, the general consensus across the industry does acknowledge that the traditional way of measuring performance does need to change.

The goal is to provide automotive advertisers - OEMs and Dealers - with a better understanding and appreciation of the next generation of value measures that better reflects the connections with Cars.com Consumers, using a framework to demonstrate value and influence called Influence Drivers. The frame will continue to evolve and grow with the consumer and consists of Digital Drivers, Physical Traffic, and Revenue Signals.

Digital Drivers

Digital Drivers refers to a strategy and use of the full spectrum of digital media opportunities that boost broad influence of a message rather than trigger a behavior. Examples of this might include OEM campaigns, reviews, editorial content, and desktop/mobile integration or even insights.

Physical Traffic

Physical Traffic refers to tracking consumer behavior in the physical world in order to make more informed marketing investments elsewhere. One might think of it like night-vision google for shopper behavior. Cars.com was first to market with such tracking with its lot insights tool.

Revenue Signals

Revenue Signals refers to patterns of results from marketing investments calculated from a wider rate of financial metrics beyond weekly unit sales. You can think of this like judging GPA rather than an SAT score. As an example, over a six-month span, Cars.com influenced an average of 274 sales per dealership, 32% of sales at a dealership, and an average of 135 first-time vehicle sales, according to the Transparency Case Study January 2015 - September 2016.



Influencer Summit

Cars.com recognizes that it cannot do this alone. This is an industry move that requires collaboration with other industry players, and because of this has launched its first ever Influencer Summit, an event that is expected to continue occurring annually and grow, also with an ongoing online community effort.

On February 9th, 2017, thirteen industry players from outside the Cars.com family descended upon the Sheraton Grand in Downtown Chicago for a one-day roundtable discussion to explore  these ideas and how the industry can lock arms to bring solutions to dealers. These players included:

Cliff Banks, The Banks Report
Steve Finlay, Ward’s Auto
Ryan Gerardi, AutoConversion
Darren Haygood, Transparency
Jeff Kershner, DealerRefresh
Eric Miltsch, DealerTeamwork
Gary May, Interactive Marketing and Consulting Services
Cory Mosley, Mosley Strategy Group
Joe Oltman, Pin Business Network
Brian Pasch, PCG Digital Marketing
Matt Reid, Clarivoy
Joe Webb, DealerKnows Consulting
Steve White, Clarivoy

State of the Industry

During this roundtable discussion, Cars.com CEO Alex Vetter kicked things off with a State of the Industry address that reflected on the industry in 2016 as well as share how Cars.com is continuing to build a decision engine for consumers and a growth engine for its advertisers. During this time attendees had the opportunity to ask questions and share insights, which as you might imagine from the name listed, we did.

Industry Metrics and Influence Drivers

So much in fact that we rolled seamlessly into the second segment without the planned break. This second segment, led by EVP of Business Operations Elaine Richards explored the issues caused by the modern consumer being mobile and multi-touch whereas most dealer attribution models are not.

Product and Research Strategies

After a brief lunch , Chief Product Officer Tony Zolla gave attendees a glimpse into Cars.com's product strategy and upcoming enhancements. He also shared new consumer insights based on Cars.com's research.

Industry Innovation Roadmap

Finally, we spent the last part of the day with Chief Strategy Officer Greg McGivney leading a discussion on the advances in digital, giving attendees an opportunity to chime in with their own views on where the auto industry and market is headed in the immediate years to come.



Reflection and Insight - A Summary

Being part of this inaugural Summit was an honor, and I believe all attendees were more humbled by the experience than anything. Each of us in the room has put forth tremendous effort over the last 15-20 or more years, not just riding the wave of digital evolution and innovation in automotive retail, but putting our necks out to be pioneers in our own way. To be recognized for this and asked to participate in this Summit was a welcome nod, especially coming from the folks at Cars.com.

Not So Warm and Fuzzy

As stated in the opening sentences of this article, dealers have a way of viewing a third-party provider that is not always pleasant. The people at Cars.com not only recognize this but also embrace it, seek to understand it, and are attempting to change that sentiment.

As an example of this, let me assure that not all input from attendees at this roundtable was music to the ears for the team at Cars.com. There was no brown nosing going on in the room. In fact, I observed more challenging situations for the folks at Cars.com than sugar coating, and it was evident that the Cars.com team not only wanted this, they expected it from us.

Having dealt with, collaborated with, and observed other third-parties in this space, I am enthused to see such authenticity from an established company such as Cars.com who by the looks of things is about to make its last few years in the business appear like its adolescence.

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Discuss in the Forum

Care to chime in about the Summit and the need for simplifying dealer attribution?

>> Go Here to Discuss in the Forums <<

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Digital marketing in the automotive dealership industry is incredibly competitive. Dealers are constantly vying for the top position in all channels - SEO, SEM, listings, display. If it exists, they want to be at the top. And as a result, we get many requests for benchmarks and whether they are “better than the guy down the street.”

However, putting too much emphasis on external benchmarks may lead you down the wrong path as it focuses purely on how others are doing rather than how well (or poorly) you’re doing.

What dealers should be focusing on are internal benchmarks and comparisons such as how well you are doing compared to yesterday and what you need to do today to improve your results tomorrow.

External Benchmarks Don't Provide Any Actionable Insight

Forget about digital marketing for a minute and let’s compare benchmarks to something else. Suppose you own an NASCAR team. The lap times at Daytona range from 44.53 to 47.97 seconds, the average lap time is 45.51 and your car’s lap time is 45.30.

I’m not sure about you, but I wouldn’t be happy if my car had a lap time of 45.30. Even though I’m above average, I would want to improve on that. I would want to get my lap time to 45.00, then 44.53, and if possible 44.00. What’s more, it wouldn't matter if my car was the one bringing up the rear at 48.00 or in the pole position at 44.50, I still want to better my lap time.

As this example illustrates, external benchmarks don’t have any bearing on what you should do next.

This analogy can be applied when comparing results for your digital marketing efforts. Whether it’s Time on VDP, VDPs per Session, Bounce Rate or anything, it’s more important that you keep improving regardless of where you are on any external benchmark.

Internal Benchmarks Provide Much More Insight

Internal benchmarks provide much more value because they are a direct reflection of the actions you have taken. As a result, you can see where your decisions or activities have become better or worse.

Below are a few internal benchmarks that will help with your comparisons.

Benchmark 1: Before vs After

This is typically what people think about when they do internal benchmarking and it works well to measure the difference between a major strategy shift. Given the same time period determine if we are better now than we were before.

Example 1 - VDP / Session - Before vs After

Months 1-6
Months 7-12
% Change

0.84
1.12
33%

 

In Example 1, the benchmark from Months 7-12 was 33% better than from Months 1-6. As a result, we know that the activities we are executing are producing positive results.

Benchmark 2: All vs One

“All vs One” benchmark comparisons are good for determining if a particular tactic is contributing to an increase or decrease in your average. This helps assess if a tactic is helping or hurting your metrics.

To do this, measure the metrics from a particular tactic and compare them to an aggregated benchmark of all tactics. The benchmark in this case is the “All” measurement and the comparison is against the “One” measurement.

Example 2 - VDP / Session - All vs One





In Example 2,  the internal average of all sources for VDP / Session is 0.84 and we can see that Technology1’s average is higher than the average for all sources.

What this means is that Technology1 is helping bring up overall metrics and is contributing to the success of that metric and should be viewed positively.

Benchmark 3: Month vs Month

“Month over Month” comparisons provide insights into two things:

1. What direction items are trending, and
   
2. If the results are an anomaly

Example 3 - VDP / Session - Month vs Month





In Example 3, we see a general increase in metrics for Months 1-3 and a dip in Month 4 for “Technology1.” However, results recover in Month 5 and Month 6. As a result, Month 4 looks to be an anomaly.

Additionally, when we compare it to the “All” line, we see that both sources dipped in that month. This indicates that the dips were universal and may be caused by an external market factor.

Focus on What’s Important: Continuously Improving

It’s easy to get caught up in external benchmarks. It’s nice to hear that you are doing better than the average or, alternatively, it’s frightening to hear how much further you need to go. But the one thing that both of these scenarios have in common is a shared goal for constant improvement.

So the next time you are given benchmark metrics, take them with a grain of salt and try turning your focus inward.

Over the course of nearly two decades where Firas Makhlouf has spent leading technology and digital marketing initiatives at Driver’s Village, he’s pretty much done it all. From helping the dealership initiate client server architecture to move the group from “dumb” green screen terminals to PC’s in 1999, to introducing new forms digital marketing such as third-party leads, banner advertising, and now growing brand awareness through social media. But what Firas says works best for the dealership right now is when they’re able to drive low-funnel, VIN-specific traffic directly to their website.

So when Firas was introduced to LotLinx at a Chrysler conference in Las Vegas in October 2014, he was immediately intrigued.

“A different kind of digital marketing solution.”

A couple months after he became aware of LotLinx, Firas tried it out, and he’s been an enthusiastic customer from that day.


“We feel the value of that LotLinx customer is a lot higher than what we were once accustomed to. When LotLinx sends a shopper to me, I know that person is in the lower part of that funnel. He’s seven to 10 days away from buying. When we see traffic that’s not VIN-specific, those people are either mid- or top-funnel. They’re between 60 to 120 days out.

“We serve up our new and used vehicles to LotLinx, and they take it and distribute it out to many different sites. When a customer is doing a search and sees that VIN-specific 2015 Nissan Altima with 18,000 miles — that’s a unique vehicle. It’s like a snowflake. No one else has that vehicle but me. Yes, there are other 2015 Nissan Altimas out there, but this one with the scratch on the front bumper is mine and only mine.

“The results are measurable. The traffic that comes to my site is traffic we own. I can do with it as I please. If I want to serve up an ad to them, or they want to see all my inventory, both new and used, or they want to get into the e-commerce side of things and get a trade valuation — the LotLinx model is really profitable for us because now we have the shopper right where we want him.”

Better analytics make for better marketing

In recent months, LotLinx has increased its capabilities to deliver actionable intelligence to dealers at the VIN-specifc level, and Firas is taking full advantage of it.

“When we first started looking at it,” he reports, “we saw that some vehicles that I don’t have enough of were getting too much exposure, so we started shaping our spend based on our bread-and-butter cars. We no longer serve up Jeep Wranglers because those are on my lot maybe 15, 30 days. The ones that are on my lot for 45 to 60 days and those that I have multiple models of are the ones we want to serve up, and LotLinx is helping us control that spend.”

Firas recently gave LotLinx access to the dealership’s Google Analytics. “They’ve set up goals and work flows, so I can see now how LotLinx traffic is engaged, how deeply they’ve penetrated our site. It’s become a lot easier to analyze our traffic and spend.” 20 years on the job, and Firas is still getting better at it — with a little assistance from LotLinx.

Fore more information about how Driver’s Village is benefitting from LotLinx, get the free case study. Included in the case study is a scorecard that shows:

• Percentage of new shoppers delivered to the Driver’s Village website
  
• VDP Views on the Driver’s Village website
  
• Cost for each VDP View
  
• Number of Vehicles sold attributed to LotLinx
  
• Cost Per Vehicle Sold Through LotLinx

Go Here Now to Get the Free Case Study

NADA and its dealer members have experienced many major milestones over the past 100 years, and had the fortune of celebrating this in New Orleans last month at NADA 100. Being adaptable to changing circumstances has allowed NADA and its members to thrive. The traits of hard work, diligence and perseverance continue to propel dealers toward the future.

