Vol. 34 No. 3 A Publication of the Illinois Automobile Dealers Association Automobile Dealer News Yemm Automotive Thriving Amidst Challenges Napleton Automotive Group Raises $176,000 for Pediatric Brain Cancer Foundation in Violet’s Name
Located in Central Illinois, we serve the entire state. We specialize in automobile dealers in the following areas: Certified Public Accountants Memberships in: AUTOCPA Group The American Institute of Certified Public Accountants The Illinois CPA Society Serving more than 250 Automobile Dealers throughout the United States Woodward & Associates, Inc. 1707 Clearwater Avenue ·P.O. Box 1584 ·Bloomington, IL 61702 (309) 662-8797 ·Fax (309)662-9438 ·Email woodwardassoc@cpaauto.com ·http://www.cpaauto.com Dealership valuations Automobile dealer legal support Buy-Sells for dealerships LIFO inventory computations Financial statement analysis Corporation Income Tax returns Personal Income Tax returns CPA prepared financial statements Dealer estate planning Employee theft consulting Internal control studies and audits Profit consulting Training office managers/CFO’s 401K Audits
Julie a. Cardosi, esq. 3040 spring Mill drive, suite B springfield, iL 62704 (217) 787-9782 jcardosi@autocounsel.com www.autocounsel.com EXCLUSIVE. STRATEGIC. RESULTS. ConCentrations: Dealership Mergers & Acquisitions Dealership Franchise Law Business Litigation / Motor Vehicle Review Board Disputes Manufacturer / Franchisor Relations Business & Commercial Law Advertising Compliance Review Consumer Complaints Dealership Succession Add Points Real Estate Law Employment & Labor Law Federal & State Regulatory Compliance BaCkground: Principal, Private Law Firm Former, IADA Legal Counsel Former, Illinois Assistant Attorney General, Deputy Chief, Consumer Protection Division Drafted Illinois Motor Vehicle Franchise Act Amendments Creating Motor Vehicle Review Board Drafted Illinois Motor Vehicle Advertising Regulations Exclusively representing the unique business interests of automobile dealers for over 30 years. LAW OFFICE OF JULIE A. CARDOSI, P.C.
CONTENTS Vol. 34 No. 3 Chairman David Parkhill / 217.352.4275 Sullivan Parkhill Automotive 440 W. Anthony Dr. Champaign, IL 61822 Vice Chairman John Alfirevich / 708.429.3000 Apple Chevrolet, Inc. 8585 W. 159th St. Tinley Park, IL 60477 Secretary/Treasurer Jamie Auffenberg / 618.624.2277 St. Clair Auto Mall Auffenberg Auto Mall 1130 Auffenberg Ave. Shiloh, IL 62269 Executive Director Joe McMahon / 217.753.0220 Illinois Automobile Dealers Association 300 W. Edwards, Springfield, IL 62704 2023 OFFICERS ©2023 Illinois Automobile Dealer News | The newsLINK Group, LLC. All rights reserved. Illinois Automobile Dealer News is published four times each year by The newsLINK Group, LLC for the Illinois Automobile Dealers Association (IADA) and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and 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 the IADA, 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. The Illinois Automobile Dealer News is a collective work, and as such, some articles are submitted by authors who are independent of the IADA. While the Illinois Automobile Dealer News 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. Illinois Automobile Dealers Association 300 W. Edwards St. Springfield, IL 62704 T 217.753.0220 / F 217.753.3424 IllinoisDealers.com 12 Scan here to check out the new, interactive IllinoisDealers.com website! 24 6 Chairman’s Message Stronger Together By David Parkhill, Chairman, Illinois Automobile Dealers Association 7 Automotive Titling Company 8 The “Shift” Has Hit the Fan By Ethos Group 10 Dealer Spotlight Yemm Automotive: Thriving Amidst Challenges 12 Dealer Spotlight Napleton Automotive Group Raises $176,000 for Pediatric Brain Cancer Foundation in Violet’s Name 14 Counselor’s Corner Federal Government’s Regulatory Impact on Auto Dealerships: Review Your Existing Business Practices and Policies By Julie Cardosi, Law Office of Julie A. Cardosi, P.C. 16 Consultant's Corner Compliance Auditing: Evaluating Who Should Be in Charge of Internal Audit Processes By Joel Kansanback, Executive Vice President, Brown & Brown Dealer Services 18 Partnerships Help Dealers Succeed By Sharon Kitzman, Dominion DMS 22 How Automotive Digital Retailing Can Affect Your Dealership 24 Ways to Increase Your Service Department Traffic 4 Illinois Automobile Dealer News
THE FIRST DMS WITH A $0 CORE FEE. EVERYTHING YOU NEED, NOTHING YOU DON’T. INTRODUCING CLOUD-NATIVE FLEXIBILITY SECURITY & CUSTOMIZATION AN AVERAGE OF $6,500 IN SAVINGS PER MONTH DominionDMS.com
