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Stop, Drop and Do Nothing! (Or You Can Simply Roll With It)

You’re on fire! What do you do? For those of us who grew up as Baby Boomers and Gen X, you were taught in school how to stop, drop and roll. Right? Now, the battle cry is seemingly stand there and wait to see if you get burned. Profits are high enough (again)  to allow dealers to freeze, just as we did around 2005-2010 with the impending digital explosion.

What’s taken place in 2021, for the most part, is a conundrum of monumental proportion. And we thought 2020 had taken the cake! Record profits, record PVR, record low availability, record high wholesale values and more records breaking records. Pretty soon w’ll be staring at near-zero inventory on many lots and everyone screaming about incentives when new inventory finally makes it to dealerships.

Sure, do cut TV and radio along with paid search for models you won’r have and don’t have and skip some of the direct mail, unless it’s screaming “We Want Your Car!” (like everyone else is, by the way). Wait. Wait. Wait. Wait. Then wait longer and “save on expenses”, then scream when your website value/position/SEO drops along with your traffic, when stock does arrive you’ll expect everything to “be back to normal”.

How many times has it been said that when things are challenging, that’s when you double down? That’s truth. It doesn’t mean that we’re advising you spend incorrectly, however for dealerships not to take advantage of this time to improve variable and fixed operations (notice: operations, not expenses per se). Want to improve your service operations while inventory is tight and you’ve been making record profit per unit? Do that now, not in 3-6 months. Need to properly coaching and train your staff? Do it now, not when the phones are ringing off the hook.

Dealers do this to themselves over and over, not looking at history. Invest now in your digital operations (that means analytics, SEO, improvements in local citations and reputation management, overhaul your social media and more). Look at how to have more when the inventory does arrive and you start selling units for loses again because the consumer makes you (yeah, that’s another lie).

Or be one of the smart ones and stop, drop and roll yourself to a better business and stop looking for shiny objects and silver bullets. After thirteen plus years doing this, we’ve seen thousands of dealers get it wrong.  And a ew get it right…

 

Best Practices: Professional Insight, Powerful Results

Don’t Blink. Don’t Think. Yet Don’t Wait…

Lessons come frequently, if you pay attention. Lessons are disguised as many different things. Were you paying attention? And to what? What you have control of or what someone else told you? Last year taught us plenty, and it taught us nothing at all. Your point of view will determine which side you’re on (if not both).

Many things in automotive could be easily categorized from what took place in the year that just (slowly) passed by, like ‘data’, however it is essential – if not mandatory – to take a deep look at what resulted in your year.  And, how your business got there…. Quite frankly, it was not one thing that had an effect on whether or not your business made it through well.

Let’s deal with the elephants in the room (yes, they’re still there): digital retailing, marketing co-op funds, operations (fixed and variable),and  inventory. There are some other, smaller elephants playing patty-cake in your facilities however those are the main ones.

Not on the list, the biggest factor in making lemonade out of 2020 was whether your business was able to pivot in a leaner and, dare we say, meaner environment. More than anything, your ability to pivot and have the entire dealership culture thrive was bigger than anything else driving results last year, as well as the foreseeable future. Staff counts got leaner, and so thinking had to change for the smartest operators.

Many had the dreaded inventory/availability item however seemed to make it through (relatively) unscathed depending on how you secured inventory in unconventional ways. Dealers that could open in what resembled mostly ‘typical’ operating hours over the bulk of the year had per-unit profits that resembled years gone by.

The buzz word (read: buzz kill) of the year, especially OEM-mandated programs, was digital retailing. In our experience, same-store sales completed by digital retailing , based on opportunities grew incrementally (at best) and provided some daylight as well as perspective into what is possible going forward. Listening to industry-wide data along with CRM-based results, showed that there was a ‘lift’ from these tools, however not the godsend promised by any stretch of the imagination. That said, the dominant driver of tool utilization shows that what consumers want to do is know how much to expect to pay per month for a truck, sport utility, crossover or car. As OEM bolt tools on their websites (and charge franchises for customer/transactions that predominantly end up as showroom visits), we are now looking at the data play IM@CS has been telling dealers about for nearly a decade.

Many operators experienced lift in used car operations and fixed/service operations, while some even had banner years for their parts operations. No matter what, the theme seems to be making it known that you offer full-service and customer service and customers showed up, called and wanted it shipped or you picked up and dropped off their cars for sales and/or service. Hold on for a moment….2012 called and wants their flexible business ideas back…guess we’ll have to take those “idea trophies” back.

