NADA 2008 Review

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Hello to everyone, and especially to Jeff. Lot's of insights in these posts and it's nice to see dedicated professionals pursuing so many answers. I'm afraid I had to miss this year's show - busy replacing (and filling in for) a key employee whom I had to show the door, oh and busy building 3 (three!) pinewood derby cars this year.

I had several confidants who made the trip and had asked them to keep their eyes peeled. but they too returned with "nothing too new" reports.

I don't know much about Dealerflow, but they seem to be tickling at an area that could be poised for huge revision - the comprehensive DMS completely reborn with modern messaging and employee focused operation - merge that with Arkona and take on the world.

BZ dropped the rolling billboards - Good. Maybe that's a telltale we could all find uplifting. That organization has done the largest financial disservice I have ever... ah stop me here.

I would like to float a little prediction. the next big thing - perhaps... for dealerships...a system for developing UGC that allows a dealership's website to demonstrate with credibility - "how we get our customers to tell our potential customers that the experience was a good one when they did business with us."

Like joe says, "My market is the 98% that went somewhere else.
"

The next big thing will solve the puzzle of getting customers to talk to potential customers over the Internet platform. Imagine dealerator.com not as a bitch zone, but as a cheerleading section.

- Jeff

 

[Lau Shi]

The chief economist for the National Automobile Dealers Association expects a bit of a rebound in the second half of the year. Unfortunately he is basing this projection on what he has learned from the past and the issues we face today are very different.

Oil going to $100.00, 125.00 a barrel…or more, the housing market facing issues that are much different than before, the demographics of the boomers looking to unload, the increasing issues with the local, state and federal employees retiring and looking for their money, the military retirees whose number will be a huge one in the next 8 years. The meltdown in the US sub-prime real-estate market has led to a global loss of 7.7 trillion dollars in stock-market value since October. Hard to refinance now to buy that new $55,000.00 Escalade. It will be an interesting next few years for the industry in the US; maybe this is why there was a poor dealer turn out.

The issues America has been watching develop and watching the leaders sweeping them under the carpet are now becoming a issue to deal with. This is just part of the cause an effects… then look at India and China producing vehicles at half the cost as the US Market. It will take great skills for the smart/wise dealers to use to survive this coming challenge.

If anyone wants a real treat for an auto / dealer show check out the ones in China and in Japan. Both will revitalize those who attend. The use of technology is now beginning to unfold in China and I think we will see even more evidence of this in the next show. I think one of the benefits here is most dealers and industry folks do not have a lot of baggage from the past and are open to new concepts as the whole industry is a new concept to many.

Jeff's observations on ADP's event is classic and an indication of where this dinosaur is heading, thank God when that is over. It always amazes me that when I speak to some who have converted to another DMS system the usually say "boy what a difference". It is also a great observation on BZ Results. It is amazing that the faster the rising star the faster the burnout. With their pricing strategy, the fact their technology was old when ADP purchased them. (Reminds me of the timing of Steve Case's sale of AOL to Time Warner, some say perfect.) With the difficult economic times we are facing in America, the decreased business we (many) in the Auto Industry will face the next few years where can BZ go with their 5-6 K a month solution?

 

[andwrig]

I agree with Jeff Bonnell. I think that consumer driven websites like Dealerrater.com will eventually be JD Power killers. If you look at the money that manufacturers and dealers spend on follow up geared towards CSI it is crazy. Everything is geared towards dealers covering their rear ends and the manufacturers saying "gotcha - you aren't getting the job done for us." It is crazy. It should be more of a collaborative effort but it isn't. Customers are getting pounded with surveys and it is creating a lot of ill will. We have great CSI and we are constantly following up on people but the fruits of our labor are really not published anywhere for people to see. We just know based on the number of repeat and referral customers we have. We know the value of great service and the impact it has on our business. The problem the manufacturers have is that not all dealer's care about CSI. Every manufacturer is chasing that JD Power score even though the survey sample that JD Power takes is so small that I don't think it is entirely representative of what is going on at the retail level. We work our tail off to achieve the highest recognition from our manufacturer but most customers don't even know what it means nor do they care. We chase the numbers needed to win these awards because we know if we hit it the rest will fall into place (profitability, retention, etc.). I think the recent article in autonews about the Dealerrater.com type sites is highly indicative of where our industry is going. Look at how many people comment about products and services on sites like amazon.com and cnet.com. I know i don't buy a computer or electronic without reading the customer reviews on cnet.com. The prevalence of this type of content is going to have a huge impact going forward. Whether it will be on our own websites or third parties remains to be seen.

 

[Alex Snyder (blog)]

Andrew - what would you think of manufacturers posting CSI surveys on their websites?

 

[Shaun Raines]

Jeff,

As a point of clarification... was it the ADP party or Reynolds and Reynolds party you attended Monday night? I'm sure both were yawning festivals (especially Reynolds).

 

[[email protected]]

Jeff,

Thanks for this post. I was not able to attend NADA this year and this is a very valuable resource to tap. I am building a "E-Commerce" Department from scratch and having to look at vendors with a fresh set of eyes. After being in this arena for so long I got settled with my old "stand by's" that I was comfortable using over the years.
Going through this process has forced me to reassess those "stand by's" and look at a new set of "solutions" in order to sell cars. I think many of us, especially myself, get hypnotized by the "functionality" of some solution and don't always focus on the the end result of putting metal on the road.

