1. HAGEN
DURANT
Classic Chevrolet
page 22
Vol. 17 No. 7
July 2010
Jim Ziegler:
Business Sucks...
Could It Be You?
page 12
Leadership:
The True Measure
of a Leader
page 16
Ownership:
What is Your Dealership
Real Estate Worth?
page 17
Pre-owned
Vehicles:
With History there
is No Mystery
page 55
6. ABLE OF CONTENTST
JULY 2010
PRESIDENT AND CEO
MICHAEL ROSCOE
VICE PRESIDENT AND
EDITORIAL DIRECTOR
CLIFF BANKS
cbanks@Dealer-communications.com
248-351-2620
PUBLISHER
GREG NOONAN
607-264-3359
gnoonan@Dealer-communications.com
CONTENT COORDINATOR
MARIA BURKEL
mburkel@Dealer-communications.com
ART DIRECTOR
JOE BIRCH
PRODUCTION MANAGER
ELIZABETH BIRCH
PRINT PRODUCTION
NICK THOMAS
COVER DESIGN
JOE BIRCH
COVER PHOTOS
RANDY ANDERSON
CIRCULATION SUBSCRIPTION
RICH JARRETT
314-432-7511
rjarrett@Dealer-communications.com
www.Dealer-communications.com
NATIONAL ADVERTISING SALES
adsales@Dealer-communications.com
607-264-3359
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FEATURES
Dealer Advocate by Jim Ziegler
12 Business Sucks...Could It Be You?
Cover Story
22 Hagen Durant
Classic Chevrolet
COLUMNS
From the Chairman
10 Dealer-Assisted Financing Still at
Risk in House-Senate Conference
Ed Tonkin
Cliff’s Notes
11 FI Profit, Captives and IRS
Wealth Squads
Cliff Banks
Leadership by Dave Anderson
16 The True Measure of a Leader
Ownership
17 What is Your Dealership Real
Estate Worth?
Erin Kerrigan
18 Cut Through the Multiples – Focus
on Real Value
Greg Gilmore
Employee Management
20 Life in the Fast Lane!
Chuck Barker
Sales
51 Millennial Madness! (or ‘How I
Missed the Big Boom!’)
Jim Boldebook
Finance
53 Pricing Guidelines for Fun
and Profit
Gil Van Over
Pre-owned Vehicles
55 With History there is No Mystery
Tim Deese
56 The New Reality of the Used Car
Business
Dale Pollak
Fixed Operations
58 Wow! A Free Money-Maker
Ed Kovalchick
DEPARTMENTS
6 Editor’s Note
8 Dealer Mail
54 Dealer FI New Products
60 Dealer New Products Services
SPECIAL SECTION INSERT
DD16 Joe Ellsasser
General Manager
Golling Chrysler Jeep Dodge
DD8 Take Out the Trash and
Keep the CRM from Being a
Garbage Dump
DD10 How to Set Yourself Apart in a
Competitive Market
DD14 Eight Steps for Real
Reputation Management
DD20 Turn Your Site into the
Ultimate Closing Tool
DD24 Four Steps to a Super DOC –
and More Profit
Full Digital Dealer table of contents on page DD2.
pg. 25
4 Dealer July 2010 Dealer-magazine.com
7.
8. DITOR’S NOTEE
Just spent a wonderful week in Southern
California with my daughters Christina
and AJ. You see, AJ left for her school
soccer team’s summer camp in Georgia
the Saturday before Father’s Day, so we
couldn’t go to Destin for the weekend to
celebrate.
I guess that’s why we went when we
did...but there’s another reason why we
went where we did. AJ thinks she might
want to go to college in California. Now,
truth be told, I don’t want her to go to
college all the way out in California.
Christina is attending the University of
Texas in Austin, but that’s only half as far.
And I went to school there. And TADA’s
Bill Wolters told her if she ever needed
anything just call him up. California is a
four-hour plane ride away!
My first thought, instinctively, was to
take her out there and make sure she didn’t
like it. But that just didn’t seem right. It’s
my job as her father to encourage her to
explore, to be unafraid to try new things,
to reach for the stars...whatever that is
to her. So I committed to showing her
Southern California in its best light. The
three of us had a blast.
Probably the best day was when we
went out to Catalina Island and took the
new Zip-line EcoTour. It takes about two
hours...you put on a harness and a helmet
and they hook you onto this cable and
zip...off you go down the mountain from
one platform to the next. Except when we
got to the platform, both of my girls had
second thoughts. I suppose reading about
zipping over 1,000 feet, 300 feet above
the canyon floor at 45 miles per hour on
a web site is different from actually doing
it. AJ has never been one to go on fast
rides or big roller coasters and now she’s
about to hang from a cable moving at 45
miles per hour.
The instructor was very encouraging but
the more he spoke, the more they stepped
back.Three people had already gone, then
out of nowhere, AJ says, “I’ll go next”.
And she did. I once told her being brave
isn’t not being scared. Being brave is when
you’re scared and you do it anyway. She
was very brave.
Some say a parent’s job is to raise their
child so that they are ready and wanting
to leave. And I suppose part of that is get-
ting them unafraid to take chances. After
we got back, AJ still thinks she wants to
go to college in California. She took a
chance with that zip-line and apparently
she is willing to take a chance to live four
hours by plane away from her mother and
I for four years, where she knows...nobody.
Don’t know if she will or not...still three
years away, a lot can happen.
But that’s a pretty good Father’s Day
present when your daughter is even con-
sidering making a move that big...on her
own...at age 15.
Mike Roscoe
Michael Roscoe
Editor-in-Chief
6 Dealer July 2010 Dealer-magazine.com
9.
10. Jim Boldebook,
Thankyouforyourarticleseverymonthin
Dealermagazine.Theyalwaysteachmesome-
thing. I would like to take you up on your
offerandrequestyousendmethe“Wordsthat
Work” abstract. If you ever hold a conference
where you share your knowledge on making
media more effective, please contact me.
Barry Merrill
Hello Barry,
Thanksforthecompliments. Allofthewriters
at Dealer magazine put a lot of time and effort
into making the magazine the best it can be.
The ‘Words thatWork’ abstract is on its way.
I’llkeepyournameinourfileforfuturemarket-
ing conferences.
Sincerely,
Jim Boldebook
Dave Anderson,
I enjoyed reading your article in the April
2010 issue of Dealer magazine, “What I
ShouldHaveLearnedinFirstGrade.”Bravo!
Julie Emberton
Julie,
Thanks for the note! Glad you liked the
message!
Dave Anderson
Dave Anderson,
I just wanted to give you a “well done”
on your article in the June issue of Dealer
magazine, “The Calm Before the Storm”. It
furtherhelpstoclarifyapicturethatI’vebeen
seeingalso.ButwhatIreallyappreciateisyour
encouragement to lay solid foundations so
that you’ll be far ahead of your competitors.
Our new product we’re developing can be a
keyassetindoingthat.Withlaunchplanned
for the end of this year, it will be interesting
to see how the economy affects us.
Jim Hughes
President
Hughes Hunter Automotive Marketing
Thousand Oaks, CA
Jim,
Thank you for the feedback on the article.
It’s great to be prepared and positioned well.
Regardless of what the economy does, we’ll win.
Dave Anderson
EALER MAILD
Dealer welcomes your letters and after
verification will run them signed or unsigned.
Letters may be edited for space and clarity.
Send letters to: 2000 Town Center • Suite 1900 • Southfield, MI 48075
FAX: (248) 351-2699 • e-mail: cbanks@dealer-communications.com
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8 Dealer July 2010 Dealer-magazine.com
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12. T
he 60-30 bipartisan Senate vote
on the Brownback motion sends
a clear message that Main Street
auto dealerships should not be in a Wall
Street reform bill, yet the future of dealer-
assisted financing is still in jeopardy.
The success of the Brownback motion
comes thanks to the immense grassroots
engagement by dealers and dealership
employees. Continued engagement is
even more critical as Representatives and
Senators meet in conference to work out
details of the legislation. The final bill
is expected to be sent to the President
before July 4.
The Brownback motion urges Senate
conferees to support House language,
which protects consumers by keeping
auto credit affordable and available.
Conferees will have to reconcile the
Senate version and its House counter-
part, which -- thanks to an amendment
offered by Rep. John Campbell (R-Calif.)
-- preserves dealer-assisted financing as a
competitive option for car buyers.
While the majority of Senators and
House members clearly understand that
dealers are not banks, there is immense
pressure on conferees by the White House
and others to strip out the Brownback/
Campbell language. The goal is to pre-
vent new, unnecessary and burdensome
regulations over auto dealerships that
would make it harder and more expensive
for consumers to purchase a vehicle at a
dealership.The existing regulatory struc-
ture has permitted millions of families to
make a vehicle purchase at competitive
interest rates.
We must remain engaged or this fight
could be lost. Dealers and dealership
employees should reach out to the confer-
ees to urge them to retain the auto dealer
language in the final Wall Street reform
bill. More information on the legislation
and a list of conferees can be found at:
www.NADA.org/KeepCreditAffordable.
Ed Tonkin
NADA Chairman
Dealer-Assisted Financing Still at Risk in
House-Senate Conference
From the Chairman
Ed Tonkin, NADA Chairman
Don’t miss the
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Key Points in Favor of the Brownback/
Campbell Language:
• Conferees should support the
Brownback/Campbell language because
dealer-assisted financing provides
convenience, competition and choices for
consumers who rely on affordable credit
to meet their transportation needs.
• Both the House and Senate have voted
on a bipartisan basis to keep in place
the sound regulatory structure that
has allowed millions of consumers to
buy vehicles at competitive interest
rates instead of creating an uncertain
regulatory regime under a new agency.
• Main Street auto dealerships are not
banks and didn’t contribute to the
financial meltdown.
• If adopted, the Brownback/Campbell
language keeps every auto loan and every
auto finance source that underwrites,
funds and/or services a loan (including
buy-here/pay-here operations) regulated
by the new agency.