Chairman’s Message STRONGER TOGETHER DAVID PARKHILL, CHAIRMAN Illinois Automobile Dealers Association Springfield, IL The state legislature has adjourned, and among other successes, IADA was able to DEFEAT the following legislation: • Manufacturers' attempt to REPEAL the Warranty Reimbursement Law for Labor and Parts • Proposal to have vehicle sales tax distributed to the municipality where the vehicle is titled rather than the dealership location • Proposal to adopt California Emissions Standards IADA offers many services to assist our dealer members, including our always-improving IADA-CVR process, Ethos Group Income Development program and Federated Insurance partnership, but our advocacy efforts on behalf of dealers will always be our primary focus. Your IADA staff and dealer officers will soon be in Washington, D.C., attending the NADA Washington Conference and meeting with our Illinois Congressional Members. Our Association has recently completed renovating IllinoisDealers.com and the production of an informational video highlighting the benefits of our “Dealer Owned” association. We are proud that our site has been recognized with a Silver and Bronze Telly Award. The Telly Awards annually showcase the best work created within television and across video for all screens. Receiving over 12,000 entries from all 50 states and five continents, Telly Award winners represent work from some of the most respected advertising agencies, television stations, production companies and publishers from around the world. Finally, IADA is excited to be able to again offer the NADA Professional Series, New Manager Training, right here in our IADA office. This series allows us to provide the most efficient and affordable way to offer the best-in-class training to dealership managers without having to fly to other parts of the country and spend extra nights in hotels. As your 2023 IADA Chairman, I thank you for your strong support of IADA. I urge you to continue to be involved in our grassroots legislative efforts, to take advantage of our partner programs and to stay informed by reading all the timely IADA information. It is an honor and privilege to work with you as the IADA Chairman! 6 Illinois Automobile Dealer News
The “Shift” Has Hit the Fan By Ethos Group Although all of us would like to believe the current success rate in the retail automotive world will last for another five, 10 or 15 years, our history tells us otherwise. The industry has experienced fantastic growth since 2009, with only a few dips along the way. Often though, the biggest detriment to success is success. History has always shown ups and downs in sales volume and profitability. What we do in prosperous times will dictate our ability to weather the storm of the “shift.” As leaders and managers, we have a responsibility to our people to prepare them for a potential slowdown. In fact, our job is to do three things consistently to ensure their continued success no matter what the current market conditions. These three things are Education, Motivation and Accountability. Education is a must for continued growth. We should consistently educate our processes, values, vision and expected behavior habits. If management is constantly reviewing what we believe is truth and expecting consistent growth, we should not be as affected if the business slows down. Motivation in the good times is easy. Motivation in the slowdown is a different story. It has been said that there is no better motivator for you than you. Our responsibility as leaders is to eliminate all the negative things around our people that affect their personal motivation. It is also our responsibility to help them grow. One way to do this is to consistently perform one-on-ones with our staff. Four areas should be addressed: personal issues, things done right, areas of improvement and effective follow-up procedures. All four areas focus on your involvement in your employees’ lives and success. We all use the word Accountability too much, without action. Our job as managers and leaders is to hold our people accountable to our company processes, values, vision and successful behavior attributes, as stated earlier. However, for true continued growth with and in our people, we must hold them accountable for what they want to accomplish in their businesses and lives. That being said, we have to truly know them and understand their goals, motivators and expectations. Remember, when we focus on these three objectives, we are focusing on the growth of our business and more importantly the growth of our people. No matter what the market conditions, we can grow with intentional, focused behavior. Ethos Group partners with dealers to promote an ethical, customer-focused approach to the sale, financing and servicing of automobiles. For more information, contact Lance Graves at lgraves@ethosgroup.com or (402) 960-0538. No matter what the market conditions, we can grow with intentional, focused behavior. 8 Illinois Automobile Dealer News
