May 2012, Auto Dealer Today - WebXclusive
There’s just not enough time in the day to get everything done. How many times have you thought that? Many savvy dealers use a host of online tools to help improve efficiency in various areas. Auto Dealer Monthly took a closer look at an array of online tools that can help dealers make the most of their valuable time. Those featured here are not the only options available, but they can help in the areas of sales, inventory management, training and compliance.
ProMax Unlimited, Auto Summary
Auto Summary is a tool that provides users of the various ProMax programs pertinent information on a customer’s past auto loans. The Auto Summary of a customer includes the following information on past auto loans: the interest rate, term, monthly payment, original loan amount, whether there was a cosigner, how much of the term is remaining, estimated payoff, percent of loan paid, how many late payments the customer made in the past 24 months, the lienholder, the lienholder’s phone number, and the amount of revolving credit the customer has available.
“Essentially, we wanted to give the sales manager or finance manager a quick snapshot of the consumer’s auto history … all the information that’s important to figure out where to start these people off [when working a deal],” said Shane Born, COO of ProMax Unlimited. Some of this information is already on the credit bureau, but managers must dig to find it. With Auto Summary, that information is compiled in an easily-consumable format and is available once the credit bureau is pulled. He added, “To a finance manager and a lot of the banks financing customers, the most important piece [of information] is how they paid on their car.”
An additional benefit of this knowledge is dealers can use it to work a deal to hold gross. Born provided the following example: “If you know that their credit score has obviously improved since the last time they bought a car because they paid 15 percent [interest], you’ve probably got a good chance at making some decent spread.”
Westlake, Buy Program
Getting deals approved by finance companies is another day-to-day challenge dealers must face. To combat this issue and put the power of approval in the dealers’ hands, Westlake Financial Services offers its Buy Program, which allows dealers to input deal information and tweak a deal until approved.
The dealer or finance manager enters a customer’s credit information and the vehicle information into the program. If the deal structure and amount financed works, the deal is automatically and instantly approved. If something is off in either category, the dealer or finance manager has the ability to tweak the car price, loan term, and/or customer down payment in order to get an approval.
The different finance programs Westlake offers are built into the software, and once a new deal is entered into the system, the deal is automatically evaluated and placed in the proper finance program. The Buy Program also provides tips along the way. For example, it can alert the dealer if an additional few hundred dollars down would bump the deal up into a different finance program, which could result in a better deal for both the customer and the dealership.
In addition to simplifying the approval process, dealers can realize time savings using this method to get approvals. “In the 20 minutes you wait to hear back from other finance companies, you could have structured five to 10 car deals … just by using the Westlake Buy Program,” said David Goff, Westlake’s director of marketing.
Generally speaking, dealer websites are geared towards selling vehicles. Seldom do dealer websites include much information on the parts department, other than the department’s hours and an occasional generic order form. Also, dealer websites don’t typically dominate the top results on Google searches for specific parts. CaseyClick offers dealers online parts solutions to help fill that void and generate more parts business.
Dealers can work with the company to build a dealership-branded parts landing page or microsite optimized and marketed to capture valuable market share in online searches for parts-related terms. “Aftermarket [providers] own parts search,” said Craig Moore, national sales director at CaseyClick. “Dealers who do come up in [parts] searches are usually being cross-referenced because somebody typed in the brand name … but if customers click there, they just go to the dealer site… where they’re trying to sell cars [not parts].”
The parts sites allow customers to buy parts online, but Moore said most customers call in orders or email questions, as opposed to ordering online. The website, he explained, is designed to generate leads. “A lot of people use it as a research tool … The majority of shoppers still have questions … the nature of the market just necessitates the phone call.”
Acquiring used vehicles is one of the biggest challenges dealerships encounter, and while online auctions offer access to inventory across the country, the research needed to make informed buying decisions is time-consuming and requires data from many different sources. Auction Genius was designed specifically to help conquer this challenge.
The program brings the online auctions together with the different sources of information dealers need to make informed decisions, such as book values and condition reports, and presents all this information in one place, streamlining and significantly reducing time spent on the research process.
Dealers essentially create and customize a dashboard on their computer screens by choosing and arranging different components that display information, including condition reports, Black Book, CARFAX and many other sources dealers would otherwise have to research separately by visiting the different sites and entering each vehicle’s VIN. Dealers can watch live auctions online and as cars come through the lanes, the various modules on the dashboard instantly populate with information for those vehicles dealers are viewing. When viewing vehicles in a list format, the program offers one-click functionality to enable dealers to see all this same information in the various modules on their dashboards.
Since Auction Genius cuts down drastically on the time it takes to research each vehicle, dealers have time to look at more vehicles to find the best cars for their lots at the best prices. The program is currently integrated with Manheim and ADESA.
The reconciliation process for inventory and accounting is a regular chore for auto dealers, requiring a fair amount of time to complete and meticulous attention to detail to ensure accuracy. One online tool that helps dealers automate the reconciliation process is CP Handheld. It can take several hours to go through the manual process of making sure your physical inventory matches up with your general ledger, what’s been delivered from the manufacturer and what’s on internal floorplan records.
