OFFICIAL PUBLICATION OF CENTRAL FLORIDA AUTO DEALERS ASSOCIATION CONNECTING AUTO DEALERS AND THE CENTRAL FLORIDA COMMUNITY CELEBRATING THE CENTRAL FLORIDA INTERNATIONAL AUTO SHOW
warrantyprocessing.com 303.795.0612 Flower Mound, TX Scan the QR to schedule a time to chat with an experienced agent. 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. WE’RE HERE! Let’s Talk.
OFFICIAL PUBLICATION OF CENTRAL FLORIDA AUTO DEALERS ASSOCIATION Pub Yr 4 ©2024 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 Seasonal Changes 6 Our Leadership 2024 Board of Directors 8 Celebrating the Central Florida International Auto Show 12 When Saying Less Gets You More 14 Protect Your Dealership From Fraud and Cyber Threats Learn About the Latest Fraud and Cyberthreats, How To Defend Against Attacks and What To Do if You’re a Victim of Cybercrime 18 Control What You Can 20 How to Build a Consumer-Friendly Service Experience That Is Efficient 22 5 Factors to Consider in This Hot Seller’s Market 14 18 8 ACCELERATE 3
Evelyn Cardenas President/CEO Central Florida Auto Dealers Association PRESIDENT’S MESSAGE SEASONAL CHANGES Spring is my favorite time of the year. It is a time that, like New Year’s, reminds me of new beginnings, new possibilities and fresh starts. The flowers start to bloom, the trees begin to flourish and the birds start singing their morning harmonies. I always know when Spring is in the air because I have the added reminder of seasonal allergies. For as much as my eyes love to see nature flourishing and my lungs love to breathe in the Spring air, my body is ready to fight everything it deems a threat. The histamine begins to flow, and the antihistamine pills begin to form part of my morning ritual. Like seasonal allergies, our industry faces seasonal changes. Last year, almost 16 million new cars were sold, which represented a 12.3% increase from 2022. While GM, Ford, Toyota, Nissan, Honda, Mazda, Hyundai, Kia and Subaru enjoyed sales growth, Stellantis struggled a bit. The luxury brands also enjoyed increases. New and somewhat newcomers like Tesla, Lucid, Karma and Fisker also made strides. The top four best-selling models were the Ford F-series, Chevy Silverado, Ram Pickup and Toyota Rav4. Last year also marked the first time that battery electric vehicles sales surpassed one million units making it 7.2% of all new light vehicle sales. As 2024 is coming along, high interest rates and high inflation are having an impact on vehicle sales. The electric vehicle hype has almost extinguished as OEMs realize that, while there is a place for alternative fuels, the gas-powered car is still the preferred fuel of consumers. At CFADA, we have been serving dealers since 1929. One true and consistent fact throughout all these years is that dealers are resilient. The automotive industry is a mainstay. Vehicles are the key source of transportation. And, for all the evolutions, pivots and shifts that industry has faced and will experience, dealers will endure, so will the factories, and so will the consumers that rely on them. You do not get to be a double-centenarian industry of continuous innovation and success if consumers do not believe in you and your products. In Florida, our industry sells $107 billion worth of products, employs almost 200,000 people and contributes $8 billion in payroll. This type of success and stability does not happen overnight. As the economy continues chugging along and interest rates and inflation hopefully begin to subside, we know that you will do what you do best, serve your customers’ mobility needs. You keep them moving and living the life they want with the sophisticated vehicles that you provide, service and maintain. 4 ACCELERATE
Anticipate every turn In an industry that’s always evolving, your dealership can rely on our Dealer Financial Services team’s 90 years of experience to see what’s around the corner, forward-thinking insights to prepare you, and technology to keep you ahead of the curve. What would you like the power to do?® Lauren D’Hondt, lauren.dhondt@bofa.com business.bofa.com/dealer ©2023 Bank of America Corporation. All rights reserved. DFS-699-AD 5949042 Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value “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, derivatives, 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., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA.
