Categories
Business Development Dealer Software Retail Car Lot

The Important Question To Ask Dealer Software Vendors? Hint:Not DMS Integration

The Core Question?

If you draw concentric circles around your dealership accounting office you will probably find several software packages attaching themselves to your DMS. Everything from inventory managers, compliance software to CRM’s and service schedulers.

Each supplier probably had a booth at NADA where they showed off their bells and whistles and colorful graphs and functionality. We all get sort of mesmerized by the experience, taken by the flashiness and chrome.

Dealer Software is too complex
DEALER SOFTWARE IS TOO COMPLEX:
This is an actual training slide from a software vendor. I hid the brand to avoid the embarrassment for the company in question, but you know who you are.

As the long time Director of Variable Op’s for a large dealer group in Upstate New York,  I used to look forward to returning to the group to show of the latest and greatest software that could “revolutionize” our dealer group. Usually very early on in that meeting someone will ask , “does this integrate with our DMS?” I would say that is one of the least important questions early on. What dealers need to start asking is “How often are those shiny features actually used?”

We founded Dealer Simplified after sitting through three dealership website meetings. In one case I was shown a really cool bar that allowed customers to track searches. It looked great and was presented as a “Killer Feature” of their website. When I asked, “how much is it actually used by customers?” the salesperson actually gasped and stood there for a moment like a deer in the head lights. I pushed and finally he said 1-2% of the time.

I realized right then and there, Shiny Features are much different from Usable Features. The core question is, why are we always focused on the shiny bells and whistles instead of the features that make us money.

Lets take CRM for example, vendors love to show how you can make lists of customers to call and fancy reports showing our failing salespeople. The programmers that designed these features never sold a car in their life. Reports don’t sell a thing, until the salesperson learns to love his/her CRM.

In CRM the real questions are:

  • How does it help me retain customers?
  • Will my sales team use it and why?
  • How does it identify potential clients?
  • Can I speak to a satisfied 50 year old salesperson using this CRM every day?

In my opinion, the evolution of dealership software is not to add more bells and whistles or better DMS integration but to remove unused features and work towards higher utilization.

Utilization Through Ongoing training.

I really believe that software utilization comes through training. I think dealers spent way too much time showing their sales team every bell and whistle of the new software package they’re trying to launch. In my training classes I focus only on the items that salespeople and sales managers are going to use. Especially early on.

The key is to have multiple meetings over multiple months, because the sales people and managers have no idea what questions to ask until they use the software for a period of time. They also should have the cell phone number to the software vendor so they can ask questions on the fly as they are using the dealership software.

Require Quarterly Training Revisits as Part of the Contract:

One of  the least mentioned and most important lessons I have learned with software vendors is to require in their contract that they revisit and retrain your team at least once a quarter. Again it is my believe that ongoing training is an essential part of software utilization.

Categories
Car Auction Retail Car Lot

With VDP’s A Photo is worth a 1,000 words.

photo-nophoto
Your Car is Dead in the Water if you don’t have photos

Your Dealer Website is a Photo Visual Experience

When it comes to selling cars online, quality photos are the highest return actively I can think of. Would you use a dating website if there were no photos, I think not? Think about it, a web site by its nature is a visual experience, so if you have no visuals of the car, you are quite literally dead in the water.

How Many Photo’s is too Many?

Today customers expect photos and lots of them. Now you can see some dealers adding 50 or 60 photos to their online showroom. While that may seam like a lot and it is, some cars need that many pics to off show all the options. Your customers may not look at all of them but for the few extra minutes it will take you why not have them there.  At a bare minimum, I recommend 15  as this will allow you to show off most features but if you want to truly represent the car you will need 24-30 because it will give your customer a good virtual tour of the car.

Use a Photo Template for Your Photographers.

Along with the number of photos you take,  having a consistent look is important. Start by putting together a templet showing how you want the layout to flow. First photo, second photo, third photo… It’s all most like building a burger at a fast food restaurant, step one is… step two is… and so on.

Don’t Skimp on the Camera.