Whether or not you were able to attend NADA 100, DealerRefresh has you covered. As Assistant Editor I was on the beat broadcasting via Facebook Live all three days, snagging interviews with DealerRefresh Sponsors and other exhibitors from their booths, attending special events, and more. For a glimpse of what we were able to capture, which is literally but a mere fraction of everything that occurred at this year's convention, here is a breakdown of the video material we produced:

DealerRefresh Facebook Live Videos (Facebook)

• Jake Wittler Live from Cars.com Booth
• Marci Trares Live from Dominion Dealer Booth
• Eliana Raggio Live from DealerOn Booth
• LotLinx Turning Point 2017 Interviews with Brian Pasch
• John Clavadetscher Interview with Steve White of Clarivoy talking about the new partnership with Cars.com
• Wes and Tyler at Digital Air Strike Booth Announcing their French Quarter Parade with Dennis Rodman as the Grand Marshall

  NADA 100 New Orleans 2017 Video Compilation (BlogPro Automotive)

Here is my official music video compilation from the convention. This is the third time I've done this at NADA. The video consists of clips from the above Facebook Live broadcasts on DealerRefresh as well as those on AutoConversion's Facebook page. It also consists of photos I took at a few different events such as the LotLinx VIP Reception at Harrah's and the Cars.com Party featuring Fitz and the Tantrums. Be sure to watch the entire video so you don't miss the "Viewer Bonus."

Login to view embedded media View: https://www.youtube.com/watch?v=8EwrCjoCDvE


10 Best Facebook Live Recordings from NADA 100 (BlogPro Automotive)

For a deeper look into the Facebook Live broadcasts I captured, here is my post on BlogPro Automotive that consists of the 10 Best recordings. Included in this post are the six above-mentioned, plus four others that were published to the AutoConversion Facebook page. These are the 10 most-viewed broadcasts from the event, reaching more than a combined total of more than 10,000 people.

LotLinx Turning Point 2017

You may have noticed in each of these segments the inclusion of LotLinx's Turning Point 2017 event. LotLinx, which is a DealerRefresh Sponsor, held a private event Saturday at Loews New Orleans where Guest Speaker Brian Pasch and LotLinx Founder Len Short shared the stage to announce the latest innovations being introduced and how that benefits dealerships.

I was able to broadcast both Brian's and Len's speaking slots via Facebook Live. Below is Brian's time behind the podium explaining why there is chaos among dealers with measuring ROI and what he and LotLinx are doing about it. His presentation lasted approximately 30 minutes which you will likely find dynamic, engaging, and compelling.


Looking Ahead: DealerRefresh and Automotive Events DealerRefresh is committed to capturing the spirit of events such as NADA. Our goal is to give dealers a taste of the experience and also to help give our Sponsors coverage during and after the event. If you're interested in coordinating with us for future events, contact us and let us know what you have in mind. Additionally you may also text DEALERREFRESH to 555888 to opt in to receive text alerts while we cover such events.



From Top Left: Steve McFarland and Melissa Maxey; Jennifer Briggs, Eliana Raggio and Veronica Dunford; Jared Hamilton and Stu Berkely: Eric Brown and Ryan Gerardi

Greg Holway, General Manager of DCH Toyota of Milford, was assigned to the store shortly after it was acquired by the Lithia Automotive Group. According to Holway, many aspects of the store were in need of improvement, including its online reputation. “The ratings were as poor in Service as they were in Sales,” stated Holway. “The store had every opportunity to improve.”

In the 365 days prior, the store added a mere 6.8 reviews per month at a 3.1 average star rating with little to no presence on third party sites. Based on satisfaction Holway had enjoyed with Dominion’s solution for fixed operations marketing, he turned to Dominion’s award-winning reputation and social media platform, Prime Response.

About Prime Response

Prime Response enables dealers to track, manage, and engage with online car shoppers.
After bringing in Prime Response, not only did the store master monitoring online conversation, responding to negative reviews, and winning with social media campaigns, but it has set records in third party site review generation.

In the first 161 days of using Prime Response, DCH Toyota of Milford skyrocketed to an impressive 51 reviews per month at an average 4.6 star rating. “I would have had a tough time believing that it could happen that quickly and with that much improvement,” commented Holway, “but if you listen to the experts, it makes life a lot easier” – referring to the partnership Holway now enjoys with his dedicated specialist at Dominion.

Both review quality and quantity have improved dramatically. What used to be 3.2 and 3.0 star ratings on Google+ and Facebook, now stand at 3.9 and 3.5, respectively. Likewise, with seven DealerRater reviews posted in the year prior to partnering with Dominion and zero presence on Cars.com, 80 reviews hit DealerRater and 100 reviews posted to Cars.com, all of this within the first five months on the solution.

But this isn’t all. Now that Holway has unleashed the full potential of Prime Response, DCH Toyota is also experiencing significant improvement in its social media traffic to highly specific destinations on its website. How much traffic and where and how this is impacting business at Holway’s store, you will have to see for yourself by downloading this free case study today.
Download the Case Study Now and Get the Full Story

Everyone loves new cars. They’re shiny, they smell great and the sales staff love making a big sale. It’s a huge part of how OEMs rate their dealers as well. I mean, who doesn’t want to be the “#1 Chevy dealer in the county”?

But once we scratch the surface, the bright sheen of selling these new cars starts to wear off. According to the NADA DATA Midyear 2016 Annual Financial Profile, dealers actually LOSE $227 on every new car they sell and PROFIT $228 from every used car they sell.

Now, I’m not suggesting that you don’t shoot for being the “#1 Chevy dealer in the county”, but if you’re looking to make a real profit, you might want to shift your emphasis towards more pre-owned inventory.

However, if you plan on focusing more on pre-owned sales, you need to realize that the methods you’re using to market today aren’t actually optimized for pre-owned sales. Here’s why:

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>> How to Attract Buyers At Every Stage of the Journey <<
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Pre-Owned Buyers Need to Confirm Inventory, New-Car Buyers Don't

According to an article by Automotive Ventures, “On average, car buyers only visit 2.2 dealerships” and “two-thirds (68%) visited two dealerships or fewer before buying, while 40% of consumers visited only one dealer before buying.”

What this means is that the buyer knows what he/she wants before going into your dealership.

Here’s the difference:
New car shoppers assume you DO have the cars they want on your lot - or that it’s easy for you to get them. After all, if you’re a Ford store, you MUST have the new Ford Mustang, right? And if for whatever reason you don’t happen to have the exact package or color your shopper wants, the shopper expects you to be able to order it for them. As a result, they don’t need to confirm you have to the vehicle they want before they visit.

However, used car shoppers assume you DON’T have the car they want because they know that a used car’s availability is inconsistent. They know that if you don’t have what they want, it’s not as simple as ordering one from the factory. As a result, they need to confirm you have the vehicle before they visit.

In order to optimize marketing for pre-owned vehicles, dealers must move past only marketing the make and model, and go all the way down to the inventory level.

Which brings me to my next point:

Most Dealership Marketing Tactics Don't Focus on Used Inventory or Any Inventory at All

Let’s look at the most prevalent tactics a typical dealership employs and how they relate to inventory level marketing:

Digital Channel
Sub Type
Inventory level marketing
Sufficient for New Car Marketing

SEM
Branded Keywords
No
Yes

SEM
Non Branded Keywords
No
Yes

SEO
Blog Articles
No
Yes

SEO
Videos
No
Yes

Display
Brand, Offers, Specials
No
Yes

Facebook
Sponsored Updates
No
Yes

Facebook
Sponsored Carousel
Yes
Yes

Listings
AutoTrader & CarGurus
Yes
Yes

 

As you can see, a good six out of eight do not market at the inventory level. But, because most dealership marketing is geared toward new cars and new car shoppers assume you have the inventory they want, many dealers stop at this point.

However, only your campaigns on listings sites are actually aligned with how used car shoppers buy, since that channel allows shoppers to confirm available inventory.

Pre-Owned Optimized Marketing = Inventory Level Marketing

The interesting thing about inventory level marketing is not that it’s new, but rather, that it’s just a slight variation of some of the existing channels that you are currently using.

In fact, there are webinars available that talk about existing and available technology as well as tactics for optimizing pre-owned vehicle marketing.

So, if you’re more interested in results, try focusing a bit more on marketing your pre-owned cars at the inventory level. According to the data from NADA, your bottom line, and hence your wallet, will thank you.

Back again for my annual car dealership predictions post for the retail automotive industry.

This year will be defined by a new level of awareness surrounding relevant marketing, the state of accountability and performance, and understanding mobile consumer behavior. I believe we'll reach a higher consciousness of execution, operational excellence, and results that every level of the dealership can understand. No more shell games.

Are we beginning to understanding the seemingly endless flow of data flow as it relates to quantifying marketing results? Or, quite possibly, have solution providers finally been identified as not providing the results other industries demand as a standard? Whatever the reasons, there are significant events the professionals in our industry must be aware of to collectively raise the quality of the solutions our industry uses.

2017 Car Dealership Marketing Predictions 

I've placed the key marketing items into five categories.

1. Mobile
   
2. Metrics
   
3. Media
   
4. Messaging
   
5. MPOP

Mobile - Search engine results will be disrupted 

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The mobile mindset is agreed upon. We're well past the point of just saying "mobile is important" or, "we need to pay attention to mobile." We all get it - people use their phones to do stuff. A lot of stuff. I believe what we're all missing is how search engines are changing the ways marketers deliver mobile content and the way users consume and interact with mobile content.

Last year I predicted the death of SEO as a stand-alone tactic. (Rather, a single product that agencies and consultant sell) The largest portion of traffic a dealership website receives is from their branded organic traffic. Anyone still paying excessive amounts of money to optimize pages for long-tail search traffic and compete with more authoritative content is misinformed. Also, be extremely cautious of any solution which doesn't provide proactive management and is 100% transparent with their strategy.

This year we'll see local SEO become even more important for marketers. Why?

Simple. Local and mobile searches will rule the land. 50% of mobile searches have local intent. I expect to see this number approach 65% in 2017. Google released the following statistics as it relates to this behavior from last year:

• 4 in 5 consumers use search engines to find local information.
  
• Local searches lead to more purchases than non-local searches. 18% of local searches on smartphone lead to a purchase within a day vs. 7% of non-local searches.
  
• 30% of consumers would buy in-store instead of online knowing they are close to a store.
  
• 57% of smartphone users look for local info at least once a week

I predict we'll see signals of a transformation in the search engine landscape. Google may make the first bold move and begin to reduce the number of organic listings displayed in the mobile search results. (When was the last time you clicked an organic result from your phone?) They've already increased the size of their Adwords units by 58% in their new Expanded Text Ads. This takes up more screen real estate (especially on your phone) in the hopes of creating better-contained choices for the user.

However, a major flaw exists in the early phase of the ad unit utilization: Only 30% of the companies in all industries have converted to ETAs. In fact, some early adopters are experiencing lower click through rates because their ads are simply longer, but haven't improved their contextual relevancy.

Why do I believe this change will happen? The first clue was the elimination of the right side-bar ads earlier last year. Everyone was batching and blasting the same plain-vanilla ads that didn't appeal to anyone's search intent. Plus, we've experienced a massive change in how Google shows local listings due to the increase in mobile usage.

Also, we observed a faster evolution of Facebook's paid search advertising ecosystem than standard search engine platforms. Facebook quickly moved to a pay-for-play platform for advertisers and has quickly demonstrated how they can generate massive levels of revenue. About 80% of Facebook's $7 billion revenue comes from mobile advertising. Facebook's local data is an incredibly impressive and effective platform where shoppers can easily find what's important to them - rather, the information finds them.

Going even further, hands-free devices such as the Amazon Echo and Google Home will also change how we interact with search engines. These devices will also create more transactional based activities. As these activities continue, search engines will seek more alternatives to monetize their results.

What Should I do? Hold Your Providers Accountable.

• Are your paid search campaigns fully converted to Expanded Text Ads?
  