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 Vice Chair Sutherlin Nissan Richard Sox Counsel Bass Sox & Mercer Eric Matos Director Universal Nissan Randy Parks Secretary/Treasurer Parks Auto Group Shannon Kominowski Past Chair Chrysler Dodge Jeep Ram Brooksville Glenn Ritchey Jr. 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 2024 BOARD OF DIRECTORS 6 ACCELERATE
See your business from a new angle Take your dealership farther and get there faster when you have the right vantage point—and the right partner, Truist Dealer Services. Learn more at Truist.com/DealerServices Truist Bank, Member FDIC. © 2023 Truist Financial Corporation. Truist, the Truist logo and Truist Purple are service marks of Truist Financial Corporation. Dealer Services
CELEBRATING THE CENTRAL FLORIDA INTERNATIONAL 8 ACCELERATE
AUTO SHOW The 2024 Model Year Central Florida International Auto Show was a sight to see. As in years past, many favorite brands dazzled the floor. The show brought old fashion nostalgia, new tech anticipation and positive energy around automotive speed. The squeal of the tires echoed throughout the day as almost a dozen brands hosted an electric vehicle ride-along inside. Outside, customers enjoyed being in the driver’s seat, test driving their favorite brands. The show allowed families and friends to see the latest technology in cars. The beauty of the auto show is that it is a show for sharing. Families and friends come to sit in the vehicles, open the gates, pop the hood and measure the legroom. The real test is not how well a car drives but how well the car drives for you, for your loved ones and for those most important in your life. There is not another place where that can happen in a family-friendly, friend-friendly, no-sales environment. Memories are made even when the cars are not moving. ACCELERATE 9
There were a couple of new additions to the show. First was the Auto Tech Competition. Eighteen students from around Central Florida competed for the title of Top Tech, scholarships and awards. The three winners: first, second and third place, took home $10,000 in cash alone. These students were 17 and 19 years old. Their skill and talent for automotive technology were impressive. The other inaugural event this year was the Ladies Brunch. Professional women from Central Florida enjoyed brunch, drinks, car history, Florida history and each other’s company as they shopped at a local nonprofit serving survivors of domestic violence. The Auto Show is not a place to shop for cars but a place to be with those you love as you dream and learn about the cars coming to our region. As we prepare to go to the places that matter to us, our cars are not only a means of transportation but our personal assistants. They not only keep us moving and keep us safe, but they keep us in our lane, make sure we get places on time, tell us where we are supposed to be going and how to get there. They read our texts, make our calls and remind us of the important things. For over 40 years, the Central Florida International Auto Show has been the place to find the vehicles that make your life possible. We are happy to produce an event that means so much to our community. Now, we plan in anticipation of next November when we get to build these memories again. 10 ACCELERATE
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WHEN SAYING LESS GETS YOU MORE “Less is More” is a popular phrase that has been tossed around for years, even dating back to the ancient Greeks. You may have heard it in various settings — perhaps the Minimalist Movement comes to mind. “Less is More” is a simple yet powerful concept that can greatly impact your life. The essence of the principle is this: Instead of always striving for more, sometimes focusing on less and simplifying things is better. By doing so, you can reduce stress, increase clarity and achieve greater satisfaction in your daily life. This principle can be applied to many different areas of life — from home organization to cooking and more. You wouldn’t want to ruin a nice steak by putting too much salt on it! So, why not try embracing the idea that less can sometimes be more? This premise may be more valid in the sales business than any other. We often teach salespeople that in order to excel, they need to be product-knowledge experts on each vehicle model the dealership offers. And while this is true — product knowledge can be a catalyst for growth, confidence and professional development — it must be relayed in moderation. F&I managers are also encouraged to become experts in their product, or it could reflect badly on their business. Nobody wants to be sold anything by someone who doesn’t know what they’re selling. If the salesperson or F&I manager has put forth the effort to become a product expert, they should be prepared and ready to share what they’ve learned in response to a customer’s question. The issue is that some people tend to share excessive information about a product when asked a question, instead of providing a direct answer. This can turn their extensive product knowledge into a negative rather than a positive. Whether prompted or not, sharing everything you know is usually not the best course of action. A direct response that is clear and concise trumps the volume of information just about every time. Why waste time and energy using 10 words when one will do? It takes skill, awareness and experience to know how to answer and when to stop answering. Most customers are probably not interested in the details; instead, they want their answers and they want to get on with their day. So why is it so hard for some salespeople and F&I managers to get to the point? It’s possible that they don’t have a point. Perhaps they haven’t thoughtfully considered the question and how to answer it before they start talking, or maybe they lack experience or confidence, which