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
Yemm Automotive Thriving Amidst Challenges DEALER SPOTLIGHT Sara Yemm Witherell, a thirdgeneration family member of Yemm Automotive in Galesburg, IL, is no stranger to being different. And embracing those differences is what drives her. According to various sources, women today make up just 25-30% of dealer principals in the United States. At Yemm Automotive, Sara is the first female family member in management and hopes to be one of a handful of female auto dealership owners in Illinois. Starting as a part-time receptionist at age 15, Sara has worked at Yemm Automotive for over 16 years. After graduating from Illinois Wesleyan University in 2014, she moved back to Galesburg to begin a full-time position in the family business. Her dad, Rick, challenged her to create Service and Sales Business Development departments, which were quickly formed. Sara then began managing the company’s websites, marketing and advertising while working alongside dealership managers, finding ways to improve and grow the business. In 2021, she graduated from the NADA Academy. Today, Sara oversees operations at the Chevrolet Buick GMC and Chrysler Dodge Jeep Ram dealerships. She is an example of the bright future for women pursuing a career in automotive retail. 10 Illinois Automobile Dealer News
Sara is also one of a short list of women in the automotive industry with a physical disability. She was diagnosed with Limb Girdle Muscular Dystrophy at the age of 12, and without treatments or a cure, Sara’s muscles continued to weaken. Through these physical challenges, Sara embraced her diagnosis, implementing a fundraiser for the Muscular Dystrophy Association (MDA) at Yemm Automotive, in addition to raising thousands of dollars for MDA through annual MDA Muscle Walks. Meanwhile, she adjusted to living and working with a progressive neuromuscular disease. While attending a Limb Girdle Muscular Dystrophy conference in 2019, Sara met a woman who made her think twice about her diagnosis. Due to new medical discoveries, this woman had recently discovered her diagnosis of Limb Girdle Muscular Dystrophy was incorrect and was actually an autoimmune condition called Anti‑HMGCR Myopathy. With treatments available for this newly discovered disease, Sara decided to proceed with testing. To her and her medical team’s surprise, Sara’s results showed she did not have Muscular Dystrophy but rather Anti-HMGCR Myopathy. “Anti-HMGCR Myopathy, an autoimmune myositis, is a rare disease marked by severe muscle weakness that is thought to be caused by an over-active immune response directed against muscle,” Sara explains. “Recently discovered by researchers, Limb Girdle Muscular Dystrophy symptoms closely mimic those of Anti-HMGCR Myopathy.” Having the correct diagnosis changed a great deal in Sara’s life. For the first time since her symptoms began as an adolescent, she was able to receive treatment to hopefully slow or stop her muscle deterioration. Today, Sara continues to use a wheelchair for distance but is able to better manage her symptoms while balancing her home and work life with enthusiasm and gratitude. Sara feels fortunate to work alongside a team of 75 employees who are very supportive, assisting her through daily physical challenges. She also leans on her husband and parents. “It is a blessing to work with my family,” Sara says. “Growing up, it was truly special to see the relationship and bond that my grandfather and father shared. The ability to learn from my father, Rick, and our time spent together is extremely meaningful.” Sara and her Dad, Rick 11 Illinois Automobile Dealer News
DEALER SPOTLIGHT This spring, 55 Napleton Automotive dealerships located in Illinois and six other states received help from their employees and customers to raise $176,000 for the Violet Foundation. This money will help fund research and support dozens of families whose children are currently being treated for pediatric brain cancer. Founded in 2022, the Violet Foundation strives to provide greater resources and support for scientific research and clinical trials, specifically focused on improving survival rates for pediatric brain cancer patients. At this time, only 4% of federal funding allotted by the U.S. goes toward pediatric cancers, which is why the Violet Foundation has committed itself to addressing this issue head on. “Charity and community involvement are a big part of what we do here at the Napleton Group,” said Kristen Napleton, Vice President of Ed Napleton Automotive Group. “That’s why we were so excited to be able to help support the Violet Foundation. We were thrilled with the outpouring Napleton Automotive Group Raises $176,000 for Pediatric Brain Cancer Foundation in Violet’s Name 12 Illinois Automobile Dealer News
