OFFICIAL PUBLICATION OF CENTRAL FLORIDA AUTO DEALERS ASSOCIATION CONNECTING AUTO DEALERS AND THE CENTRAL FLORIDA COMMUNITY GETTING TO KNOW ERIC MATOS, UNIVERSAL NISSAN PLANNING FOR DEALERSHIP SUCCESSION DIVIDING MULTIPLE DEALERSHIPS AMONGST FAMILY
By providing the ultimate white-glove warranty administration service, our clients recoup the most dollars to help drive dealer receivables up. We successfully serve hundreds of dealerships and auto groups across all of North America. Established in 1986, Warranty Processing Company has the deepest pool of expertise covering the broadest set of manufacturing lines. We are ready to help you make money and control costs. Scan the QR to schedule a time to chat with an experienced agent. FLOWER MOUND, TX WARRANTYPROCESSING.COM 303.795.0612 WE’RE HERE! Let’s Talk.
OFFICIAL PUBLICATION OF CENTRAL FLORIDA AUTO DEALERS ASSOCIATION Pub Yr 4 | Summer ©2023 Central Florida Auto Dealers Association, Inc. (CFADA) | The newsLINK Group, LLC. All rights reserved. Accelerate is published three times each year by The newsLINK Group, LLC for CFADA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and dealer education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of CFADA, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Accelerate is a collective work, and as such, some articles are submitted by authors who are independent of CFADA. While Accelerate encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at: 855.747.4003. FOLLOW US ON: 100 Weldon Boulevard Sanford, FL 32773 Phone: 407.708.2780 cfada.org The magazine is produced in partnership with 4049 South Highland Drive Holladay, Utah 84124 855.747.4003 | 801.676.9722 thenewslinkgroup.org 4 President’s Message Working Hard for You 6 Our Leadership: 2023 Board of Directors 8 Dealer Spotlight: Eric Matos General Manager, Universal Nissan 12 Ways to Increase Your Service Department Traffic 16 Planning For Dealership Succession Dividing Multiple Dealerships Amongst Family 20 How Automotive Digital Retailing Can Affect Your Dealership 22 CFADA Charitable Giving Foundation 24 Partnerships Help Dealers Succeed 26 Why Wait? How Evaluating Your Dealership Can Help Your Business. 28 Dealer Members 31 CFADA Mission and Vision 16 ACCELERATE 3
Evelyn Cardenas President/CEO Central Florida Auto Dealers Association PRESIDENT’S MESSAGE WORKING HARD FOR YOU Welcome to our latest issue of the Accelerate magazine. We take a lot of pride in putting together articles and including interviews that will help you continue to succeed in your business. In this issue, we are going to spotlight one of our local dealers and learn about his journey in this everchanging industry. You will see articles looking at ways to help you increase your service department traffic, improve digital retailing, explore EV service and discuss succession planning. I don’t know about you, but I love how holistic this issue has become. We are looking at every aspect of your business that is important for it to thrive today and tomorrow. As you digest the great content between the covers, remember that we at CFADA are working hard for you. There are ways that we can help you continue to succeed. We worked closely with the state association to pass legislation that strengthens our industry and protects your right to serve your customers well. As mentioned in the last issue, in May, we received approval for the first registered EV apprenticeship in the state of Florida and in the nation. We have a program statewide to help you train the next generation of EV talent. As demand for hybrid and electric vehicles continues to grow, we want to ensure that the talent needed is ready for action. Another event to look forward to is our Auto Tech Competition that happens on Nov. 2, 2023, in conjunction with our auto show. Twenty students will compete to be the Top Tech in Central Florida. We are excited to showcase local talent and drive talent to your stores. If you would like to participate, please reach out to us. We would love to have you. We hope you enjoy this issue as much as we enjoyed putting it together! 4 ACCELERATE
Running a dealership comes with its share of uncertain terrain. But one thing is certain. Our Dealer Financial Services team is dedicated to being by your side with the resources, solutions and vision to see you through. Lauren D’Hondt lauren.dhondt@bofa.com 407.420.2771 business.bofa.com/dealer Making business easier for auto dealers. Especially now. “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: | Are Not FDIC Insured | Are Not Bank Guaranteed | May Lose Value | ©2022 Bank of America Corporation. All rights reserved. 4826555 08-22-0145
Jason Kirkland Director Jenkins Auto Group Evelyn Cardenas President/CEO Central Florida Auto Dealers Association Chip Gannaway Director Van Gannaway Chevrolet Raul Gomila Director City Kia U.S. Marine Director Sutherlin Nissan Richard Sox Counsel Bass Sox & Mercer Eric Matos Director Universal Nissan Randy Parks Secretary/Treasurer Parks Auto Group Shannon Kominowski Chair Holler Hyundai Glenn Ritchey, Jr. Vice Chair Daytona Hyundai Jon Hall Automotive Group George Nahas Director George Nahas Chevrolet Raj Lally Director Orange Buick GMC Our officers and directors play a critical role in our success. The board consists of a diverse group of highly trained professionals. Each person on our leadership team brings many years of experience in the U.S. and worldwide. Their dedication ensures that Central Florida’s new and veteran automotive professionals have access to the region’s most comprehensive industry resources and educational opportunities. OUR LEADERSHIP 2023 BOARD OF DIRECTORS Jay Mealey Director Sport Auto Group 6 ACCELERATE
CALL US NOW 877.875.6906 30 Two Bridges Rd. Suite 240, Fair eld NJ 07004 • vanguarddealerservices.com FOLLOW US ON OUR SOCIAL NETWORKS OUR DEALERS BENEFIT FROM: Free, Confidential, Honest Sales Strategy and Proficiency Analysis. Free F&I Specialists/ Emergency Fill-in Better Managed Sales and F&I Departments Low Employee Turnover Compliance Experts Continuous In-house Coaching Higher CSI Scores and Customer Retention Rates EV Solutions Specialists Ongoing Compliance Staffing Support SCAN ME F&I PRODUCT TRAINING SALES TRAINING
DEALER SPOTLIGHT ERIC MATOS GENERAL MANAGER, UNIVERSAL NISSAN CFADA is over 90 years strong because of caring and engaged members like Eric Matos, General Manager at Universal Nissan. We recently had the chance to sit down with Eric and get to know more about him, his life and thoughts on the current state of the industry. We would like to thank Eric for his time. The following are excerpts from our conversation. We hope you enjoy getting to know more about him as much as we did. 8 ACCELERATE