can lead to over-answering. People speak at about 150 words per minute but process words at about 750 words per minute. Providing too much information without getting to the point can bore your customer and come dangerously close to a lecture or history lesson nobody asked for. Over-answering can harm your credibility and erode trust, potentially resulting in a quick “No, thank you” or silence when you stop talking — which is not ideal. If salespeople and F&I managers can learn to give direct and concise answers, this can prompt customers to ask more questions. Each question can provide valuable insight into the customer’s needs and problems, which the salesperson or manager can address in a clear answer that showcases the products’ benefits and features. Remember: Speaking less leads to better listening. In sales, actively listening can be more influential than words. Effective listening gives you a better idea of how to respond, allowing for more targeted, specific, concise and direct communication. When handling a customer concern, less is more. Salespeople and F&I managers often over-empathize with the customer by offering a lengthy response, trying to show understanding or similarity with the customer’s issue. When asking for business, less is more. If a customer raises one of three common concerns — such as cost, need or urgency — offer a solution and then ask for action. The old tried-and-true method still works: “If that works, I just need your approval.” If we can learn to talk less and listen more, it will lead to more yeses from our customers. 12 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
Auto dealerships are attractive targets for fraud and other cyber threats. Adopt the mindset of a tech-savvy criminal and it’s easy to see why — dealerships have sizeable deposit balances, make frequent high-dollar transactions (i.e., ACH, checks and wire transfers), and have numerous employees who use systems with sensitive customer data. Dealer management systems contain a treasure trove of information that hackers can sell or use to commit other crimes: social security numbers, bank account information, credit applications and scores, and insurance data. And auto dealers’ information technology systems often lack the latest firewalls, updates and security patches, giving criminals an easy path to cyber fraud. Given the sluggishness of digital security measures adoption, hackers know the odds of a successful cyberattack on a dealership are high. Roughly half (47%) of dealers surveyed lack confidence in their level of cybersecurity protection.1 Similarly, 46% said their dealership had experienced a cyberattack in 2023 that negatively impacted business operations or finances.2 With threats so prevalent, dealers must work to better understand the complex fraud and cyber threat landscape — and adopt proactive strategies to effectively mitigate their risk. Understand the Varied Threat Landscape Although many types of fraud pose risks for auto dealers, payments fraud is most common. Four out of five organizations reported an attempted or completed payments fraud in 2023 — a 15% increase from 2022.3 Of those, 65% involved checks, making checks the most fraud-prone form of payment. ACH debits were next at 33%, while fraudsters used wire transfers (24%), commercial credit cards (20%) and ACH credits (19%) somewhat less often. Business email compromise (BEC) is the primary source of attack for payments fraud.3 Relying on social engineering attacks, scammers trick PROTECT YOUR DEALERSHIP FROM FRAUD AND CYBER THREATS LEARN ABOUT THE LATEST FRAUD AND CYBERTHREATS, HOW TO DEFEND AGAINST ATTACKS AND WHAT TO DO IF YOU’RE A VICTIM OF CYBERCRIME By Lyubena Smith, CTP, Treasury Sales Manager and Pamela Garrison, Treasury Consultant for Truist, and Paula Mashburn, CPA, CFE, Partner with HHM CPA firm 14 ACCELERATE
employees into providing sensitive information, making fraudulent payments or opening email attachments that contain malware. Criminals can then enter a system and gain access to sensitive data or impersonate another member of an organization. Regularly review your online user entitlements to make sure rights are legitimate and appropriate. All users do not need access to everything, particularly personally identifiable information such as your customers’ social security numbers. Accounts payable and treasury teams are primary marks for BEC since they manage and approve outgoing payments. Others target legitimate, outsourced service providers or vendors to get into an organization’s systems or pose as a new vendor to obtain fraudulent payments. Synthetic fraud based on false identity is an increasing threat as well. Be Alert to Synthetic Fraud Synthetic fraud is on the rise at auto dealerships, up 38% in 2023.1 Criminals use stolen or “synthetic” identities to facilitate vehicle theft by securing approval for a loan in someone else’s name. Synthetic fraud combines information available for purchase with stolen or falsified documents to “prove” an identity. Don’t let today’s decisions lead to surprising repercussions. Recognize Common Risks Quickly Auto dealers identified email phishing, including BEC, as the most prevalent cyber threat in 2023.1 Other top threats dealers experienced in 2023 included (in descending order): 1. Ransomware. 2. Infection by PC viruses and malware. 