Category Archives: Internet Department Development

Warning Bells: The Internet, Pricing and Discounting

I was reviewing reports of court cases recently and ran across something that sounded familiar. It also sounded a few warning bells. I’d like to share my observations with you.

"Dolly" saw a 2006 Nissan Murano advertised on the Internet. When she contacted the dealer about the car, a dealer representative quoted the purchase price as $15,500. When Dolly drove to the dealership to pick up the car, a second representative told her the purchase price was actually $21,500. “Molly,” Dolly’s sister, agreed to act as a co-signer so that Dolly could get a better rate. A dealership representative drove to Molly’s house and had her sign a blank retail installment contract. A month later, Molly received the completed documents. The contract showed the amount financed as $23,800. The contract also showed Molly as the sole buyer and borrower. Molly and Dolly sued the bank that bought the contract from the dealership. The sisters argued that the bank violated the Truth in Lending Act, the Equal Credit Opportunity Act, and state unfair trade practices and consumer protection laws. The bank unsuccessfully moved to dismiss.

It’s too early in the course of this lawsuit to make any judgments about who did what to whom; that will come later after some discovery or, if it comes to it, after a trial. For now, I want to focus on Dolly’s claim that the car was advertised on the Internet at $15,500, but that when she arrived at the dealership, the price was $6,000 higher.

It is possible that the price discrepancy was simply an error on the part of whoever did the Internet ad, or that there is some other innocent explanation for the extra $6,000. It’s also possible that the Tooth Fairy is real. When I hear facts like this, alarms go off and I start asking myself questions.

What if this dealer was advertising the vehicle on the Internet at $15,500, and what if the Internet ad said something in small print like, "for cash and good credit customers”? I’ve actually seen Internet ads like that.

And what if Dolly’s or Molly’s credit wasn’t strong enough to qualify for purchase by a non-discounting sales finance company? And what if the only sales finance company willing to buy Dolly’s or Molly’s deal was a deep-discounting buyer who would buy the contract only if the dealer agreed to a $6,000 haircut? And what if the dealer simply tacked the expected $6,000 haircut onto the car price to recoup the haircut?

I read this case a week after I was in the offices of a sales finance company that buys retail installment contracts from dealers at a discount. The compliance officer of the company described to me a problem he was wrestling with. It seems that his company had just bought a contract financing the sale of a Chevrolet pickup truck, showing a cash price of $15,000. The compliance officer, however, had gone to the dealer’s Web site and had found the very same truck advertised at $11,000. Was it just coincidence that the contract had been bought at a $4,000 discount? The compliance officer wanted to know what, if anything, the company could do about the deal.

Now, either these two situations just happened to pop up at the same time, or they illustrate a more-common-than-I-thought dealer practice that is (1) illegal and (2) dangerous.

If practices like these are occurring at your dealership, write this on a piece of paper and post it on the break room bulletin board: "YOU CANNOT INCREASE THE PRICE OF A CAR TO COVER A DISCOUNT YOU TAKE ON THE SALE OF A FINANCE CONTRACT FOR THAT CAR."

Why not, you ask?

Because when you increase the price of the car to cover the discount, the amount of increase in the purchase price suddenly becomes a finance charge for federal disclosure purposes, that’s why. And, unless you disclose the price increase as a finance charge (and no one does), you’ve violated federal disclosure laws.

Along the way, you’ve probably also violated the maximum finance charge rate provisions of your state’s retail installment sales law, state advertising laws that require you to sell cars at the price at which you’ve advertised them and state laws that prohibit "unfair and deceptive" acts and practices. You’ve also, no doubt, violated the terms of the dealer agreement between you and the sales finance company to which you have sold the discounted contract, subjecting yourself to the potential liability of buying the contract back if the sales finance company demands that you do so.

If your dealership sells retail installment contracts to sales finance companies at a discount, the dealership needs to understand how to do so, and how to price its cars, without violating the law. Although most dealers will probably dislike changing their practices to accommodate those pesky laws, they will find that they will sleep better at night if they do.

Time to schedule another visit to the lawyer’s office.

Thomas B. Hudson, Esq.
Hudson Cook, LLP

Ways to Brand Your Dealer’s Internet Sales Department

Five Rock-Star Ways to Brand Your Dealer’s Internet Sales Department

There’s nothing more frustrating than looking across the showroom floor only to see your customer sitting at another salesperson’s desk signing the paperwork for a new vehicle. This is the same customer you had been corresponding with via email and over the phone for the last several days. Why is this person buying from that guy? Why didn’t the customer ask for you? This happens every day, and many times results into a heated conversation between the salesperson, sales manager and the internet sales department.

