Best Practices

4-step process for effective text messaging at your dealership

LEHI, Utah - 

The way that consumers research, find, and engage with dealership has changed significantly in recent years. In the past, dealers would buy newspaper and radio ads, put up a billboard, get listed in the Yellow Pages, and wait for customers to call or show up to their dealership.

Now, the process is much more detached. While traditional advertising and marketing are important to create awareness, they are no longer the primary sources car buyers turn to when deciding which dealership to choose. Online searches are now king. Today’s car buyer typically searches for dealerships near them, reads reviews, maybe looks at your website, and then calls or messages you directly from your listing.

The option for customers to message businesses is a new addition. Google recognized that more and more customers would prefer to message a business as opposed to placing a call. In fact, 90 percent of consumers want to use messaging to interact with a business – with 50 percent preferring to message via SMS text.

The problem is only 48 percent of businesses are capable of messaging with their customers, but that number will likely increase with the launch of Google Click-to-Message. To help you get started, we have outlined the steps to get your dealership’s account set up to accept messages from your customers.

Here are the four steps to setting up Google Click-To-Message:

1. Login to your Google My Business page

2. Select messaging in the left menu and add phone number

3. Verify that number with a code sent from Google

4. Now searchers can message your dealership

Tips for interacting with customers via text

Now that your dealership is all set up to take incoming texts, let’s review some tips that will help you successfully interact with your customers.

1. Be responsive

Oftentimes when consumers are conducting an online search on their mobile device, they want their questions answered immediately. This is because they are likely experiencing what Google refers to as micro-moments. These are when consumers want to know, want to go, or want to buy. If your online presence isn’t able to quickly answer their questions, they will probably move on to your competition.

One of the main reasons that online searchers want to connect with you via text is they feel like it is a quicker, more efficient method of communication. But that’s only true if the dealership is placing an emphasis on quick response times.

To ensure this happens, general managers should make sure their team is well equipped to offer quick responses to customers. If you don’t consistently respond to messages in a timely manner, customers will know because over time Google will post typical response times on your listing.

2. Don’t ask for sensitive information via text

This might seem obvious, but it bears repeating. Businesses should never ask for sensitive information like credit cards, banking information, or social security numbers over text. While text messages seem secure, the information isn’t encrypted so the data could be vulnerable.

3. Ask for customer back

Another valuable way to utilize text messaging in your customer interactions is asking for back. A lot of times customers don’t want to take the time to fill out a lengthy customer satisfaction survey, but they would be willing to answer a few questions via text. That is because asking questions via text comes across as more personal and less intrusive than a survey.

One way to approach this is by asking your customers after a transaction is complete, “On a scale of 1 to 10, how likely would you be to recommend this business to a family or friend.” And then follow that up with one or two questions about the service your business delivers. Our research has shown that approaching customer back this way results in significantly higher open and response rates than traditional CSAT surveys.

4. Invite customers to review your business

Text messaging is also a good method for collecting public facing customer back on your Google My Business listing. One of the biggest reasons to use text messaging to do this is many people are already signed into their Google account on their smartphone, so it’s much easier to connect them directly to your Google reviews page.

5. Encourage customers to add you to their s

Texting with your customers will help you build stronger more loyal customers. To help you reinforce that loyalty, try texting them a vCard with your information on it. If customers have access to your phone number in their s, it removes one of the steps in the car buying journey. It will help you evolve from being just a dealership to being their dealership.

Jon Eyre is director of content at Podium, which helps businesses drive user-generated content in the form of online reviews to increase visibility, improve business operations and drive the purchase decision. The company serves more than 50,000 users across all business sectors and has a robust automotive division. More recommendations from Podium are available through webinars the company has hosted with AuSM that are available here as well as here.


Podcast: Cort DeHart with MBSi Corp.