• Make sure your ads aren't just longer versions of your older ads. Increase your relevancy, not just your character counts.
  
• Is your website optimized for local prominence? Greg Gifford knows what's up.
  
• Smart SEO is still a requirement. Consider companies who actually do the work needed, such as Search Engines MD.

Metrics - Massive changes with measurement

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More dealerships will realize they've been measuring wrong metrics. The primary measurement theme for 2017 will be measuring the quality of traffic vs. quantity of traffic. At the end of the day dealers only care about the marketing activities which demonstrate real results. Does It Sell Cars?

Sure, historical analytics metrics such as bounce rate, page views and time on site are indicators of page and site quality. And yes, they contribute to the overall quality rating Google assigns to pages. These items on their own don't indicate sales success. Bots became the new school SEO cheat because people realized how easy it was to correlate engagement with improved rankings. Unfortunately, this traffic is pure garbage and contributes nothing of value.

Quality engagement drives conversion. We all understand video drives engagement rates that are up 10 times higher than standard content. It's time this engagement is tracked properly to show ROI and give dealers the results they're looking for from their marketing partners.

Dark social will become a larger point of confusion. Apps, messenger apps, texting, and secure browsing (and others) make it impossible to track referral traffic. It's happening at a such a massive scale. In North America alone, dark social referrals account for up to 59% of referral traffic.

I believe Brian Pasch and his team at PCG will drive the concept of understanding hard conversions to a new level with their engagement project. A new group of metrics will help demonstrate the quality of the traffic and its true contribution.

Four metrics to focus your attention on for 2017:

• Cost per Engagement (CPE)
  
• Engagements per Session (EPS)
  
• Zero Engagements per Page (ZEP)
  
• Form Completion Rate (FCR)

As traffic quality increases, natural engagement increases, and so do traditional "hard" conversion events: lead forms, phone calls, chats, and text messages. - Brian Pasch

Click to expand...

Media - Streaming experiences will become an important branding element

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The marketing ecosystem will be dominated by paid ad spend for content and eventually paying for video advertising solutions. Approximately 14% of marketers experimented with live video past year. I believe this may explode to over 40% of marketers using streaming media in 2017. Standard post reach has been pegged at approximately 1-2% while paid search spend has increased 234% in the past seven years.

2017 will see considerable less effort and resources spent towards irrelevant content creation. This is due to the fact the largest brands have cornered the content market and competing against them will prove to be worthless. This also ties into the understanding of the shopper's journey and where they're consuming different content. Visitors come to dealership sites to buy. Filling a website with irrelevant pages that don't act as a catalyst to move the buyer to the buying stage is a waste of efforts. Dealers will realize their irrelevant marketing efforts are driving up costs and it can be prevented.

Videos will create more empathetic and emotional experiences. I would also expect to see a better method of video channel organization within Facebook. (Think YouTube channels) I watched over 50 videos before I purchased my last vehicle. My youngest son began the search for his first vehicle on Youtube.

Another indicator of this trend is the fact that Facebook changed their own experience to include a new section for their video feed within the app. The line between the standard newsfeed and the video feed will be blurred as the two experiences merge into one. Customers are four times more likely to take action on a product demonstration video. 75% of ALL Internet traffic in 2016 was streaming video. Facebook has also stated they will invest up to $4 billion dollars in more AR/VR experiences within the platform.

Look for a new level of mobile video appreciation as Apple releases the iPhone 8 later this year, which is rumored to include mixed reality technology. This will usher in a new age of immersive experiences that raise the bar for incredible brand experiences. I believe (mixed) augmented reality will be more widely accepted than virtual reality due to the ease of use of out of the box and lower costs compared to VR solutions. Plus, AR is seen as less creepy and a lot less dorky. All of these improvements will keep users on their phones and contribute to changing how we find and interact with the products we purchase.

Bonus prediction - Twitter gets bought out by either Google, Facebook or Salesforce.

Messaging - 4 billion messaging app users isn't a fluke

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I expect to see more dealerships using Facebook messenger with some moving towards 24/7 coverage. I also expect to see larger brands leveraging message bots to handle initial conversations and customer interactions. Customer service will be defined by when it happens, not where it physically happens. More smart dealerships will leverage one-to-one communication platforms such as Slack, Conversations, or Pando for more personalized experiences.

Our communication behaviors are changing as a result of the functionality available and the real-time experience it provides. Social and Messaging commerce will become more acceptable as users rely on this channel for customer service, FAQs, and appointment setting. Watch for more direct purchases via platforms such as Instagram and Pinterest. 31% of consumers are using social media platforms to actively search for products to buy. Their personalized and smart experiences make it easy and enjoyable.

Younger users prefer Snapchat and I have a different theory why. Remember when many of us (I'm talking to the parents of Millenials or younger Internet users) could enjoy a social gathering without the fear of someone sharing content in real-time beyond your current location? Sure, photos and video cameras captured moments, but it didn't have real-time broadcast capabilities and the ensuing consequences.

Snapchat user behavior isn't much different. They have the same experiences. They're taking pictures and videos of each other without the risk of content going beyond the current situation. Sure, users can grab screenshots, but that's not acceptable and tolerated. Just as it wasn't acceptable for us to share content beyond its original intenders.

As platforms, such a Snapchat and Instagram, continue to drive real-time disposable interactions, marketers will attempt to connect with these users. Unfortunately, about 74% of Snapchat users and 63% of Instagram users don't even remember seeing advertisements on these platforms.

As younger consumers maintain this type of activity, it will be become increasingly difficult to connect with these shoppers. Think of how many personal chat groups you currently have on your phone. Safe to say you have at least one text group, one in Facebook messenger and yet another in WhatsApp.

I believe the real value for dealerships is real-time customer service via social messaging from multiple departments. Dealers shouldn't be surprised to see more of their dealers adopting their own follow-up processes that include more direct video responses rather than standard email follow-up responses. Elise Kephart continues to do an excellent job of guiding dealerships and salespeople down the path of video personalization.

MPOP - A Merchandising, personalization, and optimization platform

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Martech solutions will prove their value. Last year's post also introduced the concept of dealers operating as Martech companies to improve their customer relationships. I believe those efforts will extend further creating more effective, relevant marketing solutions. Dealers will recognize easier, faster and more effective methods of creating and managing their website marketing processes.

New vehicle sales may be flat in 2017 and used vehicles may be value plays for shoppers based on the inventory available. Mobile consumer behavior and many of the factors mentioned above will convolute the marketing processes.

Third party platforms will find it increasingly difficult to provide dealers with concrete attribution and performance data.

The dealership website must be the cornerstone of the marketing strategy, especially as dealers are offered more website provider alternatives. Watch for more creative designs, better mobile experiences and improved performance from website providers such as Carbase, DealerOn, and Dealer Inspire.

Less than 5% percent of marketers receive the full benefit of the tools they're using. 39% desire an improved technology strategy, 36% want to improve analytics reporting, and 33% want better support and training to help improve their current Martech tool performance.

Nearly 88% of marketers use more than one Martech tool regularly, of which include single-vendor platforms. Only 16% of vendor suite users say it’s the only tool they use because of the ease of use, simplicity, and overall effectiveness. Incredibly, 42% of marketers described their marketing technology as “fragmented” or “piecemeal.” Sound familiar? Dealers want to change however, that change must be easy to understand and use.

I'm also a used car dealer and we need to be as efficient and relevant as possible with our merchandising and marketing efforts. This will be an increasingly important philosophy for new and used car dealers in 2017.

Our focus is simple: Make it as easy as possible for search engines to find our relevant organic and paid content - and deliver our content to in-market car shoppers faster. I'm putting my money where my mouth is and using Launch Control to manage our vehicle marketing efforts.

(Full disclosure: I am a Co-founder of DealerTeamwork's Launch Control) 

Predictions from the community

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Dara Moore: Customer retention is going to be the key to dealer’s success this year.

Tony Ly: Paid Traffic is and will continue to dramatically increase as Dealers, OEMs, Lead Generators, 3rd Party Buying services compete for clicks. We may see a point of saturation on some top keywords.

Jeff Green: Speed, efficiency, creativity are all going to become exponentially more important in 2017. More specifically, aligning your marketing message to show customers that there’s more to your dealership than just the transaction. Standing out from the crowd gets harder every day as we all step up our collective games so creativity will make a huge difference. Customers will continue to demand a more streamlined road to the sale. End to end transactional websites will start to become even more common. F&I processes will get more streamlined allowing faster purchase experiences.

Andrew DiFeo: I believe the shift from third party advertising to first party will continue, especially as more dealers harness the power of Facebook. Dealers must continue to make it easier for consumers to shop and transact online, as well as ensure their offline processes match their digital presence and brand promises. As Dara mentioned above, customer retention will yield the highest ROI versus trying to conquest customers from other brands and dealerships.

More dealers will also realize not all web traffic is good web traffic. The amount of fraudulent web traffic, intentional or unintentional, to websites. is significantly higher than most people want to admit. Savvy google analytics users can spot this, and now companies like Orbee can assist dealers in identifying this fraudulent traffic.

Scott Monty: My wish: that a fraction of the budget allocated toward sales gets shifted to service, in an attempt to show existing customers that they’re more important, thus reducing the cost of new leads. The reality: the same budget will be put toward sales and no additional attention will be paid to service and retention, because of the increased efficiency of digital advertising.

Eric Giroux: Page/site speed will become increasingly important. OEMs will continue to tighten mandates for their stores to ensure a consistent online and in-store UX for their consumers. More vendors and OEMs will push toward an online purchase/desking process. More manufacturers will explore a direct-to-consumer purchase process. Pricing will become more transparent as the market will demand it and more states will regulate it. And, of course, the race to catch up with Tesla will continue… more self-driving technology and (affordable) fully electric vehicles.

Ed Brooks: My prediction, dealers will (finally) begin to move away from last click attribution and towards more advanced analytics. The age of influence measurement is upon us.

Gary May: We can all hope. 80%+ won’t unless prompted by outside forces. Vendors themselves don’t get it. Most have never been into MCF in GA or even assisted conversions.

Michael Donovan: I am not giving up my secrets but here are some hints:
Transactional data uniformity, Search/Social Marketing, Sales processes, Digital inventory merchandising

Jarrett Kuljis: An increased awareness and concerns by Dealers about data ownership and access to that data. Obvious advancements in autonomy and traditional OEM’s embracing relationships with autonomous technology. Increased subscription to the on-demand transportation models, Uber, dynamic ownership… Maybe more automotive technology companies with dealerteam in the domain name?

Benjamin Freedman: Used cars will continue to become a commodity, the rise of digital merchandising (a best practice within digital marketing), innovations to help retain gross profit due to the commoditization of used vehicles, and digital marketing innovations across all stages of the customer journey.

Robert Scoble: I’ll let you know. A major car company is taking me out in a prototype self-driving car on Wednesday at CES. My biggest prediction? Tesla won’t ship its model 3 in 2017.

Kacie Faye: Say goodbye to 3rd party lead generator and even a lot of SEM budgets will decrease as OEMs take over making it less affordable or efficient for dealers. Shift to creating home and work deliveries not only in sales but service too. Bring me what I want, when I want it I how I want it. Less about $$$ more about saving the customer time and giving them VIP service.

Ryan Dunkle: 2017 for us will be about trimming the vendor fat. Taking the increased money over the past 1-2 years (that was supposed to get us increased sales) and reallocating it into new marketing and advertising areas. Deploying a new hybrid floor model to increase efficiency overall and create a better customer experience. Continuing our focus on retention both internally with employees, but also with our customer base. Lastly, continuing to learn and pioneer to be at the forefront of the automotive space for others to follow.