3. Theft of business data. 4. Criminals enter email and systems using stolen or weak passwords. Regardless of the method, it’s important to uncover and remedy a problem as quickly as possible. Fraud doesn’t always trigger immediate alarm bells, but the longer it’s left undetected, the higher risk it presents. A recent survey showed that organizations identified 31% of reported fraud incidents within one to four weeks, while 22% took a month or more to discover.3 Early detection is important, but preventing fraud and cybercrimes from happening in the first place is ideal. All major dealer management systems provide a daily reconciliation module, which is an effective tool to catch fraud faster. As an example, it recently took a dealer 45 days to identify a fraudulent attack, which could have been found in 10 minutes if they had reconciled their account. Shore Up Your Defenses Auto dealers, like all businesses who handle consumer financial data, must comply with the Federal Trade Commission’s Safeguards Rule, which took effect in 2023. Your defensive actions should align with the security measures you’ve already taken for compliance with the Safeguards Rule. Consider people, processes and technology to create a comprehensive plan. People are your first line of defense. Make employee education a top priority. Train all staff to recognize the latest social engineering schemes and follow these security basics: • Don’t open suspicious emails or unexpected email attachments. • Be cautious when sharing personal or dealership information online. • Conduct online business via secure networks and internet connections only. • Verify any suspicious requests that purportedly come from staff, vendors, suppliers or other business partners. • Design financial process tasks to maintain strict segregation of duties — the staff member who initiates a task should never be the same one who approves it. Processes to safeguard company finances are another critical defensive measure. Start with the payment methods you choose. When possible, replace checks with a more secure medium, including credit cards, ACH and Real-Time Payments (RTP®). And always store checks safely, even canceled checks. If your dealer management systems have the capability, moving to Integrated Payables is another way to reduce financial risk. Integrated Payables allows you to streamline the payments process by sending all vendor payments in a single, secure electronic file to the bank, saving you from having to upload multiple files. As the bank distributes the payments based on predefined criteria, it can flag potentially fraudulent transactions. (Note: Seek expert help to ensure smooth platform integration with dealer management systems.) Follow these safety guidelines when making wire transfers: • Don’t rely on emailed or faxed instructions alone. Always obtain voice verification from an authorized person, at a known phone number, to confirm wire instructions. ACCELERATE 15
• Implement dual controls before approving a wire transfer, have one person receive the instructions, and another authorize the release. • Use the bank’s wire template for repetitive transactions. • Be suspicious of urgent requests. • Scrutinize ACH payments: • Verify authenticity and ownership of bank routing and account numbers. • Perform daily reconciliation on ACH debit accounts. • Separate file processing from file creation and maintenance. • Restrict access to payment data forms and records. • Use Truist ACH Fraud Control to set parameters for allowed transactions and receive daily activity reports. Designate specific bank accounts for distinct types of transactions. Segregating accounts makes it easier to spot suspicious activity. You can block wire and ACH activity on accounts not designated for those purposes. Technology is the third part of your cybersecurity program. Reduce the risk of fraud activity and cybercrime by following these technology best practices: • Keep technology systems, devices and software updated with the most current security protections. Install patches and updates as soon as they are available. • Regularly back up dealership data and store backups securely. • Limit access to devices and sensitive data to authorized individuals. • Use single sign-on systems (SSO). • Mandate the use of strong passwords and two-factor authentication. • Establish a cyberattack response plan. • Get cyber insurance and work with your insurance provider to further reduce risk. Create and Practice an Incident Action Plan Designate an incident response team to develop and maintain your response plan. The team should extend beyond your IT department and include senior managers, as well as essential staff from key operational areas. Make sure you know who you’ll contact for external resources and expertise. Your go-to list could include: • Cyber incident response experts. • Communications and public relations professionals. • Data forensics experts. • Data privacy legal counsel. • Your cyber insurance broker. • Other professionals as needed. Once your plan is complete, remember to keep a copy offline — a cyberattack could lock you out of computer files and systems. Don’t just file your plan and then forget about it. Test it with practice runs that simulate various incident scenarios. Conduct periodic cyber-attack drills that provide team members an opportunity to practice their response steps. This kind of “dry run” improves familiarity with response procedures, can help you identify potential barriers to execution, and can uncover gaps in the plan. It can also reduce stress levels after an actual incident, helping you act more quickly and effectively. Use these simulated incidents to update and improve your response plan. Act Immediately When an Attack Occurs Fast action is important if your dealership undergoes a significant cyberattack. This incident to-do list can help you move from problem to solution as quickly as possible. 1. Activate your incident response team — Make sure that the individuals designated with oversight duties are all on board. a. Consult your insurance broker to discuss insurance policy incident notification requirements. Your insurance broker can work with your cyber insurance carrier to outline the appropriate first steps and the optimal process to engage carrier-approved vendors. This ensures you’ll have the right resources charging the right rates and that you’re adhering to insurer terms and conditions, so you receive your full policy benefits. b. Engage your legal team. Some dealers will involve approved breach counsel at the onset to determine appropriate actions that fulfill legal obligations, manage potential liabilities and prepare for the possibility of future litigation or regulatory investigation. 16 ACCELERATE