CARY, N.C. - 

We circle back to one of the most difficult challenges of the automotive business — repossessions — for the latest episode of the AuSM Podcast. Nick is joined by Cort DeHart, who is the corporate strategy manager with MBSi Corp. The conversation touches on how complicated repos can be and how the industry is working to streamline the necessary processes.

We also look ahead to where Cort is returning again for a keynote session during Repo Con, of which MBSi Corp. is the presenting sponsor.

Check out the conversation below.

Download and subscribe to the AuSM Podcast on  or on . 

You can also listen to the latest episode in the window below. All episodes can be found on our  or by visiting ausm.info/ar-podcast. Please complete ; we appreciate your back on the show!

 


NADA reiterates IRS warning about new phishing scam

WASHINGTON, D.C. - 

The National Automobile Dealers Association relayed a warning from the Internal Revenue Service about the latest tax-related activities generated by unscrupulous entities on the Internet.

The IRS warned all e-services users to beware of a new phishing scam that tries to trick tax professionals into “signing” a new e-Services user agreement. The phishing scam seeks to steal passwords and data.

Officials explained the scam email claims to be from “e-Services Registration” and uses “Important Update about Your e-Services Account” in the subject line. It states, in part, “We are rolling out a new user agreement and all registered users must accept its revised terms to have access to e-Services and its products.” It asks the individual to review and accept the agreement but takes them to a fake site instead.

NADA suggested that all tax professionals should be aware that as e-Services begins its move later this month to Secure Access authentication and its two-factor protections, cybercriminals likely will make last-ditch efforts to steal passwords and data prior to the transition.

“As the IRS has warned over the past few years, these sophisticated schemes are adaptive in nature, and everyone should be cautious before clicking on a link or entering sensitive personal information,” NADA said.

IRS commissioner John Koskinen added, “These scams evolve over time and adjust to reflect events in the news, but they all typically are variations on a familiar theme. Recognizing these schemes and taking some simple steps can protect taxpayers against these con artists.”


Podcast: Jeremiah Wheeler of DRN

CARY, N.C. - 

Jeremiah Wheeler, vice president of financial services at DRN, returns to the AuSM Podcast, as Nick hosts a discussion about the impact technology is having on vehicle repossessions.

We also touch on the special segments at  that include Jeremiah and DRN, which is the presenting sponsor of Auto Fin Con.

Check out the conversation below.

Download and subscribe to the AuSM Podcast on  or on . 

You can also listen to the latest episode in the window below. All episodes can be found on our  or by visiting ausm.info/ar-podcast. Please complete ; we appreciate your back on the show!

 

 


5 ways to spot finer points of potentially weather-damaged vehicles

AUSTIN, Texas - 

An auction operator who likely saw at least some of the rain from Hurricanes Harvey and Irma spelled out his five points to consider as the industry watches for flood-damaged vehicles.

Chris Tomchay, co-founder and chief operating officer of The Appraisal Lane and co-owner of the Georgia-Carolina Auto Auction, shared his five thoughts as estimates approach 1 million units being impacted by the consecutive Category 4 hurricanes to touch the U.S.

“Apart from the basics, there are other telltale signs that dealers and private parties should pay attention to when it comes to signs of hurricane-related damage,” said Tomchay, whose auction is located 70 miles northeast of Atlanta. “Information is power, so arm yourself with as much knowledge as possible to avoid getting burned on the bottom line.”

Here are Tomchay’s five additional tips:

1. A clean history report doesn’t always mean a clean vehicle.

With widespread hurricane damage in Florida and Texas in recent months, and with Tropical Storm Nate now bearing down on the Gulf Coast, Tomchay explained that it’s important to note that dealers can’t always trust a clean vehicle history report.

“Sometimes there is lag time in the reporting of flood damaged cars to vehicle history reporting organizations. Even 60 or 90 days, at this juncture, is enough time for a vehicle that would otherwise been deemed as ‘salvage’ or ‘totaled’ to be sold to an unsuspecting buyer,” he said.