• Dealers’ retail financing activity would
continue to be effectively regulated by
the Federal Reserve Board and the Federal
Trade Commission. Dealerships would
continue to be subject to all Federal and
state consumer protection laws and
regulations that currently govern dealer-
assisted financing today.
10 Dealer July 2010 Dealer-magazine.com
13. FI Profit, Captives and IRS Wealth Squads
T
here was a lot of news over the last
monththatwillaffecttheautomotive
landscape for the next several years.
ThebignewsisthattheU.S.Senate,unlike
the House, refused to adopt an amendment
that would exclude car dealers from being
affectedbythefinanceoverhaulbill.Butthen,
a couple of days later, the Senate decided to
instruct its negotiators to push for adoption
ofsimilarlanguagetowhattheHouseversion
has which does exclude dealers.
The bill is in conference now as of press
time, and negotiators from both the House
andSenateareputtingthefinaltouchesonthe
legislationwhichwillbesenttothePresident
for signing.
Dealers still are not out of the woods on
thisone.TheWhiteHouse,thePentagonand
several consumer organizations are fighting
NADA hard to include dealers.
NADAofficialssaythisisthetoughestand
most important battle in recent memory. If
the bill passes with inclusion of car dealers,
FI revenue likely will dry up.
That’s not being chicken little. A federal
agency will determine which financial prod-
ucts you can sell, how much you can make
and which firms you can do business with.
You may have some influence over your con-
gressional members, but a federal agency?
Not a chance.
This battle has to bewonon the legislative
side. So keep fighting hard.
In other financial news, GM leaked that
it is exploring options to either buy or start a
captive finance firm.
Ever since it sold controlling interest of
GMACtoCerberusafewyearsago,GMhas
had little to no control of the financing of its
vehicles. It became a real problem in 2008
when Cerberus decided that GMAC would
onlyfinancedealsforcustomerswithbeacon
scoresinthe700sorhigher–inotherwords,
theonlypeopleabletobuyaGMcarthrough
GMAC were those with near perfect credit.
Sales tanked for GM, pushing it into
bankruptcy. Cerberus relinquished control
of GMAC. It also owned Chrysler Financial,
whichithasputonthebackburner.Sincelate
last summer, GMAC has become Chrysler’s
main lender also.
Althoughthecreditscoreshavecomedown
some,GMAC(althoughitchangeditsname
to Ally, it’s retaining the GMAC name for
its automotive business) still is not financing
sub-prime buyers. Overall, GMAC finances
at least a third of GM’s customers.
According to the latest numbers, only 1%
of GM’s customers in the first quarter were
sub-prime. Experian reports that 16% of all
car buyers in the fourth quarter of 2009 fell
intothesub-primecategory.That’snotcount-
ing deals that weren’t completed because of a
customer’s credit score.
Tocomparewithotherautomakers,theAP
reports that 20% of Honda’s business comes
from the sub-prime market – 20% vs. 1%
-- no wonder GM – and Chrysler – is at a
disadvantage.
The problem extends beyond sub-prime,
though. GM and Chrysler have little control
over the incentives they can offer customers
and dealers to push sales. Yes, automakers
have said they want to end their reliance on
incentivestodrivesales,butGMandChrysler
have no flexibility.
Bothautomakers,obviously,needafinance
arm – preferably separate from each other
-- they can control. Until that happens, both
automakers will continue to be handcuffed
as they try to recover.
Chrysler did make a move last month
announcing a relationship with the Spanish
bank Santander that will enable it to offer its
customers cheaper sub-prime loans.
Meanwhile, get ready for the IRS wealth
squads.
You’re sitting in your office at your confer-
ence table. Your accountant is there along
with – not one – but four or five agents from
the Internal Revenue Service who are dig-
ging through every nook and cranny of your
financial life.
This scenario likely will play out at your
dealership in the near future, according to a
column last week on Forbes.com written by
Donald T. Rocen, a member at Miller
Chevalier Chartered, a firm that helps large
corporationsandotherbusinesseswithfederal
tax controversies.
Before you think Mr. Rocen simply is
tryingtodrumupbusinessusingscaretactics,
considerthis:hewasthedeputychiefcounsel
ofoperationsfortheIRSfrom2004to2007.
His column, IRS ‘Wealth Squads’ On the
Way, provides a window into the plans IRS
Commissioner Doug Shulman has for a cer-
tain level of wealth owners. Rocen says the
IRS has not said what type of earnings will
generateavisitfromanIRSwealthsquad,but
thinks it is in excess of $10 million.
These so-called squads will be part of a
Global High Wealth Exam Group being
implemented by Mr. Shulman and likely
will be created from the 16,000 new agents
the IRS is in the process of hiring.
Rocenbelievestheauditingprocesswillbe
a major overhaul of one’s finances and could
include a criminal investigation agent.
So if you’re one of the few that can be
labeled wealthy, consider yourself warned.
Cliff’s Notes
Cliff Banks
Cliff Banks
Vice President and
Editorial Director
Dealer-magazine.com July 2010 Dealer 11
14. T
he month of May 2010 just might
havebeentheturningpoint.Asmany
ofyouareaware,Icommunicatewith
hundreds of dealers every month. Making
phone calls, communicating online, and
now...talking to dealers, managers and sales
professionals daily on Facebook andTwitter;
I like to think I am fairly tuned in to what’s
happening at the grassroots levels.
Well,speakingwithmostdealersandman-
agers, their mood was ecstatic. Coming out
of the Memorial Holiday Weekend, most
dealers were telling me they’d had the best
sales they’d seen in three or four years. With
few exceptions every manufacturer saw huge
percentagevolumesalesincreases,mostinthe
double digits over just one year ago.
But, of course, with all of this enthusiasm
andinfectiousoptimism,therewerestillthose
rare birds whose cup is perpetually three-
quarters empty.
Ibelievesomepeopleare,bynature,whin-
ers, wimps and complainers.
Inthecourseoftalkingtoallofthesedeal-
ers who were celebrating a great month; here
I was listening to complaints and excuses
from dealers in towns where their competi-
tors had exceptionally good sales in May.
Same brand of cars, equally good location,
but; one dealer had a recent-memory sales
record with highly-motivated employees
while another dealer selling the same cars in
thesamecommunityhadamiserablemonth.
It’snotthemarket--createyourownmarket.
It’s not the product -- every manufacturer
builds good cars and trucks. It’s not your
location -- it’s you.
Could it be that if your business sucks, it
might just be because you suck at it.
FormonthsI’vebeenwritingandspeaking
about this moment -- as in right now. How
many times have I said or written that busi-
ness is coming back like a runaway freight
train -- no stopping it -- and you’re prob-
ably not ready for it. This is the best we’ve
seensinceCashforClunkers.And,youknow
what? It’s going to get better. In light of May
sales, most statisticians in the industry pro-
jected their seasonally adjusted sales to an
11.2 million unit light vehicle sales based
on May 2010.
Howeverboldtosayit--but,Ibelievewe’ll
see another 16 million unit year in the not
too distant future.
But, if your business still sucks despite the
fact others are enjoying near record sales all
around you; then, you might strongly con-
sider the possibility that something is wrong
with the way you’re running your busi-
ness. It might be the way you’re marketing.
Maybeyou’vegotthewrongpeopleincharge.
Your processes might be wrong. It’s got to
be something. This is the time to evaluate
unemotionallyeveryaspectofyouroperation.
It’s time to upgrade to first-class
Five years ago I ran an ad in Dealer maga-
zine featuring the headline...
“If you’ve been doing business with any
other automotive training company, isn’t it
time you upgraded to first-class?”
That headline grabbed a lot of attention
at the time. My competition certainly wasn’t
thrilled.
Recently,Ihavebecomeincreasinglysensi-
tivetothenegativeperceptionofpeopleinthe
car business. The overwhelming majority of
dealers and dealership employees are decent,
hardworkingpeoplewhoarehistoricallyand
emotionally involved in their communities.
Even so, old stereotypes, no matter how
untruecontinuetobeperpetuatedandregur-
gitated. Companies like CarFax run ads on
televisionportrayingcarsalespeople(dealers)
asdishonestwithalittlecartoonFoxpopping
upbehindthesalespersonrattingusouttothe
consumerinsinuatingwe’rehidingsomething
about the cars we sell. They certainly make
it a point to insinuate that only reputable
dealers have CarFax.
Edmunds.compublishesanallegedexpose
fromasupposed‘undercover’carsalesperson.
Wearecontinuallyportrayed,onpurpose,
ADVOCATE
Business Sucks...Could It
Be You?
Jim Ziegler
12 Dealer July 2010 Dealer-magazine.com
18. The True Measure of a Leader
P
ulitzerPrize-winningauthorAlexander
Solzhenitsynspenteightyearsofhislife
inprisonformakingafewdisparaging
remarks about Joseph Stalin. He went into
prison an atheist and come out eight years
later a Christian. The first words out of his
mouth were: “I bless you prison – I bless you
for being in my life – for there lying on rotting
prison straw, I learned the object of life is not
prospering as I had grown up believing, but the
maturing of the soul.”
Thesoulismadeupofone’smind,willand
emotions:yourthoughts,desiresandfeelings.
Aparadoxofsuccessstatesthatifyougetthese
factors “right” first, then success will ensue.
However, when you chase the material and
position “stuff” of life with a bereft or unde-
veloped soul you may indeed get more than
yourshare,onlytofeelemptythroughoutthe
process and marginal in the end. While you
can certainly have prosperity and a mature
soul, your overall fulfillment and happiness
asamanorwomanisgoingtolargelydepend
on which you pursue as a priority.
Motivational speaker Jim Rohn was dead-
on when he declared that, “To get more than
you’ve got you must first become more than
you are” Throngs of people in our industry
strivehardtogetmore,buttheyneverbecome
more.They use the same old skills, habits or
attitudes,merelystiffeningwithagebutnever
truly growing. They’re not lazy. They work
hard…on their jobs. But they don’t work
hard on themselves.They grow old but they
don’t grow up. They become so focused on
their destination that the journey becomes a
haplessdeathmarch,anecessarymeanstoan
end.Theyhavenojoyorpowerinthepresent
because they are too fixated on their destina-
tion. They willingly sacrifice health, family
and relationships in exchange for their goals,
accepting their diminishment as a necessary
tradeoff for that better job, bigger paycheck,
larger house and loftier title.