Walk the higher road and let the sales floor have the deal. Take responsibility for the customer not asking for you and instead find ways of branding yourself so when one of your next potential customers arrives at the dealer, he or she wants nothing more than to work with you and your the internet sales department. Here are five proven ways that are quick and easy and will help brand your internet sales department like no other:

1. Sharpen Your Image With Great Photos

Potential customers are initially on your site for one reason: Inventory. When customers find the vehicle they are looking for, the first thing they gravitate to are the photos. Use this opportunity to grab their attention and start branding your department.

Slide a photo of your internet sales team members in the line of vehicle photos between the exterior and interior shots. Be sure your team photo radiates professionalism while also portraying that you’re easy-going and fun to work with. Don’t forget your glamour smile on the day of the photo shoot.

2. Leverage the Dealer-Rating Websites

A strong WBFM (“Why Buy From Me”) message can give you the competitive edge. Your customers love you — you hear it all the time about how great of an experience they had. Why not get them to share their positive experience for everyone else to read?

Condition yourself to ask every one of your customers to share their experience on one or several of the consumer or dealer-rating websites, such as and As you build enough positive customer comments, you will now have a tremendously strong WBFM message that you can talk up to all of your potential customers.

3. Be Fearless and Build Transparency With Video

Video is yet another way of gaining the competitive edge, since most people shy away from the camera. Nothing builds transparency quicker than a few short videos of you and your team. Commit to filming several videos that distinguish the difference between you and the competition. Let your customers know you and your team are the solution to their vehicle-buying needs. Consumers are looking for the right car, just as they’re looking for the right dealership and the right person with whom to do business.

Video is easier than ever. You can certainly go high-end, but a simple Flip video recorder from your local electronic store will do the trick. Check out for free and easy-to-use video editing software that works great with the Flip camera.

Take your filming to next level and get your positive customer testimonials on video, as well.

4. Master Your “About Us” Page

What is the real value of your dealers “About Us” page anyways?

When customers click on your “About Us” page, they are looking for a reason to do business with your dealership. For lazy reasons, most dealers ignore this page or use the default text provided by the website vendor.

Take advantage of this page and take your internet sales department to another level while cementing a relationship between you and your potential customer. Let customers see a more human side of your dealership. Remember, just because the page is labeled “About Us” doesn’t mean you get to talk the “Me, Me, Me” message. The key to great marketing is not what you say about yourself, but what your customers say about you. This is a great place to display those customer testimonial videos.

5. Don’t Forget Your Sensational Signature

This might seem like a no-brainer, but believe me, many salespeople overlook this effective element for branding themselves. Every email you send is yet another opportunity to brand yourself and your internet sales department. Before you hit “send” one more time, make sure your signature line says all it needs to about you and your internet sales department. Your signature line should include your name, job title, the name of your dealership, your direct phone line along with your cell phone number and your website URL. These are, of course, the obvious elements — but why not take it a step further? Include a photo of yourself, a dynamic tag line and/or a P.S. note linking the customer to your consumer ratings profile page or your new “About Us” page.

Many internet sales managers are left to believe that you need special “internet pricing,” a “benefits package” or a “free giveaway” to get the customer to ask for you. Instead, sell something larger than the price of your vehicle. Sell your brand, sell your image and sell your customer what they are truly looking for. Be the rock star you are — take full ownership of your internet sales department and find every opportunity to brand it to the max.

Written by Jeff Kershner

What are the Appropriate Reports to Track

What are the Appropriate Reports to Track in Your Internet Department?

In every industry, you hear talk of reports and numbers and how good or poorly someone is doing at any given time based on the data in the reports. It all sounds good and is extremely important — but only if you know what the numbers mean and what to do with the information to make you and your team better. Let’s take a look at the big picture as it pertains to the reporting aspect of internet/business development center(BDC) sales.