STRONG? Is Your Marketing Plan (801) 676-9722 | (855) 747-4003 sales@thenewslinkgroup.com Advertise in this magazine and strengthen your business. CONTACT US TODAY. QR Code: website /#ad-space 2. Conduct a thorough damage assessment and implement the appropriate response plan. a. Identify the threat and try to isolate affected systems to prevent further damage. Resolve the vulnerability that allowed the incident, if possible. b. Preserve and document evidence related to the incident so it will be available for future prosecution or law enforcement purposes. In your haste to restore data, take care not to destroy evidence that could help identify the attackers and be used in their prosecution. c. Decide how to address the most urgent priorities: mitigating the impact of the incident, repairing systems, restoring data and strengthening security. 3. Work closely with your forensic investigation firm and other incident response experts to assist with the negotiation process, prepare for secure and lawful extortion payment (if necessary) and provide support in restoring full operational status across the organization. a. Report the incident to appropriate law enforcement and regulatory agencies. They may be able to assist in the investigation. 4. Contact your bank if your account has been compromised. a. Report the fraudulent incident to your bank’s fraud response unit. b. Work with your bank to try to recoup funds. 5. Craft your communications plan. a. Talk to an insurer-approved public relations and communications team about the best ways to communicate about the incident with internal and public-facing audiences. b. Verify and comply with legal requirements to notify those affected by the incident and offer credit monitoring and/or identity theft restoration services as approved by your insurer and advised by your breach counsel. Fraud is prevalent. Preparation is the key to prevention and fast response if it strikes. Truist has expertise within the automotive retail industry and can help you with your fraud prevention plans. Working together, you and a Truist Dealer Services relationship manager can identify steps to reduce risk of attack, defend against threats and respond promptly when issues arise. Sources 1 Driving into Danger: CDK Global 2023 Cybersecurity Report Reveals Rise in Auto Dealership Cyberattacks. CDK Global. 2 Mark Hollmer, Dealerships slammed by multiple cybersecurity challenges in 2024, Automotive News, January 3, 2024. 3 2024 AFP Payments Fraud and Control Survey Report, Association for Financial Professionals, 2024. Truist Bank, Member FDIC. © 2024 Truist Financial Corporation. Truist, the Truist logo and Truist Purple are service marks of Truist Financial Corporation. Equal Housing Lender. To learn more, please scan the QR Code. https://www.truist.com/commercialcorporate-institutional/industry-expertise/ auto-dealer ACCELERATE 17
In business, as in life, there are some things you can control and others you can’t. However, there are many controllable aspects of your dealership. For example, you can control how you spend your time, allocate your resources, respond to challenges and obstacles, and the suppliers you choose as partners to propel your success. Cycles Are Inevitable The automotive industry goes through cycles just like other industries. In 2019, dealers sold over 17 million vehicles. In 2020, it was less than 14.5 million vehicles. The number fell even lower in 2022 to less than 13.9 million. We’ve seen this before and know sales and service will pick up. The best thing you can do is get deep processes in place so your dealership can grow when sales rebound. A finely tuned service department can pick up the dealership. Warranties matter because they impact service revenue. When fewer vehicles are fixed, maximizing the profit margin for each repair is more important than ever. Payroll and Process Hold Hands This is worth discussing. If you make the process efficient now, you can keep your overall payroll smaller and may not need to hire anyone later. Having your house in order helps you avoid having to hire unneeded staff during the rebound, which can maximize your margin of profitability. Why Dealers Need a Warranty Service Partner No matter how successful you think your dealership is, you can strengthen it by looking at processes and training employees. Employees should know what CONTROL WHAT YOU CAN By Justin Carr, Vice President, Warranty Processing Company 18 ACCELERATE
matters and how they contribute to the dealership’s success. Understanding their role helps them to feel part of the bigger picture. This strengthens your culture and can help reduce turnover. Dealers who ignore issues with efficiency or timeliness hurt their dealerships in multiple ways that can affect their dealership’s longevity. First, managers need to know which processes are working or failing. Revenue can decrease if a manager cuts costs without understanding which costs grow revenue. For example, a manager might not realize a highly paid employee’s value in lifting the entire service department and training younger, less experienced employees. Being well-paid doesn’t equal being overpaid. Second, dealers sometimes expand their payroll instead of maximizing their margin within the service department. Many people play a role in the life cycle of a warranty claim. Since people compensate for inefficiencies with workarounds, the results can affect the whole service department adversely. Hiring more people instead of improving the