After being in both worlds now, I think you and Alex nailed it when you said dealer's are lost. However, I fault vendor's as well, in terms of their lack of follow up and support of the products they sell. My old boss is very cynical about vendors getting their contracts signed and you never see them again. I tended to disagree with him at the time, but as I go into a new environment with existing contracts, I see the how the vendors got their contracts and deserted the dealer. I have heard it said that it takes a "Champion" in a dealership to ensure a certain software is utilized sufficiently and to it's greatest potential. That is very true to a point. It is incumbent upon the vendor to do their due diligence and to go above and beyond to service their client.

I compare it to a dealer selling a new car and throwing the keys at customer and saying, "Good luck", and walking away. We know as car guys we are going to do an excellent demo and follow through with an excellent delivery. Moreover, we will follow up with that customer until they are ready to trade in or trade up.

There are a lot of great car vendors in our industry, however, even they at times have to be pushed to make it happen. Their is a a lot of lip service out there. They talk the talk, but don't walk the walk after the ink is dry.

 

[Wayne Anderson]

@ Brian T -

my SEM plan is on auto-pilot right now. That's why I'm surprised to see software solutions out in the market to 'optimize' SEM. I login into Google about every other month. I think buying software to do it is overkill.

It took me about 10 hours to complete my plan. I first brainstormed every possible way someone will enter phrases relating to our business. I came up with a list of 700 phrases and then wrote a specific ad FOR EACH PHRASE. I do exact-match. The title of the ad is the keyword. The ad description is the same for all. Yes - it's alot of work in the beginning - but I haven't had to touch it for years. I'm using the long-tail approach. Out of the 700 phrases, only about 200 of them are used by searchers in a given month. Some keywords are only used once a quarter, but ad those up and you get very cheap clicks. (costing .10) You then use your website metrics to figure your ROI. I've maxed out Google. I was paying $0.58 two years ago, now its $0.71 a click.

I don't bid to be in the top position. My average position is 2.9. A click is a click to me. It's a commodity.

I'm now focused on building my organic clicks with a hybrid 'flash +blog' approach.

 

[andwrig]

I don't really have an opinion about posting CSI surveys on manufacturers websites... If they did, I don't know how much credibility they would have with the customers anyway???? JD Power doesn 't rate dealers, only manufacturers. I just think that these DealerRater type sites are going to gain in popularity especially given the way that DealerRaters process works for both customers and dealers. They give dealers an opportunity to respond to customer complaints before they are posted in an effort to rectify the situation. It isn't simply a post board for customer puke which these things can turn into.

The one thing that is for sure is that customers are over surveyed to the point of it bordering on harassment.

 

[Mark Bonfigli]

"My flip-flop vendor award goes to Dealer.com. It's almost as if they themselves don't remember that they started building websites with heavy flash (I am glad they've turned this corner though). I'm also amused by Total Control Dominator. If a dealer really wants total control of their SEM efforts they simply need to spend some time learning Google AdWords then Yahoo and MSN. That's total control!..."

Responding to the above post:

Shaun,

Thanks for the award!

I am not sure that Dealer.com has never been heavy in flash website design although we did make several flash splash page designs for dealers that demanded them about 4-6 years ago but in general our designs have always been very search engine strong from the beginning. Our flashier designs represented about 5% of the sites we launched during that time frame. When our company was growing and in need of more business we were willing to do the flash designs every so often since they paid well. The truth is that we simply turn these opportunities down now since we have solid metrics and know that don't convert traffic nearly as well as the solutions we have launched over the past 4 years.

With regards to our TotalControl Search Engine Dominator, there is no way the average dealer could create local automotive search engine ad campaigns in 10 seconds like they can with TotalControl and have 8-10,000 keywords launched for any dept at the dealership. Additionally, the tools inside of TotalControl are above and beyond ad words in that they are all automotive specific and give the dealer unmatched control over creating vehicle specific ads for makes and models in stock in a matter of seconds that are fully tracked down to the call recording (at no charge!) What's even better is that there is optional landing pages that can be deployed for dealers that are not using the fully integrated Dealer.com website solution.

I urge you to contact me so I can give you a full walkthrough of this revolutionary new way to advertise all the dealership profit centers,

you will be truly amazed.

Best regards,

Mark Bonfigli
President, CEO
Dealer.com, Inc

[email protected]

 

[Shaun Raines]

Response for Mark.

Regarding the award... you're welcome. I certainly don't know the percentage of your customers today vs. two or three years ago that are on flash sites. My impression/experience with Dealer.com sites up until the launch of what I believe you call "SmartSites", was that Dealer.com built a lot of flash to compete with BZ. I know that most of the sites Dealer.com showcased in the early days were very much flash sites.

Anyway... I'm not beating you up about flash. In fact, I'm quite glad you're deliberately pursuing search engine friendly sites. Your customers deserve it!

With regards to your new SEM product, I agree that dealers can't create ad campaigns in 10 seconds that automatically produce thousands of keywords for multiple departments. It sounds like Dealer.com has done what many SEM companies have done which is create something for those that can't really handle "total control." For the record, I'm ok with that and completely believe that some dealers are best served by using a great SEM solution. On the other hand, I know dealers that are having such amazing success right now doing everything in-house that they've dropped Cars.com and Autotrader.

There's room for lots of products and services in this space and maybe "TotalControl Search Engine Dominator" is truly amazing but, "total control" still suggests no assistance required.

Thanks again for your response.

My best,

Shaun