Your internet/BDC sales reports can be broken down into two categories. The first is more of a simplistic overview of your activities that will provide decent information and show you how you are performing. Examples of this kind of data are:

[list:32gat15j]- The number of leads/opportunities per lead source.
– The number of sales from those leads.
– The cost of the individual source. [/list:u:32gat15j]
With this information, you can calculate a cost per vehicle sold based on the total, as well as the individual lead source, and create the closing percentage for both the individual lead source and the total number of leads. This information will help you determine if the lead sources are working for you and how well your team is performing based on the opportunities they have to create sales.

The second level of reporting allows you to track the above information plus a lot more. It provides more detail and dives through the numbers. This will give you detailed information on the activities involved in your process. In addition, it provides you with solid operational data that helps you make intelligent decisions on what to concentrate on to increase sales. Examples of this kind of data are:

[list:32gat15j]- The number of leads/opportunities per lead source.
– The number of sales from those leads.
– The cost of the individual source.
– The gross created from the sales.
– The gross average per individual sales/internet/BDC associate.
– The number of appointments created by sales/internet/BDC associate.
– The number of shows. [/list:u:32gat15j]
This more detailed information will allow you to really analyze potential problem areas such as appointment ratios per lead source and associate, show ratios, and sold ratios, as well as a comprehensive return on investment per lead source. When you can track this kind of detailed information month over month, it will give you confidence when making the difficult decisions of adjustments that sometimes need to be made in order to achieve the optimum results.

The lesson here is a simple one. The more information we have to make intelligent decisions the better off we are regarding potential changes we need to make. The key is to track the numbers using good data and know what to do with the information once you have it.

Written by Bobby Malatia

What Does the Dealership Management Team Need to Focus On

What does the dealership management team need to focus on to get better Internet sales results?

Anyone who has spent time working in a retail automotive environment knows that what we focus on is what produces results. The most common gaffe I observe in almost every dealership I visit is upper management’s lack of oversight of their Internet departments. While these managers know how many ups came into their store and how those shoppers were handled on the floor, few, if any, are equally in tune with their online prospects. Let’s look at how taking a top-down view of your Internet department will increase both your understanding of day-to-day operations and the success your team achieves.

For dealers who want to improve the performance and accountability of their Internet departments, a solution has been proved in store after store by dealers with successful e-commerce operations. Simply put, your upper management staff, midlevel management staff and anyone getting paid on Internet sales must be involved, on a daily basis, with the business from which they collect money. Running reports and asking general questions like "How many appointments do you have?" is not involvement. The process must be started, inspected and managed every day by those who profit from it. I have successfully worked retail for quite a few years, and I am a car guy who understands that you think I’m asking for more of your time. Actually, I’m not. I’m telling you that you need to reprioritize how you spend your time every day: Your business model is changing, and you need to change your activity to match.

I refer to the "savior complex" as the method by which dealers and managers believe that, when they find the right person, all their problems will be fixed and their Internet departments properly managed. These individuals will bring in their own process and, sometimes, their own crew or followers. They will work for you as long as they are happy or don’t have a better offer – at which time they will take what they came with and leave with it, leaving you back where you started. The car business has high turnover so we must plan for this reality.

These saviors often work to stack the deck and feed management results that are not real. Leads brought in from brokers, buying services and motor club referrals are not e-commerce business. And, to complete this point, neither is a consumer who walks on to the lot and says he or she saw or found you via the Internet. You will often find leads attributed at the point of sale to the dealer’s or the manufacturer’s website to create a closed deal from this source. For those of you who challenge this behavior, you have probably never checked to see the gap between suspect leads and DMS entry times or even phone monitoring logs.

Hopefully, you are starting to understand why many third-party providers scream foul at the claim that their leads are of lesser quality and close at ratios below your own. These leads are often a critical component of your success. We need to rid ourselves of the perception that you don’t have to inspect what you expect from your e-commerce business. You must change your thinking on who manages your Internet department and what is being managed. More managers must be involved because the business issues that currently are being overlooked compromise your results more than you may realize.

On a positive note, it is possible to get your Internet department under control. Regaining control will give you a handle on where your business is headed and help you put into place a management staff that is more in control and less reliant on a savior to tell you that you are. I want to encourage you to realign your staff to pay closer attention to the process aspects of your business. Managing the end results of a poor process has led many in this industry to see with blinders. You can get control of a process in your store. You can make decent gross profit on e-commerce-originated consumers. Managers do have time to manage it because their floor traffic is dying without it. Your dealership can either plan for the future or be left struggling in what is shaping up to be a difficult year. A saying we have all heard seems appropriate: Failing to plan is planning to fail.

