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NADA Time: Start Operating Your Business As Yours Or Someone Else Will

More often than not, businesses are left to turning part (or all) of their operation over to vendors and partners with the reasoning that they're not able to "do everything". In automotive retail the de facto excuse you hear usually has something to do with how selling cars is what gets done and nothing else matters. Well, it's 2012 and everything has to do with selling cars.

News flash: It always has been so.

More likely than not, as we're upon the National Automobile Dealers Association (NADA) season, hundreds if not thousands of dealers will leave with contracts signed, or nearly signed, convinced that simply punting their responsibilities over the wall is the best way to get 'er done. Fact is nothing is further from the truth.

Dealers must grasp a much more realistic perspective of controlling their business through action, education and accountability or they will absolutely have it taken over. And nobody is saying that's a bad thing, in the event that a business has no desire to be "in" business. While a $6M dealership may not scale, invest, market or operate like a Fortune 100 business, but there is not a single reason why it can't approach and plan business in the same way or using the similar methodology.

A few things to keep in mind as we go into the NADA conference this coming weekend.

  1. Assess your dealership's needs and gain consensus from your employees on what to return from the conference with
  2. Plan 90% of your schedule via expo and workshop schedules, focusing on must-have meetings
  3. Schedule meetings with critical existing and vendors and check out their competition
  4. Talk to as many dealers as you can outside of your 20 Group, in the booths you visit, about what they're doing and not doing with the vendors you're visiting as well as haven't considered
  5. Look at vendor and supplier reviews on Google, forums including DrivingSales and other reliable sources
  6. Ensure the viability of vendor/product deployment in your store prior to signing any agreement
  7. Talk with existing/new vendors after the conference again, prior to accepting any new agreement

 

While the above steps are no guarantee against "being had", it should at least put some steps between a mediocre quick decision and a thought out beneficial one.

Areas that seem to be gaining traction and popularity that don't make sense include:

  • Reputation management: services that promise hundreds, if not thousands, of well-deserved gleaming reviews from consumers that just haven't provided them to you. Garbage! Consumers see through it faster, better and more than Google does. Start expecting your staff to obtain reviews when selling or servicing products and ensure a process is in place. Some staff members don't want to do that? Let them go or simply hand over the keys because you're not leading a dealership…
  • Social media: services that promise hundreds, if not thousands, of fans simply because you're a car dealership, with "caption this" or "tell us what you think" on nearly every other post sprinkled with inventory or incentive specials don't say "great place to buy" in the least. If a great Facebook, Twitter or blog presence means 2,000 likes, followers or readers and not more than 3-4 comments, shares, retweets or +1's, you're likely being had. Nobody wants to go to a dealership Facebook page to play Asteroids or Bejeweled 2 and write a title for a photo showing two dogs dressed up as superheros chasing each other, let alone find a tab that doesn't work (for months).
  • CRM: services that say their great, train your staff for $5,000-10,000 a day, put in standard templates and tell you to look at reports to create accountability need to start traveling with the Dodo bird. At the same time employees not using CRM for any reason need to pack their neon-green Hulk baggage and leave town as well. Get real, negotiate agreements, expect your account person to visit regularly, get all of management to use the tools and then expect everyone else to in the dealership. If utilization of CRM is under 75% in your dealership, get your vendor to start acting like a partner and put sales and service staff on the bubble. It's not a choice, it's a reality check.

There will be a lot of fanfare, parties, speakers pitching and snow jobs at booths. However, it's in everyone's best interest to see through the smoke and put the rose-colored glasses down. Our entire world is digital, mobile and fast. It's time for 17,000+ franchises (and who knows how many independents) to get so as well. Leave the hook, line and sinker at home, ignore the playmates for as long as you can and get real with your business.

There is a boatload of opportunity for those that want it in 2012 and NADA happens to be a great place to kick it all off or continue down the progressive road if you've already started. It's also where tons of dealers get sucked in by nothing more than marketing and get nothing for their hard-earned cash except for an open liability door.

So go with purpose to NADA. Come back and operate your business properly. Or someone else will take it from you. All of it.

 

Best practices: Professional Insight, Powerful Results


Flipping The Light On: Life After The Pitch

You heard about them. You read about them. You phoned them. You had them in. You listened to them. You took the pitch. You signed the deal. And now, with services starting, either everything is the same as it was before……or the lights are on and it's kind of "ohh my my".

(Twilight Zone music in the background) You thought it would be different. You thought you knew what everything meant. You made that final turn…welcome, to real life after the pitch.

So what happened? Everything seemed fine. Well, what did you expect from adding the services? Did you write down your goals? Were resources already set aside to handle the new vendor? Was their customer service department part of the initial pitch at all? You know, the people that you'll call with questions and issues? Did you get an "out" clause or are you roped in tighter that a M3's engine in the space under the hood of a MX-5? Did you ever think "what happens if they don't do what they say they'll do?"