2021 is going to present huge challenges and opportunities, you can determine your own path to success as long as you have dogged determination to not resort back to the 1975-2015 mindset. It’s easy to do when profits remain high and some semblance of inventory remains.

Are you genuinely vested in your marketing (focusing on equity mining in 2021 as a new strategy doesn’t qualify as ‘your marketing’), messaging and operations? Market driven factors aside, do you already see your February and March plans in place and starting to shape your reality?

Be ready for more shifts in local marketing, specifically search engine optimization and citations, paid search and measured conquest opportunities. Other than those, don’t think or blink too much. Because if you don’t drive your business, as in 2020, you’re simply focusing on keeping your hands and feet inside the ride at all times… Don’t wait!

 

Best Practices, Professional Insight, Powerful Results

It’s Time To Get NEAT or beat in 2020

Since 2007, IM@CS has earned a reputation for allowing dealers to take advantage of trends, opportunities and addressing what’s next. Well, nobody could have seen what has ended up being “what’s next” for 2020. At the same time, we are proud to have enabled hundreds of clients in their digital progressions, with our existing dealership base absolutely set up for the current crisis as they’ve become nimble operators.

While new technology is exciting and, quite frankly, enabling organizations on an increasing basis (if not thrusting them into a do-or-die mindset), automotive is an interesting niche and any one aspect of digital retailing or online sales with home delivery, consumer-first tools and the like will not make you successful. No, you need to understand the tools and their measurement, have the proper culture in today’s businesses environment and make everything about the customer, which we’ve been doing exclusively with our sales coaching and unique CRM skills mentorship for over twelve years.

NEAT (Nimble Engagement And Transaction) is a whole-store approach and mindset from any initial touch to in-store visits and beyond. NEAT focuses your dealership on the most important aspects of attracting, engaging, creating and keeping your customers. If 2020 has proven anything, the arguments around keeping the “traditional road to the sale” are in fact, dead and have been for years. Stop making your prospective clients jump through hoops, you won’t likely get them and you definitely won’t keep them.

Removing the many cumbersome aspects of automotive transactions, people and processes, as well as the mindset that kept those in play is the first step. Your next step? Contact IM@CS to arrange for an assessment meeting and determine your best course of action to enable results.

Best Practices: Professional Insights, Powerful Results

This Year Like Last Year: OEMs, Agencies, Middle Men, Invisible Measurement and the Almighty Dollar

As we boldly run headlong into 2020 with digital more and more prevalent, whether wanted or not, there are some aspects of our business that seem to be getting less clear and one factor driving decisions more than ever. Digital marketing still is without a legal guardian. The babysitter has been receiving the calls and all of the “supervision” hour are spent face-first in mobile devices, kind of like most salespeople at any given moment when customer less.

While the babysitter shouldn’t truly receive all of the blame, those handsomely-rewarded middle-people, even as some of the companies and faces change (with rumors of sone OEMs switching hands of the ill-prepared caretakers of digital marketing programs), are happily rewarding themselves through the data-play environment as the dealers they claim to serve lose control of their customers, websites, tools and CRM data. Yet, when decisions come down to dollars, they claim “my hands are tied”, “we’ve been forced to go with approved vendors” and “my colleagues say their program is working well (cough)” along with a half-dozen similar-sounding reasons (excuses) for not taking ownership of their digital eco-system.

This week we were invited in to an import dealer accountability call with both their (mostly silent on the call) OEM and the marketing company responsible for a large-deployment campaign. The results they are claiming for over 400 dealers in the program simply didn’t happen at this one store. One. Yes, one. “All of the dealers had success with the heavy-up campaign” and “you’re the only dealer out of over 400 asking the performance questions” rang over and over on the hour-plus call. A simple check of only Google Trends both in the dealer’s AOR/DMA (as well as nationally) show that the search lift was (interestingly) roughly the same for organic search that the marketing company is claiming that the campaign delivered (OK, a good percentage of it when pressed harder). Nearly the same year over year lift as shows organically that they’re claiming from paid video campaigns!

Now this article isn’t about the one specific example this week of performance overhype and, since the largest traffic segment wasn’t properly tracked by the marketing company (or on the “large” social media platform that the videos were campaigned through – yes you read that properly: no tracking) so all claims can be called into serious question, the near-intentional lack of transparency No, this is about the industry’s saturation of vendors doing the same exact thing(s) to thousands of dealers each month with the OEMs and/or the dealer body buying in. It’s about hundreds of agencies that claim to be digital (even better, digital-first) and mostly reselling products for commissions that may also be handcuffed on real reporting and accountability.