Emails blasted or personally sent do not sell cars: People still sell cars. Phone scripts memorized or read do not sell cars: Personality and skill sells vehicles. In fact, managers are most always the ones selling the cars. Unpleasant as it can be when you’re busy, if you’re a manager, you and a few others in your store touch almost all the deals and actually cause them to happen. For this reason, managers must get involved at a whole new level, one that may be much lower than they may want to bend. Find a training company that can teach your managers who have a full plate to utilize their time effectively so they properly monitor both your e-commerce process and floor traffic.

Written by Bill Phillips
( is the president and CEO of Automotive Internet Management, Inc.

The Two Sides of Dealer Success for 2008

1. How The Smartest Dealerships Make The Most Money During The Worst Years.

The first quarter of 2008 is near history. Fact is, most industry news is still predicting a downturn and it makes for good headlines too. Industry surveys clearly show that the average dealership is reactive over proactive and allows it to be the effect of industry indicators rather than the cause over them.

So let’s face facts — in 2008 many dealerships are going to fold up on forward movement faster than a lawn chair and fall flat, while being grateful that they’re still in business in 2009. Many will look at budgets over opportunities and conjure up any excuse to grind a better deal to lower overhead as opposed to incentivizing an increased income through solid relationships.

Goal planning will be replaced with problem solving and unwanted change will be the result for some. In the end, fear of the industry taking a downturn will cause it to happen much more so than economic realities ever would.

Good news. Take a brief look at history and we clearly see that in years like this, market share always makes its biggest change of hands between competitors. That’s because the dealerships running in high gear will not bump into much opposition along the way. Mind and market share will be relocated; high-talented employees will be easier than ever to recruit; advertising easier to buy and so on.

Considering the current condition of existence, the only thing left to do as a dealer this year is to pick a rope and climb it. That doesn’t mean plan the rest of the year from a predicted dwindling income statement from inside a closet while keeping an optimistic mask on for the troops by calling it a multi-sided approach.

Yes, we all have to manage our businesses from a spreadsheet, but doing it from the standpoint of fear means reduction is the goal and profit is the hope. Instead, make your revenue goals the master and force your budget to serve that master. That makes the vision the driving force and the C.F.O. the fiscally responsible rudder.

Remember it’s not your ability to add and subtract or plan for growth that makes the difference. The key is in which of the two you do first, which of the two consists of the primary focal point and your mental state while you do each. 2008 will be the best year of the decade to take advantage what will surely be an under-fished and thus over stocked lake.

2. Learning Long Enough to Master vs. Finding Out Just Enough To Fail.

Round two: In all my years of fighting and teaching martial arts, I have never been a believer in self-defense classes because I think they teach you just enough to get killed. Carrying a firearm can be a poor alternative because most people don’t have the fortitude to use one or the time to decide if they did. So the advice I give is always based on preparedness. Things like never put your keys in your purse or pocket until you are sure you’re in a safe place and if you feel the need for protection, carry a can of potent mace or pepper spray. Why? Because it’s probably attached to the key ring you now will still have in your hand and because people will spray someone with mace without a second’s hesitation.

Now when it comes to your skills as a dealer, you can’t afford to rely on self-defense videos or a can of mace. You have to take up advanced studies or you’re going to eventually get jacked up by a better fighter. So with that being said you have to ask yourself, whose system are you learning and how well do you really know it?

Also whom are you listening to? For example I like to test all psychological success principles in a fighting ring then move them outside the ring into business from there. Why? Because if you can teach someone to lead and succeed while someone else is trying to physically knock them out, then the underlining principle is assuredly going to be more effective than anything else out there. In the car business you need a coach 20 percent of the time and people that can actually do it better than you 80 percent of the time. For example, the best special-fi mastermind I’ve ever met is actually reading deals and getting them approved every day. When I hired our BDC trainer for the Mastery Council, I did so because he could and can pick up the phone and set 97 percent appointments with a 75 percent plus show rate. The best advice I’ve ever heard on how to be the best dealer in the country has come from a guy who is one of the best dealers in the country.

This can be especially tough for aspiring managers because they’re supposed to be able to train. That’s one of their primary missions, so most good managers want to be “The One.” The challenge with wanting to be “The Man” or “The Woman” is that our survival instinct is to tear the other men or women around us down along the way. But who dares to teach must never cease to learn. As a trainer, you have to be good enough to stimulate ordinary people to unusual effort and extraordinary results. To do that in-house you’ll need to plug into sources better than you in each of the primary areas of your dealership’s success. As a result of short-fusing one’s education, many become jacks-of-all-trades in the world of dealer skills and the master of none. A master trainer must be able to reach unattainable goals with inadequate tools.