2. There’s a big difference between salt water and fresh water damage.

While fresh water submersion means damp upholstery or wet engine components that could ultimately be dried and restored, Tomchay pointed out salt water damage is something altogether different.

“Salt causes significant corrosion which, in the long run, can cause big problems to the major components of a car, including the steering and electrical systems, the transmission, the undercarriage, the fuel system, the body panels, and much more,” Tomchay said.

He added that while some waterlogged vehicles with minor damage can represent a good value, it’s important to know the type of water that caused the damage.

3. Flood damaged vehicles can break the bank — but they can also come at a value.

Tomchay acknowledged that certain flood damaged vehicles represent a value depending on the extent and type of damage.

“I’m all for buying a car at  ($0.50) on the dollar if it was submerged to the floor in fresh water, or purchasing a vehicle for ($0.75)  on the dollar if it was stranded on a ship in a salt water port and the manufacturer merely voided the exterior paint warranty,” he said. “It really depends on the situation.”

4. Beware of out-of-state registrations.

If a vehicle that is registered in a known hurricane-havocked region suddenly shows up for sale in your Northeast or Midwest market, Tomchay recommended that dealers should be extra diligent — particularly now.

“Take a little extra time to evaluate the vehicle using The Appraisal Lane’s SMART tips,” he said. “It could wind up saving you thousands of dollars in the end.”

5. Flood damage isn’t the only hurricane damage.

Tomchay also mentioned small sized hail on a light colored exterior could go unnoticed, as could sand blasting from high winds.

“Be sure to closely inspect a car’s exterior in proper lighting, preferably in sunlight and from various angles,” he said. “If you’re still unsure, solicit an inspection from a qualified body repair shop.”

Tomchay concludes that if dealers are still uncertain when it comes to evaluating a potential hurricane damaged vehicle, or off-brand/one-off inventory, a community approach to appraisals is best — one that connects you with expert appraisers in real time, backed by cash offers.

“Evaluating vehicles based on the law of averages is particularly risky, not to mention trying to evaluate vehicles that may have been damaged during this volatile hurricane season,” he said.

The Appraisal Lane — a Silver Sponsor at  which begins on Nov. 13 in Palm Springs, Calif. — consists of vehicle appraisers whose singular responsibility is to evaluate thousands of vehicles each month across all makes and models. The company’s mobile app can connect dealers with a larger community of appraisers and buyers to receive real time cash offers on inventory.

For dealers interested in more information about The Appraisal Lane, visit or send a message to [email protected]


NADA provides guide to help dealers educate customers about leasing

TYSONS, Va. - 

The National Automobile Dealers Association recently rolled out a resource for members to help stores leverage vehicle leasing in a way that results in happy customers and compliant deliveries.

In light of the vehicle leasing business reaching an all-time high in 2016 with 4.3 million new units being leased, NADA said consumers are still leasing new cars at near-record levels. In fact, Experian Automotive reported that 30.83 percent of all new-vehicle turns during the second quarter came via a lease.

To help store manage that volume, NADA is offering its members a resource titled, “A Dealer Guide to Leasing Fundamentals.” The material aims to help dealers and their sales staff explain leasing, including how it compares to purchasing, so that customers can make the right decision for their individual needs.

Discussed are: closed-end consumer leases, how leasing benefits both customers and the dealership, and who are the best and worst candidates for leasing.

“Leasing appeals to many consumers who are able to acquire a more expensive vehicle, often with lower monthly payments, than they could have afforded as a purchase — and they can get into a new car every few years, with no depreciation risk,” NADA said.

“Still, many consumers don’t understand the leasing concept or vocabulary,” the association added.

NADA members can obtain this leasing guide by going .


2 candidate traits dealers need to build solid workforce

CHICAGO - 

Many dealerships have a promotional moniker to distinguish itself in their market; for example touting the biggest selection of used vehicles.