This week we also experienced a website company “not knowing” why (or how) Direct traffic hits from two AWS servers (from OR and VA) representing 5% of monthly users/3-4% of sessions were happening to two different websites both hosted by them (the dealerships do not pay for any third-party data companies or “targeting/conquest solutions”) with vastly different performance issues represented by the two cross-country AWS locations (the VA location providing 0:00 T.O.S, 1 page/visit. and 100% bounce rate visits while the OR location provided 6:00+ T.O.S., 6+ pages/visit (up to near 20 pages) and sub-30% bounce rate however still non-human behavior). The dealerships are in the Midwest.

Add to the above, the even-present chant of “co-op program, co-op program” and “I’ll lose spiff money if we choose a non-approved vendor”. In 2018, we participated in assisting a domestic dealer pocket ~$450,000 with quite a bit of “non-approved vendor” expense (~20% of it in reduction in duplicative or unnecessary expenses). The dealer committed to it, counted on us and a very few other partners for measurement, and attacked all of their marketing, website performance, changed up their sales meetings (sales people had to take over the largest part of each morning’s sales meeting with a new idea or concept related to selling or use of the CRM), pushed a higher level of accountability and drove results, even changing how and what they bought for their used cars and the way they marketed and sold those cars (nearly doubled turns). Not once did the dealer or GSM complain about how their OEM co-op funds may not be available to them for part or even all of their marketing expense. As a matter of fact, they bragged with other dealers to the opposite.

Because it penciled!!!!! Results, especially with time, eclipse programs if you know what you’re doing and are committed to it. Agencies seemingly never want to cut their fee or commissions, even when the dealer’s results diminish over time. Why? Nobody can explain that to us (or anyone else). Aren’t you representing the dealer? Apparently not. Reselling and commissions (including Google Ads fees) have become too lucrative to focus on the dealer more than the agency bottom line. Once-a-month calls on your website and paid search efforts? Why didn’t you notice on the 15th of the month that your Google campaign on a model that you didn’t have in stock was spending 30% of your budget? No eyeballs, no accountability and no results. Keep sending the checks silly…

By and large nothing is going to change in 2020. The buzz at NADA suggested something definitely different, however the past two weeks alone have showed us that it may only be for a few adventurous dealers that have had enough of the “more of the same for me” digital programs. There may be a little more at hand, though. Especially if we face unprecedented, new threats to business (we’ll take “Worldwide Illnesses” for $1,000 Alex!) that may cover everything from supply chain to new car availability and sales to finance, funding and floor plans, to used car availability and pricing. Those who truly have their eyes on the real measurements of their business, all aspects, will weather impending storms.

And to do so, you have to invest time, effort, resources and money, yes some or all of the money that your OEM won’t repay you, however the dividends from doing business right will ALWAYS pay you back more. The R.O.I. from calling bullshit on improper marketing investments is huge. The R.O.I. from a cancelled investment and re-appropriation of those funds to well-run digital marketing that is fully-tracked and generates new sales is huge. Did you cut $15,000+ per month from your budget and sell MORE cars (including a record December) for four plus months? We know two import stores that did n the Midwest and the West Coast.

If you can’t measure it, stop spending it. If you don’t have more prospects, contacts and sales (or at least tracking to sales) from it, stop spending it. Best practices are called that for a reason. And no bad investment has ever been called a best practice. So keep going co-op and digital program. Until someone else completely owns your customers because those babysitters, middlemen and resellers have your data and monthly dates with your OEMs and/or your competitors. We don’t and never will.

Best Practices: Professional Insight, Powerful Results

You, Your Website And Your Sales Don’t Need To Participate In A Down Market

More often than not, pennies are saved by dealers, especially when things are perceived to be or becoming “tight”, while stepping over dollars in the effort to cut to a profit. First, you can’t do either and win. Second, down markets are bought into therefore they don’t need to be participated in.

It used to be that businesses looking to thrive took a combination of calculated risk and finger-in-the-wind chances to stay ahead plus create new opportunities. Now days, the largest emphasis is on making dealerships more of the same at lower investments (or net investments after co-op and incentivized funds), through digital programs, heavily copied traditional advertising, misguided conquest/target advertising and risky moves in completely unproven/unmeasured arenas.