For the rest of 2008 take whatever your people are learning and practicing and help them to once again become the student, take off their blue belts and go for their first degree black belts in systems that can teach them to fight standing up and on the ground. Discover, Develop and DirectTM. You’ll make more money, have more sanity, they’ll become better producers, you’ll incorrectly guess reasons for poor performance less often, and finally you’ll get what you paid for.

Rapid Tips for 2nd Quarter 2008

Buying Special-Fi Leads From 3rd Parties: As long as you’re allowing yourself to be addicted to the heroin hit of leads keep a couple things in mind. They all come from search engines so forget the word Organic and think Key-Word relevance. What search terms were used that drove a prospect to submit a lead means more than if it was sold four times prior on the wholesale market before getting to you. Cost factors are based 80 percent on supply and demand not closing probability. Have someone aside from the BDC manager negotiate lead deals.

Third-Party Infomercials: Bad move for a grip of reasons. If you want an infomercial bad enough to let someone come in and bastardize your market, with a professional newscaster style character trying to pitch special-fi, my advice is to buy a green screen, some stock vehicle footage and an actor looking for side money and film your own.

Know Which Relationships Are Profitable: There is a big difference between someone trying to close you as a deal and someone that is actually trying to make you rich for a lifetime. Knowing the difference will make or break us all in the end.

Pick a rope and climb it and keep the wheels turning in second quarter of 2008.

Eddie Coleman is the CEO of Hyperdrive Technologies Inc. in Portland, Ore. and the author of the automotive industries two best-selling, full-length books, Mastering The Art Of Selling Cars Online and 101 Internet Sales Objection. Eddie can be reached at or

Hyperdrive Technologies Inc. – Portland, OR

The Virtual Showroom

Since the first automobile rolled off the assembly line, the automotive industry has recognized the need to drive the customer to the product. There’s nothing like the appeal of slipping into unblemished seats, admiring the luster of new paint and polished chrome, observing the configuration of the dashboard, measuring the trunk, taking to the road for a test drive and the smell…oh, that new car smell! In the past, all marketing tactics had the same strategy: The customer shops at the showroom. “Get them in, let them touch, sign them up.”

Things have changed. The showroom today is now your web site, and your web site is your showroom.

Every day more and more retailers are committing a larger percentage of their marketing budgets to engage the consumer online. There’s a steady migration away from traditional media to the Internet, wireless and other new media.

The automotive industry has moved slowly in adapting to this new world. In 2002, the historic and common dealer perceptions discounted the Internet customer. Many automotive groups saw that online shoppers were the cheapest of the cheap. They made newspaper shoppers look like high grossers. These consumers were relegated to the less-talented, lower-paid sales staff so they would not interfere with “real” customers.
By 2004, these same automotive groups were clamoring for more Internet resources and support to help filter good leads from bad leads. The consensus was still that the leads were soft and would not increase sales. It was just too expensive, industry marketers felt, to ferret out the real buyers.

Two years later, the automotive industry began to see a bit more clearly. It recognized that there was a difference between third-party customers who shopped 10 dealers to save $10 and the unbelievable volume of people who visited manufacturer and dealer web sites without even requesting a quote.

While the automotive industry analyzed and agonized over the potential of online marketing, the consumers were engaged and rolling. The Internet had become a consumer-centric environment looking for relevant content, and they were increasingly reachable.

Just about everyone who wants broadband connectivity today has it. More than 91 percent of workers and more than 76 percent of homes in the United States are active on the Internet. The hot trends are social networking, rich media, media convergence, mobile and reach. What this means is that today’s consumers are seeking meaningful online dialogue. They have become educated and formidable buyers.

Of course the goal is to still get the buyers from the virtual showroom into the physical showroom. It’s critical for dealerships to recognize that no shopper is going to visit a web site just for fun. Sure, some people enjoy browsing auto dealerships and manufacturer sites without objectives. Most people do not. They visit when they’re looking to buy. If a dealership had 5,000 unique visitors last month, chances are good that the dealership had almost 5,000 people ready to buy product.