process costs you hard dollars and lets the service department continue to be inefficient. Increasing the profit margin is smarter than spending money unnecessarily; also, maximizing your margin when it is harder to make a profit will serve as preparation to grow profits more efficiently later. To improve how your dealership works, evaluate and improve the quality of your business decisions. Running a dealership is complicated. Getting knowledgeable and objective advice from outside the dealership can help you examine and improve your business’s processes. Your goal should be to capture every warranty dollar, but you must be granular to do that, and a general manager’s job is typically not granular in that department. Instead, hire a warranty company to act as your partner. What the Right Partner Should Do A warranty partner can get receivables flowing and protect your dealership from audit problems, but they don’t just lift warranty claims. A good one boosts the service department by making it unnecessary for the service manager to spend time in the weeds. They also help the team work together more efficiently. Tech enablement is important on the fixed operations side of a dealership, but deep tribal knowledge and an equally deep understanding of data are also important. The warranty company helps the service manager focus on growth by fixing processes and providing insights and information. Owners and general manager often don’t have a frontrow seat to the intricate details that get and protect the money on a warranty repair. Although state laws are being implemented to combat dated factory policies, dealerships should not solely focus on getting a labor rate and parts markup increase. These types of increases will certainly help the bottom line, but are they being as impactful as they could be? Some dealers don’t maximize the warranty to include items like rentals, test drives or any additional work that needs to be done so the repair is handled correctly the first time. They may skip signing and approving add-ons, which could ultimately result in you losing that money down the road. Sometimes employees leave items off claims because they don’t know how to get an advanced repair order paid. Teach them. Checks and balances in the warranty process are important to maximize repair orders. Adjustments that appear on the warranty schedule are not necessarily a bad thing. Imbalances are an opportunity to gain knowledge, fight for additional dollars and make corrections to processes or systems that improve efficiency. Too many dealers are submitting repair orders to the manufacturer before they are closed to the DMS system. Once they are paid, they are closed to the DMS for that amount. How can you ensure that you have collected every dollar in that process? What is your tool to monitor progress? In the previously mentioned scenario, there is nothing on the schedule that would show you that a rental was left off or a part was marked up incorrectly. It also creates risk and potential audit liability. Was a recurring problem not identified? Are you giving the manufacturer just reason to recapture your legitimate dollars stating that a repair didn’t follow policy and procedure? Be conscious that you are getting all the dollars the manufacturer will pay, and avoid closing repair orders after the manufacturer has released the credit statement. Audit each claim to ensure it complies with the policy and procedure, and nothing is missing. Ensure all codes are applied, identify and understand all variances before reconciling the differences, and update everything daily. It is easy to keep a schedule clean and running clean when you touch it every day. When warranties fall behind, they become a mess. When that happens, the work it takes to clean them up is extremely time-consuming and can involve many staff. By controlling the things you can, you make it easier to achieve your goals and objectives. You also minimize the risks associated with uncertain or uncontrollable factors. The right warranty company can help you create a clean, complete process. Justin Carr is a VP at Warranty Processing Company, which recently relocated to Texas. Justin works with dealers nationwide to increase efficiency within service departments and educates dealer staff on why efficiencies matter. To learn more, please visit warrantyprocessing.com. ACCELERATE 19
HOW TO BUILD A CONSUMERFRIENDLY SERVICE EXPERIENCE THAT IS EFFICIENT By Sharon Kitzman, Dominion DMS Delivering a superior service experience is the goal of every business. To achieve this goal, dealers must build a service experience that is both efficient and friendly. Achieving this balance can be difficult, but with the help of some fantastic technology, it’s not impossible. In this article, we will explore the steps necessary to create a consumer-friendly service experience that is also efficient. The Check-in Process The check-in process is a crucial part of the overall customer service experience. It sets the tone for the entire service experience. As such, it is essential to get it right to deliver a truly consumer-friendly experience. By looking at other industries with check-in processes, we can learn from their operations and apply them to our own. My veterinarian reminds me of my appointment more frequently and in a fun and friendly way (think texts with dog emojis) than the appointments I have booked online for my car. The emojis might seem childish, but it makes me smile when I see the text, and I open the text to read the whole reminder. My dealership could do better with the appointment reminder process or the linkage between what I have already filled out online and the questions I am re-asked when I get into the service lane. This level of accessible customer service keeps me coming back. Similarly, the automotive industry could take a cue from the airlines and