At the end of their days, these misguided
“achievers”reflectandreachahorrifyingcon-
clusion: while they have made money, they
have made no real difference in the lives of
co-workers,intheircommunitiesorfamilies.
They are haunted by the fact that when they
dieitwillbeasthoughtheyneverlived. They
becamesuccessfulintheworld’seyesbutthey
neverreachedaleveloftruesignificance.They
crossedmanyfinishlinespersonally,butfailed
tobringotherswiththem.Infact,thebacksof
others running the race bear their footprints.
Manyleadersenduprichandalone;richand
sick; rich and spiritually bankrupt.
I agree with Solzhenitsyn, that the objec-
tive of life is not about prosperity, but the
maturation of the soul. And that the former
without the latter assures an emptiness that
shakes many shallow leaders to the core with
the question, Is this really all that there is? On
the other hand, when maturing your soul
becomes a priority, you can have it all. You
move from success to significance as you
improve yourself, export value to others,
and edify humanity at large.You accomplish
this by taking the focus off your own selfish
ambitionsandaspirationsandputtingothers
first: God, family, friends, co-workers and
customers. It works like the teeter-totters on
the playground. By pushing down your own
ego you elevate and expand your platform to
do well, to have an impact, to leave a legacy.
Maturation of the soul begins with devel-
opingastrongercharacter,purermotivesand
broader outlook on life. In other words, you
stoptryingtofixeveryoneelseforawhileand
work harder to get yourself right.
Here are a few areas to examine.
1.What is your plan for personal growth?
How many serious books do you read each
year that help you become a better leader? If
you’re not committed to growing yourself,
can anyone really expect that you have what
it takes to develop others?
2. What is the state and strength of your
family relationships? Do those who know
you best love and respect you the most? If
you can’t run your family with excellence,
how eager should someone be to allow you
to run their business?
3. How moral are your ethics? Do
you keep commitments without excuse
and regardless of the cost? Do you tell the
truth—always—orareyoupronetowhitelies
and false impressions? On a day-in, day-out
basis do you do what is right or what is easy,
cheap, popular and convenient?
4.Howstrongareyourrelationshipswith
others? Are you a gossip, a purveyor of dis-
cord? Are you loyal to those not present? Do
youusepeopleforyourownbenefitordoyou
add value to them? Are you selfish or selfless,
a taker or a giver, a mentor or a moocher?
5.Whom have you impacted? Howmany
people under your leadership have been pro-
moted to better positions? Who can point
to you and say, “That person made a real
difference in my life”? Do you leave people
betterthanyoufoundthem,ordoyoumerely
maintain them?
6. Do you have the “disease of me”? Are
you too protective of your turf? Do you put
your own personal comfort zone and agenda
ahead of what’s best for the team? Would
the other leaders in your organization say
that you’ve got their back or stab their back?
7. How do you impact the world outside
your business and family? What do you vol-
unteer for? How much money do you give
to worthy causes? How much time do you
give and value do you provide to people who
could never possibly repay you?
The questions that made you the most
uncomfortable have the most to teach you.
Leadership
Dave Anderson
continued to P-62
Maturation of the soul
begins with developing
a stronger character,
purer motives and
broader outlook on life.
16 Dealer July 2010 Dealer-magazine.com
19. continued to P-62
What is Your Dealership Real Estate Worth?
What is your dealership real estate worth
today?That is a very good question, and not
one that is easily answered. Most dealers and
theirlendersorderanMIAappraisaltodeter-
mine real estate value.
Unfortunately,duringtherecentrealestate
bubbleandsubsequentcrash,appraisalshave
often proven unreliable in determining what
your real estate is worth.
By way of example, I know a dealer whose
real estate appraised for $6 million in 2002.
The same property appraised for nearly $12
million at the peak of the real estate bubble
in 2006, doubling in just 4 years. Since
then, according to three different apprais-
als, the property’s value has plummeted. It
was valued at $8 million last year, $6 million
in April and $5 million in May, below its
2002 value.
How can the same property have so many
different values in such a short period? We
all know that the frothy credit markets are
primarily to blame for the boom and bust in
commercial real estate. However, part of the
blamecanalsobeplacedonthewayinwhich
real estate is appraised.
Appraisers typically deploy three
methods when valuing real estate.
They are as follows:
• The cost approach: The cost approach
is based on the idea that a buyer would not
pay more for a property than the cost to con-
structasubstituteproperty.Inthisapproach,
appraisers collect data from comparable land
sales to determine the cost of land and then
calculate the current cost of constructing the
improvements. As part of the process, the
appraiser also applies discounts to the build-
ing costs to take into account depreciation
and market dynamics.
• The sales comparison approach: The
sales comparison approach is similar to the
costapproach,inthatitreliesoncomparable
sales to determine value. In this method, a
property is valued by comparing the subject
property to similar properties that have sold
in the surrounding areas.The appraiser then
applies the comparable pricing metrics to
determine value.
• The income capitalization approach:
The income capitalization approach is
based on a multiplier between the prop-
erty’s net operating income and its value.
Not unlike blue sky multiples, capitaliza-
tion rates are derived from expected risk
adjusted returns on real estate investments.
These return expectations are then applied
to a property’s net operating income to
determine the property’s value.
In today’s market, all of these approaches
have flaws, particularly when valuing
owner-user real estate. The first chal-
lenge is that since the Great Recession,
we have had few comparable transactions
upon which to calculate substitute pric-
ing. Instead, the available comparables are
often recent distressed sales of abandoned
dealerships. In search of non-distressed
sales, appraisers must often look far out-
side a subject property’s region, even to
another state. Given this situation, the
cost and sales comparison approaches
vary widely depending on the appraiser.
Neither method is dependable as a barom-
eter for value today.
Alternatively, appraisers could depend
more heavily on the income capitaliza-
tion approach. However, this approach
is rarely considered. Appraisers reason
that because most dealership real estate is
owner-occupied, the rental income may
not be market and is therefore not a good
determiner of value. While accurate, this
assumption is unfortunate because the
income method is the only one that takes
into account what a dealership may be
able to support in rent.
In the end, the biggest challenge with
all of these valuation methods is that none
actually looks at the dealership’s financial
performance. The appraiser never con-
siders whether the dealership can/will
support the value being placed on the
property.This is particularly problematic
in a market where over 13% of all dealer-
ships have closed in the last two years.
To accurately value dealership real estate
that is owner-occupied, an appraiser must
understand how much the underlying
business can support in rent payments.
This means (i) reviewing the dealership’s
current and projected financials, (ii)
Ownership
Erin Kerrigan
Based on 2009 NADA figures, the average dealership paid about
$30,000 per month in rent, before insurance and taxes. At that
level, assuming a 7.3% fixed mortgage interest rate (400 bases
points over the 10-Year U.S. Treasury on 6/2/10) and a 20-year
amortization, the average dealership could support a $4 million
mortgage. Assuming banks and captives are lending 80% loan-
to-value, the average dealership’s real estate is worth $5 million.
Example of alternative real estate valuation methodolgy
Property appraisal
has become much
more of an art than
a science. Let’s return
to the science.
Dealer-magazine.com July 2010 Dealer 17
20. Cut Through the Multiples – Focus on
Real Value
F
ormerSpeakeroftheHouseTipO’Neil
once remarked, “All politics is local.”
I believe the same is true of dealership
valuations. Contrary to a common industry
belief that multiples of earnings drive deal-
ership transaction prices, dealership value is
primarily determined on a very local level
by reviewing local variables specific to the
selling dealership.
Rarely a week passes where I don’t field a
question regarding franchise multiples from
aprospectivedealershipbuyerorseller.While
multiples provide a general industry frame
of reference, they fall short in determining
the final dealership transaction price. A few
years ago I took on the task of recording and
comparing multiples based upon individual
historic dealership earnings. I sourced the
informationfromthemanysaleandpurchase
agreements that passed through our office
over a five-year period. I then compared the
information to annual dealership financial
statements to determine average franchise
multiples.Ifurtherbrokeouttheinformation
by geographic region. While the sample size
grewtoafairlylargenumber,thefluctuations
in individual multiples were significant.
Some of the difficulty in determining an
overall franchise multiple was determining
what the true goodwill number really was
in relation to what was reported in the sales
and purchase agreement. I would also find
variations in real estate, fixed assets and parts
allocations in relation to overall dedicated
goodwill. What I found were wide swings in
theaveragesreportedbymanyoftheindustry
publications. In the end, it was apparent that
most of the final transaction prices for the
dealsIreviewedwereactuallydeterminedbya
combinationofsellermotivation,futurefacil-
ity expenditures, perceived retail upside and
the overall potential return on investment.
Finding opportunity
On the local level, everything starts with
the buyer’s perception on how many new
vehicles can be sold in the market compared
tohistoricperformance.Asweareconsidering
newvehiclefranchises,itonlymakessenseto
startwithnewvehicleplanningvolume.Once
established, all of the remaining department
gross and expense projections should fall in
line with a thoughtful forecast. The key is
finding a legitimate new vehicle planning
volumetoprovideafoundationforthereturn
calculations. In my opinion, the best way to
determineanaccurateplanningvolumeisfor
the potential buyer to independently review
the market with a focus on growth demo-
graphicsandcompetitivemarketregistrations.
A thorough review of historic registra-
tions should give the buyer a starting point
inassessingplanningvolumepotential.From
there, realistic growth projections based on
realistic inventory allocations are necessary
to develop a projected five-year return on
investment.Inquiriesintomanufacturersales
efficiency may give the buyer some informa-
tion on new vehicle sales volume potential
but caution is advised when reviewing sales
efficiency or manufacturer provided plan-
ning volumes. Sales efficiency is only as
accurate as the manufacturer’s market defi-
nition. Sales efficiency calculations may also
includeformulabiasesbasedonregionalaver-
ages or geographic differences. For example,
some markets have purchase biases when it
comes to domestic or import ownership.
