Here is an idea I'd like to run by you

[Results]

This is the liveliest activity I have seen in a long time. The input is remarkable.
Greg, Like Kevin, I believe your idea will work. I know from visiting directly with you that this can work. Here is the BUT.
I agree with everyone else on how the deal will blow apart at the dealership. In fact all of these comments above should be transferred over to dealers forum for the GMs and Dealer Principles to read.
The sales process has to flow from the web site to the taillights going over the curb. There has to be training, follow-up and authority placed within this program to make it work.
You mentioned listening to the customer. Excellent points. However until we as consultants actually teach the stores to listen to us we are not going to get them to listen to the customer.
There has been a lot of wisdom presented at this point by this forum, I believe that when the industry begins accepting the information presented above then they will be ready for your out sourcing program,


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Results
Mike Stinson
results@rintuit.com
www.rintuit.com

[doc]

Excellent string. Allot of great input has been placed here however there are two main points that I would like to make.

1. Dealers don't want to change.
2. If most dealers think there is no value to the Internet Dpt. the why would they pay to outsource it?

Here's an example. One of my clients has been struggling with the Internet since it's inception. His story is simple.

Sells the best product for the Internet (Toyota) due to its virtually free traffic build up that most Toyota dealers receive.
Small to medium store selling 70 - 115 units per month traditionally.

Have very few competing Toyota dealers to contend with (1 is large but about 30 minutes away. 1 is about the same size about 30 minutes in the opposite direction)

Has a lack of local dealerships competing due to the minimal efforts that they have made to capitalize in this area.

Have a dedicated department, & staff.

On average this dealer receives about 125 leads a month (Slow months are 100, big months are 150).

Outcome: They sell roughly 5% of their lead volume.

Reason: Lack of trust, commitment of staff, and most importantly, willingness to release a LITTLE control. The Dpt. has only been given enought to pay for 1 individual but they also are the Lease Manager, Dealer Trade Manager, extra Sales Manager, etc...

(Mean while, the store that I run daily operates at around 15% and have built more lead volume through effective and strategic advertising than theirs. Oh yeah, and FREE advertising. Now my store is selling 10 - 20 units a month and doing it with a B-line product. Lincoln-Mercury. Of course my GM trusts me and knows that this is my forte so very rarely does he even question my moves.)

This is the same story that plagues 85 - 95% of the dealers nationally to date. There are very few individuals like Greg, Results, myself, etc. who have dedicated their time, energy, and in some instances their life to the building and creation of a successful E-commerce Department and integrating that into the current buiness module of tiodays dealership. A department that is actually producing anywhere b/w 10 -30% of the Sales Dpt Gross and increasing the ratio incrementally every month. This is what allot of us want yet most cannot achieve it. Very much like Greg says, no one is enforcing the policies in the absence of their Internet staff. Allot are still preaching the old school gospel of a 7 day buying cycle, ask for full gross on your car and offer 1K under rough book for theirs as your opening offer. Every customer is a liar. Misrepresenting a fair deal by showing great discounts but keeping enough manufacturer monies in the back to have raped the poor customer. Believe me I will be careful showing remorse for todays auto consumer for every time I do I have some old school dealer/manager attack me saying that it is fair to make a profit. I agree. But it's a crying shame to make 5,00 on John Doe this morning and then turn around and make $1,500 on the next guy buying the same car. When asked why you rape one over another I get "Because we can" or "If we can make a better profit shouldn't we". This is WHY customers are becoming increasingly difficult over the last couple of years. This is also why most Dealers despise what the Internet has done to their Industry for now instead of raping 3 out of five customers sold, their only able to get 1 out of 5.

This reminds me of an example in my past:
One of my customers wouldn't commit the day of his visit for several different reasons. Some excuses, and some were valid. Instead of irritating the customer or push the situation I offered assistance and guidance. I quit acting like a salesman and started acting like a customer service rep. After I let him go my boss chewed me a new one saying "Their is no such thing as a be-back", he continued "That customer sold you a line and now he is going to buy from the first REAL salesman he meets". He blamed me for not turning him over so that they could place the vice grips around the guys neck and try and force a buying decision.

Fortunately I was smart enough to NOT LISTEN to this once wise manager. A week later I sold a car to my fictional be-back, and then sold two of his friends. Why? Because I treated him like a real person and not just another notch in my report or on my check.