of support we saw from our employees and customers throughout the month.” The Violet Foundation was founded by the family of threeyear-old Violet Napleton, a smart, sassy, fun-loving little girl who was diagnosed with the deadliest form of pediatric cancer, Diffuse Intrinsic Pontine Glioma (DIPG), in 2021. She had a brave spirit and an unwavering fight that inspired those around her, particularly her family. She lost her battle not too long after she was diagnosed with this form of brain cancer, which has a less than 1% survival rate and no effective treatment. In addition to research, the Foundation’s mission is to support the families of pediatric brain cancer patients who are sometimes forced to continue working to pay the bills and keep insurance active while simultaneously supporting their child and coping with their own emotional experience. The Napleton family has already made a major impact in the fight against pediatric brain cancer on behalf of Violet and other children like her. Since launching its support in October 2022, the Napleton Auto Group has raised more than $316,000 by dedicating a portion of sales and service revenue towards the Violet Foundation. As a result, the Foundation has provided critical support to 30 families in Illinois and Indiana whose children are undergoing brain tumor treatment, and co-funded six research efforts in the fight against pediatric brain cancer. Visit www.violet-foundation.org to learn more about Violet’s story and to make a donation. 13 Illinois Automobile Dealer News
Counselor’s Corner JULIE CARDOSI, Law Office of Julie A. Cardosi, P.C. Federal Government’s Regulatory Impact on Auto Dealerships Review Your Existing Business Practices and Policies The Consumer Financial Protection Bureau (CFPB), a federal government agency, enforces federal consumer financial laws against unfair and deceptive acts or practices to protect consumers in the financial marketplace.1 Some of the areas of focus by the CFPB include: enforcing laws prohibiting discrimination in consumer finance; fielding consumer complaints; and monitoring the use by consumers of certain financial products. Earlier this year, the CFPB issued orders to nine large auto lenders requesting information about their auto lending portfolios; filed suit against a Michigan-based subprime indirect auto lender; filed suit against Credit Acceptance Corporation, a large subprime auto lender alleging deceptive practices in the financing of low-income consumers in high-interest auto loans; and ordered U.S. Bank and Dealers’ Financial Services to cease deceptive advertising and lending practices targeting active-duty military personnel.2 Among CFPB initiatives impacting the auto industry is its action “against sloppy servicing practices that cause harm” involving optional, add-on products that dealers sell and consumers can purchase when they buy a vehicle. This includes GAP and other add-on products. CFPB has observed: “auto dealers and finance companies often charge consumers all payments for any addon products as a lump sum at the origination of the auto loan, and they generally include the lump sum cost as part of the total vehicle financing agreement.”3 Additionally, CFPB investigative findings were published in a report, concluding: “Our examiners have focused on the way servicers handle these add-on product charges when the loan ends before the add-on product’s potential benefits end. Such early termination may happen because the consumer pays the loan off early, often through refinancing, or because the consumer was delinquent in making payments and the servicer repossessed the consumer’s car … [CFPB] examiners found that servicers engaged in unfair practices by failing to request refunds from the third-party administrators for “unearned” fees related to one such add-on product, GAP, and failing to apply the applicable refunds to the accounts after repossession and cancellation of the contracts. At that point, the consumers did not have the cars that had been subject to the GAP product, and the product no longer offered any possible benefit to consumers.”4 And the Federal Trade Commission (FTC), another federal agency which also enforces consumer protection laws targeting unfair and deceptive practices, has introduced the proposed Motor Vehicle Dealers Trade Regulation Rule5 proposing stricter regulation of dealer advertising and F&I practices and seeking to ban what the FTC described as “many of the junk add-on fees and bait-and-switch tactics plaguing car buyers,” and by regulating “the sale of ‘add-on’ products and services in a deceptive or unfair manner” to include add-ons such as extended warranties, service and maintenance 14 Illinois Automobile Dealer News