Tell us about your childhood. I was born in the Dominican Republic. One interesting thing from my past that links to me and where I am today is that while my family lived in the Dominican Republic, my father owned a Datsun dealership. The Datsun brand became Nissan, and that is the automobile brand I am selling today. As a child, I would go to school, and then, in the afternoons, I would go to the dealership and help my father with whatever needed to be done. I learned a lot about cars and business. When I was 13 years old, my family migrated to New York. We lived in Queens for 13 years. At the time, my uncle had a business in Brooklyn wholesaling fruits and vegetables. I started working there, helping with pickups, and I began moving up in the company until I became a driver. Soon after that, my father opened his own fruit and vegetable wholesaling business in the Bronx, and I started working there. Then, in 2001, the owner of the house that we were renting was moving back to New York City and told us we had to move out because they were moving into the house. We tried to find another place to live in the area, but everything was so expensive. I remember my father saying that it was “time for us to move to another state.” Even though we didn’t have any relatives or family members in Florida, we decided to take a leap of faith, and we moved there. What is your educational background? Degrees or Certifications? I have a bachelor’s degree in accounting from Queens College (CUNY). How did you get into the auto industry? In 2001, just after moving to Orlando, Florida, I needed to get a job since we no longer had the family business. I decided to look for a job as an accountant and put my college degree to work. The only job I could find wanted to pay me $12.00 per hour, and that was not going to work. That’s when it clicked; I loved cars. I was so enthusiastic about them that I had four different subscriptions to auto magazines, and I thought to myself, “Maybe I should sell cars.” The house that we had rented was a mile from Universal Nissan. They gave me the opportunity to start selling cars, and I have worked there ever since. I’ve been involved with CFADA for over four years now. If you want to have your voice to be heard and be part of the solution to problems affecting the auto industry, CFADA is a must. Being a member gives you that power. ACCELERATE 9
What experience did you have working at a dealership before you became a General Manager? I have worked in almost every position, from salesperson to the variable side. In 2004, I was promoted to Finance Manager. I was involved in training, closing the deals and doing everything that had to do with the sale, including the finance paperwork. I was happy that my accounting degree finally came into play. Then I moved to Desk Manager with a lot more responsibilities like leading the team, evaluating credit, finding out what bank is going to do the loan, making sure the payments are affordable to the customer and so on. After that, I became the General Sales Manager and then the General Manager, working with the variable side, which is everything that goes with sales as well as service. Please tell us about your mentors. I’ve had many mentors, but three come to mind. When I first started, John Kendrick taught me the fundamentals of how to sell a car. He helped me become a good salesperson. The second is Scott Popwell. He was a very interesting person because he was always teaching, even in small day-to-day interactions. He would often say, “This is what you need to know, and this is why you need to do it.” He taught me “why” things needed to be done a certain way, and knowing how to and why makes it easier than just saying, “Do it.” My third mentor, who is the best mentor that I’ve had, is our CEO and Owner, Bill Nero. He’s an amazing leader. I am lucky to be able to interact with him on a daily basis. Everything I know about leadership, I learned from him. What are the most valuable career suggestions you would tell someone you wanted to mentor? 1. Learn the business and understand the “why.” It’s easier to accomplish what needs to be done when you understand why you are doing it. 2. Be open to learning and set a goal of learning something new every day. Everyone around you has something they can teach you. What are the two or three biggest issues facing the auto industry? The right inventory. What I mean by that is the inventory that sells the quickest. The industry is still being affected by the COVID pandemic. A year ago, we had no inventory; today, it is getting better, but it’s still not where it needs to be. I am hopeful that in the next year, we will begin to see more of the right inventory on the lot. The other issue is high-interest rates. They are affecting consumers’ budgets. Let’s say a customer has a $25,000 budget. With current interest rates, they need to find a $20,000 car. That is definitely affecting the industry right now. Why is the franchise system still the best way to sell cars? This is the way I look at it. You have a manufacturer, and you have the consumer. The best way to marry the two is 10 ACCELERATE
with the franchise dealership because we’re working on behalf of the consumer. We are professionals and know the product. We can help guide the consumer to what works best for them. Many times, customers come in and say this is what I want, but once we figure out what they need, we can suggest a better product for their needs. We know what works, and we know what doesn’t work so we can make a happy marriage. Why did you join CFADA? Why is membership in CFADA important, and what are the benefits? I’ve been involved with CFADA for over four years now. If you want to have your voice to be heard and be part of the solution to problems affecting the auto industry, CFADA is a must. Being a member gives you that power. With the association, including dealers’ opinions can help make better decisions about what’s happening to the auto industry around us. What is your biggest career accomplishment so far? When I started in the sales department, we used to have six days off a month. I remember there were about six to eight days that we had to work the entire day. The work-life balance wasn’t the best. I’m happy to say that for many years, in my store, everybody has had between nine and 10 days off per month. Everybody on my team gets a weekend off every month so they can spend time with their family and have a quality of life. Not only do they have a weekend off, but they also have a Tuesday or a Wednesday off during the month to allow them to take care of things that can’t be handled on the weekend. From the fixed side, my technicians only work three days, then they have four days off. Any last thoughts? My employees are the most important part of the business. Taking care of my employees is what I live for. It’s my number one goal. I think that is the secret to having a successful business. I believe that if I take care of my employees, they will take care of my customers. If the customer is happy, everything else after that is easy. My employees are the most important part of the business. Taking care of my employees is what I live for. It’s my number one goal. I think that is the secret to having a successful business. I believe that if I take care of my employees, they will take care of my customers. ACCELERATE 11