Point is this. Dealers have bucked the many ideas that have been presented in this forum since day one. They don't want to release the CONTROL that they have gained by doing everything in their power to keep the customer, salesman, and management stupid.

Everything in this Industry is approached like the military, on a need-to-know basis. Unfortunately many of the reasons to this for dealers are more dishonorable than that of military.

So again I ask. If you could come up with a good solution to outsourcing, could you sell it to a dealer? Not just to the 10 or 15 dealers nationally that have management and owners who are willing to bend over backwards to make it work, but to the majority?

At this time in the Industry's present state I do not think you could unless it was to major groups.

Secondly, how would you convince them to spend the money for such a thing when most of us can't even get our boss to spend $500 on a 30-day advertisement? Or $10 p/hour + to man the department. Or to increase staff of existing Dpt.

Every dealer I have met shrieks at the sound of $.
They don't want to spend it. They don't want to spend it because it cuts into their bottom line, which (since most are paid a percentage there of) takes away from there own check.

IMHO I think your better off trying to find away to convince dealers alike to set aside and budget for this department, and the development of, like any other department. Quit leaving the decision to your GM or GSM who is only looking at the cost and how it is going to affect his check.

Bottom line. Sonic, Auto Nation, United Auto Group, Group1, etc..... Are re-inventing this and are buying more and more dealerships every day. They are turning in to the Wal-Marts and Kmarts of the 70's & 80's. Less than 30 years have passed and those two companies have put many locally owned stores out of business. These major groups are going to do the same in this Industry as well. And there are not outsourcing, but instead have built their own polices internally and have been dominating every market they enter.

I am more worried about these guys, and whether outsourcing, or internally building, the Internet is paving the way for the future. If todays dealer doesn't get involved now they will be left behind.

I think your idea is valid, and could work for some. However the ever-rising threat of corporate dominance and take over is more apparent now than ever. Within the next 5 to ten years many of todays dealer will be no more as their stores will be run by the larger, more efficient and goal oriented corporations that have quickly risen and dominated the market.

By the way, the Toyota dealer I referred to just had sonic buy three stores across the street in a three year deal. I have been trying to convince the store to just give me 1 DEDICATED person and instead I have a GM who has given up and even to my amazement PULLED resources. Of course the only sad thing is the amount of time and wasted money over the last 5 years that was loss due to a lack of commitment and ability to stay on track.Where do your think this dealership is going to be in 5 years. I am willing to bet my own salary that it will not be nearly as competetive and profitable as they are today. I'm also willing to bet that if they buckle down TODAY and work on building their internet BDC/Internet Dpt that they can compete in due time.

Of course that is if Sonic doesn't try and buy it as well!!!

[machado]

Great comments Mike and Doc

I agree with a lot of what you are both saying.

All of us know that there is no magic pill that dealers and managers can take that will ever zap them into the 21st century. I will never forget a quote that I believe was from the former CEO of AT&T. "When the world on the outside of your universe is spinning faster than the world on the insideThe End Is Near".
A lot of this could easily be equated to a few of Doc's comments. Grant Cardone once said on one of his videos and audio tapes that "The Carmax(s) of the world are offering customers a new way of doing business and they like it. Offer customers a new way to do business and they will flock to it.".

When I trained salespeople on the steps of the sale, for the dealerships that I have worked for in the past, I was always amazed with the crap that the other managers fed theses young rookies, when we would come outside for an occasional break (I was even more amazed that a dealer or GM would allow this to happen). In the beginning I could never understand why so many people wanted to leave there legacy in this industry as a shyster, conman or master manipulator. If they were such great trainers in ethics and such phenomenal car guys, why was I training the staff and not them??? The answer is simple they make money TODAY! {Sure what Greg is teaching them may rub off and at the vary least a the staff should have some idea of how to do it right} It seemed as though all that ever mattered was selling a car today and making sure that we left no money on the table. This has and may always be the credo of most dealers, but who knows, this may some day change.

When it is all said and done all that will be left with is our integrity and our word nothing else will matter. How many cars you sold in your day, what type of house you lived in or what type of watch was strapped on your wrist will not matter.