Now that you have picked the layout the next thing to do is get a good digital camera. There are hundreds of cameras to choose from, make sure you get one that lets you change the pixels, a common size is 1024×768. While you don’t need a $3000 Nikon -, I would tell you to get a better than average one. Remember you are going to take a lot of pictures with it and you don’t want to be buying a cheap camera every month. Plus the photos that come from a good camera look a whole lot nicer. We use a Nikon COOLPIX L810 16.1 MP Digital Camera with 26x Zoom , at the $170 price point, has all the features and durability without a huge learning curve.

Shop Your Site as if You are a Customer.

As you can see from looking at other dealers websites everyone has found some kind of flow or process to add photos to their cars. A best practice is to have someone in the dealership look at the website each day just like the customers do. Remember this is your digital showroom and it needs to stand tall. Bad photos, dirty cars, crumpled up white paper mats, other dealers plate frames are all little things that can drive customers away. You would never put cars like that inside the building where 20 people a day will see it, why would you want them online where 20,000 will see them.

Best Practice, a Photo Booth.

Taking good photos of the cars you intend to sell will increase your leads and keep customers coming back to your website. Keep your photo area or booth clean and free from clutter, set up good lighting and use a proper camera. Remember the car is the star, have it fill the frame and take your time.

Categories
Retail Car Lot

What’s Your Strategy for Pricing Used Cars?

Pricing Used Cars

Pricing Used Cars for Your Retail Used Car Lot

Having the right pricing strategy is key to selling used cars in todays markets. Pricing used cars and re-pricing should be strongly based on your market and the online metrics SRP (search results page) and VDP (vehicle detail page) you are getting on your website or other search sites you are advertising with.  It has become a best practice to have every vehicle you select for retail advertised for sale starting at day one with a competitive “go-to market” price. This means competitively pricing your vehicles to the market to achieve quick turn at a fair profit.

VDP conversions

0% – 2%       underperforming vehicles
2.1%- 3.5%  avg. performing vehicles
3.6% +         high performing vehicles

How to pick the right pricing strategy for your store. Different dealers are looking for different results from their used car department. Some dealers are looking to increase market share, while other dealers are all about the money. Whether you are going for volume or gross, having a pricing strategy and using it consistently will help you achieve the results you are going for. Here are two examples;

To achieve a MAX TURN set your targets at:

Days                  Min %         Max %
0-10                 0%                    95%
11-20               0%                    90%
21-30               0%                    85%
31+                  0%                    80%

To achieve the MAX GROSS set your targets at:

Days                         Min%               Max%
0-30                 110%               150%
31-60               100%               125%
61-90                 90%                 100%

Once you have determined if going for max turn (high volume) or max gross (all the money), which will cause you to pass on the occasional deal, it is time to build your pricing strategy. Most strategies are based on the age of the car. As a vehicle ages we move the price down in an attempt to build interest in it. While having pricing targets tied to the age, can and does work you still have to watch the market when it comes to making pricing moves. It’s not just age that causes values of vehicles to drop, although it is a big factor things like MDS (market day supply) and seasonal change will affect the value of your cars.

Market day supply (MDS)

0-40      days, fast moving

41-80    days, average

81-100  days, slow moving

101+     days, very slow moving

 

The most important part of having a pricing strategy or implementing any procedure is laying out your expectations and then holding people accountable to the task. Setting a strategy for a used car manager to follow can be tricky, from time to time they may have to veer off the strategy if the data they are looking at tells them to price a car different from the targets. You may have set your targets to price all fresh cars at 110% to market, but if the market day supply is 150 you will never sell that car for 10% over the market average price. You may not even sell it at 100%. Or maybe you have a 30 day old car and your target is set at 85% to market (15% discount) but you are getting an avalanche of internet traffic (4.5% VDP) you may want to holdout on moving the price down to 85%. Try moving it a few hundred dollars and watch the traffic. Don’t give up gross if you don’t have to.

 

So you have picked your pricing strategy and set your targets now its time to outline your plan. If you need a little jump start here is a 70 day and out pricing plan.