Brian Pasch: My hope for 2017 is that dealers will embrace the four new PCG metrics that will focus their advertising dollars to increase high-quality consumer engagement on their websites. The focus for 2017 should be toward QUALITY metrics and away from QUANTITY metrics.

Owen Moon: With 85% of all marketing currently being spent in the Consideration stage, Mobile GPS targeting will continue to become more of a factor as dealerships are now starting to understand the importance of reaching car buyers later in the shopping cycle.

Lee Drake: Direct to consumer sales by companies like Tesla will significantly eat into dealer market share, just like it did in the IT world 20 years ago. Increasing political pressure on states that forbid direct sales like NYS from free market proponents backed by Trump will see more and more direct sales availability. When the mid price model 3 hits the street it’s runaway success will result in a huge impact on all non-Tesla brands, and major manufacturers will scramble (and fail) to create their own Giga factories.

Will McGinnis: Just a hunch but overall vehicle sales across the nation will take a noticeable dip. Used and New… except for Tesla

Tom Hawkins: “Direct to consumer sales by companies like Tesla will significantly eat into dealer market share”…this is NOT true…first of all, Tesla has no money except investor money. Secondly, this has been predicted for years…and we are still almost as far away as years ago.

Troy Spring: I predict that the business will get harder for some and easier for others. Those that don’t already know the difference of why…. will be on the wrong end of 2017.

Carl Bauer: Massive auction disruption by roaddealer.com.

Patrick OBrien: In 2017 the car business will continue to allow indie dealers to dominate the used car sector.

Chris Kelly: These are all very interesting! DISC! Here my prediction for 2017! Dealers will finally take charge of their marketing messages online and offline. Remembering cars are still an emotional purchase! The 2% of the grinding shopping public and 98% that can be brought into the cycle! This will be a year of waking up!

Michael Warwick: As we approach a 70% turnover rate, dealers may finally realize that their managers actually need to know how to train their salespeople to be successful.

Brad Hensley: “Traditional” dealerships that continue to try to crank “home runs” every deal will continue to shut the doors and wonder what happened. They tend to be ones who are force feeding warranties and not embracing a transparent process.

Matt Watson: I’m hoping we see more and more electric cars! After owning one, I don’t understand why anyone would want anything else! I’m hoping the Chevy Bolt sells like hotcakes in 2017.

George Nenni: Sales below 17 million, even worse in 2018
Expense cutting challenges vendors. Showdown on DMS data. Used car supply is up, price pressure will be strong. Who knows, hoping the train keeps steaming along, just not sure it will.

John Gentner: I predict a new up and coming dealership out of New York expanding even more. Adding 4 more stores blowing their sales and customer service through the roof….This prediction we have control of.

Cliff Banks: AI becomes more prevalent; two big sales on the vendor front; at least two large dealer groups will be sold in 1st or 2nd quarter; 1st quarter pricing pressure on used vehicles; and a legal showdown on DMS data will happen.

Larry Schlagheck: 1) Tesla wins a big lawsuit over franchise laws. 2) AI grows but infrastructure holds its growth back 3) Oil prices up. Truck sales down.

Bill Playford: The battle of 2017 will be fought with inventory. Due to the market’s seemingly insatiable urge to purchase trucks, SUVs, and crossover type vehicles, dealerships who are in urban areas or are limited on real estate, will be hamstrung by what they are able to stock. Manufacturers will be quick to use allocation as a means to control dealerships who do not care to fall in line with OEM mandates. Consumers will increasingly turn to virtual test drives (such as those on YouTube) and targeted social campaigns (follow the eyeballs) to hone down their selections. Dealerships that actively manage the proper selection, mix, and display of vehicles will be at a distinct advantage.

In regards to tech, the onboard diagnostics port (OBD) will be the hottest piece of real estate inside the vehicle. Vehicle to vehicle (V2V) communication will gain steam along with the autonomous push so that older vehicles will function in the autonomous world. The same technology that will allow pull-alerts to be broadcasted will also be used to push alerts to vehicles and passengers. Services will be developed to proactively and automatically schedule service for vehicles, further bolstering the service department as a revenue generator.

On the vendor front, a critical mass of dealers will leverage the NADA to finally crack the duopoly that is CDK and Reynolds & Reynolds. With falling margins, crippling fees, and questionable data practices, dealers will slowly, but surely, band together politically to get their way. Before things get busy in DC (and to counter Cox’s portfolio of services), CDK and Reynolds & Reynolds will go on an acquisition spree as a means to offer best-in-class tools to retain dealerships and protect their position in the market. Everyone will be happy…for a few months. Bold prediction: One OEM will have an autonomous shuttle offering service to and from the dealership by the end of 2017.

Glenn Pasch: Education and then implementation. Too many people preaching without helping to implement. Learning how to spot the pretenders.

Ryan Everson: Some of my 2017 automotive digital marketing predictions….

Google Paid Search Ads Will Capture 50+% of SERP Clicks – With paid search ads looking more like an organic result and more relevant than ever before, the percentage of people who click on paid search ads will start to overtake organic clicks. Not participating in paid search will no longer be a viable option, dealers have to pay to play.

Accelerated Mobile Pages (AMP) Will See Adoption in Automotive Industry – Automotive website providers will start implementing AMP versions of vehicle detail pages. Dealers need a great mobile website in 2017 not for Google but for our customers and faster pages will help drive conversions.

Display Ads Evolve into Native Advertising – Customers continue to largely ignore display advertising regardless of how well the targeting may be. Native advertising will grow in popularity as an effective way to get customers’ attention more naturally.

Dealers Will Start Targeting Niche Markets – Almost every dealer is active online nowadays which has resulted in crowded and more expensive online marketing while the number of consumers has remained more or less steady. Astute dealers will start targeting more specific niches and queries which will result in almost personal level content and ad campaigns.

Online Retailing Will Finally Gain Real Momentum – After failures like GM’s shop click drive, this is the year that online retailing will finally start to pick up steam. With tools like Joe Chura’s Online Shopper, dealers will finally be able to offer customers the online buying experience they have come to expect and are increasingly desiring.

2018 PWA Prediction - Innovative website companies will start developing a progressive web app version of their websites in 2017 that will be ready to launch in 2018. Customers love the experience of mobile apps but getting them to install one is near impossible for dealers whereas progressive web apps will provide the mobile app experience while sill being indexed by google and not requiring the user to download anything.

Bill Simmons: I believe 2017 will be the year that many smart dealers prepare for the expected industry slowdown in 2018. Many single point dealers may realize this could be the last year of record blue sky numbers and sell out to a mega group in their area. I’ll go against the idea that dealers will increase digital paid search spend. But will reallocate their dollars from some of the digital fluff like retargeted display ads that many studies prove are not effective at all. Look for those dollars to be shifted to tried and true paid search methods including Facebook.

James Klaus: Website companies will see their dealers shopping for a better customer experience on mobile. We have known the importance of mobile for years, hopefully, this will be the year that mobile is no longer ignored.

Chuck Parker: Media is generally ineffectual in not only advancing automotive business model strategies — but in gaining any respect for ideas or visionary thinking, however subliminal — so the current dealer business model is in for massive migrations and changes in next 3 to 5. Dealers should become Total Transportation Management Centers and the Beepi/Fair business model should move to a Personal Vehicle Management Strategy. Stand by for more.

Thank you for reading and thank you to everyone who contributed their vision for 2017. I look forward to seeing many of you at NADA in New Orleans. Keep learning. Keep helping others. And keep on improving the retail automotive industry.

For more of Eric's yearly predictions check out his previous posts:
2018 Automotive Marketing Predictions – DealerRefresh

5 Automotive Marketing Predictions For 2017 – DealerRefresh

4 Predictions in 2016 for Car Dealerships – DealerRefresh

4 Predictions That Will Affect Car Dealer Performance in 2015 – DealerRefresh

6 Predictions That Will Impact Automotive Retailing in 2014 – DealerRefresh

Today’s consumers have a lot of the answers they need before they ever contact your dealership or set foot on your lot, but they don’t have ALL the answers. Your organization’s processes and talk tracks must adapt to this ever-changing reality, which means you should be training your team constantly with the most up-to-date lessons you can find.

Sure events such as NADA, Digital Dealer, the DrivingSales Executive Summit and the likes offer helpful resources for savvy dealers, but they aren’t cheap to attend and they aren’t on-demand for your team when they need specific training. DealerRefresh can be a great free online resource, but when individual team members need the best training on specific subjects, your options are limited.

Say “Hello” to 24 Free Online Training Resources

At SteveStauning.com you will find a diverse array of online dealer training content and videos, and on this page in particular you will find more than 24 free online training resources that you and your team can access absolutely free anytime you need.

To make assigning and watching these free videos even easier, they are organized by job title and dealership function as follows:

1. Sales Managers; General Managers and Internet Managers
   
2. Floor & Internet Salespeople and BDC Agents
   
3. Receptionist Training

Accountability Quizzes

After your team members have indicated they’ve completed the video training, you can have them complete the two tests that are also available on the site - Creating an Appointment Culture and Appointment-Driven Communications.

Steve’s Guarantee: By focusing your team on this curriculum and holding team members accountable for learning and applying what they’ve learned, you will have gone a long way toward improving your sales, market share, gross profits, employee turnover and customer satisfaction.

About Steve Stauning

Steve Stauning [LinkedIn] is a respected automotive ecommerce industry veteran, and is the founder of pladoogle, LLC., a leading mystery shop, ecommerce and automotive consulting firm providing cutting-edge products and in-store sales consultation to automotive dealers, industry vendors and media companies. Prior to his involvement with pladoogle, Steve served in various automotive ecommerce leadership roles, including as Asbury Automotive Group’s Director of Ecommerce, the Director of the Web Solutions division of the Reynolds & Reynolds Company, and as General Manager for Dealer Web Services at Dealer Specialties. Steve is also an extremely popular automotive industry speaker and writer.

When shoppers on your website inquire with your dealership, the expectation of hearing from you is at its highest, be it a phone call, email, or text. But when they inquire with you indirectly by way of third-party automotive sites, sometimes their association with your dealership can be fuzzy, or in some instances, completely unexpected or unwanted.

Why do some shoppers forget why you are contacting them, or outright deny they ever asked to hear from you?

To address this, we've laid out five free car sales training videos in a series titled, "Turning Leads Into Engagements." In these videos we address the following topics:

1. Understanding the Mystery Car Lead
   
2. Online Car Buying Behavior and the Value of Leads
   
3. How Loyal Are Your Car Leads?
   
4. Tips to Best Manage Your Car Leads
   
5. Car Buyers Rely on Third Party Information

Understanding the Mystery Car Lead
We've all gotten it before. The Mystery Auto Lead. The consumer who says 'How did you get my information?' This dealer training video outlines the process by which auto shoppers submit their information on third-party automotive sites so that you can understand what they're really saying and how you can improve your sales tactics to overcome objections.

Login to view embedded media View: https://www.youtube.com/watch?v=7vKRDvukelI


Online Car Buying Behavior and the Value of Leads
Car buyers today spend an average of 17 hours online researching their next vehicle purchase. This dealer training video highlights the 24 touchpoints that influence car buying behaviors to give you a better understanding of the path to purchase, and the value that car leads continue to represent today.

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How Loyal Are Your Car Leads?
Auto lead loyalty is a hot topic today, and one that needs to be addressed from a sales best practices perspective. In this dealer training video, find out whether or not consumers predominantly buy the vehicle for which they submit a lead. Knowing these important statistics can help you improve your sales process and sell more cars.

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Tips to Best Manage Your Car Leads
If you're not following the right car sales process, you could be leaving money on the table. In this important dealer training video, learn about the buying behaviors of today's consumers and the steps you can take to keep more consumers in your brand, in your vehicles, and at your dealership versus the competition.

