Working Your Pay Plan by Increasing Your Dealer’s ROI on the Internet
Having invested almost thirty years in the retail automotive industry, from salesperson to General Manager to Dealer Principal – I have matured my role as a consultant on automotive advertising – specifically focusing on the internet, related technologies and processes.
I have attended and conducted many seminars in my search for best practices where I have “borrowed” some of the best ideas I ever had. My responsibility is to recognize the ones that will work in my situation and dismiss those that won’t. Easier said than done – but that’s what they pay us the big bucks for!
This article will provide insight into real world problems and solutions that are universal but since the devil is in the details I will leave that part to you.
Not all of the situations I discuss will apply to you so listen to the ones that do and make note of the others for future reference in case they surface in some other form. I will cover common issues that are part of human nature. After all, the key to success in the car business is in the people – not in the franchise or facility – so most problems start and finish with “people.”
The Internet Department – From The Dealer’s Perspective
As a former new car dealer and current consultant on dealer operations, automotive advertising and marketing I am constantly amazed by the disconnect between dealers and their key personnel. I liken the miscommunication of their common goals – to sell more cars/service and make more money – to that of a long marriage. Courting equates to the interview and the first few months are like an extended honeymoon. Once the excitement wears off it is a lot of work to remember why you got married in the first place; but worth the effort!
Dealers are people too! They often indulge their emotions in the hiring process based on the fact that they need you more than you need them! Great interviews get you the job with the dealer’s hope and desire to solve a problem – not make a friend. Their business needs eventually outweigh their emotions and words like “bottom line profits” and “accountability” and the latest buzz words “Verifiable R.O.I.” take over. Auto dealers should always have “Job Descriptions” and “Areas of Responsibility” along with supported “Compensation Plans” based on individual and department “Guidelines and Objectives.” How many of you have those today, let alone during the interview process?
Today’s market losses have forced auto dealers to make difficult decisions that should have been made before your position was even considered. The survival of the fittest must apply! It’s a dirty job but someone has to do it and the Dealer must base his decisions on performance and individually contributed profits or we will all suffer the consequences!
Re-defining your role at the Dealership – C.C.C. vs. B.D.C.
The A, B, C’s of the car business – “Always Be Closing” – go beyond the showroom floor and apply to you as well as your staff and customers. The key to the close, however, is to know the answer before you ask the question – or at least provide a limited response that you can control!
Based on your new found knowledge and understanding of the dealer’s requirements of you and your department I suggest that you ask the hard questions before he does! The more you and your department are involved in the selling process in both vehicle sales and fixed operations the more productive and profitable you will be. The more accountable and verifiable your R.O.I. to the dealer the more secure your income and your job. Sell yourself and your department to your dealer with the leverage of proven performance in a clearly defined position on the team beyond what most dealers envisioned from their Internet Department and be paid accordingly.
I propose that you literally have the tail wag the dog, so to speak, by having the Internet Department become more than a lead generator with limited selling responsibilities. All communications, before, during and after the sale can, should and soon will be handled over the internet and/or on the dealership’s website which is already part of your “area of responsibility.”
Currently, Business Development Centers, or “B.D.C’s.”, coordinate selling opportunities developed on the telephone, showroom floor, service drive, data base marketing and in many cases the Internet. They rely on linked technology like telephony systems, vendors, such as Whos Calling, and onsite data base management systems, “DMS”, such as Reynolds and Reynolds and customer retention management systems, “CRM”, like Higher Gear, that are all now available on the internet. Who is better prepared to coordinate communications and even transactions on the Internet than the Internet Manager? Who has the best understanding of computers, software and integrated links to access and apply information? It better be you!
Customer Communication Centers, or “C.C.C’s.” provide a more integrated and accessible central point of contact at the dealership for your customers. All customer contacts for sales, service/parts and office should be channeled to one location from all sources including telephone, email, mail, internal DMS and CRM, Internet – you name it! The cross-sell opportunities between sales and service/parts by having one contact person suggesting shared opportunities is obvious but unlikely if they are handled by two different people or departments! Less obvious opportunities like customer complaints and key vendor communications provide the ability to turn a problem into a solution but only if channeled properly.