WAYS TO INCREASE YOUR SERVICE DEPARTMENT TRAFFIC 12 ACCELERATE
Although your parts and service departments are fixed operations, there are ways to increase traffic and, ultimately, your net profit. The first and most obvious one is keeping expenses down. That could be worth a separate article, but assuming you’ve already done that, the next step is to increase net profit by focusing on creating new business. There are several ways to accomplish this. You could focus on the profit margins for labor and parts sales, increase the number of sales per repair order or increase your repair order count. This article is about the last option, a fancy way of saying you should increase foot traffic. Examine Capacity Challenges We would all like to think that the pandemic is behind us; however, pandemic-related consequences continue. The shutdown prevented many people from maintaining their vehicles on time, and many owners are still playing catch up. The auto parts supply chain is still dealing with shortages, thanks partly to a brittle and arguably too-long path between the factory and the service department and partly to shutdowns and employee shortages. Currently, there aren’t enough loaner cars because many businesses sold off their fleets to generate needed income and haven’t been able to replace them. Thanks to labor shortages, some auto dealership service departments are understaffed. These are problems you can’t always solve at the dealership level, although many experts are working to remedy them. The J.D. Power 2022 U.S. Customer Service Index Study was released March 9, 2023. It contained some interesting information. For example, wait times for service appointments have increased. It now takes approximately 5.6 days for premium cars one-to-three years old and 4.8 days for mass-market vehicles one-tothree years old. That’s an increase of almost two full days. According to the report, delays are due to the increasing volume of EVs being serviced resulting in the first customer satisfaction decline in nearly 30 years. Why not take that hard truth and make it work for you? Now is the time to stand out from the crowd. Most dealerships work hard for a positive relationship with their customers. People who view the dealership warmly and know from first-hand experience how much it does for its customers and the community will react well when you need patience from them. Friends are good to friends. As the market continues to shift toward EVs, be aware that there’s an opportunity for better service. According to the J.D. Power study, people who own gas- or dieselpowered vehicles marked their overall service satisfaction at 852. For EV owners, it was only 784. Remember, many of those EVs are Teslas coming out of gigafactories in California, Nevada and New York. A lower satisfaction rating might indicate that Tesla’s customers are missing the service they used to get from dealership service departments. Never underestimate the power of keeping customers happy. Communicate Surprisingly, the survey found that communicating with customers keeps them happy. Customer satisfaction improves if service departments are proactive about communication and send texts or emails about unresolved problems. If a dealership problem affects customers, consider being preemptive about it and reassure them that you are working hard to resolve the issues. Increase Productivity Finding technicians without enough to go around can take some creativity. Focus on the following: treat techs well, consider hiring more diversely, and take an interest in programs at local schools. Do what you can to create a pipeline, hire more women and minorities, mentor young techs and help create satisfying career paths for them. ACCELERATE 13
Master techs are great, but you don’t need a master tech for every job. Instead, hire “B” and “C” level techs to handle repairs and maintenance. You can increase the work capacity that your service shop has by hiring just one tech. In turn, having one more tech reduces the customer wait time and can generally increase gross profit by about $10,000 per month. Even if you focus on hiring less-experienced techs, they will, in most cases, improve their skills over time. Schedule Appointments Get customers into the shop as soon as possible by scheduling an appointment for them when they call. For the dealership to be as competitive as possible, the appointment must be that day or the next. Until a tech looks at the problem, you can’t expect to provide them with an accurate diagnosis. And, if customers can’t get their vehicle into the shop immediately, they may call the aftermarket competition. Therefore, whoever handles calls — a service adviser, an appointment coordinator or someone else — should have only one primary assignment: scheduling appointments. Make Communicating Easier Many technology channels have made it much easier to communicate with customers than ever before. Set things up so people can make appointments online or through an app. Ease payments by putting that online, too. Send text messages and videos about repair work. People like getting a video or photo that shows them repair work to be done, and when you send some photographic evidence to them, they are three times more likely to agree to the work. Use Valets or Send Technicians People have always liked personalized service. Be willing to send a valet to collect a vehicle. Alternatively, send a technician to the vehicle’s location. Owners who use valet or mobile service rated their overall higher in customer satisfaction. Call No-Shows No-shows are a fact of life. People get busy, and they forget what they’ve scheduled. However, there’s a lot you can do to reduce the number of no-shows. Send a confirmation text when someone makes an appointment and a