Vehicles are looked at for re-pricing as they age. No vehicle should go longer than 7 days without a price change and should be changed by the Used Car Manager. It’s always a good idea to have the GM, as well as the other managers in your store participate in the pricing conversation. Set up a bullpen so you and your employees can look over fresh inventory before putting cars out on the lot. Have the go to market price at the bullpen so you can discuss it with the team.

0-15 day

The re-pricing of cars 0-15 day old should be done at 7 and 14 days. You will need to monitor the vehicle’s online performance with SRP and VDP metrics. Vehicles with a low conversion percentage or with low SRP counts will typically need a larger price adjustment to help them get some interest.

16-30 day

Vehicles are re-priced at 21 and 28 days. Under performing vehicles (0%-2% VDP) or vehicles with a higher days’ supply (over 81) are marked down in price more than vehicles performing at a high level (2.1% VDP or lower day supply). Try to position vehicles in the top 5 price point base on vehicle condition and miles to increase online traffic. Make sure all vehicles have marketable photos and a well written description that differentiates your vehicle from the competitions. Promote any maintenance or  recondition you have performed in that description.

31-45 day

Vehicles are re-priced at 35 and 42 days. These cars should be re-bull penned with sales consultants.  Used vehicle managers, inventory managers and sales managers need to review SRP and VDP counts as well as MDS – looking for underperforming and slow moving vehicles. Price changes at 42 days should be moved at or below 90% of the market and should be set in the top 3 price position. (Based on market size)

46-59 day

Vehicles are re-priced at 49 and 56 days. At this point, you should have an exit strategy depending on market days’ supply (MDS) and stocking levels of vehicle class. You may want to keep a vehicle with low VDP conversions if it is of like brand to your franchise, but make strong consideration to be price ranked #1 in your market. Use MMR (Manheim Market Report) to re-price your vehicle based on what this unit will draw at the auction.

60-69 days

Set the retail price at or close to what the car will draw at the auction. Its time to make this car go away and retail at any price usually makes more sense than taking a wholesale loss.

70 days and out

Time to rip the band-aid off and send it to the auction.

 

Hopefully you have been re-pricing and making good stocking decisions so you never have to send another car off to the slaughter.

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Categories
Business Development Retail Car Lot

Top 10 Tips to Encourage Employees to Utilize the CRM

It’s Sad, I Know, But Your Average CRM Utilization is:

28%

Getting Your Team to Use Your CRM

Having a new customer relationship management system (CRM) won’t grow your business until you figure out how to get everyone to use it. Your CRM needs to be EASY and make sense for your manager and their team. CRM is probably one of the most valuable systems that any small business can implement. It is as important as the employees and will have a more significant long term effect than any one individual.

1. Don’t bombard users with features. 

Change is hard enough for most users, the manager does not need to spend a majority of the training class showing off feature after feature of the new system. Especially at the beginning, keep it EASY for the user. Display only the features the employees need to do their job. After the basics are understood by all employees, hold weekly meetings where you can show off additional benefits of the CRM.

The Easy CRM is not Bloatware2. Hide the Complex Features at First.

“Make sure your CRM is as simple as possible for what the employees need,” says Maggie our head of customer service, “If you think you need a full blown bloated CRM system with every feature possible, then plan on failure. Bloated CRM’s are almost always under utilized and under appreciated. Think about the phone system in your office, it probably has many great features, but most of your employees only use it to make calls.”

3. Make sure the owner uses the CRM, too. 

Nothing is more effective than when an employee knows the company owner is using the CRM, especially if they email questions to the employees about their utilization. Example: “I was looking in the CRM and did not see….’ Insert your ending here. When everyone uses it, it will become a trusted source.

CRM Trusted Source4. Make the CRM your trusted source of information?

Companies that also use Outlook or other contact management software often find themselves torn between two systems. If you can find a CRM that does it all, like the EASY CRM consider using it as your only source of customer info and customer detail. Most great CRM’s integrate with Gmail and google contacts, the user will not have to worry about an inability to access information. All of the info will be at your fingertips when you are off site.

5. Make it fun (and competitive) and reward the use of the CRM. 

Turn it into a game–with leaderboards, rewards and public recognition. Use competitive nature to encourage use of the CRM. Spiff’s and incentives work great, especially during the install phase of the CRM.