Hireology chief executive officer and co-founder Adam Robinson recommended that stores also generate a local reputation that helps the rooftop generate quality “ups” who could be high-performing, long-term employees.

Robinson described the importance in light of how the firm collaborated with Cox Automotive on a study that showed stores have a 67-percent annual turnover rate among its sales teams, and the average cost of hiring a new dealership employee is $10,000.

“The very first step in establishing a talent-centric strategy for dealerships is a focus on their employment brand,” Robinson told AuSM during a phone conversation on Thursday. “If your consumer brand is the face of your company to your local market, your employment brand is what your local labor market thinks of you as an employer and a place to work. It’s the single most influencing factor in whether or not a dealership is going to be successful.

“Similar to a consumer brand, when your employer brand is strong, the dealer is going to get more people opting in to the process,” he continued. They’re going to get more people to take a look at the brand and decide that it’s for them versus just trolling the Internet looking for open jobs and slinging resumes all over the place with automated software, which happens these days.

“A strong employment brand is a like a filter in front of the process; almost like a magnet because it attracts the right people and repels the wrong people. That’s what you want,” Robinson added.

“Once you have those strong brand elements in place, you can take full advantage of a robust hiring process. That’s the recipe for success,” he went on to say.

Currently, Hireology is working with 2,000 dealers in the U.S. to help them assemble the best workforce possible. Robinson acknowledged dealerships “are struggling to hire and keep the right people,” as the study showed.

“The study confirmed what we’ve seen on the ground every single day,” he said.

Robinson described characteristics potential new employees should have as dealerships evaluate candidates for various store positions, stating that, “It’s not easy, but it’s also not complicated.” He began by noting great potential employees have to be customer-experience focused

“If you get intrinsic value from providing great service to others, and that can come through specific product knowledge of automobiles, it could come through a love of the product, it could come through the enjoyment of helping people, that’s really a prerequisite for a role in this environment,” Robinson said.

Robinson also mentioned that candidates also should demonstrate a desire to learn and grow during their dealership career.

“That really comes down to accountability,” he said. “People who are service oriented and … they believe destiny is in their own hands, that’s a fantastic combo.

“What we recommend to our dealers is that they’re screening for those elements for all roles in the store during the interview process. When they do, their hiring results and retention should both go up,” Robinson concluded.


How much insufficient training is costing dealerships

ATLANTA - 

The data points Cox Automotive found through its dealership staffing study are startling.

Stores have a 67-percent annual turnover rate among its sales teams, and the average cost of hiring a new dealership employee is $10,000.

Perhaps one of the primary reasons dealerships are burdened by those personnel challenges is connected to training — or the lack of it. The anecdotes shared by Isabelle Helms, vice president of research and market intelligence at Cox Automotive, paint a grim picture.

During a phone conversation before the study was released this week, Helms told AuSM, “One person said, ‘I assisted with a salesperson for one week and then they threw me out to the sharks.’”

“Another one said, ‘Training? Huh? I was required to complete all online ‘training’ mandated by the OEM and the dealer. Otherwise there’s never any training,’” Helms continued.

The 2017 Cox Automotive Dealership Staffing research was conducted on behalf of Cox Automotive by KS&R with consultation from Hireology. The study was fielded among a random representative sample of 50 dealer owners, principals and general managers through an online discussion about their current dealership staffing practices and challenges.

The project also included 343 dealership employees through an online quantitative survey about their experience as a dealership employee as well as 834 U.S. general population also through an online quantitative survey about their opinions about working at a dealership.

Helms suspected the project would highlight the stereotypical challenges about working at a dealership — long hours during a six-day workweek while being compensated mainly by commission. However, Helms emphasized it was the training component that she thought impacted dealerships most, especially since it’s possible that the quality of worker support could be improved.

“We know there are dealerships out there, in particular the more progressive dealerships, the larger dealer groups, that have formal training programs in place. Those are the ones who should be modeled. But for the most part we saw a huge absence in training,” Helms said.