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Car Buyers Rely on Third Party Information
Did you know that 64% of car buyers today say they still want and rely on third party automotive information? In this dealer training video, critical statistics are addressed about the behaviors of today's online consumers, the importance consumers place on third party vehicle information, and why the right third party website can be your biggest and best sales and marketing tool.

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About Scott Pechstein
Scott Pechstein serves as Vice President of Sales for Autobytel Inc. where he manages in-house and field sales and account management for the company’s broad range of industry leading products. Scott serves as an automotive industry spokesperson, a company news media spokesperson, and lead trainer of the Autobytel Dealer Insight Series. Scott also contributes sales insight for the development of the company’s client marketing communications programs. Scott is an NADA Convention, NADA 20-group, Digital Dealer, IS-20 Group, DrivingSales Insights, Autocon, and Internet Super Conference speaker

When I think back to the days of running an Internet department, I have many fond memories. I loved the hustle and bustle of the dealership and the smiles on the faces of people driving away in their new car.

My BDC was set up so that I was in the same area as my team and one thing I often heard from my team was the dreaded, “This person said they never submitted a lead and wants to know how I got their information.”

These “mystery leads” frustrated me. I felt like I paid for an opportunity that was now deemed useless to my dealership. As I learned more, I realized this thought process doesn’t make sense and, dare I say in most cases, is a more often misleading statement from the consumer.

Let me share ways you and your team can work the third-party lead smarter to avoid frustration and ultimately help you win the sale.

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>> Free Car Sales Training Videos: How to Turn Leads Into Engagements <<
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Acquire Leads from Reputable Sources

For starters, always make sure that the leads you are purchasing come from reputable sources that require shoppers to select your dealership when submitting their information. Most third-party lead providers practice this, but not all. If you’re buying leads from a source where people aren’t actually choosing your dealership, then confusion will reign.

Consider the Shopper’s Third-party Site Experience

Let’s say I’m in the market for a new Porsche 911 Coupe (hey, I can dream big – it’s my scenario). I decide to do research first on a random third-party automotive site and then choose to request a quote from a dealer.

The first thing the site asks me for is the Make and Model I’m interested in along with my zip code. Contrary to popular belief, my computer does not automatically know this information so I must physically enter the information myself. (Hint – your customers' computers aren’t telepathic either).

Once I hit the continue button, I’m shown the dealership(s) that currently receive leads on the model I’ve selected in the zip code I’ve entered and I have the opportunity to request more information. Notice that no one is twisting my arm to fill out the information and once again, my computer cannot automatically enter the information for me.

Shoppers on reputable third-party automotive sites will automatically receive an email from the site letting them know you'll be contacting them. There should be no surprises, yet when you contact them they act surprised or in some instances violated.

At this point, let’s consider a few of the things the shopper might be saying to you without words:
“I’ve had a bad car buying experience in the past and I’m not ready to talk to you yet.”
“I’m still researching and am not ready to talk to you yet.”
“I’m not ready for the pressure yet.”
“I asked for a price quote and you didn’t send one. Why should I talk to you if you can’t give me what I want?”
“I don’t trust you.”

Do’s and Dont’s for Your “Mystery” Lead

Here are a few tips to respect the shopper while still maintaining your follow up.

• Set up an automated follow-up process specific to the lead source from which the lead was acquired. Also be sure to follow-up personally.
  
• NEVER, EVER, under any circumstances call the shopper a lead. In fact, the word "lead" should never leave your mouth when talking to a shopper during any conversation.
  
• Respect that they aren’t ready to talk to you.
  
• Send them a price quote – it’s what they asked for to begin with.
  
• Offer your assistance. Let them know that you’re here to help them and want to make the process as easy as possible for them.
  
• Don’t pressure them about coming into the dealership. Just continue to feed them the information they’re looking for.
  
• Continue your normal 90-120 day follow up procedure via email.
  
• Follow up periodically with emails about incentives and specials, as well as used car inventory that is comparable to their initial request.

When you understand the steps a shopper goes through to submit an inquiry through a third-party automotive site, is it plausible that the shopper really has no idea how you got their information and are shocked that you are calling? Yes, it is, and attempting to convince them they are wrong or forgot will never win them over.

Take the time to optimize your follow-up process to be personalized and specific to each individual lead source, be swift with your follow-up, and be mindful that the shopper may truly not understand how you obtained their information or they simply aren’t comfortable in talking with you, which gives you an opportunity to earn their trust.

Until next time - Happy Car Selling!

Author's Note: This Editorial was contributed by Cassie Perkins, Sr. Manager, Account Management Team and Programs for Autobytel.

[highlight color="#F0F0F0" font="black"]This is a follow up to my previous article “Who owns dealership data?”[/highlight]

Attending back-to-back conferences (DSES and JP Power marketing summit) was a real eye opener!

I saw tremendous energy and clear thinking about the new age of automotive retailing. And it is a new age…. our customers demand a better sales and service experience. More purchase options exist than ever before. Customers have choices and they know it. Add an increasingly complex marketing environment and today’s dealerships face business challenges that would test the very best executives.

Deeper, more textured and widespread data exists in automotive today than ever before. We know our customer’s purchase habits, their equity position, what cars they are interested in, how often they view inventory - where they travel digitally. Data is important, but not the end game. The end game is what we can do with the data.

Walking the exhibitor’s hall, I saw some fresh, innovative and sometimes disruptive solutions. I saw a few others that may not make it but out of the group, many will. More encouraging, solutions providers view data as a tool to solve problems plaguing our industry. This is a change in direction from an industry that saw the data itself as a product.

All of us should be cheering this renaissance of automotive investment and new thinking. Break out the fireworks and let’s celebrate, right? The golden age is upon us!

Yes, but wait just a minute here!

Between the dealer and the vendor are the DMS providers. Though it could be different, it’s quickly becoming common knowledge that several DMS providers are putting a stranglehold on the free flow of dealer-owned data. Their mission is to monetize an asset they don’t own.  With pressure from investors, DMS providers are searching for all possible methods to increase revenue and profitability. It’s an aggressive stance taken by the DMS providers who clearly, now more than ever are publicly showing they will stop at little to achieve desired margins -- including their apparent willingness to disrupt their customers’ businesses to achieve their goals.

Consider an example where a vendor who manages CSI for a major OEM also authorized by dealers, routinely pulled data from a dealer’s DMS to survey customers. Just as important, the data was needed to provide incentive payments calculations to these dealerships. The problem is the vendor had not become a “Certified Data Partner.” After discovering this data export, the DMS provider, interrupted (shut down) data access and subsequently, no surveys were being conducted. Incentive payments calculations were not made to dealers forcing the OEM to guess at and reserve for payments while they worked out the Certified Data Partner issue.

The Certified Data Partner program promises to protect vendors and dealer from liability for a breach. Based on what I’ve seen, that doesn’t seem to be the case.   What is also unclear is what other downstream uses of this data are and if that usage is also protected from a breach.

The DMS providers are aggressively pursuing their seemingly well-conceived plan to target this huge revenue potential.

Compel all vendors to become Certified Data Partners

In speaking with solutions partners (vendors), they tell a similar story. Solutions partners must become certified data partners to receive data. This is accomplished by the execution of broad, restrictive agreements that impose harsh penalties to those that either allow or assist others to access data from the DMS. This causes rejection of any technology that is not willing or able to pay the DMS toll.

Some of the other penalties prohibit a third-party provider from disclosing the fee they pay for becoming a certified partner. Some agreements impose six-digit penalties per instance where a third party has told his customer, the dealer, what they are paying simply to access data that the dealer owns. Unbelievable!

The Targeted approach to produce the greatest revenue.

According to those I spoke with, DMS providers first approached the largest vendors of dealership software. The more customers they had, the higher up the hit list they ended up. This was based primarily on potential revenue. As a secondary strategy, the DMS providers could create havoc if they interrupted data. This was not an idle threat, by the way, as the DMS providers have arbitrarily entered DMS systems and removed profiles that appeared suspiciously like a profile a vendor would use to get access. Again, it’s all about potential revenue and this was the low-hanging fruit.

Interestingly, smaller vendors without large customer bases that I spoke with were summarily denied partner status and told to re-apply when they had grown large enough to provide a good revenue stream from increased fees. This effectively short-circuits the smaller vendors and could kill a promising start up.

Submit to our NDA… OR ELSE!

The second part of this plan seems to be to gain broad, ongoing rights to data. Very one-sided aggressive Non-Disclosure Agreements are being sent to vendors. Those not in a position to be able to fight the apparent bullying simply sign as-is and return. Those who have the wherewithal to make a stand are apparently being subjected to intense negotiations during which time their business is impacted by the hide-and-seek user profile tactics.

Preventing Competitive Technologies

Subtler is the approach towards competing technologies. According to those I spoke with, DMS providers have a long history of spotting interesting tech solutions and buying them when it makes sense to fill a gap in their product offerings. The certified partner process is a valuable platform for the DMS providers to spot these technologies, either buying or making the data access so prohibitive that the vendor can’t compete with the captive solution. I am no attorney, but this seems a conflict of interest at the very least. This ultimately can affect our business by stifling the most promising concepts in favor of lesser products.

Where do we go from here?

This Machiavellian strategy to increase revenues at the DMS providers has proven effective…the shareholders are happy and want even more. Other recent ideas from what I’ve heard are to charge for each time a vendor hits a data base…either retrieving or posting data. Wow! Reminds me of when the DMS providers would charge by the number of sheets of paper printed by their system.

Fortunately, awareness around this issue is increasing. When talking to dealers now, most are aware of the increased charges, the increased restrictions and they are highly upset about it. A few years ago, the average dealer executive was not aware of it.

In my opinion, this will end poorly and no one will win unless the DMS providers take stock of what they are doing to their customers and act with good common sense. Too often activist shareholders drive management to make poor long-term decisions that look good on a short-term basis. That strategy often results in ruining a company. Perhaps their energies could be better directed at improving the products that dealers use every day and becoming partners of their customers instead of adversaries.

 

Today’s buyers want to purchase cars like they purchase everything else — simple, fast, and in a transparent manner.

With broad access to the internet, the days of distrust for the car-buying process are long gone, and in its place is a system that works in the buyer’s favor. Once a buyer visits one or two dealer websites, he or she can walk into a store armed with all the information they need to close the deal on their terms.

According to a study conducted by IHS Automotive in conjunction with Autotrader, the average car shopper spends more than 16 hours online researching before making a purchasing decision. Possessing valuable information, such as the car's invoice price, dealer inventory listings, competing dealer bids and manufacturer discounts, puts the buyer in the proverbial driver’s seat.

This new breed of buyer requires a new class of seller – cue the rise of the product specialist...

Instead of trying to hard sell a prospective car buyer, a product specialist strives to provide information and insight and present themselves as a knowledgeable resource. These specialists create a low-pressure, more transparent atmosphere, helping move buyers along the sales process without making them feel rushed or overwhelmed. In the long-term, this position will be vital to increasing customer satisfaction and establishing sustained brand loyalty.

Finding the Right Candidate

The product specialist job title is a relatively new one, and management has their work cut out for them trying to find the right candidates for these jobs. Prospective employees may not be familiar with the job title, and their first inclination might be to move on to the next job listing.

Since that is a move away from the traditional role of a salesperson, that fact should be made very clear in the job description.

When trying to attract a broader kind of candidate, stay away from using sales jargon in the listing, as this can turn off applicants. Focus more on the fact that this position is bonus-based with set hours and focuses primarily on client relations, a world away from what dealers offer with a sales role.

Possessing the Right Traits

There is no single blueprint for what makes someone a successful product specialist. Candidates with backgrounds varying from sales, customer support, technology and service all bring something valuable to the role.