6. Play up CRM benefits. 

We all love top 10 lists, you are reading one now! Consider creating a top 10 list for the features that are most valuable to the team. The CRM sales top 10 would be completely different than the Customer Service Team’s CRM top 10 list. Keep it simple, and focused on the things they will actually use.

Once everyone is using the CRM, then show top new features each week to highlight the parts they may not be using yet. If an employee asks for a feature, make sure to use their name in your feature list. “Nancy asked the other day how to log a hand written note mailed to a customer? That feature is found in the ….”

7. Involve everyone in the early CRM rollout process. 

Make sure that the system is simple to learn for new users, and that your users can easily teach themselves as they work. Make sure employees have the opportunity to tell you what features do and do not make sense. You do not want to change workflow and make things take more time than before the CRM was implemented.

8. Find out who Hates the CRM

Figure out why and fix it early. “Naysayers do more damage to a CRM rollout than a power outage” says Kevin in CRM development. “Find the haters, help them, heal them and make them your evangelists.“

How to find them? The site Switch & Shift says, “They [users] will love the CRM or hate it based on its functionality. Let’s assume that your CRM is easy to use and provides them with essential information – a big assumption, but work with me. No matter how cool the functionality of your CRM system, your people may still hate it. Here’s why.

If your people love your CRM, it’s because it makes their jobs easier. If your people hate your CRM, it’s because you’re using it as a whip to ride them with.

It all comes down to this: do you look at your people as wayward children whose time and activity must be controlled tightly so they don’t slack off? Or do you see your employees as mature, responsible adults who are eager to do their work to the best of their abilities?”

CRM Is About Me9. It’s all about me

As a salesperson, the mentality will generally be “all about me”… that is what makes them good. If you didn’t take the time to involve them up front in the decision making process, why would you try to convince them now? After all, the salesperson will be the primary user of this new system. ‘Buy in’ occurs up front, not afterwards. If possible, try to rally your team to be onboard with the software before you even receive it.

10. Keep Training CRM

Driving CRM (or any software) adoption requires relentless and extended training. Training the CRM users once, having a few follow-up meetings and then having CRM fail, is an organizational execution failure, not a software failure.

Finally, have patience, give employees time, offer help.

“As leaders we all want to launch new procedures and policies, but it takes time for the average person to make them a habit. Be patient, be kind and be understanding. You are only truly successful with CRM implementation when the computer illiterate and the naysayers can use it to do their job. Just because they are not ‘computer savvy’ does not mean they cannot become CRM Savvy,” says Kevin.

TIP: Sales Buy-In is critical. In your sales meeting, ask for a CRM tip of the day. Spiff the person with the  $50. Then teach the whole team how to preform the tip. Or better yet ask the salesperson to demo his/her suggestion. ‘
Kevin Leigh, Dealer Simplified
Kevin Leigh

Categories
Dealer Software Defining Car Speak

What is a DMS – Dealer Management System?

Components of a Modern DMS

A dealership management system (DMS) or auto dealership accounting system is a bundled management information system created specifically for the automotive industry and especially for  car dealerships or large dealer groups.

Some DMS's are OutdatedDMS is not for everyone, typically small scale dealers and independent used car lots will manage their business with generic accounting packages. Even large dealer groups will outsource parts of the DMS to achieve higher quality products.

A typical example of outsourcing is inventory management. In most cases dealers are using companies like VAuto, VinSolutions or Dealer Simplified.

Another reason dealers are outsourcing is that many of the traditional DMS systems are outdated or the dealership cannot afford the massive upgrade charge. It is just less expensive to keep the basic accounting package from their DMS and bolt-on modern software such as CRM and Dealer Web Sites.