The good news for dealers is that the virtual showroom leads directly to the dealership showroom. The vast majority of people are not going to fill out a form or submit a request for a quote. They just want to see what you’re about, browse your inventory and narrow their shopping choices.

The challenge, of course is that many consumers still don’t trust car dealers. The goal then is to create a web presence, a virtual showroom that captures the attention and imagination of the buyer. The online dealer needs to distinguish himself from the traditional dealer advertiser splashing around the weekend automotive newspaper sections.

If the dealership only offers the customers a lower price than the competitor, it’s a losing game. The key is developing a recognized and trusted brand beyond your commodity (location, selection, price). Stand out as a dealership that freely and openly distributes information, actively communicates with its customers online and backs up its online presence with integrity and service that reinforces that online branding.

The young consumer is already entrenched in the world of the Internet and wireless communications. They’ve grown up with it. Automotive dealerships must embrace the digital world and Internet consumer not only to create a current and ongoing strategic advantage, but also to survive as the “connected” generation alters the buying habits of the public.

Cheril Hendry, CEO of HLF Brandtailers, has a depth of industry knowledge due to her 26 years spent exclusively in automotive advertising. Hendry’s background includes marketing work with Nissan, Infiniti, Mercedes-Benz, Mitsubishi, Vovlo, Kia, Toyota, Ford and General Motors.

Time to Tighten Up

Now would be the time to strengthen the Internet department to make sure you are taking advantage of every single opportunity that you have.

There needs to be a commitment from the top to make this work. You need to know what approaches that you want to make toward the internet, what bench marks you need to set and achieve, and not just in sales but in service, parts, and F&I.
A good internal process for sales would be to track every lead, every appointment, every show, every sold, every “up” that is generated by the Internet. And use the report to manage on the items that are successes and failures..

Here are some good attainable goals for sales. First, most dealerships leads come from 50% third party, 30% dealership site, and 20% OEM. One goal would be to reverse the third party percentage to 30% and the dealership to 50%. One way to do this is to put more attention and resources to SEM and SEO. Next make sure you are spending no more then $25 per lead and $250 cost per sale. And then make sure your internet department is generating 20-50% of the dealerships business (the big gap has a lot to do with franchise and market). The internet managers should be shooting for 50% appointment from leads, 50% show, and 50% delivered. These goals should be changed once you establish a 3 month average. Work (meaning phone calls and follow up emails) for at least 60 days, then send them broadcast emails until they tell you to stop.

At the end of each month you want to review each Internet sales manager and each lead provider by what they generated. For Internet Sales Managers let’s look at a rolling 3 months percentage of leads to appointments if their average is at 32% then we want to make next months goal to be 37%. Same increase goes for showed and sold.

When it comes to lead providers, take a look at your over all average cost to sell, and as a reminder, make sure it is under $250 or your last 3 month average. You are going to have some lead providers that have a $250 cost per sale but some that have a $500 cost per sale. You must also be tracking their average appointments, show and sold. Just based on those numbers alone won’t tell you that one is better then the other. Before you cancel a lead provider, you want to look at the over all performance of that provider. For an example, let’s say’s average cost per sale is only $250 but it provided 75 leads with only 10 appointments, 6 showed and 2 delivered and for a total of $500 a month. Plus the average gross profit of those leads is $200 less then your average internet gross. closing percentage is 3%. It’s average cost per sale is in line but it is taking up a lot of man power to follow up with the lead and is driving down your cost per sale and average closing percentage. ($1300 average gross X 2=$2600)

But’s average cost per sale is $300 and it only generated 50 leads, 28 appointments, 15 showed and 10 delivered for a total of $2400 a month. The average gross profit on these deals are the same as the overall departments gross. has a closing percentage of 20%. It is above your goal of $250 cost per sale and almost double your cost per lead, but has a good closing percentage. ($1500 average gross X 10=$15000)

Now which one would you cancel? By canceling you can take that additional $500, put it toward, get 10 more leads and 2 more deals at a $1500 average for an additional $3000 gross, which will out perform the cheaper lead.

Again, now is the time to take advantage of the internet and every opportunity you have, and every lead or phone call you get from the internet. Get as many qualified leads that you can afford and work each one until they buy, die or unsubscribe.

Written by Jason Rice

Tips for More Profitable Online Inventory Management

Inventory management is the lifeblood of the dealership’s used car department. Buy and trade the wrong vehicles for your market and moss will grow under their wheels. Inventory the right ones for your market and watch days in inventory drop and profit on deals hold strong.