ensure they check in customers as quickly as possible. I know what you are thinking. Really, the airline industry? But take yourself back 10 years before the kiosks and bag drop, when everyone waited for a live person to help them. I remember my first kiosk experience with Delta, thinking, “This is never going to stick,” but now it is the rule, not the exception. The airlines invested in consumer apps to smooth processes and satisfy the desire for self-service. They also changed their operations, funneling the travelers to the kiosks the minute they walked in the door with a greeter. The key is providing an excellent check-in process, where your consumer can self-service the things that make sense, and your advisors use the data supplied by that consumer to check in quickly and efficiently. Waiting and standing in line is rarely an enjoyable experience and not one that consumers want to repeat. However, by providing a 1 2 3 4 1 20 ACCELERATE
simple, efficient and friendly checkin process, you can start your service experience on a positive note. The Waiting Area One of the essential parts of creating a consumer-friendly service experience is ensuring your waiting area is as inviting and efficient as possible. There are consulting companies that do this full-time for the medical industry. For example, having a quiet, safe and clean environment is essential. Even something as simple as comfortable chairs, bottled water and snacks can make a world of difference. Complimentary Wi-Fi is always appreciated to allow your customers to stay connected with their busy lives. Additionally, providing timely information about what is going on with their vehicle and pushing video content to the consumer’s device can keep them in the waiting area and not coming back to the drive to ask additional questions. Consider giving customers the option to upgrade additional repairs while they wait. A big plate glass window for added transparency will reassure the customer about the work being completed on their vehicle, avoiding questions regarding the services. Having a comfortable and productive waiting area will help ensure customers have a friendly automotive service experience. Overcommunicate Clear communication with consumers is critical to providing a friendly service experience. Technology can be used to streamline the process, as well as provide transparency throughout the duration of the service. A communication system that keeps customers informed throughout the process should be a priority. From the time of check-in, customers should be given an estimate that makes them aware of the approximate time and cost of their services. The estimate should list all the suggested services and the rough cost for completing each service. Upon the customer’s review and agreement, the customer will sign the document, ensuring there are no surprises once everything has been completed. Prices should never be a surprise, so communicating with the customer is vital for transparency. Plenty of research shows most consumers prefer text as the best way to reach them because it allows for concise yet detailed updates that won’t take too much of the consumer’s time. Through the use of text updates, customers will have the ability to stay on top of their service and make any necessary changes that they may require. I have witnessed certain regionally based demographic tendencies — think South Florida — where text is not always best. You know your client base! Transparency is also vital to providing a consumer-friendly service experience. It is essential to allow customers to view updates to their service or inform them of any changes that could impact the service’s completion. Good news can be delivered autonomously, as it won’t require any action from the customer. Bad news should always be delivered in person so that the customer can fully understand and respond to the issue. Finish Strong Completing the service experience in a consumer-friendly way is just as important as the beginning of the process. Ensure that the bill does not surprise the consumer and take payment their way. Offer payment options such as online, in an app, through SMS or at the cashier station. Use technology to allow the technician to show and tell what repairs were made to the vehicle and ensure the consumer knows what was done and 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/ why it was necessary. The client that brought the car in for service may have a partner, not with them, who wants to understand what repairs were made. Lastly, follow up with the consumer one to two days after completing the service to ensure there are no lingering concerns. Following these steps will ensure consumers have a friendly and satisfactory service experience. 2 3 4 ACCELERATE 21
For a dealer principal, it can be overwhelming to think about finding the right successor to assume responsibility over a business you’ve likely spent much of your life building. For dealers in many southeastern states, successorship can feel particularly challenging — but not due to a lack of demand. In fact, the challenge is a buy-sell market flooded with hopeful buyers. Opportunities and Challenges Coexist in the Southeast Seller’s Market On the surface, the demand for dealerships in the Southeast might not seem like much of an issue for a local dealer considering selling — the opportunities are ripe. But it’s a double-edged sword. While market conditions are certainly favorable for sellers right now, the stiff competition for buyers means current dealers must navigate a sea of hungry buyers — not all of whom may always be the right fit for the business in question. For this reason, it is vital to work with an experienced partner as your advocate throughout the buy-sell process. How To Choose a Partner When Selling Your Dealership When it comes to something as important as finding a caretaker for their life’s work, dealers have many factors to consider. Here are five qualities that dealers who are ready for a change — particularly those in the U.S. Southeast — should look for when selecting a broker to help them pass on their business: 1. Experienced in your market. When it comes to selling a dealership, no two markets are alike. What works in one region may not work in another. This is why DSMA maintains an active local presence in all our markets — including the Southeast. Working with DSMA grants you access to a team with global knowledge and local expertise. Dealers who choose DSMA work with dedicated partners local to them — meaning they receive a personal, engaged advisor with unique market knowledge who meets with them in-person to discuss their needs. 