final one on or before the appointment day. If a customer doesn’t show up despite the text messages, have someone call them to reschedule. Follow Up on Special Order Parts Sometimes repairs can’t be made until an ordered part arrives. You may send the customer a postcard to let them know the part came in, but don’t stop there. Someone from the dealership should also call the customer to make an appointment. Too many dealerships don’t follow up with customers about parts orders. As a result, they sometimes have a large inventory of never-installed obsolete parts. Try to get the parts installed on the vehicles that prompted the order as much as possible. Make Routine Service Appointments When customers come in for an appointment, you ideally want them to return later for routine maintenance. Talk with customers about the next required maintenance and give them the option of making their next service appointment before they leave. The appointment can be time- or mileage-based. If you implement these strategies, the repair order count may increase by at least 10%. If the service department normally performs 400 repairs a month, after hiring a new tech and increasing the dealership’s focus on following up, the number could increase to 440. In a year, the extra 40 repairs per month could add up to 480 repairs. And the extra money will head straight to your bottom line. 14 ACCELERATE
We’re more than a financial partner. We’re an invested one. True relationships matter. We don’t take this lightly. The best are built on a deep understanding of your short- and long-term goals and always backed by thoughtful, strategic advice in support of your vision. With full-service financial solutions and a deep bench of industry expertise, we’ll build a team around your organization to focus on your success. So, let’s drive further—together. To learn more, contact Jason W. Smith, head of Dealer Commercial Services, 407-237-4011 or Jason.w.smith@truist.com. Truist.com/DealerServices © 2022 Truist Financial Corporation, Truist, Truist purple and the Truist logo are service marks of Truist Financial Corporation. All rights reserved. Truist Securities is the trade name for the corporate and investment banking services of Truist Financial Corporation and its subsidiaries. Securities and strategic advisory services are provided by Truist Securities, Inc., member FINRA and SIPC. | Lending, financial risk management, and treasury and payment solutions are offered by Truist Bank. | Deposit products are offered by Truist Bank, Member FDIC.
PLANNING FOR DEALERSHIP SUCCESSION DIVIDING MULTIPLE DEALERSHIPS AMONGST FAMILY By DUNCAN MOSELEY, Managing Director, Business Transition Advisory Group, Truist Wealth 16 ACCELERATE
Middle-market business transitions are rarely simple, and family dealership transitions are among the most complex. Typically, a dealership begins after one family member opens a dealership and then decides to add more over time. Indeed, successful dealers say the best way to expand wealth in the industry is to increase the number of dealerships held. As the number of dealerships grows, so too does the number of family members involved in the business. An owner’s children may decide to work in the business, and some might even make it their career, while others may choose to work in another field. As their children become adults, dealership owners begin to wonder how they can plan for the succession of their business and the distribution of its assets amongst their children without risking the business itself or family relationships. When owners have multiple dealerships and several children working in the business, they ask, “Should I put my children in business together, should I separate the dealerships and divide them amongst my children or should I just sell the business altogether?” When owners decide to keep the business, they want to know how to provide for their children with other careers. Take Marty, for instance. He started with one dealership and now has five, with a combined worth estimated at $150 million. Additionally, Marty owns the land where the dealerships are located, which is worth a combined $50 million. Outside the business, Marty has about $10 million in assets, including a $3 million home and a $3 million beach property enjoyed by the entire family. But most of his wealth — like the airplane available to all family members — is tied up in the business. Marty has three children. Alton and Betty grew up working at the dealerships and want to continue working in the family business. While they have quite different personalities, neither can run the business alone. The third child, Carl, is happy with his own career outside the business. Marty’s total estate is $210 million, or $70 million per child. He has three goals: expanding the dealerships under the family name, giving each child a fair share of the wealth and doing so in a way that maintains family harmony. However, accomplishing these goals may become complicated. For example: • If Marty divides his estate by three, there aren’t enough personal assets for Carl to receive an equivalent value to that of his siblings without including some business interest. • If all three children receive a third of the business assets, the dealerships may suffer if they disagree on business goals. Moreover, Carl may resent salaries paid to his siblings, and they may resent him for taking a third of the profits when he doesn’t contribute. • If Alton and Betty can’t run the business together, there isn’t an even number of dealerships to divide between them, and the dealerships may lose value by not being part of a larger group. • The airplane and beach home may present a source of conflict if certain family members lose access to an asset they’ve enjoyed for years. And so, Marty is left with two crucial questions: “How do I treat each child fairly? And does the division have to be equal to be fair?” Eight Key Points for a Succession Strategy 1. Interview your children to determine the intent and desires of each. Do they want to work in the business? Can they succeed together? Can they manage the business as a whole? 2. Educate your children about what it means to be in business together. 3. Explain how assets are not equal. Why might a fair share not be an equal share? Why is $20 million in cash not equivalent to a dealership valued at $20 million? 4. Set clear expectations on what your children must do to maximize the benefits of your plan. 5. Involve your children in the business so you can mentor them, assess their capabilities, and examine their ability to work together. 6. Guide your children on managing their own personal financial lives and assess their ability to use the business’s assets responsibly. 7. Set a plan for children not involved in the business. If your children can work together but don’t all want to work in the business, consider including the other children as non-voting owners, communicating clearly what they might receive based on your projected growth strategy. ACCELERATE 17