All of you may be right
Outsourcing may not be a solution; but, I can tell you that the company that my friends are building a prototype for under the model that I have outlined in this string is going to test market it for a Large Dealership Group in a major metropolitan area. If it works as well as they think this may never come to fruition as a viable alternative for the rest of the country because the group may buy the company and idea for themselves.

Doc, just for the record the systems that Carmax and AutoNation are using is sort of a similar model, the difference is that the companY has already set down the policies and procedures from the top down. It might have a very different result if the two companies (Dealership & the Outsourcing Company) have different corporate architecture or relationship.

Who knows?

I am still suggesting that all dealers move toward developing some type of strategy for staying in contact with your email data base on a regular basis.

"The Internet will not sell one more car, truck or SUV, than would have been sold without the World Wide Web The real distinction will come for the stores who sell on the Internet well, and who have a long term e-commerce strategyThey will capture market share at a much lower expense then their competition and this will significantly impact THE BOTTOM LINE"


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Greg Machado
E-Commerce Director &
Independant Consultant
gMACgroup.com
machado@gmacgroup.com
210.710.8456

[doc]

Greg,

Totally agree. Carmax and Autonation are running similar systems as you have mentioned but the main difference that I see is that they integrated this system at the corporate level. The Corporation has helped design, pilot, and execute the new plans. In essence they formed a partnership.

The only reason that it WILL work (and in many cases already has) is because the Corporation is forcing their dealerships to comply. You know, doing what any other corporation would do in any other Industry but our own. There are too many dealers/groups around that have more than one store yet allow each store to run their own agenda.

What I mean is: Separate advertising, separate pay plans, separate internal structures.
Unless the stores were right next-door, very few try and keep lost customers within the company. Personally, I dont know how any true business man really thinks that each of his individual locations has the resources to be competitive on their own. Wouldnt the combined resources (Budget, monies, affiliations, etc) of the Corporation benefit each dealership more than that of its own. Hell that is what Autonation, carmax, etc are doing isnt it?

An example: I lost a deal on a Mercury Sable to a potential sell on the Accord a few stores down. I was able to convince this customer to look into a Camry, which was comparable, and I assured her I would give her the same great offer that I did on the Sable. She was so impressed that I was able to accommodate her even though I did not sell that line that she took a little extra time to go look at my Camry. Good thing too for we sold her.

In the last few years have I rarely seen a desk manager/GSM/GM send a customer or suggest a product from one of their other stores?

Point: Good products and technology are great, however if youre not prepared to make investments such as these on a corporate level then they will fail. There is too much animosity and greed b/w GM's and other GM's of stores within same group, Departments within same store, and managers and sales associates within same departments. When the breakdown starts at the top then it doesn't matter what great idea you have, product, or advise, then it will ultimately fail.

Again, find a way to convince dealers to stop thinking like mom & pop dealers and start looking at themselves as a corporate force fighting to stay alive amongst bigger, stronger, and more dominant companies then you'll be able to sell ideas like this.

Right now there are not enough Dealers that will support what it would take because it means re-writing most internal operating procedures. You know the one that no one really knows anyway. Except this time force it, hold people accountable to it, and base all decisions on it. Don't just type it up, put it in a book, and pull it out upon request. Live it, learn it, and adhere to it at all costs. Since this is what needs to be done it is not up to the Managers, GSM/GM's, or even the consultants paid to teach people these things.

THE RESPONSIBILTY LIES IN THE HANDS OF THE PRINCIPLES. Only they are able to change this Industry, and they alone have the power to change the future of their companies. Their managers will buck, bitch, and complain. So what.

As a wise GM once told me, "One employee will not make or break this company".

If staff doesn't support it then replace them. Train the new staff from the beginning the way things need to be done. Eventually the complaints will cease, business will continue as normal, and hopefully it will help some dealers stay alive a little longer and still turn record profits. Where as right now, many are falling short of expectations.

So I leave you with this for all of our readers.

When did the Internet come about? And in that time how much of this Industry has changed or been effected by the Internet?

Finally, if there was that much change already, in the infancy stages, and within such a short amount of time how long will it take for your dealerships to feel the pinch. After they begin feeling the pinch how long will they be able to stay alive? If they can stay alive, how long will it take to catch up to be competitive again?