The Internet is hosting telephone, DMS and communications through webinars and emails so take charge and credit with the dealer. Re-define your role at the dealership by increasing your areas of responsibility!
Integrating the Internet into the selling process-Sales and Fixed Ops.
Most auto dealers have been traumatized by software solutions they are still paying for and never used. Usually they require secondary input, are redundant with other more integrated systems to the selling process or just lack real world applications to their deal flow – which is driven by human nature on all levels. “Inspect what you expect” coupled with standards like “you can’t manage what you can’t measure” can be applied to support your “close” for enhanced opportunities for you, your staff and your dealer.
The following areas of responsibility cross over department boundaries and place your “Internet C.C.C.” squarely in the middle of all selling processes. Of course be careful what you ask for since an astute dealer will, and should, hold you accountable. No pain, no gain – so go for it!
As admitted, the “devil is in the details”, and there is no standard application to apply to all situations. Deciding “what to do and what to delegate”, and how to best integrate with your current systems to minimize disruption, is the key. Don’t throw out the baby with the bath water but expecting different results from the same action is a good definition of insanity.
INTERNET C.C.C. MANAGER – AREAS OF RESPONSIBILTY:
1) OUT-BOUND PHONE CALLS / CONTACTS – Sales & showroom follow up: It is the job of the CCC to determine why they didn’t buy and what will get them back in.
Service and Parts – open and closed R.O.’s and Counter Tickets will be followed up daily to solicit the sale, generate referrals and to improve customer satisfaction, (CSI, SSI, FFV etc.)
2) IN-BOUND PHONE CALLS / CONTACTS – Sales Calls: A CCC coordinator will answer all calls for sales and obtain: a phone number, a name and an appointment.
Service and Parts: All special sales and marketing material will use an 800 monitored number which will be answered by a coordinator to set appointments for all departments.
3) INTERNET SALES: Each lead will be answered within 15 minutes and called within 30 minutes, if applicable.
An Internet lead will be given THREE prices on initial response, not Auto responder.
1) A price on what they want, 2) A price on something similar with a little less equipment and 3) On a used similar vehicle.
An Internet vehicle sales lead will be followed up in a specific sequence of emails and phone calls for a period of 90 days (or until they buy, die or say to stop bothering them)
A service appointment or parts order will be either automated on line or replied to within 15 minutes, applied to integrated appointment setting software and/or forwarded to a qualified service/parts writer.
4) LEASE RETENTION: 6 months before the lease termination, the customer will get a letter, followed by a phone call. The purpose of this letter is to inform the person about what is about to transpire, to let the customer know that the bank will try to sell them their vehicle and also about the pre-termination inspection about to come.
Continued, Internet C.C.C. Manager Areas of Responsibility – LEASE RETENTION:
At 4 1/2 months, the customer will get a pre-termination inspection package, including a date for the pre-termination inspection. This will be followed up with a confirmation email and phone call. There is also a confirmation email and phone call the day before the appointment and a visit outcome email and phone call after the visit.
5) GALLEY LISTS: A specific letter and email from the dealership sent to the list followed by a scripted phone call inviting the recipient to the dealership. Expected rate of return: without the follow up phone call .5-1.5% – with the phone call, 5-10%
6) THREE YEAR RETAIL PURCHASE letters followed up by an email and phone call
7) LETTERS – SALES AND SERVICE: Sold and unsold opportunities as developed through the use of the CRM system will be done on a daily basis. Three year cycle touch points: quarterly letters/emails for referrals, first service reminders, birthday and holiday greetings, blast email special events, 11 month time for inspection notifications, follow up call list for parts manager asking if the customer wants to enhance their purchase, etc, etc.
8) INTERNET CLUB EMAILS AND SPECIAL PROMOTIONS
9) BUSINESS LINK: Business to Business Club and all available programs will be utilized.