8. Consider alternative ways to pass value to children who aren’t working in the business. You’ll need a different approach for a child who doesn’t want to be involved with the business or whose involvement would disrupt the family dynamics or the business. Consider options like a life insurance policy, a dividend recapitalization to extract value, selling a business asset (including one or more of the dealerships) or prolonging a growth strategy for the business to keep that child’s inheritance on par with the other children. Discuss your approach with your child, showing your commitment to a fair — but not necessarily equal — distribution to a child who has chosen to pursue other opportunities outside the business. What Are the Keys to Creating a Successful Plan? • Time: Allow enough time to prepare the proper strategy. A succession plan is neither created nor accomplished overnight. • Education: Ensure you and your children have a thorough understanding of the options available within your business and outside of it so you can structure an appropriate plan. • Communication: Set clear expectations for your children, make sure they understand your approach and get their buy-in at every step of the process. • Flexibility: Make your plan flexible enough to accommodate changes in your business operations, family dynamics and personal goals of your children. The Truist Business Transition Advisory Group has helped many dealership owners prepare and successfully transition their businesses, breaking through roadblocks with an integrated approach that leads to success and peace of mind for owners and their families. Developing a transition that supports both the needs of your business and your family ensures your hard work will provide for generations to come. Ready to prepare your dealership succession strategy? Ask your relationship manager about how the Truist Business Transition Advisory Group can help you and your family prepare to successfully transition your dealership. Go to truist.com for more information. 18 ACCELERATE
CAUGHT YOU LOOKIN’! CONTACT US TODAY! 801.676.9722 sales@thenewslinkgroup.com Your Customers Are Too. Advertising Space Available. QR Code: website /#ad-space
Digital retailing makes it easier and more exciting for customers to shop for cars. The physical and digital processes of buying a car are merged into one seamless experience for the customer, creating more engagement and more sales with the dealership. What is Automotive Digital Retailing? In the early 2000s, customers would visit, on average, five dealerships before purchasing a vehicle. Today, customers may visit two dealerships before making a decision. They know what they want to buy, and they know exactly where to go to get it. With this new age of consumers searching online for the car they want, dealerships need to change how they approach vehicle sales. Digital retailing is different from digital marketing. It’s more than just viewing an online inventory or marketing the dealership on social media. With digital retailing, customers can dive deeper into the car-buying process from the comfort of their homes. They want to buy a car the same way they buy every other product online: with an easy and streamlined checkout process and without pushy sales tactics or overly-complicated forms. They want to pick out exactly what they want and show up to your dealership ready for the keys. Even though it may feel like dealerships are losing influence and control in the car-buying process, it doesn’t have to be a bad thing. Omnichannel Digital Retailing Omnichannel is defined, in terms of business strategy, as a way to provide a seamless shopping experience from your phone to the store. There is no one right way to implement omnichannel because it depends on the needs of the business and the customer. No matter how the customer wants to shop, they should remain interested and engaged across all shopping avenues. Using omnichannel, your dealership can control how the customer interacts with your brand and inventory. You can guide customers to the general inventory, or you can be more specific and push them towards a specific model of car you are trying to sell. Customers then will have control over where they go to complete the process, but your dealership pushed them in the right direction. This way, customers create their own experience while digging deeper into the buying process. You are able to reach your customers directly without an email or phone call while the customer makes their own decisions. The Two Types of Customers Digital retailing gives customers the opportunity to shop exactly how they want, and there is one of two ways they usually do. The first type of customer rushes through the whole process, wanting to make up their mind quickly. They want to offload their trade-in, secure financing, and complete the sale within a matter of hours from any device. They don’t want to be upsold and want to finish the process as quickly as they would at any other online retailer. They will only need to show up to the dealership to sign the final papers and grab the keys to their new vehicle, making the interactions in the dealership quick and minimal. They know what they want and don’t need to contemplate their decision. The second type of customer needs time to think everything through. They need to sell themselves on the idea of buying the car before they make any big decisions, contemplating all the possible options and making sure they are getting exactly what they want. They may want to discuss their options or ask questions about the specific qualities on the cars they are analyzing. They don’t want to feel rushed for fear they will end up regretting their choice after the sale is already complete. HOW AUTOMOTIVE DIGITAL RETAILING CAN AFFECT YOUR DEALERSHIP 20 ACCELERATE