IMHO every principle today needs to think about these questions. Stop worrying how much something costs, or whether it will be useful.

Instead say, Thats ALL it costs to make me more successful, and We will make it work and commit our selves to making it work. Dont base the future of your company on whether your people are going to utilize something, or whether it is going to stir the waters amongst management. Choose the best path for your company for the long run. Not for today, tomorrow, or months end. But for next year, next decade, etc.

Choose wisely for time is running out and this Industry is about to be rocked upside down. As if no one has seen evidence of that yet. lol.

[LarryB]

Hello Greg. I have enjoyed reading all of this. Having only been in the car business about 7 years, I am constantly amazed at the lack of quality training, and even more amazed at the lack of quality management decisions. Note I did not say quality management. Some of the managers I have met are quite good. But some of the decision making defies logic.

Greg, you and I have discussed this issue several times, but for the benefit of others who may read this, I work for a very large, very good organization. In SPITE of our success and image, we still manage to regularly come up with some of the most bonehead reasons for personnel assignment possible. i.e. the worst sales person on the floor gets to help me with the Internet business. Now I wonder why we struggle to stay around a 10-12% close?

I started selling on line in 1996, from my home computer. I have gone from being a raving lunatic about improving our department, to just finally accepting whatever we are given, taking the critisim, and moving on to the next month.

I agree with all who decry the sad state of training in the auto industry. I used to travel and train government agents, and I am sure many had better things to do than show up for my class. BUT... We had a couple of differences. First, I was more qualified than my students, and at a higher pay grade than most of them.(credibility) I was teaching a subject that they HAD to have to stay certified. (management support) I taught subjects that could keep them alive, or could make their lives easier. (efficacy)
Our classes were NOT optional, and they were NOT frivolous. You came and paid attention, or we did NOT certify you.

I go to several sales and or Internet Sales training sessions every year and listen to so called experts tell me how to achieve these GREAT results, and most of them have never been asked to sell a car on line. Moreover, the numbers they tout are pie in the sky. (lack of credibility) None can answer the question: why are you telling me? Shouldn't this be mandatory training for owners and GMs? Shouldn't the manufaturers insist that the owners and GMs get up to speed. (lack of management support at the highest [manufacturer] level). We, the field ISMs, cannot affect policy, nor do we write policy.

Greg is one of the few trainers I have worked with who has actually been able to show me things I could do, and believe in, from a practical manner. And I can do them without fighting the head shed for approval. They are small things, but done right, they are effective.

A lack of commitment to the daily and or weekly contact with old leads is easy to explain from my perspective. I do many things (fleet, fill in Sales Manager, etc). I have only so many hours a day to earn a living at the pay level I wish to be at. When anything takes more time than it has the potential to reward, it becomes a "c" priority. Actually "r" would be a more appropriate letter (I'll do it when it RAINS in the desert). For you managers out there, this may sound a little insubordinate, but I get paid for some things I do, and I get zero for others. When I am getting short on month, I work for me. You, nor my managers, are going to pay the mortgage if I do great follow up, write great programs, answer all of the emails, and sell less cars.

Finally, a word about the companies that have really good programs (I would rate mine as fair). The ones I have met have managers that are NOT car people. They got here from somewhere else. They understand business and people, so it seems incongruous to them that we are trying to sell someone something without telling them how much it is. They cannot imagine asking someone to run a part of a company that could generate several hundred thousand dollars of profit a month and offering to pay them $50k or $60k per year! (I had that offer!) They believe, as some of you have so eloquently stated, that if you treat people right, with integrity and caring, you will sell them more than one car.

Greg, your idea has great merit. I hope someone does buy it from you and take it into a corporate setting. It will not work at individual store. You want to know why? Because Kevin wants sales staff to "do their jobs". (Management won't support it.) S.W. has a great point. Manning 24/7 costs, and it costs plenty if you want the quality of person who will actually learn enough about every product they can chat intelligently. Amonteiro wants dealers to have a plan to sell EVERY customer, and have everyone follow the plan. And good ol doc hits the nail on the head. DOLLARS. They got it and they don't want to spend it. My favorite line locally? When you have generated higher returns, we'll spend money to improve. The target. Close 25% of raw leads, with a fair sales person to assist me. Good luck, Greg.