plans, payment programs, GAP insurance, emergency road service, VIN etching and other theft protection devices and undercoating. The proposed rule was opposed by the National Automobile Dealers Association. In an Automotive News dealer outlook survey earlier this year, a majority of dealers surveyed responded that the proposed rule would be a net negative for the automotive industry. In April 2023, the CFPB issued another policy statement pertaining to “abusive” practices stating that an abusive practice by a business: “(i) materially interferes with the ability of the consumer to understand a term or condition of a consumer financial product or service, or (ii) takes unreasonable advantage of (a) a lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service, or (b) inability of the consumer to protect the interests of the consumer in selecting or using a consumer financial product or service, or (c) the reasonable reliance by the consumer on a covered person to act in the interests of the consumer.”6 Legal experts agree about the ambiguity of this CFPB policy which puts businesses in a compliance “trick bag.” The level of collaboration of enforcement action by federal agencies and State of Illinois agencies tasked with enforcement of consumer protection laws, such as the Illinois Attorney General’s Office, is well-documented. Dealerships should carefully review existing business practices and policies in light of these federal regulatory initiatives which are ongoing in nature, and the cooperative enforcement efforts with state agencies in Illinois. Julie A. Cardosi is Principal of the private firm, Law Office of Julie A. Cardosi, P.C., of Springfield, Illinois. She has practiced law for over 35 years and represents the business interests of franchised motor vehicle dealers throughout Illinois. Formerly in-house staff legal counsel for the Illinois Automobile Dealers Association, she concentrates her private practice in the areas of dealership compliance matters, transfers of ownership, mergers and acquisitions, franchise law, commercial real estate transfers, dealership employment and other areas impacting day-to-day dealership operations. She has also served as former Illinois Assistant Attorney General and Deputy Chief of the Consumer Fraud Bureau of the Attorney General’s Office. The material discussed in this article is for general information only and is not intended as legal advice and should not be acted upon as such. Dealers should consult their own private legal counsel for application to their specific circumstances. For more information, Julie can be reached at jcardosi@autocounsel.com, or at 217-787-9782, ext. 1. 1. See https://www.consumerfinance.gov/about-us/ the-bureau/ 2. Id. 3. See https://www.consumerfinance.gov/about-us/ blog/overcharging-for-add-on-products-onauto-loans/ 4. Id. 5. See https://www.regulations.gov/document/FTC2022-0046-0001 6. https://www.consumerfinance.gov/about-us/ newsroom/cfpb-issues-guidance-to-addressabusive-conduct-in-consumer-financial-markets/ 15 Illinois Automobile Dealer News
Consultant's Corner JOEL KANSANBACK EXECUTIVE VICE PRESIDENT Brown & Brown Dealer Services Compliance Auditing Evaluating Who Should Be in Charge of Internal Audit Processes Compliance has become an important topic in the retail car business as there has been a significant increase in enforcement from the FTC, staffing of the Consumer Financial Protection Bureau (CFPB) and activity from several state Attorney General Offices. With these increases, many dealers are reevaluating the processes they have within their dealerships. Dealers can fall into a range of compliance, with some dealers compliant and up to date, while others may not be as stringent in their audit practices. No matter where your dealership falls in this range, it is a good idea to review your current process to help ensure it is efficient and effective, beginning with the person who oversees the auditing function. This person should be well-trained and knowledgeable about the dealership and compliance rules and regulations, unbiased