No matter which type of customer you get, both eventually end up at your dealership. An omnichannel provides flexibility for both types of customers to shop how they want. Whether the customer wants to race to the end of the buying process online or wants to do thorough research on various vehicles without hours of repeated conversations with a salesperson, an omnichannel solution is the way to go. A fluid omnichannel digital retailing experience allows the customer to go between your website and your dealership without losing their place or being forced to provide the same information multiple times. Customers like transparency and control, and when they have both, the chances of a sale improve exponentially. Implementing Omnichannel Digital Strategies There are multiple ways to implement omnichannel, but it can be difficult to know where to start. One of the most important aspects is simply knowing what the customer wants as part of their online shopping experience. Your dealership must create the strong online presence over multiple platforms that the customer is used to from other industries. Another important aspect is ensuring the customer has a seamless transition between digital and physical channels. AI features such as virtual assistants and virtual test drives boost the customer’s experience while also collecting data. This data could be about the customer’s vehicle preferences, what specific features they’re looking for, what features they are avoiding, and more. You can then save that data and use it for the customer’s in-person experience in the dealership as well. This will assist in reducing the number of repeated conversations between the customer and salesperson and avoiding asking for information that could have already been collected earlier. With smoother transitions and faster sales, the customer will walk out of your dealership feeling satisfied with their purchase. Plus, the new technology will make the process quicker and shorten the length of time it takes to process a sale, closing the gap between the fast-paced online markets and traditional in-person stores. Plus, customers will always be happy to no longer sit in a dealership for four or more hours. Even after the sale is complete, there are still opportunities to connect with the customer using omnichannel. The data collected from the online channels can be used to create personalized interactions and establish a long-term relationship with the customer. AI assistants can help remind customers about regular checkups for the car and increase engagement with add-on services. The customer won’t feel like they are part of a mass email to every customer that has ever shopped at your dealership, and instead, they will feel like they have a more personal connection with your dealership, building rapport and brand loyalty. In Closing Like everything else, the automotive industry needs to embrace the transition to the digital world. It may be difficult to begin, but a strong digital retailing experience will smoothly integrate your dealership with an online presence. It opens the door to new ways to leverage customer data, build trust with the customer, generate leads, and increase the dealership’s closing ratio. You could be closing more deals without using any extra manpower. It may be a challenge, but making this extra effort will pay off for you and your customers. ACCELERATE 21
Together with our members, CFADA strives to be more than just business owners. We serve our communities and help them flourish through our charitable giving. Over the past 92 years, our association and our members have invested thousands of man-hours and volunteer time in hundreds of local and national causes. Together, we have donated more than $12 million dollars to various charities. The CFADA Charitable Giving Foundation, with the help of our members, shares our industry talent and resources to bring attention to the needs of our Central Florida communities. United in purpose, we organize and promote multiple events. At the heart of our foundation are the children, the students and the families within the communities we serve. They are at the core of our giving efforts. Of note, over the past decade, thousands of students have benefited from our support through the following programs: • ASE Student Career Development Program • Orange Technical College Automotive program • Automotive Technology Training Center at Seminole State College The association helped build and continues to fund the Automotive Technology Training Center at Seminole State College to ensure that we have a pipeline of skilled automotive technicians to help service and care for our customers. With our help, students with a passion for cars or those who recently discovered their love of cars can pursue a career bustling with opportunities. Students say that their favorite part of the program is the ability to get hands-on experience, hone their technological skills and set free their creativity to service and repair the smartest, safest vehicles on our roads. To learn more about the foundation and get involved, please visit cfada.org/foundation or reach out to Evelyn at (407) 708-2780. CFADA CHARITABLE GIVING FOUNDATION ACCELERATE 23
Ideally, vendors and businesses work together as partners. Having a genuine relationship and being able to problem-solve together is an advantage no matter what. The auto business is not exempt. Dealerships have done well during the last couple of years. But there’s a downside to good times: dealerships sometimes develop bad habits because it becomes so easy to wait for customers to come to them instead of going out and finding new ones. Without leadership and a good plan, teams can fall apart quickly. As John C. Maxwell said, “Teamwork makes the dream work, but the vision becomes a nightmare when the leader has a big dream and a bad team.” Having a vendor as an ally in business can play a crucial role in the success or failure of an organization. Organizations should work to strengthen their vendor relationships in the same manner that they focus on team development and fostering customer loyalty. Once your goals are set and your vendor has committed to working with you, it’s important to maximize the relationships so you continue to get the most out of your tools. Here’s how to keep relationships going so you see the best results. Team Training and Support Working with vendors to come up with a well-thoughtout training plan for your team helps with integrating new products into your dealership. At times, it can be hard to implement new tools because daily routines are set, and everyone is pressed for time. That’s why it’s important to work closely with your vendor to set your team up for success. When possible, bring in a vendor representative to train and educate your employees. That way, everyone understands how to use the new product. Key Performance Indicators (KPIs) Vendors should provide you with KPIs. KPIs create targets for your teams to hit, milestones to track