Dealers need software to support all aspects of running a dealership such as:

  • Tracking vehicle inventory
  • Tracking sales
  • Finance and insurance calculations
  • Dealer websites
  • Menu selling systems
  • Tracking
  • Accounting
  • CRM
  • Wholesale management
  • Internal company websites and message centers
  • Calculating employee commissions
  • Purchase order tracking
  • Parts inventory
  • Auction management
  • Work order management
  • Appointment scheduling
  • Proper planning
  • Follow-up

Most Common Dealer Management Systems found in dealerships today are ADP, Reynolds and Reynolds and Dealer Track. However many new DMS systems have arrived on the scene in the past few years and are offering easier integration and connectivity with software partners with modern API’s and SSL Keys.

# of Dealership using Non-DMS add-on's
Categories
Business Development Retail Car Lot

44 Questions to Ask Before Buying A CRM

I have compiled a list of question to ask before buying a CRM. Comment below to add any I have missed. 

  • How fast does support answer the phone?
  • What is you typical support response time?
  • Does each of our locations get a dedicated (non sales) rep?
  • How does the CRM work with e-leads and Internet inquiries?
  • Is the CRM certified with my brand?
  • Will I be able to import my contacts from Outlook or Excel?
  • Will I be able to import my contacts from my Gmail?
  • Will I be able to keep meeting notes in the CRM?
  • Will AutoRaptor integrate with my current DMS (Dealer Management System)?
  • crm-must-be-useful-usable-valuable
  • Will I be able to attach documents, scanned business cards and contracts to contacts in CRM?
  • Will I be able to access my contacts on an iPhone or Android phone?
  • Will I be able to set a follow-up task after I enter a note?
  • Will I be able to keep track of the last time I talked to someone?
  • Will I be able to import contacts from my Mac address book?
  • Will I be able to get task reminders via email/SMS on my cell?
  • Will I be able to access my contacts if I’m in someone else’s office?
  • Will I be able to keep important emails in the  CRM?
  • Will I be able to easily export contacts, notes, and emails from the CRM?
  • Will I be able to attach a signed contract directly to a contact?
  • Will I be able to use the CRM to remind me of a client’s birthday?
  • Will I be able to store all my contact’s contact info in the CRM?
  • Will I be able to use the CRM together with my co-workers?
  • Will I be able to see a map of where a contact is located?
  • Will I be able to see a list of everyone I know with a single area code?
  • Will I be able to tag a group of contacts so I can easily find them later?
  • Will I be able to keep some tasks to myself and share others with everyone?
  • Will I be able to use the CRM to keep track of conversations with vendors?
  • Will I be able to forward important emails directly to the CRM?
  • Will I be able to set a reminder to call someone back in 30 days?
  • Will I be able to use the CRM on a Mac? A PC?  An iPad?
  • Will I be able to keep some contacts private so only I can see them?
  • Will I be able to use the CRM to remember who I talked to last week?
  • Will I be able to comment on a co-worker’s conversation notes? And collaborate.
  • Will I be able to categorize my tasks, emails to send, calls to make?
  • Will I be able to store background and biographical info on each contact? And link them with others like spouse coworker etc.
  • Will I be able to see a list of all the CEOs I know in a town?
  • Will I be able to use the CRM to remind me of someone’s anniversary? Yea and any other memorable date you would like to remember.
  • Will I be able to find out what time it is in a different time zone?
  • Will I be able to see a list of all the people within a company we’ve talked with?.
  • Will I be able to keep related notes together in one place in CRM?
  • Will I be able to integrate CRM with mailchimp.com services? It was the first thing we built into our CRM.
  • Will I be able to capture data from a web form and send it to the CRM?
  • Will I be able to upgrade, downgrade, or cancel any time? Yes and you can export your data at any time as well.
  • Will I love the CRM?
Categories
Dealer Software Retail Car Lot

Top 10 Reasons you need an Easy CRM

how-to-use-the-easy-crm“Do I need a CRM?” is the most common question we hear. First let me ask these questions; do you want a system to help you convert leads into customers? Do you want a system to help you retain your existing customers so they buy from you again? Do you want to have your customers send you referrals?

The Easy CRM (shameless plug) is the perfect match for small businesses, ranging from 1 to 1,200 employees that need to turn leads into customers for life. There is no need to install software on a computer, no need to spend hours studying a manual, it’s easy to use and secure.