Including either the Detroit or Los Angeles
metro market averages into a regional sales
efficiency calculation with upstate markets
could have a significant impact on whether
a dealer achieves sales efficiency for a specific
franchise. When attempting to determine a
realistic planning volume and ultimately an
accurate return on investment, it’s best to do
your own homework.
Once the planning volume and overall
department gross profit projections are com-
plete, its time to prepare a realistic annual
expense structure. While compensation
expenses should account for the majority of
dealership expense, facility expenses are typi-
cally the wildcard when determining return
on investment. Today, most manufacturers
maintain high expectations when it comes
to their signature image programs. Many
dealerships on the market today are there as
a direct result of the seller’s decision to forego
a costly manufacturer mandated remodel.
Additionally, those that have completed
the required upgrades may have occupancy
expenses that have not been supported with
additional profit generation.
If the buyer does not address the manu-
facturer’s image plans at the beginning of
the buy-sell process, the new requirements
will surely come up later during the approval
process.Iftheexistingdealershipisnon-com-
pliant with respect to image or facility square
footage, most manufacturers will provision
the buyer’s new dealer agreement with strict
timeframes regarding the required upgrade.
Additional issues that I have found which
play a key role in determining the final
dealership transaction price include seller
Ownership
Greg Gilmore
Most of the final transaction prices for the
deals I reviewed were actually determined by a
combination of seller motivation, future facility
expenditures, perceived retail upside and the
overall potential return on investment.
18 Dealer July 2010 Dealer-magazine.com
21. motivation, the buyer’s overall acquisition
strategy,thebuyer’saccesstocreditandfinally
the manufacturer’s overall business plan.
While seller motivation often contributes to
the largest fluctuation in multiples on a local
level,thebuyer’soverallpurchasestrategyalso
has a significant impact on final price.
For example, in our study of goodwill
multiples and final transaction prices, I have
foundthatlocaldealersoften paya premium
over out of town buyers. The strategy fol-
lows that purchasing your competition adds
inherentvalueupandbeyondthetraditional
transaction.Otherbuyerstrategiesincludethe
large and public auto group’s franchise shop-
ping lists. Of course, once the large groups
beginnegotiatingonaspecificsegment,trans-
action prices increase.
Beyond mega dealer acquisition strategies,
tight credit markets have severely limited the
dealership buying pool. There was a time
when first time buyers commanded a healthy
percentage of new dealership acquisitions.
Today, those numbers are negligible. If the
buyer does not have firmly established floor-
plan relationships, the deal will most likely
fall apart. Finally, overall manufacturer busi-
ness plans do play a role in determining the
final transaction price of a dealership. While
factory image and facility initiatives have
been addressed earlier, some manufacturers
are planning additional representation in
markets that they feel can support additional
sales penetration.
Ifabuyerislookingtopurchaseafranchise
that falls into this category, it’s important to
review the manufacturer’s last market study
of record. If there are monitored or open
points located in or near the prospective
dealer’s primary market area, the return on
investment may be severely impacted. In the
end,therearemanyfactorsbeyondmultiples
that determine the final transaction price of
a dealership. An educated buyer will review
as many of these variables as possible before
making a final offer.
Greg Gilmore is president of The Apex Group,
Inc., a non-brokerage firm that develops buy-
sell and open point packages for its clients. He
founded the company in 1997 following his
tenure as market representation manager for
Toyota Motor Sales, USA.
If you wish to discuss this article with
other dealers, or with the author, please
go to the “Discussion Forums” at www.
Dealer-communications.com and enter
the“Ownership”forumore-mailhimat
ggilmore@Dealer-communications.com.
3 Time Winner
Dealers’Choice Awards
Dealer-magazine.com July 2010 Dealer 19
22. motivation, the buyer’s overall acquisition
strategy,thebuyer’saccesstocreditandfinally
the manufacturer’s overall business plan.
While seller motivation often contributes to
the largest fluctuation in multiples on a local
level,thebuyer’soverallpurchasestrategyalso
has a significant impact on final price.
For example, in our study of goodwill
multiples and final transaction prices, I have
found that local dealers often pay a premium
over out of town buyers. The strategy fol-
lows that purchasing your competition adds
inherentvalueupandbeyondthetraditional
transaction.Otherbuyerstrategiesincludethe
large and public auto group’s franchise shop-
ping lists. Of course, once the large groups
beginnegotiatingonaspecificsegment,trans-
action prices increase.
Beyond mega dealer acquisition strategies,
tight credit markets have severely limited the
dealership buying pool. There was a time
when first time buyers commanded a healthy
percentage of new dealership acquisitions.
Today, those numbers are negligible. If the
buyer does not have firmly established floor-
plan relationships, the deal will most likely
fall apart. Finally, overall manufacturer busi-
ness plans do play a role in determining the
final transaction price of a dealership. While
factory image and facility initiatives have
been addressed earlier, some manufacturers
are planning additional representation in
markets that they feel can support additional
sales penetration.
Ifabuyerislookingtopurchaseafranchise
that falls into this category, it’s important to
review the manufacturer’s last market study
of record. If there are monitored or open
points located in or near the prospective
dealer’s primary market area, the return on
investment may be severely impacted. In the
end,therearemanyfactorsbeyondmultiples
that determine the final transaction price of
a dealership. An educated buyer will review
as many of these variables as possible before
making a final offer.
Greg Gilmore is president of The Apex Group,
Inc., a non-brokerage firm that develops buy-
sell and open point packages for its clients. He
founded the company in 1997 following his
tenure as market representation manager for
Toyota Motor Sales, USA.
If you wish to discuss this article with
other dealers, or with the author, please
go to the “Discussion Forums” at www.
Dealer-communications.com and enter
the“Ownership”forumore-mailhimat
ggilmore@Dealer-communications.com.
3 Time Winner
Dealers’Choice Awards
Dealer-magazine.com July 2010 Dealer 19
23. Life in the Fast Lane!
Get your store to its full potential
L
isteningtomyiPodwhilemowingthe
yardthispastweekend,theEaglessong
“Life in the Fast Lane” began playing.
Hearing it, triggered an experience I had a
few years ago and gave way to my thinking
about the power of growth potential and the
idea for this article.
A few years ago I was riding with a friend
in his new Porsche 911 Turbo S on the
Autobahn in Germany. He couldn’t wait to
show me the potential of his new car. As we
migrated over into the fast lane he began to
accelerate quickly until he found a comfort-
able cruising speed of 135 miles an hour.
“Can youbelieve thepowerinthis thing?”
he asked. Then, glancing in his rear view
mirror he said, “Oh, my gosh!” I turned
around expecting to see police lights but
instead saw a car bearing down on us in our
lane a half mile back flashing its lights for us
to get out of his way.We pulled over into the
next lane to give way to this vehicle and as it
flashed past us in a blur I noticed it was the
samemodelPorscheweweredrivingbutmost
likelydoingsomewhereintheneighborhood
of 175 miles an hour. Just when we thought
wewereutilizingthepotentialofthisPorsche
we were immediately humbled by someone
else who was actually fully using the car’s
potential much greater than we were.
In my travels around the country, I see the
same thing occurring in dealerships all the
time.Somestoresthinktheyareutilizingtheir
fullest potential while there are stores who
are blowing right past them by utilizing the
new sales development methods. Many are
not challenging themselves to become better
thantheycurrentlyare.Ihaveseenstoreswho
essentially have a similar sales team, manage-
ment team, product line and desirable loca-
tion,yetaredifferentinsomanyways.Inspite
ofthesesimilaritiesbeinginplace,somestores
sellmoreunits,doubleand/ortriplethegross
profits, as the other stores. They also have
created a total team synergy platform from
which to build upon and have a low attrition
rate.Why is it that some stores drive along at
135 and almost identical profiled stores are
doing175?Wheredoesthedifferencereside?
Ask 20 people this question, “What are
the first thoughts that come to your mind
when I say car salesman”? Their responses
are a reflection of negative paradigms built
up over the years from experiences they, a
relative or friend had in dealing with a car
salesman. The dealerships that are driving
to new levels of achievement recognize this
perception and are affecting a change in the
waytheydobusinesswiththeircustomersby
creating a paradigm shift.
This shift can only be created when the
dealershipandalltheemployeesarecommit-
ted to raising the level of professionalism to
new heights. When this occurs you will see
dramaticproductivityincreases.Productivity
increasesoccurasaresultofleadingedgepara-
digmshiftingtrainingandresultinincreased
output(units,gross,CSI)beingachievedwith
thesamelevelofeffortcurrentlyrequired.No
moreworkrequiredjustabetterwayofdoing
the same work.
Examples of productivity increases
include:
• Professional sales training priorities are
put in place thus reducing the effort and
time required to accomplish various tasks
required to increase the store’s growth.
• Reaching higher levels of skill set devel-
opment leading to elevated work quality
and growth in professionalism and profit
increases.
• Significantly reaching higher levels of
employee satisfaction and motivation
which leads to willing increased effort and
increased team work and synergy.
When you stop learning new strategies
you stop growing. When you stop growing
you become a prisoner to high maintenance,
problems and irritations. You become stag-
nant and complacent. Once you adopt the
decision to do things differently, you must
consistentlybedisciplinedwithyouraccount-
ability in seeing it through. It is OK to make
adjustments along the way but in no way
should you compromise your new approach
to doing business.
Fact: Every dealer wants to grow the store.
Yetfewformthehabitofdoingthethingssuc-
cessfuldealersdoonaregularbasis.Recognize
that there are two types of pain. There’s the
short-term pain of disciplined accountabil-
ity and the long term pain of regretting to
become accountable.
Gooddecisionplanninghelpsusbeginthe
increasedpotentialjourney.Beingaccountable
and consistent to new sales techniques and
processes encourage and allows us to finish
ahead.Thepainofdisciplinedaccountability
is momentary but the payoff is monetary.