progress and insights to help organizations make better decisions. Using feedback from KPIs will help you to continually improve performance. Communication Set up regular check-ins with vendors to talk about what’s working and what’s not. This is where you can get the help you need. A receptive vendor will use your feedback to improve its product, so be honest. It is also important to establish open channels of communication for your team to ensure everyone using the vendor tools knows how to get help if they need it. Long-Term Training Training is not simply finished after the initial setup. Follow-up training from your vendor is important because it allows your team to give feedback, get questions answered and allows for training as the product develops new features. You’ll keep your staff engaged and maximize the value of your dealership tools. A good vendor is there to help you achieve your goals, so make sure to stay on the same page, keep your communication going and continue to look for ways tools can benefit your dealership. Having a great relationship with a vendor who has a vested interest in your business can prove to be beneficial in a number of ways. Cost Savings Being a good customer — with consistent orders and on-time payments — can lead to vendors offering volume discounts and having special deals. Timely Deliveries In order for you to meet your obligations and provide excellent customer service, you need to have the tools you need delivered on time. That’s what’s great about having a good relationship with your vendor, they will prioritize you. Vendors will deliver the goods ahead of time. In addition, they’ll make sure that you get the best training and will follow up. Vendor Support When issues arise, the vendor will be prompt in their responses. More than likely, they’ll go beyond the basics to address your problem and compensate you for your trouble. PARTNERSHIPS HELP DEALERS SUCCEED By Sharon Kitzman, Dominion DMS 24 ACCELERATE
Customization As your vendor begins to understand your business, they can provide you with unique and customized products that can create a competitive advantage over other businesses in the marketplace. Customer Satisfaction A strong relationship with your vendor can also impact other relationships, that of your customers and your company. When you deliver goods and services on time and free from issues, your customer relationships will become stronger. This can foster loyalty and trust as they will feel that their money is well-spent. There is more to consider. Recent trends in the auto industry are affecting dealerships, and dealers will have to adapt. What are some of those changes? You already know about an increase in EV sales, but specifics are harder to find. How many will be built, and where will they be distributed? When will the national charging infrastructure become a reality? Additionally, What are the next steps in putting digital technology into evermore-connected cars? How will tech partnerships with auto manufacturers affect product offerings and sales strategies, including the market for accessories? Also, what progress is being made on autonomous cars? Will interest rates continue to rise? How will that affect the drop in used car prices as market conditions stabilize and supply chains return to normal? What about the regulatory environment? Major changes in finance, insurance and lending have all taken place. How will dealers create a consistent sales experience for customers? Will they refine multi-channel coordinated marketing? Will they go to Gen Z’s current search engine favorite, TikTok? As the market changes, finding lowhanging fruit may be more difficult. Establishing and maintaining solid vendor relationships is vital. Now is the right time to return to selling basics — focusing on customer service while maintaining cost efficiency, quality and developing your market are key. That means using your DMS to give you the information about customers you need. NADA keeps statistics about many aspects of the auto business, but one of those statistics has to do with inventory. About 2% of the people in a dealer database return to the market every month, but that doesn’t mean they return to the dealership where they bought their last car. Very few customers are loyal to a specific dealer, but a good DMS can help you to identify helpful information about customers: When was the last time they did business, did they buy or lease? Pay cash? Buy insurance? What was their payment range? How do you track your customers who aren’t coming back to your dealership? The technology is now there to know when customers visit other dealers. Dealers can use that information to determine why their customers are going elsewhere and possibly find ways to bring them back. Google Analytics (GA3) is making way for a unified GA4 specification written by the Automotive Standards Council, due in November 2023. Also, you can look forward to tracking across all vendors and outcome-oriented conversion signals that replace clicks. With the pandemic over and concerns about disease fading, how is shared mobility developing? We know fewer people are currently buying new automobiles. Of those who do, they don’t often have much equity in their old one. Will younger people continue to avoid buying or driving cars, or will they finally decide that getting a license and having a car is worth the time and money? What will happen to the subscription-based services manufacturers are experimenting with? Some people are coming in to return leased vehicles and walking out with a substantial check instead of another leased vehicle. If fewer people are buying automobiles, that also means there are fewer used automobiles. Optimizing revenue streams has become critical to staying in business. Dealers and vendor partners both benefit from communicating ideas and solutions for the problems they see. It’s easy to spend time on administrative tasks instead of building relationships and talking with business partners is as important as any other task. Maximizing your vendor relationships will increase your return on your technology investments and keep your dealership ahead of the curve. Finding a balance is key. Sharon Kitzman leads the launch and long-term growth of Dominion DMS. Previously, she managed the strategic direction and product development for Reynolds & Reynolds and Dealertrack. Her experience spans every area of dealership software development, including sales, marketing, product lifecycle management, process re-engineering, OEM management, professional services, and customer services. Kitzman is a recognized leader in the automotive industry for her expertise in DMS technology. She received numerous accolades for her leadership, including Automotive News Top 100 Leading Women 2015 and 2020, Auto Remarketing Women in Retail 2021, and AutoSuccess Women at the Wheel 2021. She has a Bachelor of Business Administration from Ohio State University. Listen to our VUE Points podcast to stay up to date with news and current events related to the automotive software and retail industry. https://www.dominiondms.com/podcasts/ ACCELERATE 25