Let's face it, retailers want a fast, easy, painless, seamless, passive, snap-your-fingers solution. So why in the heck would anyone, unless they are offering an education with full disclosure in their pitch (read: NOT most vendors), tell you that they can't do what you need? It's so much easier to add modules and updates rather than focus on the effectiveness of a core product. It's a lot more fun, apparently, to fill up review sites with bogus users' glowing reviews than actually make it a dealership process to get recommendations. That's why dealers' investments fail and vendors fast profits are usually replaced with a shrinking client list over time.

Without question there are a few companies in the industry that are in a position to add to their product line. And because they can and are able to. Not just because they want to or are getting pressure from compoetitors. Can you find Nike golf bags, backpacks and glasses? Yup! If their shoes started sucking, those superficial products, as profitable and lifestyle "branding integrated" as they are, would be inconsequencial if the core product failed.

And, as a dealer/client, it's your job to turn the lights on. And that means ask the tough questions. Don't take the reports to heart, especially if there's no validation. When you turn the bright lights on, the cockroaches go running! When you have a partnership with your suppliers, guess what happens? Real growth, real education, real improvement. After the pitch should be the best part. If companies knew what was good for then, they'd pitch modestly and over-deliver. Now THAT'S a concept!

And life after the pitch should get progressively easier. Here's a great test and maybe something you want to try in 2011. When you start a new agreement with a vendor, ask for no more than 6 months commitment, maybe less if not month-to-month. After 50-75% of the initial period is done, indicate you're going to cancel at the end of the term and watch/listen to the response. That will tell you volumes about who you're doing business with.

Here's a few things to think about in your next (and likely soon) approach to new providers:

Ask:
1. How long have you been providing this service and who can I talk to about it?
2. What is your average turnaround time for support and completion of a ticket?
3. What hours does your customer service department work?
4. What is your after-hours/weekend customer service policy?
5. When was your last failure/cancelled client and what happened?
6. How many of my competitors to you currently work with?
7. How well does your service integrate with the system(s) currently used by my business?
8. Do you use internal or third party reporting of metrics?
9. Can I cut back on part or all of my services and what kind of notice do you need?
10. Do you subcontract and services and have you experienced service outages?
11. Is ongoing training or field support (not sales rep visits) part of your service?

Thinking about what your needs are away from how much more product and services you're being told you'll sell is critical. And go with your gut. If it sounds too good to be true (1,000 Facebook fans in no time, 200 glowing reviews per month, best sourcing of all customers of any ILM/CRM ever, increases conversion 20% every month for a year, sells cars for you 24/7, builds your client base while you're sleeping and more), it probably is.

And then there's the Golden Rule: Generally stay away from "#1 in (fill in the blank)". If you can see marketing from a vendor you are considering on every automotive network, in every publication, on every B-to-B forum and in your showroom (more often than you'd like), pretend you're a consumer –because you are!– and ask yourself this: do the best working companies in a vertical advertise everywhere? Are they screaming "we're number one"? Now, if you are always screaming "we're number one!" yourself, it might just be a match made in heaven.

Otherwise, for the rest of us, chances are there's too much focus on the frosting and not enough on the cake. Some frosting is so good, it can cover up what looks like a full, well-made, perfectly done cake. Remember that next time you simply grab the box and drive back to the office, thinking about how great everything will be, pull in, run into the store, flip on the lights and open the box. Ooh bummer…

Best Practices: Professional Insight, Powerful Results

Dealeritis or Vendoritis? Has The Game Changed At All?

There seems to be a perpetual struggle in the dealer world between the client needing services, needing to change/improve, needing to stay in front of the competition and the vendors needing new places to hock their wares, prove their value, bang the 'we're the leader' drum and pay back their investors. They're both right while not typically paying attention to each other.

In the course of recommending vendors, after assessing the needs of the client, it is sometimes difficult to pinpoint what services will be beneficial. This is more the case today with some providers offering truly integrated, real-time solutions. There are times when, over the course of an engagement, fitting vendors are brought in to do their jobs, but in hindsight it's realized that one larger provider could have done the work. And likely at a lower price while providing a more streamlined experience.

It is always appropriate to push for the larger picture and achieve more but automotive retail has been hit hard over the years with less-than-promised services at outrageous prices and lackluster support. This has been painfully evident with DMS and CRM systems. Many dealers are numb to the pitch today. But have they turned a deaf ear and a blind eye when now is the right time to hear them out again?

Many consultants have the benefit of working with leading-edge and/or forward thinking dealerships and it is a pleasure. In providing best practice recommendations (i.e. the suggestions are honest and the vendor doesn't pay anyone a finder's or recurring fee) it is always necessary to keep goals in mind while ensuring the possibility of exceeding them. Too often the client feels it's the vendors job to 'perform' and the vendor feels it's the client's job to do so as well.

Getting over this 'dealeritis' and 'vendoritis' type of game is essential. and many think it's not happening fast enough. One event started changing things last year and we need more change.

What suggestions do you have to get vendors and dealers together in not-simply-for-large-profits-for-the-promoter forums around the country? Can it be sponsored so the cost is free-to-low for everyone and vendors pitch or should it be a pay-your-way-and-bring-a-sack-lunch event? This is the year of the automotive community: pitch in so you'll win!

Best Practices: Professional Insight, Powerful Results