Where does it all begin? At the top.
Top down strategy simply means that
everyone in management has to be com-
mitted to discovering new business strate-
gies, planning, implementation, manag-
ing and the leadership of a new sales and
management approach. Let everyone know
how valuable and essential to the store’s
success they are because quite frankly it is
Employee Management
Chuck Barker
When you stop
learning new strategies
you stop growing.
When you stop
growing you become
a prisoner to high
maintenance, problems
and irritations. You
become stagnant
and complacent. You
must consistently be
disciplined with your
accountability in seeing
it through.
20 Dealer July 2010 Dealer-magazine.com
24. AUTOMOTIVE ADVERTISING
SPECIALISTS SINCE 1983
1-800-222-2682
info@cbcads.com
www.cbcads.com
All these dealers have two things
in common. They’re #1 in their
market, and they work with CBC.
Want to see your logo
here? Call us today!
SINCE 1987
AUTOMOTIVE
CHEVROLET
Your
Logo
Here
ARE YOU
READY
TO bE #1?
all about your people.
We all need to acknowledge that the land-
scapeoftheautomobileindustryhasandcon-
tinues to change and if you want to be a part
ofthesuccessstoriesregardingconsistentstore
growth then you will just have to do things
withenhancedprofessionalismandnewtrain-
ing methodologies. What got you here will
notkeepyouhere.CorporateAmerica,witha
fewexceptions,hasbeendoingitthiswayfor
quite some time with remarkable results. Yet
the automobile industry, for some unknown
reason, feels this professional approach is not
for us. If you’re current thinking is taking
you towards a “business as usual” shortcut
approach then be prepared for a diminish-
ment of everything you have built thus far.
We need entrepreneurship to be at its best in
this industry right now.
One tremendously important factor in
‘growing to your potential’ is your invest-
ment in your employees. If people really are
your greatest assets, isn’t it time to look at
giving your people an opportunity to reach
their full potential? Look at them as invest-
ments in your organization’s human capi-
tal and not just as an expense. Anyone can
be competitive with their capital (such as
advertising) but investing in the skill sets of
your people develops a stronger store and
is priceless. A very small percentage of your
advertisingbudgetredirectedtogrowingand
training your employees will deliver to you
much greater long term benefits than the
newspaper in the trash. Don’t wait until you
have a flat tire to do something.
Now more than ever are we required
to be people of excellence.
In an industry where mediocrity has been
thenormforsomanydealerships,consumers
fed up with this approach are now expecting
to develop relationships with professionally
acting sales consultants. No half-hearted
efforts any more. Full throttle forward in the
directionofawelloiledprofessionalmachine.
Excellence is doing the right things when no
one is watching. Earn respect, sharpen skills,
whatever you do – get better at it. Develop
a spirit of total team excellence in your deal-
ership and watch your potential begin to
increase speed.
Shed a few paradigms. It has become such
a cliché for management to claim that ‘our
employees are our greatest asset’. Yet, much
to the dismay of most employees, the effort
management puts forth into developing
this valuable ‘human capital’ continues to
be seen as an expense and not as an invest-
ment. It’s time for you to turn this around.
Start looking at your training programs as if
they were capital investments. Develop your
very own ‘in-house’ training solution and
deliver it consistently twice a month using
new enhanced material. Don’t just settle
for the ‘same old stuff’, make it purposeful
and clear. At a time when there are so many
exciting new developments in enhanced skill
andpsychologytrainingandwiththemarket
increasing,you’regoingtoneedpeopleattheir
full potential. Invest in your people and they
willinvestinthemselves,inmanagementand
thedealership.Youalsohavetothenempower
themtomakedecisionsinordertogetthings
done. I like to say if it doesn’t burn the store
down, break the law, hurt anyone and we
would be proud of it on the front page of
our newspaper, then just make the decision.
Empowerment, what a great word.
Chooseyourroadwiselyandnavigatewell.
We can no more afford to spend major time
onminorthingsthanwecantospendminor
time on major things. Keep your eyes on the
road especially when you are accelerating in
thefastlanestrivingtoreachthefullpotential
you are capable of. Need a map for reaching
your dealership’s full potential? Send me an
e-mail and request ‘The Map’. Keep both
hands on the wheel!
“Half of knowledge is knowing where to find
it.” ~ Ben Franklin
Chuck Barker is CEO of his two companies,
Impact Marketing Consulting Group, LLC
and Impact Summit, LLC, both located in
Virginia. His experience ranges from an execu-
tive with a Fortune 200 corporation to the
automobile business where he has performed
all management positions. His firms specialize
in growing people and dealerships. He delivers
leading edge sales training programs, customer
relationship strategies, management leadership
workshopprogramsanddealer/principalconsult-
ing assistance for the automobile industry. He
has recently published the first comprehensive
‘in-house’ sales training solution program for
dealers entitled Dealership Success Guide.
If you wish to discuss this article with
other dealers, or with the author, please
go to the “Discussion Forums” at www.
Dealer-communications.com and enter
the“Ownership”forumore-mailhimat
cbarker@Dealer-communications.com.
Dealer-magazine.com July 2010 Dealer 21
25. COVER STORY
ClassicChevrolethasagood-naturedbattle
with Paddock Chevrolet in Buffalo for the
titleofthetopsellingChevystore.Andyou
won in 2009. How many years in a row has
Classic been number one?
Fouryearsinarow.Itlookslikeitcouldbe
five in a row if we stay strong. We are more
than 300 hundred units ahead of Paddock
right now. That’s been a fun rivalry.
The loser was supposed to take the win-
ner’s management team to lunch. Have
you collected yet?
DuanePaddocktookusouttodinnerafter
our fourth victory, which was this year. He’s
a good guy.
How long has Classic been around?
Since 1990.
Was it your dad who started it?
My father, Tom Durant, started it. It was
actuallyabusinessthathepurchasedindown-
townFortWorthsometimein1988or1989.
He moved it here about 20 miles away to
Grapevine in 1990. There was nothing here
at the time. The area looks much different
now because of the growth.
Classic recently acquired some of the old
Bill Heard stores.
Yes, one in Florida and one in Sugarland,
Texas.
How are those stores doing?
The Florida one is doing relatively okay. It
is not thriving right now, but the economy
in Florida has some catching up to do. Our
Sugarland store right out of the gate is just
doing awesome. We get to share the same
front page on the top 250 list.
Are you looking to acquire more?
Ithinkwearetakingalittlebitofabreather
on that one, but we always keep our eyes and
ears open. If a good opportunity came up we
will look at it.
Do you get to Florida at all? Or are you
tied to Texas?
I went to Florida for NADA. I got to drop
by Stingray Chevrolet, but that is the only
time I have ever been there.
Every store that we buy, we put in a key
person who has gone through our flagship
store in a management form, we like to call
it the Classic Academy. They have proven
themselves over here and have absorbed our
cultureandthenwesendthemoffaspartners
to go run another store.
It typically works pretty well. We don’t do
it with a corporate mentality, though. We
actuallydoitasapartnership,meaningweare
notgoingtooutlineprocedures.Wedon’tdo
contractswithvendorsthroughoutthewhole
group either. It is just about as independent
as it gets.
You grew up in the business?
Ihave.Ofcourse,IhadmytimewhileIwas
at college thinking nothing of the business.
But I have most certainly grown up with it.
Since the age of 10 I started doing the basics.
I washed cars, swept the service department.
Everything you can think of, I’ve done it.
But I didn’t work in the back end. I grew
up a little more front end oriented, which a
lot of dealerships are strong in, but I want to
balance it out now.
What are some of the things you are doing
now to do that?
I spend time visiting with and learning
from my service manager. Having a daily
visits with him and then wrapping my mind
HAGEN
DURANT
Classic Chevrolet
22 Dealer July 2010 Dealer-magazine.com
26. In existence for only 20 years, Classic Chevrolet in Grapvine, TX, has been the number one selling Chevy
store four consecutive years and is about to make it five. Much of that is due to the culture Owner Tom
Durant created that his son Hagen, Classic’s general manager is carrying forward. Hagen sits down with
Dealer magazine and shares his thoughts on GM’s new management, being a “dealer kid,” and how
technology is helping Classic continue as an automotive retail leader.
around the back end – including the body
shop – is giving me a good perspective.
Texas seems like it has a vibrant body shop
business.
Yes, but it depends on the area you are in
and the relationships you can develop with
the insurance companies.
Where did you go to college?
I went to Texas Tech. I went in 1998 and
came back here in 2002.
A Red Raider?
Yes sir.
Good football team.
Interesting football team.
What did you study?
I studied business. I didn’t have any real
generaldirection,Ijustwantedaneducation.
You came back from school and started
working at the dealership again, and now
you’re the general manager. What is the
timeline of that?
I sold cars starting in 2002, mainly
Hummers. I looked at vehicles that I was
enthusiastic about. I felt it wouldn’t be hard
to sell that vehicle. I never wanted to have
to talk a vehicle up. I was 22 and wanted
something outrageous to sell so I chose that
department. Selling those was the most fun
I had in the car business.
Now you’re the general manager running
the dealership. As a GM, what are some
of the challenges that you have running
such a big store?
Ithinkoneofthechallenges—considering
theemployeecountismorethan260–isjust
being able to stay on top of communications
and procedures. We have six trusted manag-
ers running our stores and often procedures
can be created and I am not aware of them.
So staying on top of the operational flow
is very important. This is a business that has
been around for 20 years and it is huge. It is
hardtowrapyourmindaroundhowitworks.
That is an ongoing challenge.
How is it being the son of a dealer princi-
pal and having to gain the respect of the
staff and not just being seen as another
dealer kid?
I have thought that since I was young.
I have always tried to approach everyone
humbly. I try not to look down on anyone.
I look straight at eye level. We are all here to
work together. In many cases my elders are
people that I manage and they have a lot to
teach me.
That is both a good and a tough position
to be in.
Yes sir.