Beyond the sales team churn and the cost of hiring new employees, Helms also noted how workforce issues can cause other problems for stores, including planning for long-term objectives.

“Many dealers are having to think about the future. They’re thinking about how they’re going to have to evolve and create a dealership of the future,” she said. “When you’re constantly focused on retaining your staff, or bringing on board new staff, that leaves very little time to really think about how you’re going to evolve your model and how you’re going to set up your dealership to compete.”

Furthermore, Helms also mentioned how customer loyalty can erode if buyers seeing new people working at the dealership each time they make a purchase or come in for service.

“Once you create a rapport with someone at the dealership, you expect that person to be there,” Helms said. “Loss of customer loyalty can be a factor because we know from research that the two more important factors that go against a positive customer experience at the dealership; it’s the sales staff followed by F&I staff.

“If you’re having turnover in those two areas in particular, your customer loyalty tends to sustain a significant impact,” she added.

The study showed turnover within the F&I office is lower than the store’s sales department — 38 percent versus that 67 percent figure. But overall, dealerships are sustaining a 40-percent turnover rate across all department.

And referencing back to that $10,000 average that it costs to a hire a new employee, “You can do the math quickly. If you’re experiencing 40 percent turnover at your dealership, that runs up pretty quickly,” Helms said.

Yet one other potential pitfall for employee churn: Helms pointed out that maintaining and refining operational efficiencies might not happen to the degree ownership would like.

“If you’re constantly rolling in new employees, you don’t have the chance to build processes into the business and find the opportunity where you can improve,” she said.

With so much at stake — both financially and with non-tangible costs — Cox Automotive’s study also included some thoughts for dealerships to consider, including:

— Look at your culture and pay plans and make changes where necessary.

— Review your hiring process to properly assess talent, accelerate early relationships with managers and peers and share information about career opportunities in your organization.

— Make sure your development plans support performance expectations.

“My hope by conducting this research is we’ll be able to change people’s opinion about what it’s like to work in the automotive industry, in particular, dealerships,” Helms said. “It’s an exciting new world. The world at dealerships is changing significantly. We need the next generation of workers to embrace looking at this industry differently.”


EFG commentary: Another turn of the screw by the CFPB

DALLAS - 

On July 10, the Consumer Financial Protection Bureau (CFPB) issued a rule banning companies from denying arbitration to groups of people. And, if everything passes, the law should go into effect in September. For auto retail dealers and lenders, this change is just one more turn of the screw clamping down on the ability to do business.

The new ruling stipulates that auto dealers and their lending partners will still be able to include arbitration clauses in their contracts. But those clauses may not be used to prevent consumers from joining a class action lawsuit. The rule specifies the language that must be used in the contract. Companies are also required to submit detailed information to the CFPB about claims and awards made in arbitration. That data eventually will be made public, with consumer names and identifying data removed. It’s no wonder dealers and lenders are feeling like Big Brother is looking over their shoulders.

Shaun Petersen, vice president of legal and government affairs with the National Independent Auto Dealers Association (NIADA) recently joined the EFG Companies Common Sense Compliance podcast and shared some thoughts on how this ruling might impact dealers in the future.

“While the original purpose of the CFPB was to ‘root out’ unfair, deceptive or abusive acts or practices, supervise companies, and enforce laws,” Petersen said, “the bureau has certainly had its eye on the automotive market. While there are certainly some bad actors, the majority of auto dealers and lenders are trying to help the consumer. This additional ruling complicates these efforts.”

“This rule will force small businesses to bear additional costs in defending class-action litigation, particularly meritless suits,” Petersen continued. “Those costs will ultimately be borne by consumers, and in the case of those who are credit-challenged, it could prove to be too much.”

Petersen outlined some of the steps the NIADA is taking to work with key members of Congress to oppose the ruling. “From the outset of this rulemaking process, NIADA has voiced concern about the poor policy reflected in this proposal to both the CFPB and to members of Congress,” Petersen said. “As Congress considers CFPB reform, we will be urging lawmakers to overturn this anti-consumer rule.”