10) CUSTOMER SATISFACTION: Follow up calls for sales and service/parts to sold, un-sold, open R.O.’s and closed tickets are a natural source for new business and will be called daily to solicit sales, referrals and improved customer satisfaction and customer retention.
GOALS: 4-5 generated appointments per day per person; selling one. This represents 120 + appointments each month, 80 +/- that show up and an additional 20 units per person per month based on a 25% closing ratio.
The sales staff and service writers hate you – JOIN THE TEAM!
The Internet “Geek” of the old days has matured into a key manager in most dealerships and the trend is growing! You can’t possibly expect to cross train on all aspects of operations – but you should try! Evaluate the current communications, customer and deal flow and create a business pro forma in concert with the other department managers to develop a profit and increased R.O.I. for all involved and you will earn your position on the team.
Inter-department squabbles in the car business will always exist but your new job – if introduced correctly – will transcend individual motives to resist your efforts to improve everyone’s bottom line. Taking on the burden of making appointments and providing centralized communications – both internally and externally to the dealership – will free everyone else up to sell more cars, service and parts!
Real time “paperless” reports available online – or in the DMS/CRM – will provide the department managers with the information and tools they need to do their jobs. Your complimentary “secretarial” services, automated and managed follow up systems to recapture lost sales opportunities coupled with your pay plan based on increased appointments, sales and customer satisfaction is not a threat but a blessing!
Establishing goals, accountability – getting paid on the bottom line
Most Internet Managers are involved in search engine optimization plans, “S.E.O.”, and search engine marketing plans, “SEM”, with applications on their website that track leads, conversions and R.O.I. – or they should be! Your goal should start with continuing your efforts to increase traffic to your website rather than the telephone. It represents the most sophisticated tracking software available; now and for the foreseeable future. Your ability to track results is where your “accountability” part gets covered!
Sales goals theoretically start with the dealer’s market share responsibility for the manufacturer, “M.S.R.”, but fixed and semi-variable expenses quickly establish more pressing goals. “Covering the Nut” is a street level goal which must be met or none of the others matter. Have the dealer provide you with what he expects – or needs – and THAT IS YOUR GOAL!
Include areas that you can directly impact and monitor like new and used vehicle sales – units and gross profit, sales and service appointments, customer satisfaction scores and all monthly sales or performance goals. Define the areas of responsibility that you will handle and decide on which ones you will delegate. Compute the budget, staff and facility you will need, online and in concert with your conventional advertising and community networking proposals, to develop the traffic required to achieve the sales and performance goals the dealer has established.
Use industry guidelines as far as closing ratios and conversion ratios specific to your franchise, size of market, staff, inventory and facility to “back into” your sales vs traffic needs. Have your Advertising Agency provide you with local media statistics, like cost per point, “C.P.P.”, to determine the most cost effective media to dominate within your budget AND DOMINATE IT.
On broadcast, for example, a 5 plus frequency and a 50% reach coupled with consistent and coordinated dealer specific “brand-tail” messages, (branding and retail), over a ninety day period with creative directed to your web site as well as a monitored 800 number will ABSOLUTELY DRIVE TRAFFIC.
Of course expenses must be considered based on line item percentage guidelines vs. other expenses to preserve profits. Another common budget tool is to establish a “per unit” cap based on experienced expenses per unit which range from $250-$500 per car but it can double in certain markets.
Pick a basis for your budget, any basis, AND STICK WITH IT!
Monitor shifts within budget based on results and R.O.I. per investment but never increase the budget without a proper risk to reward consideration and an acceptable projected R.O.I. The days of guessing are over; so be right!
Do all of the above, design a pay plan tied to specific performance under your control and you will have deserved a bonus tied to the total dealership bottom line because you have contributed to it. After that ——– WORK YOUR PAY PLAN!
Written by: Philip Zelinger, Automotive Advertising Consultant,
President – Ad Agency Online, LLC