What are some things that help make
Classic such a success?
I think it’s the culture that’s been created.
People around here catch on to the fact that
they are compensated well and treated well.
Theyaren’tgettingbombardedwithpolicies.
It is a very relaxed place to do business and
it is evident to the people who come here to
do business.
You can’t just spring up a dealership. It has
to happen over time. What got us to where
we are today is all of the referral traffic that
we’ve built over the last 20 years.
Whataresomethingsasyoulookbackyou
would say “Wow, I’m glad we did that, it
was a homerun for us.”
Thatisagoodquestion.I’mgladwestarted
doinganInternetdepartmentin1998.There
wassurealottotakeinforthatasthetechnol-
ogystartedtoevolve.Atthetime,theInternet
was barely in existence.
Classic has a strong Internet business and
has some good people working there.
Good people who really do understand
communication online.That is a whole new
skill – being able to communicate online in
nonverbal communication where you can’t
always show your expressions or body lan-
guage. A lot of our folks have done it so long
that they have fine tuned that into an art.
I’m on your web site right now. Do you get
a lot of traffic with your chat application?
Actually it is our number one converter.
Client ConneXion does that for us.
Logically,howelseareyougoingtoengage
withsomeoneonyourwebsite,besideswhat
you put out there? Ask yourself, how many
dealers are putting stuff up on their web site
that is engaging? Chat is another way for us
to communicate and engage.
You went with a company called Dealer
Trends to build your web site.
We did that as an auxiliary option. Our
OEM-providedwebsitehaditsobviouslimi-
tations,sowelookedforadifferentcompany
to do that. This month we are switching to
VinSolutions.
Dealer Trends is a good company – espe-
cially for web sites. But VinSolutions offers
such an encompassing platform that is going
to save us a lot of money.We’re going to gain
so much in efficiency and awarenenss.
For example, we never used a CRM. I
wantedtostayawayfromcomputerproducts
even though, I am a computer geek. I love
computersandIlovewhattheycandoforus.
ButIdon’twanttoturnintotheCheesecake
Factorywhereyouhave75opentables,butit
still takes five minutes to get seated because
the computer has to do it all.
ButIdidfindthattherearemanyelements
of the CRM tool that improve efficiency of
transactions. One is not having to fill out
three separate buyer orders and take them
to the sales manager for a signature. We can
typetheinformationinonceandhaveallthe
informationthathasbeencollectedpopulate
and be pushed to the different parts of the
Dealer-magazine.com July 2010 Dealer 23
27. dealership,soweneverhavetodoanydouble
or triple entry. It eliminates the redundant
tasks we’re doing now.
What is the value with the social network-
ing as you see it?
I think the value for social media is being
in front of people and having a message that
resonates with people. I originally started
playing with it in 2009. There wasn’t a lot
to do and not much business is rolling in
because of the downturn. People are talking
about social media being the next best thing,
so I thought I would give it a shot.
I’ll be honest with you, the first time I saw
it I was wondering what the heck I was sup-
posed to do with 140 characters onTwitter. I
ended up watching people engage — acting
like a mole watching people and how they
interact. It has gone really good. I know a lot
of people have argued how do you measure
your ROI? I don’t think that’s where it is. I
think it has other ways to really help your
web presence; help the SEO of your web
site if you do it right, and again it is relaying
your brand and getting in front of people. It
is also being human.
Have you brought in any consultants or
trainers to help with that or are you doing
it on your own?
I did it on my own for the first eight
months. I had my Blackberry and iPhone
out throughout the day and I don’t wish to
go back to that. But I do like to speak on
there on a daily basis. And I had a consult-
ing company put together a blog for me. It
provides valuable information and tips for
the ownership experience of a new vehicle.
You mentioned the downturn in 2008-
2009, what are some of the things you
did as a general manager that helped keep
Classic a premier store?
The first thing that happened was being
made general manager. In November 2008,
I graduated from the NADA’s Academy and
after that I just started to dive into things I
hadn’tbeenintobefore.Iwaslookingatgen-
eral ledger accounts and looking at expenses
and creating templates for monthly proce-
dures to help with workflow.
Dadcaughtwindofthatandputmeinthe
chair even though I didn’t think I was ready
for it. You never think you are ready to take
onabusinessof260-plusemployeesattheage
of 29,butyoucouldeatanelephantonebite
at a time, so I figured I would just roll with
it. It has been a blessed learning experience.
As a store you made cuts.
We didn’t have to make too many, but we
did make some.
Your sales really didn’t drop a whole lot,
right?
Theydidn’tdroptoobad,wewereat4,101
in 2009. In a typical year we usually push
5,000, so we were about 900 to 1,000 cars
short by the end of the year.
Was there any point where you were
nervous?
There were points every day where I felt
nervous. But you always have to go back to
being clear and level-headed about it. You
always have to think about how people will
react. The whole mass can react if there is a
hugetragedy,wheninfactthereislightatthe
end of the tunnel.
Recently, General Motors sent an internal
memo about Chevrolet. What was your
guys take on that?
Which memo?
ItwasleakedtothenewslastweekthatGM
executives wanted employees to ditch the
Chevy nickname and start using Chevrolet
only.
I think it is ridiculous really to be honest
with you. I don’t mind it, and I’ll roll with it.
I think I am referred to as Chevy.
I think they’re backing away from it now. I
see on your web site you use Chevy.
Thenamesaresynonymous;thenamewill
have negative effect on web traffic because
people are going to type in Chevy not
Chevrolet. They want to call it Chevy.
What are some other things you are going
to be doing over the next year?
I have been very meticulous about my
ecommerce with a huge primary focus on
the front end when I am not thinking about
fixed operations. I’ve got a lot of plans for
that, but unfortunately these plans take time
to deploy. It is kind of like watching a bean
sprout grow.
It’s tough being patient.
Yes.
You want to do it all at once, but you just
have to tackle one thing at a time.
Youwanttotakethebigpictureperspective
ofwhatIwanttodo.Ithinkweshouldbeable
to offer all of our services in an e-commerce
fashion. I’m not talking advertising, I’m talk-
inge-commerce.Ithinkjusthowyoucando
itatPayWay;youshouldbeabletopickwhat
you want to have and put your credit card
informationinthereandgotothedealership
andsayyournameandbeabletopickitup.I
thinkyoushouldbeabletodothesamething
with a maintenance plan and have a promise
to get the vehicle back at a certain time.
Why do you have to do a parts request
by e-mail to the parts representative at the
counter, who is going to e-mail you back?
Why can’t we do that real time online?
On your service side, are you looking at
bringing in a company that is going to
let your customers set a real time service
appointment?
This would be a software. I would love to
do that and I would love for no overlapping
between the computing and the viewing.
That dynamic has to be perfect. No more
Cheesecake Factory.
I have a feeling that if I talk to you in a
couple of years, you are going to be so far
ahead in your fixed operations services
then where you are now.
Well, you know there is so much fun
in fixed operations, if you good at turning
switches and being patient after you have
done that, then remembering to check your
results down the road, it can be a lot of fun.
I see there is a lot of efficiency that you can
drive in that department if you know what
you have; using technology can save you
so much money. Money that goes right to
your bottom line.
Think about this, you’ve got your sink
drain closed and the sink is making one drop
persecondandyougoonvacationandcome
back and your sink is overflowing.Those are
little drops. They don’t seem like much, but
in e-commerce we are missing little drops.
Andifwedevelopnetbucketstocollectthose
dropsthenwecangathermoreopportunities.
You have been diving into the fixed opera-
tions side. What are some things you’re
continued to P-57
24 Dealer July 2010 Dealer-magazine.com
28. JOE
ELLSASSER
General Manager
Golling Chrysler
Jeep Dodge
page 16
July 2010
Internet Sales:
How to Set Yourself Apart
in a Competitive Market
page 10
Digital Process:
Eight Steps for Real
Reputation Management
page 14
Web Sites:
Turn Your Site into the
Ultimate Closing Tool
page 20
Technology Trends:
Four Steps to a Super
DOC – and More Profit
page 24
29. DD 2 July 2010 DigitalDealer-magazine.com
ABLE OF CONTENTST
JULY 2010
PRESIDENT AND CEO
MICHAEL ROSCOE
VICE PRESIDENT AND
EDITORIAL DIRECTOR
CLIFF BANKS
cbanks@Dealer-communications.com
248-351-2620
PUBLISHER
GREG NOONAN
607-264-3359
gnoonan@Dealer-magazine.com
CONTENT COORDINATOR
MARIA BURKEL
mburkel@Dealer-communications.com
ART DIRECTOR
JOE BIRCH
PRODUCTION MANAGER
ELIZABETH BIRCH
PRINT PRODUCTION
NICK THOMAS
COVER DESIGN
JOE BIRCH
COVER PHOTOS
WUJCIAK HESS
CIRCULATION SUBSCRIPTION
RICH JARRETT
314-432-7511
rjarrett@Dealer-magazine.com
www.Dealer-magazine.com
NATIONAL ADVERTISING SALES
adsales@Dealer-magazine.com
607-264-3359
Dealer magazine makes every attempt to ensure the
accuracy of all published works. However it cannot be
held responsible for opinions expressed or facts supplied
herein. Nothing may be reproduced in whole or in part
without written permission from the publisher. All rights
reserved. The publisher encourages you to submit sug-
gestions. Submitted materials become the property of
Horizon Communications, Inc. and will not be returned.
Send material for publication to 330 Franklin Rd., Suite
135A, PMB 386, Brentwood, TN 37027. The editor re-
serves the right to edit material; submission of material
constitutes permission to edit and publish that mate-
rial. This publication is designed to provide accurate
and authoritative information in regard to the subject
matter covered. It is presented with the understanding
that the publisher is not engaged in rendering legal,
accounting or other professional service. If legal advice
or other expert assistance is required, the services of a
competent professional person should be sought. From
a Declaration of Principles jointly adopted by a Commit-
tee of the American Bar Association and a Committee
of Publishers.