In the meantime, Petersen encouraged dealers and lenders alike to review their contract language, as well as any other materials which discuss the consumer’s rights to contract arbitration.  “The ruling is scheduled to take effect Sept. 18,” Petersen elaborated. “While we continue to work with members of the House and Senate to oppose this ruling, we also don’t want dealers and lenders to be caught flat footed.”

Compliance is certainly a growing challenge for auto dealers and their lending partners. When entities such as the CFPB issue wide-ranging rulings, it’s no wonder that dealer principles, F&I teams and lenders throw up their hands in frustration. How can you manage the pressure from this latest turn of the compliance screw? Stick to your compliance checklist and leverage available resources from industry associations and providers. And turn the screw back toward your favor.

As vice president of compliance at EFG Companies, Steve Roennau utilizes his extensive industry experience to provide EFG clients a sophisticated analysis of their current compliance procedures and proactively prepare them for upcoming changes in federal and state regulations. Steve is an AFIP Senior Certified Professional in Financial Services, and has developed compliance training modules in the areas of adverse action, privacy rule, risk-based pricing/exception notice, red flag rule, safeguards rule, deceptive practices, and federal and state regulations. In addition, he has conducted several compliance courses, including compliance workshop for dealership managers; AFIP prep course for F&I producers; and, F&I compliance training for F&I producers. He can reached at [email protected]


Study: The desktop drives most car shopper calls to dealerships

CARY, N.C. - 

While car searches on mobile devices surpass those performed on desktops and laptops, because most consumers who make phone calls to dealerships shop on their desktops, automotive marketers should consider how they direct digital ad spend between both desktops and mobile devices, especially during the industry’s two peak sales seasons, says a recent study.

Shoppers on their desktops and laptops made up 54.8 percent of call conversions from dealer websites, while only 45.2 percent of calls come from visitors on mobile devices, according to a study on shoppers who make phones to dealerships by , the educational and training center of DialogTech.

DialogTech said its DT University examined more than 1.1 million phone calls made to thousands of U.S. and Canadian dealerships from 2015 through August 2017.

During the two peak sales seasons, March to May and September to November the study found that gap between desktop and mobile generated calls is even greater.

Desktop shoppers drive both the most calls and revenue, according to DialogTech.

Below lists the percentage of how many more desktop and laptop calls dealerships received during peak sales seasons:

First Peak Sales Season

  • March: 22.2% more calls from desktop/laptop than mobile
  • April: 27.3% more calls from desktop/laptop than mobile
  • May: 27.3% more calls from desktop/laptop than mobile

Second Peak Sales Season

  • September: 22.2% more calls from desktop/laptop than mobile
  • October: 22.2% more calls from desktop/laptop than mobile
  • November: 56.4% more calls from desktop/laptop than mobile

“There is no shortage of great marketing research on the importance of smartphones to the customer journey of every industry, including automotive,” DialogTech director of content marketing, Blair Symes said in an email interview with AuSM.

“At DialogTech, we've even published a lot of it. But in the rush to optimize everything for mobile, it can be easy to forget about the desktop. That's why it's important that marketers understand what devices shoppers use at each stage of the customer journey, including when they convert online or over the phone, and tailor their ad campaigns and customer experiences to generate maximum return,” he continued.

To increase ROI, the study encourages marketers to use data on what devices brings the most calls on each specific day to help direct digital ad spend appropriately.

According to the study, desktop and laptop shoppers drive more calls during the week, while mobile shoppers make more calls on the weekends.

The study also suggests that dealerships pay closer attention to callers because on average, shoppers who call a dealership purchase vehicles 10 times more than consumers just who fill out a form online, according to the study.

DialogTech said it collected its phone call data from its voice management platform, which tracks, millions of calls generated by automaker and dealership website visitors across North America each year.


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