about the transactions in your dealership, and there should not be a conflict of interest between their role and how they are compensated. Recently, our team did a deep dive on behalf of a large customer and found several consistent, compliancerelated concerns. Our analysis showed odometer readings and customer compensations had been changed, missing federal disclosures and signatures, signatures that didn’t appear to match and additional issues within the sample information set. To help prevent these errors, dealerships should ensure that the person overseeing the audit has the proper experience and training to identify potential compliance issues. They must also be objective, and their other responsibilities should not pose a conflict of interest to the audit process. By reviewing your audit process, you can help to identify some potential gaps or oversights that could lead to compliance concerns. Once identified, your dealership can work to train and further develop this process to better meet your compliance needs. For more information, please contact Francis Fagan with Brown & Brown Dealer Services at (312) 608-4979 or francis.fagan@bbrown.com. Francis is the Regional Training Director for Illinois and Indiana. At Brown & Brown Dealer Services, we put the emphasis on training. Visit www.bbdealerservices.com for our training calendar and to meet our nationally renowned trainers. 16 Illinois Automobile Dealer News
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, visit us at 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.
Partnerships Help Dealers SUCCEED By Sharon Kitzman, Dominion DMS 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. 18 Illinois Automobile Dealer News
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. 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? 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. 19 Illinois Automobile Dealer News
Additionally, What are the next steps in putting digital technology into ever-more-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 low-hanging 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/ 20 Illinois Automobile Dealer News
NEW NAME SAME PEOPLE AND SERVICE YOU’VE KNOWN FOR YEARS We are pleased to announce that Somerset CPAs and Advisors has joined CBIZ and MHM. Together, CBIZ and MHM are one of the nation’s Top 15 accounting providers.* 800.469.7206 | cbiz.com Effective Feb. ’23 *Accounting Today – March 2023 CBIZ is a business consulting, tax and financial services provider and works closely with MHM (Mayer Hoffman McCann P.C.), an independent CPA firm providing audit, review and attest services. CBIZ and MHM are members of Kreston Global, a worldwide network of independent accounting firms. © Copyright 2023. CBIZ, Inc. NYSE Listed: CBZ. All rights reserved. CAUGHT YOU LOOKIN’! CONTACT US TODAY! 801.676.9722 sales@thenewslinkgroup.com Your Customers Are Too. Advertising Space Available. QR Code: website /#ad-space 21 Illinois Automobile Dealer News
How Automotive Digital Retailing Can Affect Your Dealership 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. 22 Illinois Automobile Dealer News
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. 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. 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 check-ups 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. Like everything else, the automotive industry needs to embrace the transition to the digital world. 23 Illinois Automobile Dealer News
Ways to Increase Your Service Department Traffic 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 catchup. 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. 24 Illinois Automobile Dealer News
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-to-three 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 diesel-powered 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. 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 25 Illinois Automobile Dealer News
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. ONE LAST THING ... Did you know that you can enjoy your association news anytime, anywhere? Scan the QR code or visit: illinois-auto-dealer-news.thenewslinkgroup.org Check it out! The new online article build-outs allow you to: • Stay up to date with the latest association news • Share your favorite articles to social channels • Email articles to friends or colleagues There is still a flipping book for those of you who prefer swiping and a downloadable PDF. 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. 26 Illinois Automobile Dealer News
www.thenewslinkgroup.orgRkJQdWJsaXNoZXIy MTg3NDExNQ==