Smart operators must make the commitment to invest their own time, learn new skills, understand and look for accountability in measurement and get to non-OEM, non-vendor events. In auditing websites, CRM, paid search, sales management and more, what is painfully consistent is the lack of inspection, understanding and forethought. Those are hallmarks of the path to failure. Investments must be made to combat the easy road.

Dealer 20 groups, dealer academy and online courses are limited parts of the equation to properly leading a business today. If you can acknowledge that business changes dramatically and constantly now (as you pan through your smartphone apps and social media posts while listening to a regional conference call), what are you doing to keep up with those changes yourself? Blind faith in duplicative vendors, custom reporting that isn’t accountable and that your OEM has your back? Hopefully not…

There is no such thing as a “down market” as there are ALWAYS winners. It takes time, effort, money and, quite frankly, an unbiased set of eyes watching the operations with you. if you are missing your unit objectives by 20, 30 or even 40+ units per month, are you measuring the right things and which vendors are misrepresenting what you are getting?

Step one is always tearing things apart until you understand what the fundamental issues are. A high percentage of the time, what is discovered is a combination of sales efforts and marketing with an emphasis on the latter. If you spent $5,000 for an event that supposedly drove customers and sales and, realistically, the 7,000 visits to your website were under 3 seconds, didn’t generate leads or phone calls, were from mostly desktop devices (unlike the majority of your real traffic) with the majority not landing on another page, such as inventory, your “successful” campaign was a fraud. Did you catch that or did you stoke the check?

The first thing that IM@CS does when assessing any partner is looking at the underlying data. One of the benefits of consulting that nearly everyone misses in a world of product reselling, friendly (commissioned) product referrals and people in nice suites regurgitating Google/Facebook/Instagram/Bing/marketing study speak is understanding “the why” along with the associated error mitigation. Our consulting not only moves a dealership forward with best practices, we also have a focus on “we’ve seen that fail before”. Our clients understand. Sure, they may not remember the exact path to find it, we hope they do over time, however they do end up understanding “why” it looks good on the surface however, ultimately, doesn’t work.

Down markets are built on foundations on mistaken identity, misgiven trust, reliance on misguided perception and blind faith in what the factory feeds everyone. Be your own market. Be your own momentum forward. Be your own growth. Be your conduit to the next level. Growing market share in the only way to measure when your competition is down. Take more, make more.

Be smart. Actually, be really smart, in the coming years and watch for opportunities with the right set of eyeballs watching with you.

Best Practices: Professional Insights, Powerful Results.

2017 New Trends: What You Are Missing Is Sales

Let’s face it. The more you hear about new trends, the more you are likely to invest. The more new trends, the more investment. At what point does a new trend matter as much or more to your business than what works consistently? One constant in Automotive over the past nine plus years of IM@CS’ existence is that trends have never given a bigger yield over strong fundamentals. As a matter of fact, we have never guided a client to any significant investment with new trends, however we have with defined trends.

Do you hop on the new trends?

Trend. Merriam-Webster defines a trend as either to “extend in a general direction” (which we call a define trend) or “to veer in a new direction” (which we call a new trend).

It is a significant new trend, and worth while, to leverage text massaging for sales and service. It won’t, however, replace email in the immediate future. We have heard speakers, trainers and consultants recommending dealerships drop email in favor of text and other messaging forms. Does text/messaging tend to receive higher open rates? Yes. Have we seen the same for sales responses? Some lift, in general, yet nowhere close to pervasive. Have we seen those eclipse results from responding to emails and communicating properly, measured in dealership CRM systems? Not yet.

It was a hot new trend to jump into Display Advertising a few years ago, which we have never recommended or had a client spend more than 5% of their budget on. Results? Negligible, at best. Dealership return on investment, reviewed by those NOT taking a commission or fee, was poor at best. Lots of explanations erupted, including the “branding” argument, however the new trend diminished and many dealerships got sensible on their spends, relying more on effective search advertising, better CRM follow up on unsold customers and educating themselves on Google Analytics and other tools.

New, hot trends have shown, year after year, that too much or misappropriated attention causes lapses in core business values, efficiencies and results. We do discuss all types of trends with our clients, and at the same time keep them focused on what drives more efficient spend, while recommending small investments in new tools and technology.

Dealerships need to focus on better digital operation, more efficient showrooms, streamlined and engaging delivery, consumer feedback and top-down management with consistent measurement and accountability.

Hottest new trend for 2017: More dealerships getting real on human capital, education, accountability and customer engagement. We hope…

 

Best Practices: Professional Insight, Powerful Results