A PUBLICATION OF
C O M M U N I C A T I O N S
FEATURES
Digital Dealer Cover Story
16 Joe Ellsasser
General Manager
Golling Chrysler Jeep Dodge
COLUMNS
AAISP Notes
6 Get Rid of the Internet Department? It’s Your Call
Cliff Banks
Internet Sales
8 Take Out the Trash and Keep the CRM from Being a
Garbage Dump
Joe Webb
10 How to Set Yourself Apart in a Competitive Market
Angela Martin
12 Moving from Stiff-arm to Hug
Tom Mohr
Digital Process
14 Eight Steps for Real Reputation Management
Steve Stauning
Web Sites
20 Turn Your Site into the Ultimate Closing Tool
Joe High
Technology Trends
24 Four Steps to a Super DOC – and More Profit
Sandi Jerome
DEPARTMENTS
4 News
30.
31. DD 4 July 2010 DigitalDealer-magazine.com
IGITAL DEALER TECH NEWSD
Dealix releases major
update to award-winning
hassle free lead return
program
Dealix,adivisionofCobalt,hasannounced
additional features for its award-winning
Hassle Free Lead Return program. Features
included in the upgrade, Hassle Free Lead
Return 2.0, include enhancements that
respond to dealer requests for longer periods
in which to submit leads and easier ways to
return leads.
Dealix launched the Quality Pledge in
September 2009. The Quality Pledge speci-
fiesthatdealersshouldonlyreceiveleadsthat
can result in a car sale, and is backed by a
feature set – Hassle Free Lead Return – that
allowsdealerstoreturnleadsthatdonotmeet
acriterionoftheQualityPledge.Collectively,
the products allow dealers to make sure their
lead baskets are optimized during the course
of the month, and provide Dealix real-time
data with which to manage its lead supply.
The popular program was honored with a
Market Innovation award by TargusINFO
and has seen widespread adoption. Nearly
2,000 dealers are now returning leads each
month.
Keyenhancementsinversion2.0ofHassle
Free Lead Return, which were the result of
dealer feedback, include:
- Increased the time frame for returning
leadsfromsevento14days.Thisgivesdealers
more time to work and close the leads.
- Reduced the amount of documentation
required to prove a duplicate return. Dealers
nolongerneedtoprovideacopyoftheorigi-
nal lead when they submit a lead for return.
They just need to provide original lead date,
time and source.
- Added ability to enter comments with
lead returns, allowing dealers to provide
more information about their experience
with the lead which enables Dealix to process
the lead faster.
“With the Quality Pledge, we sought to
place the bar for a qualified lead very high.
We knew the program was unprecedented
andthatwewouldlearnhowtoenhanceitas
our customers used it and told us about their
experience,”saidEgonSmola,vicepresident,
New Used Car Leads Business. “It’s really
important to us that the program works for
our dealers – fits in with their workflow and,
in the end, saves them time and allows them
to make more money.”
The program is having a positive impact
on sales for Dealix customers. In a recent
survey of dealers using the Hassle Free Lead
Return program 86% reported that they are
able to realize a higher ROI with the Hassle
Free Lead Return program because they’re
able to replace returned leads with new ones
without increasing their spend.
“The Quality Pledge represents the best
offeringintheindustryandiswhyIwentwith
Dealix,” said Michael T. Halloran, e-com-
merce director, The Napleton Dealership
Group. “I have dropped all other lead pro-
vidersbecauseoftheDealixQualityPledge.”
www.cobalt.com/dealix
Reynolds adds real-time
vehicle inventory updates
for dealership web sites
The Reynolds and Reynolds Company
has announced the availability of real-time
inventory updates for customers using the
Reynolds ERA dealership management
system (DMS) and web sites from Reynolds
Web Solutions.
Now,withthisadvancement,whendealers
addavehicletoanERAvehiclemanagement
screen or make changes to existing inven-
tory records, the updates will be reflected
immediately – and automatically – on their
WebMakerX 2.0 web site. As a result of this
innovation,consumerswhoareshoppingfor
a car on the dealer’s web site will be able to
view the most accurate information about
the dealership’s current offerings, including
status, price, and option packages.
“Real-timeinventoryisonemorecompeti-
tiveadvantagewecanofferdealershipsasthey
work to stay top of mind with customers,”
said Trey Hiers, vice president, Corporate
Marketing, for Reynolds. “When a dealer’s
online inventory is updated in seconds,
instead of overnight, consumers see what’s
in inventory in that moment, not what cars
might have been sold yesterday or even a few
minutes ago. That can help give consumers
more confidence in the dealership’s products
and give dealers one more edge in building a
relationship with consumers.”
For dealers using web sites from Reynolds
Web Solutions, real-time inventory updates
occur automatically with no additional key-
strokesorchangestotheirERADMSorweb
updating processes.
www.reyrey.com
vAuto releases mobile
iPhone App
vAuto, Inc. has announced its used car
inventory management system is now avail-
able as an application for the Apple iPhone
and iPod Touch.
“We recognize that our dealers need the
ability to access our real-time market infor-
mation wherever they are,” says Keith Jezek,
presidentandCEO.“Wedecidedtodevelop
ourmobileapplicationinitiallyfortheApple
devices because they are the preferred mobile
devices for web searching activities.”
Live market appraising is the first vAuto
moduledevelopedasamobileapplicationfor
no additional monthly subscription charge
for vAuto users. It is available for download
from the App Store on iTunes.
All vAuto customers now have the oppor-
tunity to utilize the fully integrated market
based appraising functionality from their
Appletouchdevice.Inadditiontotraditional
third-party guidebooks and auction values,
the application features vAuto’s exclusive
rBook, which allows customers to appraise
with the mindset of “how to get out of a car
before you get in.” The mobile application
functionality also includes the proprietary
barcodeVINcapturemethodthatautomati-
cally decodes and uploads to vAuto.
www.vAuto.com
32.
33. DD 6 July 2010 DigitalDealer-magazine.com
Get Rid of the Internet Department?
It’s Your Call
Let me state right
at the beginning that
I’m going to waffle in this column. And I’m
not going to apologize for that.
More and more, I’m editing columns and
talking to people that advocate doing away
with the Internet department and becoming
andInternetdealership.Partofthethinkingis
that most – if not all -- of your customers are
using the Internet to shop for vehicles today,
therefore,everyoneinyourdealershipshould
be able to handle the “Internet customer.”
Instead of having a separate department
handlethosecustomers,allofyoursalespeople
should be able to converse using e-mail and
handle customers that are using the web to
findtheirvehicleandthedealershiptheywant
to buy from.
That’s not wrong. There are dealerships
that have moved in that direction and have
been very successful with it. But there are
still dealerships that are incredibly successful
with an Internet department and would be
crazy to change their process or the way they
manage their customers.
This where I’m going to waffle – should
you get rid of your Internet department?
Honestly, I don’t have a clue and I don’t care.
I’ve been writing about this topic for years –
andprobablywasthefirstonetostartwriting
abouttheInternetdepartmentgoingtheway
of the Dodo bird (that’s a Chip Perry quote
from years ago).
If you think about it, it really is somewhat
ironic – the Internet manager is a dinosaur
now? I don’t think so – at least not yet.
WhatIdoknowisthatyoushoulddowhat
works best for your dealership. Do you have
theright management teaminplacethatcan
successfully move your dealership to become
an Internet dealership, instead of relying on
one department to handle it?
If you want to move in that direction, you
also have to make sure you have a business
casefordoingso,notjustbecauseaconsultant
tells you it’s the way to go.
If your Internet department is selling a lot
of cars, why mess with that? If it ain’t broke,
don’t fix it, right?
My favorite part of my job is getting to
talk to so many dealers, Internet directors
and general managers. And one thing I’ve
learned is that there is more than one right
way to get the job done.
Lastmonth,IinterviewedRoyReutterwho
is the e-Commerce director for the Sheehy
Group. They have no intention or reason to
getridoftheInternetdepartment.It’sincred-
ibly successful.
This month, Hagen Durant, the general
manager for Classic Chevrolet inTexas, and
the top selling Chevrolet dealership in the
country, tells me he would like to make the
transition to becoming an Internet dealer-
ship where everybody is able to handle the
Internet customer. Durant is young, tech-
nologically savvy and probably represents
the new breed of general managers that
are going to lead our industry for years
to come.
Twodifferentperspectives,buteachwildly
successful.
In the Digital Dealer cover story this
month, we interviewed Joe Ellsasser, the
general manager for Golling Chrysler Jeep
Dodge in Michigan. It’s the top selling
ChryslerstoreinthecountryandIlovewhat
they have done.
Golling separated the Internet marketing
from the sales functions. Think about it --
it’s two different skill sets. In way too many
stores, I think we’ve dumped both sales and
Internet marketing jobs onto the shoulders
of the Internet manager. I suspect it’s a lot
for one person to manage. You really want a
salesperson handlingyouronline marketing?
And you want a marketing person trying to
close a deal?
I’ll refrain from being too dogmatic here,
butifyourInternetmanagerishandlingboth
selling cars and marketing them online, you
mightwanttoevaluatewhetheryou’regetting
the most return on your investment.
Being good at building web sites, under-
standing search and social networking and
knowing how to buy leads properly are com-
pletely different skill sets than being able to
sell a car – whether you’re doing it online or
in the showroom.
Youmightreadthingsinthismagazinethat
you disagree with. Some things might even
make you angry – such as reading that your
position should become extinct.
That’s a mark of a good magazine. We
try hard to provide you with as many ideas,
IGITAL Dealer AAISP NOTESD
Cliff Banks
continued to P-DD24
35. DD 8 July 2010 DigitalDealer-magazine.com
Take Out the Trash and Keep the CRM
from Being a Garbage Dump
P
lease open up your wallet, pull out
a $50 bill, walk over to the nearest
trash receptacle, and throw away
your money. What do you mean ‘no?’ Of
course, it sounds foolish, but that is what
your sales team is doing with your money
right now. There is a financial cost associ-
atedwithbringingeverycustomerintoyour
showroom. Every day (maybe every hour),
a member of your sales team works with an
in-store customer and doesn’t source them
properly, essentially wasting the advertis-
ing money you spent to lure them to the
dealership in the first place.