Owners and hiring managers may be unsure of what to look for in these candidates, so it’s important to consider these 10 traits that are essential to the position. The primary role of a product specialist will be assisting customers and answering any questions they have. Ideally, a product specialist should not only have a deep understanding of the cars’ technology and features, but they should also possess high emotional intelligence, presenting themselves as a credible, trusted advisor.

A product specialist’s main focus is fulfilling the customer’s needs – not trying to sell them a car so that they can receive commission. The candidate must be friendly, personable and trustworthy in order to establish a relationship with the buyer and guide them along the car buying process without losing their interest.

Knowing What to Look for in a Product Specialist

In our latest eBook, The Complete Guide to Hiring: Product Specialists, our Talent Coaches worked to compile a list of the critical factors dealers should look for when hiring a product specialist:

• Ability to be a sponge: If they know nothing about the car business, then they must be prepared to absorb information and put it to quick use on the showroom floor
  
• Aptitude to demo the vehicles: Must be comfortable using the vehicles and showcasing their features
  
• Knowledge of technology: Must be savvy to speak about tech and articulate the information to customers
  
• Provide great customer service: Willingness to learn and develop knowledge of how to help customers
  
• New to the industry: You want your employees to be molded within your system, not bring old bad habits to your dealership

Notice how the last factor suggests that looking for someone who is completely outside the industry is a good strategy to employ. When looking to hire a product specialist, don’t limit your recruiting to only those with automotive experience. As long as a candidate has the right attitude and personality, he or she could be the right fit for this new position.

This year, make a resolution to not let your dealership fall behind your competition when hiring your next product specialists.

Will your dealership be set-up for success in 2017?

[highlight color="#F0F0F0" font="black"]Download Hireology’s in-depth ebook on all things product specialists.[/highlight]

Customer reviews have become a first stop for today's savvy shoppers. Online reviews exist for everything from the quality of electronics and computer accessories to which linens are best for a guest room. While the glut of customer reviews can be overwhelming, they illustrate how much stock people put into reviews and how important they can be for any company.

Reviews may be commonplace now, but before the Internet they were harder to come by. Consumer advocacy phone lines, magazines like 'Consumer Reports' and old-fashioned word of mouth supplied much - if not all - of the reviews people relied on before making a big purchase. Since there was no way for consumers to effectively communicate directly, businesses did what they could to spin articles and published reviews to their advantage and marketing was focused primarily on appearances.

Today, of course, that has all changed since people can now post reviews on social media, video sharing sites and, of course, directly to many review-based websites like Angie's List or Yelp. As a result, companies today not only understand the power of customer reviews - they do everything they can to encourage feedback from customers and to use those reviews to improve their services.

Ratings and Reviews of Industry Vendors

For an industry like auto sales, reviews go beyond fielding customer complaints and promoting positive reviews of dealers. Dealerships too are customers for dozens of automotive vendors at any given time, who can use their own voice not only to help out other dealers considering certain vendors, but also to hold vendors accountable. This kind of collaborative, community-based approach does more than simply connect dealerships, it can improve the auto industry as a whole.

So where can dealers go to to rate and write reviews on vendors in an authentic way?

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>> How Dealers Benefit from a Vendor Management System? <<


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While our very own Dealer Forums here on DealerRefresh have been a mainstay for thousands of dealers over the years to collaborate online about their experiences with vendors, the only place I can think of where dealers can formally rate and review vendors is DrivingSales.com, which has a dedicated section on its website with more than 1,000 vendors and 32,000 reviews.

Working collaboratively with competitors to share insights, reviews, and tips may seem counter-intuitive at first but working with your competitors does offer a number of benefits.

First, it creates mentors in the industry.

Sharing knowledge isn't a sign of weakness - it's a sign that you are secure enough in your own experience to lend a helping hand to others who may be still finding their feet in your industry. Mentors in the world of auto sales are more important than ever, considering the rapidly changing landscape and technologies.

Secondly, it expands and improves your professional network.

From simply making connections with other dealers and personnel to being in the know when it comes to exceptional vendors - or warnings on who you should steer clear.

Finally - and perhaps most importantly - you get what you give.

By sharing information and being an active participant in a community of industry experts, you're more likely to hear about new technologies, emerging best practices and innovative ways to win - and retain - customers.

The rise of online customer reviews over the past 20 years has driven home just how important a company's reputation is - and how easily public opinion can impact a business' bottom line. It has also shown how important reviews and sharing information can be for the community in an industry such as automotive.

In addition to being a valuable resource for all, the lessons learned from customer reviews can fuel the future of our niche in this industry.

As digital marketers we are taught from the very beginning that one of the most important things to measure is “Lead Form Fills”.

The premise is simple: If someone is willing to provide you their information on a lead form, then they are obviously interested in the car on your lot and this automatically makes them a lead.

Score one for the dealership marketing team!

This may have worked back in 2005 and perhaps even in 2010, but today’s buyers have proven that they are much more wary of forms and this wariness has been reflected in their online behaviour.

Why Lead Form Submissions Are No Longer Good Indicators of Intent

As Ward’s Auto states: “Many shoppers were put off by filling out forms asking personal questions. And the people who did go through the exercise and submit leads didn’t get much in return.”

The article goes on to quote Jared Rowe, former president of the Cox Automotive Media Group: “Half of [the people who filled out price quote forms] didn’t get called back, and the other half didn’t get a price quote. They figured, ‘What’s the point?’”

Recent discussions that we have had with top marketers from some of the largest dealer groups in the country have echoed this statement. I’ll paraphrase the sentiment: Even when we (marketers) are able to generate form filled leads - only 50% of them get followed up on in a timely and effective manner.

Is the lead form really as valuable as we’ve been lead to believe? Many studies suggest that car buyers will find the car they are looking for online and only visit one or maybe two stores before making a purchasing decision.

According to the Harvard Business Review, “Fewer than 10% [of car shoppers] will fill out an online contact form or communicate via email.”  However, the article goes to state that “Nearly 75% of buyers had not contacted the dealership before visiting.” So, are they calling, using chat, texting or something else entirely?

What these two findings imply is that digital indicators of a showroom visit are there, but they are just not as apparent as form leads.

This directly contradicts what digital marketers are relying on as their primary metric and so if this metric is not lead forms, then what is it?

The New Indicators of Interest

Shoppers will still go to dealerships’ websites to view inventory, but they are just not filling out forms. So what we need to do is find new metrics to gauge interest.

Time on VDP

The longer a car shopper spends looking at the cars you have on your lot, the more interested you can assume they are. If you have not set up any goals or events in your Google Analytics, the “Time on VDP” metric can easily be calculated using standard Google Analytics fields.  In fact, we have a tutorial on how to measure this.

VDP per Session

The more cars an online shopper views per site visit, the more interested they are in the cars you have on your lot. Like Time on VDP, this is yet another metric that can be seen even if you have not set up any Google Analytic Goals. We have a tutorial on how to measure this too.

Photo/Video Gallery Engagement

Like many complex purchases, scrolling through the photos is a high indicator of interest. Think about an apartment you want to rent or a house you’d like to buy. It’s easy to infer that the more pictures you view in the gallery the more interested you are.

Return Visit Performance

We all know that car buying is a complex decision that requires a significant amount of consideration. As a result, it’s very likely that the buyer will return to the car multiple times. This means that one of the best indicators of interest is the car shopper returning to the site to view the car again.

Dealerships Need to Move from Explicit to Implicit Measurements of Interest

Dealers need to understand that looking at the wrong metrics can have unintended consequences on their results.

By shifting measurement from explicit interest indicators (like form fills) to implicit behavioral metrics (like those mentioned here), dealers are aligning their measurement with the way their buyers are interacting with their website.

This will allow dealers to better invest into products that help drive more traffic and ultimately more sales into their stores.

In “The $4 billion Taxi Ride: Recognizing When to Influence a Purchase” John Clavadetscher talks about the $3.93  billion automotive advertisers will spend on paid search in 2016. In fact, dealers direct 45.1% of their digital spend towards paid search. I think we can all agree that is a considerable amount of money. What is the outcome? Tens of thousands of dealers, both franchise and independent, all shouting, “look at me, look at me”!

But is being ‘found’ enough?

Even Google, the beneficiary of the vast majority of money spent on paid search, says that doesn’t mirror how consumers shop for a car. In “The 5 Auto Shopping Moments Every Brand Must Own”, Google discusses the sophisticated shopper journey consumers make and looks at the questions most customers need to have answered before they even walk onto the lot;

1. Which car is best?
   
2. Is it right for me?
   
3. Can I afford it?
   
4. Where should I buy it?
   
5. Am I getting a deal?

The long and short of it is, simply being found is not nearly enough.

The consumer’s goal is not to find you; it is to find answers to those five questions. And, unfortunately, paid search does not help them get the answers they need. Yes, your car and your dealership need to show up on the consumers’ radar at some point on the journey, but paid search doesn’t deliver all of the answers for shoppers and isn’t the answer for your dealership – at least not the only answer.

A better goal for dealers is to spend energy and money to show up in the places consumers are looking for answers to those five questions – places where consumers compare vehicles and pricing as well study dealership reviews. ‘Awareness’ is necessary, but consumers spend the majority of their journey in the ‘consideration' phase of the process, finding the answers to the five questions above.  Paid search has a place in dealer budgets, but I would suggest that dealers concentrate their energy where buyers are spending the majority of THEIR energy.

Borrell says that U.S. franchise auto dealers will decrease their paid search spend by 62% by 2018 and that may be a very good thing. When dealers devote more attention to the places where they can truly influence consumers and stop shouting, “look at me, look at me,” they win.  Awareness is one small piece of a much larger puzzle. By paying more attention to the places where you can exert influence, rather only ‘being found’, you will sell more cars and make more money.

Are you spending too much on Paid Search? Let's discuss over on the forums.

As the Greek philosopher Heraclitus said, "The only constant in life is change." People who work in the auto industry know this is more than just a catchy quote. The auto market experiences seasonal dips and surges and it is also affected by a number of outside forces. The economy affects how much people are willing to spend, environmental issues make buyers more critical of emissions and mileage and industry trends can all cause a downturn that seems to come out of nowhere.

So what can dealers do to be prepared for a downturn in business no matter what's causing it?

Invest Wisely

Making wise investments means more than just buying the best IT equipment or using services from the best providers. It means making investments while times are good that will pay off when things get sluggish. Investments in upgrading facilities, improving your website and creating easier ways for customers to connect with you will make you more accessible and a better option overall even during an economic downturn. In other words, spend for the long term.

Diversify Your Inventory AND Your Services

Carrying too much inventory is a concern for all dealerships, so keep an active eye on your inventory even when sales are brisk. If you carry a fleet of rentals, ensure the cars are well maintained and in regular demand. Also consider your leasing program and amp up your marketing if needed. Leasing a car today means you can count on a customer in 12 or 24 months.

As you diversify your inventory, make sure you're doing the same for the services you offer. In addition to leasing, there are general car services - from routine oil changes to more complex repairs. Operating an on-site service center means you can maintain your own fleet more efficiently, offer incentives to new buyers and attract customers even if they didn’t purchase their vehicle from you.

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>> DEALER REPORT: VDP Views Distribution in 2016 <<

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Check Your Pricing Against the Competition

Even if you think your pricing is competitive, double check it anyway. These days there are a number of programs that let dealers check and tweak their pricing based on local or national averages so don't think you can set a price in April and have it be competitive come May. Be vigilant about looking at local pricing and deals to ensure you're giving your customers the best bang for their buck.

Make it All About the Customer

If the only thing you're offering customers is stale coffee and a TV set airing game shows, you're actively hurting your own business. These days customers post online about their experiences just about everywhere - especially places where they end up waiting around.