10. Uncluttered focus

A great CRM will integrate emails, tasks and calendars into one easily maintained and managed place. You’ll learn things about your business you never knew before. You’ll become organized at storing things in a central location and before long you’ll bring all the pieces together.

An easy CRM system will allow you to focus on customers and sales actions.

What group of leads, customers or businesses should you be focusing on?
What is my shortlist of VIP’s?
What is my next action that will focus me on what needs to be done?
What broadcast activity or call campaign should I be doing, morning, noon and night?

9. Small business CRM is focused on sales activity.

Using a dynamic list of “Next Actions” for every prospect or customer, will help in a natural way, move prospects and customers through the sales funnel towards a sale. “Next Action” style CRM encourages upfront sales decisions with a clear and simple way of seeing sales targets.

8. A great CRM will create peer pressure.

Once your CRM is fully operational, the team will start to see who is using it well and who is succeeding on their tasks. It is like a built in older brother that constantly reminds you how well you are doing compared to the rest of the team. It’s never fun to feel like you’re going at it alone. Peer pressure is a great motivator and spending time focusing on the poor performers can increase your capacity and help you grow your company. You can stage friendly inter-office competitions to see who can close the most deals, sell the most dollars, or carry on the most conversations. Bottom line — Competition helps business.

CRM-notification-bitching-betty7. CRM Becomes Your “Bitching Betty”

Probably one of the most important advantages of a great CRM is how it tells you what to do, and when. CRM is like a great sales coach that keeps you on top of your game by reminding you endlessly and without remorse. It’s like the autopilot on an aircraft that warns the pilot to “Pull up, Pull up” when the plane is too close to the ground. A great CRM will tell you to call, email, write and when your customers needs your attention. Pilots call the voice “Bitching Betty” but would never want to live without that layer of protection in their lives. Why would you want to live without a CRM?

6. Never lose your data

If you use a Rolodex, memo books and paper calendars for tracking your customers then the odds are high that you are going to lose them at some point. If you store everything on your laptop or cell phone? Remember, they can be stolen. But with a web-based CRM you effectively protect your data from being lost. Of course, servers can crash and hard drives fail but with the proper web host and data backups you’ll never lose your customers. A responsible secure and well maintained on-line CRM like the EASY CRM (another shameless plug for our awesome software) will allow you to back up locally, take your customers with you if you leave and know that your data is secure in the cloud.

5. CRM is like a Crystal Ball

Everyone wants to know the future. If only there was a way to know what to expect. A great CRM helps you with that. Now of course a CRM cannot predict the future with 100% accuracy (it’s not really a crystal ball), but a good CRM can give you a reasonable expectation of the future based on past performances and past events.

4. CRMemory, Let your CRM be Your Second Brain

A CRM will help you not only keep track of every task and every event but also relate them to the appropriate customer or lead. A great customer relations system can help keep all those conversations in one place and make it easy for you to quickly look back in time and see how things have progressed.

3. With CRM You Become a Customer Service Superhero

Have you ever gone to a party and wished you could remember everyones name? Even if you are awesome with names, have you ever wished you could remember the last time you called that person, or if their birthday was close. CRM helps you remember all the important details, their last product of interest, their children’s names, and even when NOT to call them. Because you don’t want to be so annoying that they don’t answer your call.

2. CRM Email Campaigns.

One of the things CRM does extremely well is identify which leads and customers you should be emailing. With a great CRM you will have at your fingertips well written templates that you can use to send to your clients, leads etc. Some will tell you that email is dead, but we find that well written and mobile friendly personal messages that happen to be sent by email are very effective.

Help Key1. CRM Becomes Your Selling Assistant.

With a CRM you can store and manage hundreds of clients and let a computer ‘Assistant’ handle the task of memory and recall. Take advantage of the CRM and use it for your personal success. Then your personal growth is never held back by your memory. Lets face it you probably don’t know where your car keys are right now, so how do you expect to know who to call or who’s birthday it is?

One final thought: a great CRM will allow you to access your information from anywhere in the world where you can get internet access. It will allow you to have full access to everything from your cell phone, smart phone, tablet, iPad, PC or MAC.