Next to a strong web site and DMS, a
fully-functional CRM (customer relation-
ship management) tool is the most impor-
tant piece of technology you can utilize in
your dealership. Some Internet experts that
use them well might place their CRM’s
importance even higher. Most quality
CRMs have the ability to keep track of
the ROI (return on investment) you are
receiving from your advertising budget.
However, this only works if each and
every prospect/customer/lead/sale is prop-
erly sourced when being logged into the
system. There is no quick fix. The only
answers are training, dedication, and
discipline.
I see it almost every day I visit a dealer-
ship. A customer is greeted by a salesper-
son and when that salesperson logs them
into their respective CRM, they don’t even
ask what brought the customer in. They
assume.They choose on behalf of their cus-
tomers. The most common CRM crimes
I witness when logging customers come
to source. That is why 80% of all of your
logged customers are wrongly sourced as
“Lives in Area,” “Drive-by’” “Walk-in’”
“Phone-up’” or “Manual Add.”
Let me help explain why these should
not be allowed as sources.
“LivesinArea”–Wow.Congratulations,
customer.Didyoujustwakeup,realizethat
we are members of the same town, and
decidetopopinandpurchaseavehiclewith
no research? If that is the case, Mr. Dealer, I
want your location. More than likely, they
studied up ahead of time, sent in a lead
prior to in an effort to keep you honest, or
has even used your service department in
the past. If the latter is the case, then mark
them as a “previous customer.” Sure, it isn’t
as a previous sales customer, but there is at
least some validity to that source.
“Drive-by” – Mr. Customer, did you
spot this exact vehicle you are purchasing as
itwasnestledinamongst100othervehicles
while driving past our store at 35 mph? If
so, your eyesight is that of a fighter pilot.
Certainly some outside influence made
you drive into the dealership rather than
a glimpse out of the corner of your eye or
a rare muscle-spasm and jerk of the wheel.
“Walk-in” – Did your dealership have
a multi-million dollar mechanical moving
sidewalk installed from different corners
of the neighborhood to drag unsuspect-
ing customers into your store? No? Was
someone involved in an accident in front
of your dealership and immediately hoofed
it over to pick out a replacement vehicle?
If you answer ‘no’ to these two questions,
then there is no such thing as a walk-in.
“Phone up” – Where did the customer
get the phone number?That is the source.
It’snotlikeyoureceivecallssaying,“Yes,I’m
in the bathroom stall at the local KFC and
your number is here. Thought I’d call….
Oh, a new car? Yes, that sounds great.”
Even if that did happen, the source would
be “KFC bathroom stall.”
“Manual Add” – I can only assume
you chose this source because you manu-
ally entered the customer as opposed to its
alternativewhichis…..what?Telepathically
input the customer’s info?
These sources must be removed from
your CRMs. Having these fairy-tale
sources as options makes your employees
lazyandthrowsyourhard-spentadvertising
dollars in the trash.The saying is “garbage
in/garbage out.” If you allow this to con-
tinue, then you are paying your CRM to
put out junk and that is unacceptable.
Here are two ways to help source:
At the meet and greet:
Theorderofquestionsyouandyoursales
staff are asking the customers must change.
After the customer states their vehicle of
interest, have your team respond with
“Great. Have you had the opportunity to
research this vehicle online?” If they say no,
be thankful and tell them you can answer
all of their questions, thereby making you
the “Internet.” If they say ‘yes,’ say “Great.
Which sites? Did you have the opportunity
to contact our Internet department?”
The purpose for this is two-fold. First,
whatever sites they researched/found the
vehicle on, that is your source and you can
use that site to your advantage (if it is a
resourcesite)duringthenegotiationprocess
with the customer. Second, you will learn if
they’ve contacted your Internet team ahead
of time and get the customer in front of
IGITAL Dealer INTERNET SALESD
Joe Webb
There is a financial
cost associated with
bringing every customer
into your showroom.
36. DigitalDealer-magazine.com July 2010 DD 9
the correct person who has already built
rapport with them (and prevent skating).
Now, we have heard the phrase “buyers are
liars,”butinmyexperience,ifyouaskthem
rightawaywithouthesitationifthey’vecon-
tacted the store already, they will tell the
truth. If you don’t ask, they simply won’t
tell. Why should they show their hand if
you don’t even do your job and ask the
right questions?
In the finance office:
Have a basic sheet of paper with the
printed logos from all of your true advertis-
ingsources–(knowingthatKBB/Edmunds
can go to different lead providers – research
by shopping those sites ahead of time).
The finance manager then simply asks the
customers to circle the place(s) that they
conducted the majority of their research
on or which site led them to contacting
you. Once the customer acknowledges,
just ensure that the correct information is
being filtered back into the CRM.
Now when you run your reports, you
will see how much the Internet truly
influences your customers and you will
learn your actual ROI from your advertis-
ing expenditures. It takes training, time,
and discipline. Don’t let your salespeople
turn your CRM into a garbage dump.
You spend too much money on the tech-
nology and the advertising to let that
happen. Put the right processes in place.
You’ll spend your money better find new
ways to market to past (properly-sourced)
customers. Your mother was right. It’s time
to take out the trash.
Joe Webb is the president of DealerKnows
Consulting, an automotive Internet sales
training firm specializing in assisting deal-
ers with the advancement of their online
efforts through hands-on/on-site and virtual
consulting.Webb has been called “the funni-
est guy in the car business” and has consulted
nationwide, showing dealerships success by
instilling proven Internet marketing prac-
tices. He has been writing for Digital Dealer
magazine almost since its inception and is a
regulartop-ratedspeakerattheDigitalDealer
conferences. In the past,Webb found success in
the trenches when he created and managed an
award-winning business development center
for a Chicago dealer group. His primary goal,
as he always states, is “to better the culture of
car sales”.
If you wish to discuss this article with
other dealers, or with the author,
please go to the “Discussion Forums”
at www.Dealer-communications.com
and enter the “Internet Sales” forum
or e-mail him at jwebb@Dealer-
communications.com.
37. DD 10 July 2010 DigitalDealer-magazine.com
How to Set Yourself Apart in a
Competitive Market
T
his is my first article for Digital
Dealer magazine and I am so excited
to share my daily life in the dealer-
ship with all of you. I feel your pain and your
happiness along with the ups and downs of
the car business. We are unique. We deal
with high pressure on a daily basis; there
are not many other businesses that run full
force day in and day out. Sometimes it is
exhausting, sometimes it’s thrilling. We all
get up every day and do it all over again.
That is what makes us unique.
With all the competitive shoppers out
there, we as dealers have to find a way to
set ourselves apart from the rest. How can
you set yourself apart? You have to respond
faster than the next guy, right? We have all
been taught that since our first month in
the Internet department. I am here to tell
you that being the fastest might not get
you the responses it once did. Customers’
expectations have grown over the years.
You could have possibly gotten away with
a two-sentence response in two minutes
years ago and still made an appointment
and sold a car.
Not anymore. Customers expect a pro-
fessional look and feel to every e-mail you
send out – that’s right, every single one. It
is incredibly important to show them your
dealership’s professionalism. They might
even pay you more money for the same car
that the guys down the street because of it.
Can you dedicate yourself to making your
e-mail and phone messages professional and
effective? If so, I can guarantee you great
results. I have watched it happen – yes, it
takes an enormous amount of dedication to
do this every time but I believe that every
one of you has the ability to do this. The
problem is that most of you do not have
the self-discipline to continue to do this
every day.
Writing and designing an effective and
professional e-mail or template takes is the
very first step you need to become an expert
in order to be successful with your clients.
This is a must; it is not an option.
It seems so basic, doesn’t it? I challenge
you to take a look at the last 20 e-mails
you sent out and see how many looked
and sounded professional. Did they have
your company logo? Did they have your
full signature – and by full, I mean name,
title, dealership, web address, e-mail address,
phone numbers, physical store address and
lastly, your picture.
Your picture will create a relationship
and help break down the barrier from the
beginning. One of the hardest things that I
encountered when I began in this business
was the perception that my clients had of
me. I began hearing, “You don’t seem like
a car salesperson,” and I always thought,
what does that mean? I am sure many of
you have heard this as well. The addition
of a picture in your signature line will help
your clients see you as a living and breathing
individual. And place you a step ahead of
your competition.
Next, place a header on every e-mail. A
header should include your dealership logo,
a manufacturer logo, store phone number,
service and parts phone number and web
address. I would include images of your
store – this will help the customer recognize
your dealership.
Include an award that the particular vehi-
cle has received, such as a five-star rating.
For our visual customers, include different
vehicle images to help build emotion with
them.
Lastly, provide the customer options.
Include at least one other new vehicle with
less equipment and at least one similar used
car. The more options you give them, the
more likely they are to come in and see those
options. In my experience, customers have
trouble saying “I can’t afford that,” so show
them less expensive vehicles to eliminate the
uncomfortable situation of them not being
able to afford the fully loaded up version.
To sum it up for you, make your pres-
ence professional and your customers will
be blown away by this – as little as it seems,
it will have a huge impact on your personal
success as well as your dealership’s success.
If you are reading this, you are more than
likely ahead of your current competition,
so keep thinking outside the box and keep
setting yourself apart.
Angela Martin has been selling cars out of the
Internet department for 10 years. She now is
the Internet sales director for Feldman Imports
in Minneapolis, which averages 80-85 web-
based sales. She graduated from the University
of North Dakota in 2000 with a communi-
cations degree with a focus on graphic design
and photography.
If you wish to discuss this article with
other dealers, or with the author, please
go to the “Discussion Forums” at www.
Dealer-communications.com and enter
the “Internet Sales” forum or e-mail her
atamartin@Dealer-communications.com.
IGITAL Dealer INTERNET SALESD
Angela Martin
I am here to tell you
that being the fastest
might not get you the
responses it once did.
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