Give your customers something positive to talk about by enhancing their experience from the drinks you offer to what you can offer to those waiting for their car to be serviced. Make sure your service center is on time with appointments and familiar with the schedule. Customers want to know their business is appreciated and if they've taken the time to set up an appointment for a specific service, they don't want to be kept waiting while your team scrambles to figure out what needs to be done.

Invest in a good hot beverage machine to give customers greater choice and include cold drinks and small snacks. Offer free wi-fi and a luxurious place to sit and before you know it, they'll be tweeting about the awesome service even before they get their car back.

Be Open to Change

Finally, it's important to remember that change drives growth. Dealers who want to operate like it's 1987 simply can't remain competitive in the 21st Century. Online marketing, enhancing customer incentives, better communication and approaching sales from a new perspective are the only ways you'll stay ahead of the curve. So if the thought of changes and new technology make you nervous, it's time to jump into the deep end. Get familiar with new technology - both hardware and software - to take the mystery out of the process. Not only will you be able to improve your sales and reputation, you'll find plenty of ways these changes can make your dealership more efficient, more effect and ultimately, more successful.

When interviewing candidates for your dealership, it can be tempting to only focus on their past experience or current product knowledge. While these topics have their advantages, they can also be taught on the job. However, a candidate’s basic character traits are not nearly as easy to cultivate.

As the interviewer, it’s up to you to use the brief time you spend with a candidate to assess whether he or she will be a great addition to your dealership. You can improve your dealership by adding great employees who exhibit the following 10 traits:

1. They Fit Within Your Dealership’s Culture

According to a recent Mercer's study, 35 percent of employees cite internal politics as the reason for their unhappiness. And unhappy employees do not stay for very long; they usually leave in search for a more accepting workplace. That’s why finding a candidate that fits your company culture is incredibly important to the culture of your dealership. An employee who gets along with his or her team is more likely to grow and invest themselves in the brand.

2. They Come Prepared

If you are interviewing someone for a sales position, a great indicator of their sales ability would be seeing how well they sell themselves. If they come prepared to the interview and are confident in their answers, they will likely come prepared to sell cars.

3. They Are Self-Motivated

You can train someone to know the job, but you can’t train someone to be motivated. That is an inherent characteristic, and if a candidate lacks the ability to motivate themselves, it is only a matter of time before they will not be able to meet their workload.

4. They Are Upbeat

Upbeat employees can bring an air of positivity to your dealership and can even serve to inspire other members of your staff. You want employees who are happy to collaborate with others and are eager to create an environment that better suits your dealership’s workflow.

5. They Communicate Well

Speaking and writing ability, as well as body language, are all features of an effective communicator. If you find a candidate who has a hard time communicating, this can eventually lead to issues arising internally as well as with your customer base if they are hired.

6. They Are Proactive

An employee that shows he or she has no problem taking the initiative is a great asset to your dealership. It shows they are willing to make the effort to better themselves and make your life easier in the process.

7. They Are Detail-Oriented

A candidate with a great attention to detail is an ideal addition to any company but can add tremendous value to your dealership. Detail-oriented employees take pride in their work and make sure to limit the mistakes they make. Employees who possess this trait can eventually be great additions to your management staff as well.

8. They Are Passionate Individuals

If an employee is passionate about their role, it can go a long way in keeping that person happy, engaged and motivated. Passionate individuals tend to become great leaders, teachers and role models for future employees in your dealership.

9. They Exhibit Creativity

Being able to think outside the box is also a skill that can be incredibly useful to your dealership. An employee who is able to find creative solutions to issues or ineffective processes that are in place can help reduce inefficiencies and change your dealership for the better.

10. They Possess Leadership Abilities

Whenever you hire anyone, you are investing in the future of your business. These employees will rise through the ranks to eventually become leaders in your dealership. If they exhibit leadership qualities from the very beginning, it is in your hands to work with them to nurture their success and positive growth.

How to Spot These Traits

Finding a candidate that possesses these qualities can be a difficult undertaking, as every candidate wants to make the best impression possible. You can make the search easier by instituting a more process-driven approach to hiring.

At Hireology, we promote a standardized method to hiring that is based on aggregating data and using that information to choose the best employee available. Our research has found that dealers with a process driven approach are much more likely to find and hire quality candidates. Creating a hiring process in order to improve your chances of selecting the best candidates for the long haul is easy if you incorporate the following steps:

1. Attach a Pre-Screen Survey to the Application

As a best practice before bringing someone in for an interview, we recommend administering a survey that asks about a candidate's past experience, and the questions usually relate to the job at hand. Hireology offers a SmartRankTM survey that is automatically customized for the position you are hiring for and is sent to candidates directly after they apply for the position online. Applicants are scored based on their responses automatically, helping you prioritize who to potentially interview first.

2. Conduct a Standardized, Structured Interview

If your interview process is unguided and consists of different interviewers asking candidates a variety of wildly different questions, the data you will amass will likely be random and hard to navigate. Consider using job-specific, customized, structured interview questions for all your candidates. This will allow you to see how each candidate takes on a specific question, and you can more accurately predict job success by creating a consistent rubric for assessing each candidate.

3. Administer a Personality Assessment

When hiring a new employee, administering a personality assessment can be valuable in helping identify successful traits. In my opinion, one of the best personality assessments available is the DiSC Assessments. The DiSC (Dominance, Influence, Steadiness and Conscientiousness) Assessment Program is a profiling tool that helps improve work productivity, teamwork and communication by giving you a way to see what work styles a potential employee may possess.

As an owner or a hiring manager, personality assessments allow you to evaluate a new hire on a much deeper level and give you insights that you would normally find out about an employee after you have worked with them. You are able to gain a better understanding of the new employees’ motivations and work styles, as well as how they will mesh with the rest of your staff.

Hiring the right staff for your dealership is essential for your continued growth and success. But in order to know what to look for, a structured hiring process must be in place. What’s stopping your business from finding and retaining the best employees?

Try brushing your teeth with the opposite hand, or take a different route to work, and see what happens.

It’s been well written that we fall into routines. We look at automotive e-commerce the exact same way. All of us continue to try to fix the buying process, and that’s why the e-commerce transition continues to fail.

As I’ve said many times over the years, one of the critical barriers to selling a car over the Internet is that people have a preconceived notion of how they should buy a car. As many of you may already know, I sold cars over the Internet (as much as technology would allow) for six years. Although there were plenty of signals of an underlying weakness in the various programs, the real moment of clarity occurred when I was working on a direct buy program for AutoNation.

As many of you may already know, I sold cars over the Internet (as much as technology would allow) for six years. Although there were plenty of signals of an underlying weakness in the various programs, the real moment of clarity occurred when I was working on a direct buy program for AutoNation.

After conducting some follow-up, I discovered a customer had purchased locally - even after presenting them 100% of what they asked for. The customer confirmed that we had the exact car they wanted, option for option, at the best price. Yet, for some reason, all of the customer’s logic was overridden. It was too far removed from his/her research to buying routine. They just felt an underlying need to purchase the vehicle locally.

For those of us who have worked on a dealership floor, selling cars becomes part of a routine.

Customers say yes.
Vehicle gets prepped.
Paperwork gets signed.
Vehicle drives over curbs.
Rinse and repeat.

It happens so much that we don’t realize the transaction is an isolated one, that won’t be repeated for several years. We forget that it’s special. Instead, we feel like our efforts somehow overcame decades of ingrained car purchasing behavior. No matter how stellar that isolated transaction might have been, it doesn’t happen at an interval where, in the customer’s mind, it becomes the norm.

In the meantime, the entire automotive ecosystem continues to fall into another related routine. Since the dawn of the Internet; millions of dollars and man-hours have been thrown at creating solutions that create a novel buying experience. Although millions of cars are sold, those same customers didn’t return to the market for 5, 6, or 7 years (as of August of 2016, NADA pegs the average loan schedule at 68 months, for those who are keeping score). Some haven’t returned at all. Those who came back returned to a new purchase pathway that didn’t resemble the “new purchase pathway” they followed before.

Even if their brain tried to reference the new routine, what was being presented didn’t resemble what they were referencing. Like anyone faced with that situation, their brains revert back to what they understand. The same mechanism that controls how you get back and forth to work, or how you brush your teeth, also projects an image of how you should buy a car.

If we want to move customers into an e-commerce relationship, we need start by creating new and repetitive routines.

How? It’s actually quite simple.

Instead of focusing all of our e-commerce efforts on selling vehicles, we should look at the continuously overlooked profit center inside of every franchised dealership: The service department.

Providing a customer maintains their vehicle, they will interact with a (preferably your) service department dozens of times between purchasing vehicles. If a dealership is lucky, its service writers will get to see a household’s vehicles every three months or three thousand miles, or eight times a year if Hubby and Wifey Smith are loyal customers. Again, assuming the dealership is super lucky, and those same Smiths alternate twenty-four-month lease cycles, they interact with the sales team once a year.

You tell me, who has a better chance of altering the routine... the department that delivers smiling faces eight times a year or the department that delivers smiling faces once a year?

Now that I’ve got your attention, go look in the mirror, and tell yourself you’ve fallen prey to your own unconscious habits. For a person who built their career on selling cars online, it’s a tough pill to swallow, but I’m ready to admit it to myself. All of the things we’ve been offering to customers on the sales side in the hopes of creating an e-commerce relationship aren’t enough to change a customer’s routine.

The shopping carts, click-to-calls, live chats, no matter how fancy these things are, do nothing to alter the customer’s baseline model of how to interact with a car dealership. As soon as these tools drive a transaction, the relationship then reverts back to calling the dealership, or just showing up, to schedule routine maintenance on the vehicle.

...let that simmer for a second.   

If you want to reinvent the wheel, start at the hub. If the automotive industry wants to drive change on the retail side of the business, it must focus its efforts where customers interact most. All of the whiz-bang technology that’s meant to create a seamless digital experience should start on the service side. If we can change a customer’s routine way of interacting with a dealership, then we can cultivate a way to change the way they purchase their vehicles in the future.

Stop throwing money at a moving target five years from now, and invest that money in a future you can create today.

What are you currently doing in your service department to create a seamless experience at your dealership?

There is no question that having a solid mobile strategy, including the ability for your customers to text you in a safe and compliant manner, is important in helping your dealership increase sales and improve customer service.

The success of your texting strategy, however, hinges on maximizing a person’s ability to initiate contact with your dealership via text message. The best way to do this is to add a call to action for texting across all of your marketing and communications initiatives, including your mobile and desktop websites, to drive leads, increase engagement, and ultimately enhance your business.

Below are four easy steps for more effectively implementing text calls-to-action with your dealership.

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>> How to Turn Shoppers from Third-Party Automotive Sites into Buyers at Your Dealership <<

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Make sure all important phone numbers are text ready

Dealers can implement technologies that exist today to text-enable their existing phone numbers, including main phone numbers, special vanity numbers, service numbers, and call tracking numbers. The reality is that consumers are probably already trying to text to your current landline phone numbers, but their messages are not being successfully delivered.

Include “Text or Call” in your advertising

Anywhere you promote your text-enabled phone numbers, whether in your online or offline advertising, be sure to add “Text or Call” to open new channels of communication with customers who prefer to text. In addition to generating new prospects, your existing customers (including your service customers) will be able to engage with you quickly, easily, and in the manner they prefer.

Feature “Text Us” buttons on SRPs and VDPs and other key website pages

Be sure to implement “Text Us” buttons on new and used vehicle search results pages and on vehicle details pages, on lead forms, and on “contact us” and directions pages on both your desktop and mobile websites. This will help broaden your reach among car buyers and improve your ability to engage and communicate with shoppers who want information about a particular vehicle in your inventory.