As a discipline, inventory management should also apply to the dealership’s virtual inventory – its online listings on classified ad sites. Bottom line, the goal of inventory management is to move more metal and put more coin in your treasury.

Regardless of how you go about maximizing your inventory turn, profitable online inventory management is easily within every dealer’s grasp. Be sure the used inventory you advertise on your own web site, as well as those on car buying sites like,, and others are the hot vehicles for your market.

The following tips will help you improve your online inventory turn:

• List the right vehicles: While the web reaches everywhere, most people who will buy from you after shopping your inventory online will come from an area not unlike the market from which your floor traffic comes. Optimize your online listings with the models, makes and mileage profiles that appeal to those shoppers.

• Price competitively: Price is almost always looked at before the buyer scans images or product descriptions. Make your price attractive enough, within reason, to grab more eyeballs to your listing.

• Retail wholesale: List aged inventory on car-bid sites, where buyers bid up one another, often to a final sale price near, at or above what you might have retailed the unit for under different circumstances. Some listing services incorporate car-site bid listings as part of their package.

• Spotlight your inventory: Many listing services enable your listings to display vehicle history report logos, a strong attention-getter, and some enable streaming video logos, which really add stickiness to the listing. At minimum, listings should display about 12 or so high-quality color vehicle photos, inside and out. Shining the spotlight on your listings pops them out from others on the listing page.

• Tickle the emotions: When writing vehicle descriptions, use strong adjectives. Descriptive adjectives help the shopper see, hear, smell and touch your vehicle and get them emotionally interested in your listing. Remember, it’s not just leather – it’s C-O-R-I-N-T-H-I-A-N leather, as Ricardo Montalbán used to describe the upscale Chrysler interiors of the ‘70s.

• Call to action: Make sure your listing descriptions include a strong call to action – ask shoppers to call or e-mail for information, request a discount coupon, or to receive a streaming video presentation about why they should buy from your dealership.

• Refresh your virtual lot: Be sure the inventory you list is fresh. This means adding new vehicles online as soon as possible after they arrive at your store, deleting units sold that day and changing prices on others as the market dictates. Listing services that integrate with the dealer management system should be able to refresh your virtual lot every day.

• Follow up immediately: Online shoppers have little patience, so when you receive a lead from your listings, reply promptly. An autoresponder response, if you can’t get to the lead right away or should it come in during closed hours, notifies the shopper the lead has been received at the dealership. Otherwise, set aside what you are doing and respond in person to the e-mail or call – shoppers will be amazed at your promptness and that one courtesy alone will help set your dealership apart.

Mike Baker is president of AutoUpLinkUSA, a leading provider of online vehicle inventory listing and image publishing marketing services.

The Internet and Its Effect on Accounting Departments

The effect of the Internet on accounting departments has created new challenges for many CPA firms and their clients. It has forced both dealerships and their CPAs to upgrade their computer systems, software and sometimes their personnel. The new and/or existing personnel need to be trained in Internet use with regards to accessing multiple dealership locations and suppliers, including banks and financial institutions.

Accounting departments have had to buy and install network versions of their accounting software. For example, they may have upgraded their accounting servers to accommodate Microsoft Outlook for e-mail, Microsoft Word for form letters to existing and prospective customers and Microsoft Excel to download various accounting data to produce reports that don’t exist in their current software.

Clients are now able to e-mail accounting information to their CPAs, rather than burn it to a CD or not send it at all. This enables both the client and the CPA to interact more quickly to review and adjust their accounting records. Examples of e-mailed files include QuickBooks and Peachtree data and backups, Excel spreadsheets to help analyze and recap information, text files to import into Excel, and other accounting and sales database files.

Besides upgrading their software, dealers have had to upgrade their printers to laser instead of inkjet, buy network instead of local printers, install scanners and run network cables to every workstation. Many office managers, or other personnel, need to be trained to understand the basics of new programs and hardware. This sometimes results in having to replace personnel who can’t learn or having to hire additional personnel who can do the job.

Many office managers have had to learn how to attach files to send to their accountants. And, they have also had to learn how to download files received by e-mail. Once these files are received, they must be saved to various folders so they can be accessed. Learning how to do this is easier than using the old DOS operating systems, but can still provide challenges to many people who are able to e-mail their friends but have never learned how to attach or download files.