WHY WAIT? How Evaluating Your Dealership Can Help Your Business. By Maxime Théorêt, CPA and Managing Partner & Jennifer Rafael, Vice President and Partner at DSMA We all know someone who waited until the last minute to get a service they needed: car insurance, that warranty on their largest appliance, or a list of valuable items they would like insured in their home. And what did they wait for? A car crash, a fridge malfunction, or a flood. Well, we feel the same way about your dealership evaluation. The time to have it conducted is when things are going smoothly — we believe that there is no need to wait until an interested buyer knocks on your door (or your literal roof caving in) to know your business’ worth. So, let’s go through this question together: Why now? Your Dealership’s Biography Having a true thousand-mile view of your dealership’s financial health and capability can act as a dashboard for your business, help you know where you are now, and more importantly, where you are going (or can go). From the value of the brick & mortar to the KPIs that make up your dealership’s bottom line. A true deep dive under the hood allows you to diagnose areas that you may want to pivot (or preserve) to reach your business’s fullest potential. Waiting for your next 20 Group to know where you need to improve no longer needs to be the norm. Imagine a dedicated evaluation report with all the metrics to help you make informed decisions for the future with complete confidentiality. We’re living in an era where you can assess the health of your vehicle with a few touches on your infotainment system; assessing your dealership’s financial health can be just as efficient. No Surprises Assessing your business regularly is a lot like having your car serviced: no one wants unpleasant and costly surprises. A dealership evaluation is a preventive exercise that allows you to analyze areas of improvement and the good practices of your dealership. It’s an exercise that highlights performance but also areas where your business can do better. This in-depth analysis of your dealership’s activities also allows you to detect business trends that you may want to pursue or improve, especially if you feel short-changed by your fiscal year (we know you’re thinking of your tax return as you read this). In short, this one- to two-week exercise will allow you to take stock of your business from every angle. Be Better Equipped for Short, Medium, and Long-Term Planning Are you thinking of expanding your portfolio or maybe retiring? No matter what stage of your professional life you are in, an annual business valuation is an indispensable tool for clear and precise planning of your business activities. Anthony Codispoti, DSMA Manager of Valuations, notes that among the thousands of appraisals that have been performed over the past decade, there have indeed been several instances in which results showed a 20-30% difference in value from what a dealer thought their dealership was worth. Such a difference, whether higher or lower than expected, can paint a clearer picture of what your fiscal future will look like. So, whether you are creating a succession plan for the next generation or seriously thinking of business growth, both projects could be greatly enhanced with a little preparation — and additional information. Don’t Underestimate the Power of a Balance Sheet Thanks to the rising inflation rates, a clear and precise balance sheet of your business is crucial when negotiating. Indeed, dealership transactions can be quite complex, and the current economic climate (inflation, brink of recession, etc.) unfortunately further complicates negotiations. This is why a dealer in expansion mode should know their business inside and out. A balance sheet is your best asset when approaching investors and financial institutions in order to accomplish your next acquisition goal. In the same breath, a dealer wishing to sell will equally be much better equipped to deal with potential buyers when knowing the exact net worth of their business. Proactive + Prepared = Peace of Mind Don’t wait for a crash in the industry to act. By conducting a regular valuation of your dealership, you are being proactive. Such preparedness shows that you are ahead of the curve. Proper knowledge of your dealership’s accurate value will help you deal with various industry crises ... or, better yet, prevent them. And you know who loves to see that? Financial partners. Prepare for the Unexpected Although grim topics, when faced with a separation, divorce, or even death, dealers or their teams often find themselves completely rushed and in no state to evaluate their business. These unexpected events can occur at any time on a personal level and can greatly affect the day-to-day operations of your dealership. If this happens, having an accurate assessment of your business can help you maneuver challenging times and even protect your estate in the event of your death. Maximizing Your Dealership’s Value Lastly, you can’t grow your dealership without knowing its true value. Make sure you partner with experts who can appraise your dealership and give you an accurate representation of your business’s value on the market. So, we ask you again: What are you waiting for? At DSMA, we have the certified staff and sophisticated tools to accurately value all vehicle dealerships, regardless of their market or location. We use QUOTUS™, a confidential and secure digital platform we’ve developed internally over the past few years, which allows us to evaluate a dealership in every respect — with the most precise data on the market. It is the most reliable automotive market intelligence in North America, which allows you to maximize the value of your dealership. This tool benefits not only automotive dealers but everyone in the motorcycle, heavy truck, agriculture, marine, and heavy vehicle industries. Please contact Jennifer Rafael, Vice President and Partner at DSMA at (312) 927.9561 or Jennifer.rafael@dsma.com or visit dsma.com to learn more. 26 ACCELERATE
www.thenewslinkgroup.orgRkJQdWJsaXNoZXIy MTg3NDExNQ==