2. Aligned with your priorities. A dealership isn’t just a business. It’s a legacy — the product of a lifetime of work and dedication, a livelihood for a team of employees and a valued community presence. When evaluating potential buy-sell brokers as a dealer, it’s important to look for a partner that possesses an appreciation for all the intangible values your business represents. 3. Informed by data. With over 1,900 valuations completed and more than 450 deals closed, DSMA has a wealth of historical data to ensure every decision made throughout your process is informed. A crucial first step is conducting a meticulous business valuation to optimally position your listing in the market and attract the highest potential buyers. DSMA employs the Blue-Sky method to evaluate not only tangible assets but also intangible factors to ensure each valuation captures the true essence of a dealership’s worth. What’s more, DSMA’s proprietary QUOTUS™ platform transforms monthly OEM financial statements into actionable business insights, bringing advanced business intelligence to dealership groups of all sizes. With QUOTUS™, more knowledge means more power to make the best decision for your specific situation. 4. Invested in the relationship. As a dealer, you’ve built your business on personal service, and when it comes time for your dealership’s next chapter, you deserve that same level of personal commitment. 5 FACTORS TO CONSIDER IN THIS HOT SELLER’S MARKET By DSMA 22 ACCELERATE
Understandably, many dealers — even those who don’t expect it — find that passing on their dealership to a new owner can be an unexpectedly emotional process. For many dealers, their dealerships are reflections of themselves. The buy-sell process shouldn’t be a faceless transaction. It should be a personal, positive experience for everyone — including you as the seller, and that’s a commitment our DSMA team takes to heart. 5. Engaged throughout the process. From marketing specialization and financial expertise to OEM approvals and more, selling a dealership can be a complex process. Many buy-sell brokers offer piecemeal capabilities, outsourcing the rest to third-party players. As a dealer, this approach can make the process needlessly complicated. To avoid this, DSMA combines end-to-end capabilities, so clients have a single point of contact throughout the entire process. As a dealer, you deserve to know your dealership’s status throughout every step of the buy-sell process. For this reason, open, engaged and continuous communication is standard practice for DSMA. From the initial cup of coffee to the closing table, DSMA is with you every step of the journey. A Bright Future for You and Your Dealership The decision to sell your dealership is a major one and we at DSMA want to help you do it with confidence. Current market trends, particularly for dealers living in the U.S. Southeast, are making this a favorable time to consider listing. DSMA has an extensive network of active buyers looking to acquire dealerships and dealership groups across the Southeast. Dealers who are interested in learning more about the buy-sell process are invited to contact DSMA for an introductory call by visiting www.dsma.com. ANDY CHURCH Vice President andy@dsma.com 772.240.8566 OUR EAST COAST TEAM CHRIS FOSHEE M&A Associate chris.foshee@dsma.com 334.477.1211 BILL FIELDS Principal M&A Executive bill.fields@dsma.com 904.955.2544 LINDA BARNETTE M&A Associate linda.barnette@dsma.com 561.502.8407 ACCELERATE YOUR SALE. Fast-track your dealership sale with DSMA. Our streamlined process and experienced team, guarantees expedited transactions and maximized profit for your business. BUY@DSMA.COM +1 833-650-4188 DSMA.COM LET DSMA PUT YOU IN THE DRIVER’S SEAT. ROBERT SCHLICHT M&A Associate robert.schlicht@dsma.com 518.703.9788 JASON DERNBACH M&A Associate jason.dernbach@dsma.com 716.418.4750 For 100+ acquisition opportunities across North America and the United Kingdom, visit DSMA.com. CFADA 7.5x4.625 Ad JUNE 2024.indd 1 2024-06-13 9:30 AM ACCELERATE 23
This magazine is designed and published by The newsLINK Group, LLC | 855.747.4003 100 Weldon Boulevard Sanford, FL 32773 FRANCHISED DEALERS SAVE AN AVERAGE OF $6,500 MONTHLY / PER LOCATION! EVERYTHING YOU NEED, NOTHING YOU DON’T. SCAN THE QR CODE AND SCHEDULE YOUR DEMO TODAY! SECURITY FLEXIBILITY SAVINGS • $0 Core Monthly Support • $0 Conversion and Training • Unlimited Users • Encrypted Integration to Any Application • Continuous Software Enhancements • Robust Suite of Core Features • Easy to Learn / Simple to Use • Access from Any Web Connection • Choose the Apps You Want The new pricing structure, including an unheard-of $0 initial and monthly fee for VUE Core DMS, is unique in our industry. With the many challenges they face, we want to give dealers freedom and flexibility to create the custom software solution their business needs. Sharon Kitzman | President of Dominion DMS DominionDMS.com (866) 928-3210 1515 South Federal Highway, Suite 406 Boca Raton, FL 33432, USA SCHEDULE YOUR DEMO
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