Utilize a text lead management system that assists with compliance

Telephone Consumer Protection Act (TCPA) guidelines are strict when it comes to texts, and fines for non-compliance can run as high as $1,500 per unwarranted text sent. Permission-based texting platforms assist with proper opt-ins and opt-outs while serving as an effective lead management system to monitor and track communications since all text communications can be pushed to your CRM for follow up and lead management.

By maximizing a person’s ability to text you via your existing phone numbers (including your service numbers, in your online and offline advertising, and at your SRPs, VDPs, and lead forms), you offer your customers a great first line of communication to engage with your dealership. Texting is also a great way for you to initiate communication and reach out to customer prospects after they have opted in (and after you have implemented a texting platform to assist with compliance and manage leads).

Remember also that texting makes a great addition to the service business, enabling your service advisors to ask the customer’s permission to text with updates at the time of write up, and by allowing the customer to text back with questions once they have opted in.

For three days in the middle of October in the far reaches of the Bellagio Hotel and Casino in Las Vegas - the Conference Center - nearly a thousand of the auto retail industry’s more savvy dealers and thought leaders assembled to attend the industry’s most progressive dealer executive event - the 7th Annual DrivingSales Executive Summit.

During this brief and exhausting period were Keynote Addresses from global business leaders, Breakout Sessions presented with industry thought leaders, panel discussion, a Best Idea Contest, and the Innovation Cup. And for the second year there was the AutoVentures Summit.

6 Keynotes from Global Business Leaders



Three of the six keynotes this year, including DrivingSales CEO Jared Hamilton's, concentrated on the significance of human resources, training, development and retention. Below is a list each Keynote speaker and topic.

• Dan Zarella - Leveraging the Social Webs for Engagement and Profitability
  
• John Boudreau - The Ultimate Competitive Advantage: Your People
  
• Jim Parker - Develop a Company Culture of Winning!
  
• Richard Rikess - MVI Presentation: The Language of Closers
  
• Julie Hoffman - Automated Approach to a Luxurious Customer Experience

To explore these further and get a pulse on how the keynotes were head on over to this thread in the Forums.

Dozens of Breakout Sessions with Industry Thought Leaders



As usual there were six different periods of Breakout Sessions split across the three days, each period offering at least six or more options of sessions ranging from fixed-ops to sales and marketing and leadership. For a complete list of the sessions you can visit the DSES website but to get a pulse on how the content and presenters were in the sessions head on over to this thread in the Forums

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>> What Are the Benefits of a Vendor Management System? <<

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Best Idea Contest



Best Idea Contest Winner - Brad Paschal

The Best Idea Contest consisted of five dealers seeking the recognition of peers and awards from the judges. The winner of the Best Idea Contest was Brad Paschal from Street Volkswagen of Amarillo who won $3,000. The runner-up that received $2,000 was Josh Pogue from Lexus of Richmond Hill, followed by the other three finalists - Brian Armstrong from VW Southtowne, Derrick Woolfson from Younger Nissan of Frederick, and Jean-Francois Blaquiere from Groupe Park Avenue who each received a $1,000 cash prize from ELEAD1One which sponsored the contest. For details about each idea presented check out this thread in the Forums.

Innovation Cup



DrivingSales CEO Jared Hamilton with DSES 2016 Innovation Cup Winner - Steve White from Clarivoy

The Innovation Cup also consisted of five finalists that were selected prior to the event by an appointed committee of dealers and thought leaders. The contests were: Calrivoy, LaunchControl by DealerTeamwork, BuyerScout by Outsell, AutosOnVideo, and Shop by Pay from DriveItNow.

Each contestant had three minutes to present their solution to the audience followed by five minutes of questioning from a panel of three including Robert Karbaum (@karbaum), Eve Knudtsen, and Ric McCoy (@RicMcCoy).

Sean Stapleton’s pitch of LaunchControl was the final presentation which drew the most response, but the following morning when Steve White from Clarivoy was announced the winner, a “stunned silence” was drawn.

Each contestant was presented with an award, the largest of which went to Clarivoy. Congratulations to Steve and Clarivoy and all five finalists.

Digital Debate Panel



On Monday the Digital Debates Panel moderated by Joe Webb (@zonewebb) was held where a lively discussion of topics was explored such as gamification and augmented reality technology as to how and when it may eventually affect auto retail; price transparency vs. price validation; the slow uptake of vendor technology to meet consumer adoption; how Google Analytics measurements must change because of the new SEM strategies in the market; and finally who has run a better social media campaign - Hillary Clinton or Donald Trump.

The panelists were:

• Chad Bockius of Vast (@bockius)
  
• Kevin Frye of Jeff Wyler Automotive Family (@kevinfrye1)
  
• Kathi Kruse of Kruse Control Inc (@kathikruse)
  
• Josh Pogue of Weins Canada [LinkedIn]
  
• Matthew Sanfelippo of Wilde Toyota [LinkedIn]
  
• Jason Knight of LotLinx [LinkedIn]

2nd Annual AutoVentures Summit



Proving to be a real winner, the AutoVenture Summit is a separate (and additional) event that begins as the Executive Summit ends. Drawing about 200 attendees, the half-day event gathers a group of venture capitalists and innovators competing for not only an award but also funding. It consists of a luncheon, four rounds of presentations and audience voting, followed by a reception.

Contestants this year included:

SHIFTMobility
Voyomotive
AutoPay
Dynatron by the KEEPS Corporation

CloudEngage
Drive Motors
Carlabs
JuiceNet by eMotorWerks

Context360
WeGoLook
Migo
Momentum Dynamics

T2 (Sells Cars)
DriveMode
8Ninths
RationalRobotics



Drive Motors CEO Aaron Krane

Each contestant had a strict 7 minutes to present followed by 3 minutes of questioning from a panel of three judges that changed after each round, of which there were 4 rounds. After each round attendees were directed to a web page where they were asked to score each presentation, not against each other, just an individual score.

After a 30-minute panel discussion about “Innovations Trends” moderated by none other than Mr. Cliff Banks himself, Aaron Krane, CEO of Drive Motors was announced the contests winner. Congratulations to Aaron and the Drive Motors crew, who we happened to interview here on DealerRefresh in August during.

Innovation Coming of Age



This year, to close the event, MC Charlie Vogelheim was joined on stage with Cliff Banks to present their instant-classic “Innovation Coming of Age,” a 30-minute voyage of auto retail’s coming of age on the Internet from the mid-nineties to today. To cap it off, the two were joined on stage by a dozen industry icons featured in a 10-year-old photo, each asked to share a poignant story related to their early legacy in the business. To view this now-classic Facebook Live recording go here.

On stage with Charlie and Cliff were: Gary Marcotte, Tara Wagoner, Allan Cooper, Chip Perry, Kevin Root, and Bernie Brenner, Mitch Galub, Jared Hamilton, Payman Zamani, Mike McFall, and others.

Closing Anecdotes



As you can see there was quite a bit of activity packed into this three-day summit, more than what is even mentioned here. AutoHook provided free limousine rides to and from the airport and around the strip. Be sure to say thanks if you took advantage of that. The Canadian Dealer Summit sparked off the event on Sunday afternoon. As usual there was the Joe and Shaun Karaokethon at Dino’s Lounge Monday where all the “cool people” go, the vendor hall, the evening receptions in the vendor hall, and more, not to forget also the Twitter board that streams all #DSES tweets in near-real-time.

DealerRefresh is proud to be a Media Partner with DrivingSales and looks forward to continued coverage leading up to and following the Executive Summit and its associated activities.

Who owns the customer data, in your dealership's DMS?

“I do, of course!" and depending on your perspective, you may be right.

Dealers could emphatically answer that question, but what about DMS providers? From their perspective, they might feel they have data ownership since their systems warehouse it. If you live on the OEM side, you may feel you have ownership of the data. After all, it’s your product customers are buying through dealerships that you grant franchises to.

For purposes of this article, let’s consider customer data in its purest form; un-appended third party data and un-processed to derive a new data set (more to come on this). For Example – combining customer transaction data with search data could create an entirely new data set. This does not typically happen within the DMS system involving yet another data vendor. Who owns that data?

The war for data ownership has been brewing for a while and is now at full boil.

The stakes are high with potential impact to rival anything the industry has ever been challenged with. To the victor, huge revenue potential with severe impact to the loser(s).

From each perspective, there is an argument to be made for data ownership, each unique.

The OEM Perspective

OEM's may view themselves as “originators” of purchase customers and therefore feel they should ultimately own the data. Dealers have no customer without a product to sell. Product development driven by understanding of customer’s needs initializes interest in a dealer’s product line. Though dealers facilitate the sale of a vehicle, it’s often the OEM marketing platforms delivering customers to the dealerships.

Understanding customer’s changing desires, access to sales and service history and satisfaction with the dealer network are all business imperatives requiring free access to deep levels of customer data. Most importantly, the ability to stay in contact through the ownership cycle aids re-purchase intention.

What’s at stake? Revenue implications underline the importance of owning this data with downstream revenue opportunities like finance products, subscriptions to services and re-purchase.

The DMS Provider Perspective

DMS providers warehouse and resell data to others - Dealers have long since granted them this opportunity. As customer data resides on their systems and access to those systems are controlled by the providers, DMS providers believe it to be theirs.

For the DMS providers, changing business dynamics make for stormy seas to navigate. With a legacy business model that relies on long term contracts, proprietary hardware and software interfaces outdated by today’s standards, dealers are less satisfied with the status quo and are beginning to challenge this model.

[Tweet "Reselling customer data, with a presumption of ownership, is the life jacket of a DMS Provider."]

What’s at stake? Perhaps survival. DMS providers see the revenue potential. Licensed third-party vendors have seen their costs triple in the last few years with more price increases on the way. This is a hot button for everyone yet the market seems to have absorbed this additional cost. Further revenue schemes, however, are on the horizon.

The Dealer Perspective

Dealers believe they own the data and they make a good argument for it. Their marketing and retention efforts attract the customer. Dealership staff transact the sale and are responsible, ultimately, for retention and customer satisfaction. No data makes it into any system without starting at the dealership.

Revenue implications are just as important from the dealer’s perspective and generally aligns with that of the OEM. Downstream revenue opportunities and repurchase being the biggest elements of the profit opportunity.

What’s at stake? Dealers can certainly access customer data now, right? True, but using that data in new, creative ways are in jeopardy. In a changing customer environment, new tools designed to increase customer engagement rely on access to dealership data. With costs imposed by the DMS providers, this ultimately costs the dealer or vendor more.

Other Concerns

• Expressed in other articles on the topic are concerns around data security. Liability for a data breech is enormous and few have the proper coverage. Add lack of control over what third-party vendors may use the data for, and it’s a recipe for a sleepless night.
  
• Increased fees and added restriction for dealers to access their own data can only cause added heartache…and it’s just not good for the business.
  
• Finally, there are a host of legal implications around ownership of data, free trade and competition more numerous and complex to discuss here.

More to follow on all of these topics....

So who owns the customer data?

Legally, the duty to secure data is the responsibility of the dealer. Dealers have mostly granted access and use rights to DMS providers – often without knowing what they have agreed to.

It’s my view that dealers own their data though the OEM’s have a stake in this too – Dealers and OEM’s share a common business goal of improving customer engagement and building longer-term customer equity – to do this, they must have access to their own data, without restriction or excessive fees. Ultimately, the customer is the one that benefits from more timely and relevant communication.

Restricting access to data may work as a short-term solution to a business problem but cannot hope to be a “win” for anyone long term. Raising fees and restricting access can only increase challenges by competitors and stakeholders as awareness increases on this issue. A “scorched earth” legal battle can only damage everyone.

Let’s step back from the abyss before we jump in.

Who will Win, and who will Lose the data ownership battle?