Many office managers and dealers now access their bank accounts online each day to monitor their cash flow. They check to see if they have been funded for their car deals yet. The dealerships can e-mail their floorplan and line-of-credit payments to their lenders. They can download the cleared deposits and checks from their bank’s software and import them into their accounting software for reconciliation.

You, your accounting personnel or your accountant can access your data from any Internet connection using communication software such as PC Anywhere, VPN, VNC and terminal services connections. This enables real-time analysis of your dealership data with your accounting personnel. The Internet also lets you download the data to other software or third-party vendors you have authorized to receive your data.

Some dealerships have learned how to scan their documents into PDF or other types of image files, store them on their servers and/or e-mail them to their accountants for further review. Receiving PDF files by e-mail is an efficient and simple way to transmit data without the cost of a long distance phone call used by your fax machine. For the most part, these documents are also easier to read than faxes. They also do not have to be printed by the recipient; they can be reviewed on the screen and stored electronically on the recipient’s server for future reference. As we all know, paper takes up space and must be dealt with by all of us using various record retention rules eventually.

Hard drive space is much cheaper and easier to deal with than storage buildings, attics, etc. where we have stored all that paper in the past. An easy way to turn your reports and other data you may have printed in the past to electronic files is to use Adobe Distiller (not Adobe Reader, which has the ability to read PDF files but not to create them) or PDF freeware programs from the Internet to turn reports into electronic file formats. Basically, you can print to a PDF file, store them on your server and/or e-mail these documents instead of printing paper.

Has the Internet really improved your accounting department? I hope so. I know it has improved the methods in which we communicate with our dealers, their dealerships, their accounting departments, and the vendors and finance sources they utilize. We receive and send over the Internet on a regular basis various database files, text files, accounting software database files and backups, spreadsheets and word processing files, scanned images of various documents, PDF files, etc. We are able to log directly into many of our dealerships’ computer systems and review their accounting data as may be requested. We are able to print tax returns and financial statements to a PDF file and e-mail them to dealerships and their lenders with our clients’ permission. We are able to receive e-mails on our phones and reply to them without ever sitting in front of a computer.

Frankly, I don’t know how we ever got along without the Internet.

David Keller, CPA, CFE
Larson Allen LLP

The Right Process or The Right People?

The Right Process or The Right People? – The Million Dollar Question

Which came first the chicken or the egg would probably be a better title for this post. The real question would be can the right people work inside of the right processes? A glaring example of this is the 2003-2004 Los Angeles Lakers roster that was a sure bet to win it all with names like Gary Payton, Karl Malone to join the already amazing Kobe Bryant and Shaquille O’Neal. The team went 56-26 in the regular season and made it all the way to the finals which they lost 4 games to 1. I think it would be hard to argue that those talents weren’t the right people, but I promise you they weren’t working the right game plan or process to be successful.

It’s easier to make the right process than it is to find the right people. A well defined process can turn a mediocre salesperson into a rock star as long as the process is properly managed, by the right people. The key to any successful process, is it must be managed properly and adhered to consistently. Without those two major pieces, the best laid process will never achieve the goals it was created to reach.

The right processes can create the right people and the right people can turn their work ethic into the right process. So it is definitely chicken or egg, however a killer process that is never adhered to is a futile proposition. I have been in nearly 400 stores over the years and have aided dealers in creating some can’t miss, killer processes but the ones that actually take off and have tremendous success with those processes are the ones that properly manage it and manage it consistently.

Employees will sometimes try to "wait out" management when it comes to the roll out of new processes. They count on management not being consistent with it and hope the new process dies on the vine so they can get back to doing things like they always have. When this happens time and time again people will start to always second guess anything new, it starts a vicious cycle.

The right people have their internal processes set up so they are always successful . Also they do not have problems adapting to new things if it helps them become more successful. That is where the rubber meets the highway. The right people, even the non superstars, are the ones that adapt to embrace things that help them do their job better.

Manage it properly + Be consistent = EXCELLENCE.

Jay Barr is the National Director of Training for iMagicLab. Jay brings an exciting, energetic and unconventional, but highly effective, training style to dealerships nationwide. His unique style presents thought-provoking and stimulating topics in a very focused and entertaining manner. He guarantees that when he comes to your store, you will learn the software and processes that will make your dealership successful -and you’ll enjoy every minute of it.