“You’ve got four sources of information that are very cumbersome and different in terms of the form in which that data is delivered,” said Dan Perry, president of CP Handheld. His company’s system takes the information from different sources and merges it into one consumable format. Some of the larger dealers using the tool have compared the manual reconciliation process to the automated one, and reported that the automation helps them save up to 18 hours per reconciliation. “We’ve made the electronic information all speak the same language by bringing it together, and then we allow the reconciliation to be instantaneous … and provide dealers online reports of what they’re exceptions are.”
To help pinpoint the cause of exceptions, the program can cross-reference exceptions with other data from the dealership’s internal systems. For example, cross-referencing an exception to an F&I report might reveal that the vehicle’s not physically on the lot anymore because it already sold, but is still pending in F&I, causing it to show up as on-the-lot in another system.
A few clicks in the right tool can take you a long way. Provision, the most recent offering from vAuto, promises to show dealers in three clicks what vehicles to buy, what to pay for each one and where to find them. Launched in November 2011, Provision is an inventory sourcing tool that vAuto Founder Dale Pollak said was “made possible only because of the combination of the common ownership of vAuto, AutoTrader and Manheim.”
The tool assigns a letter grade (A, B, C, D or F) to each car in a dealer’s market. The grade is based on a weighted average, which is determined by assessing a vehicle on seven attributes: demand, interest, volume in market, market day’s supply, profitability, availability, and the dealership’s past experience with the car. “Every one of those seven attributes … mean something to the performance of that vehicle,” said Pollack.
The demand and interest in a vehicle are assessed via vAuto’s relationship with AutoTrader.com, while information on the profitability and availability of a vehicle is available because of the company’s relationship with Manheim. Pollak said, “We can see every car being searched for by consumers on AutoTrader in every market, every day, so we literally know what they’re asking to see in real time. We could never get that before.” Furthermore, the Manheim relationship, he said, allows the company to “determine with precision the average spread between the average retail and wholesale price of that vehicle in that market.”
Through this process, dealers determine what to buy and what to pay, and the third aspect of the program pinpoints where vehicles can be purchased. “With [a] click, it shows you every auction in the country where that car’s available for sale … It shows you where it is, what auction, what day, what lane, what time, what run number, and you can submit a bid for that car right there,” he said.
Automotive Compliance Consultants, Compliance Solved
One dealership compliance tool is the Web-based application, Compliance Solved by Automotive Compliance Consultants. It’s an online program that helps the dealership maintain compliance and educates its employees on sticky compliance issues that involve human resources, the F&I office and fixed operations, including courses on the Gramm-Leach-Bliley (GLB) act, Equal Employment Opportunity Commission (EEOC), Red Flags Rule and Occupational Safety and Health Administration (OSHA).
All employees have access to the program, with unique usernames and passwords and different levels of access depending on job descriptions or duties. The program also provides a place to store all manuals and documents, like employee handbooks and compliance manuals. The point of having this all in one place is to provide an audit trail, explained Terry Dortch, president and CEO of Automotive Compliance Consultants. In the event of an audit, the dealer has evidence of compliance training that can be easily provided to the auditing party.
Compli, HR and Compliance Management
Having a tool that helps handle human resources and the related compliance tasks can simplify the day-to-day duties of dealers and the office administrative staff. Compli offers two HR and compliance management programs, Enterprise and Professional. Enterprise is a more comprehensive program, while Professional is a lighter version of Enterprise.
The Enterprise version, said Compli President Lon Leneve, covers all the HR aspects of the employee experience from on-boarding through their entire history as an employee and the termination process. Every employee in the company is on the system, and it keeps a time- and date-stamped record of all employee-related activities (e.g, reading/signing off on company polices, completing training sessions, vacation requests, performance reviews). The compliance issues covered by the Enterprise platform include various F&I and environmental health and safety issues.
While automating these types of tasks frees up time for the person handling HR and compliance in the dealership, it’s helpful for other employees as well. Leneve said, “The employees like it a lot too because it makes their lives easier.” They can easily submit things like time-off requests and track them in the system. He added, “A lot of insurance companies recognize Compli when they’re doing their underwriting, so a lot of our clients have experienced insurance premium savings.”
One of the most important assets in a dealership is its staff. In 2010, according to NADA Data, the average franchise dealer had a staff of 50 and spent almost $2.4 million on payroll.
Kathryn Carlson, the product director for KPA’s HotlinkHR, said, “Unfortunately, in many dealerships, they don’t have a professional human resources person on staff. They’ve asked either a business manager, CFO or office manager [to handle the HR duties] … but HR is pretty complex. It’s heavily regulated.”
HotLinkHR is an HR management program for auto dealers that streamlines necessary HR functions—including an online application and guided workflows for the processes of hiring, on-boarding employees, performance reviews, disciplinary actions and termination. Carlson pointed out that it also includes wage and hour calculators. “Dealers have a lot of interesting pay plans … Payroll is not simple for most dealers,” she said.
Additionally, she said dealers stand to profit from proper HR management. “If you manage people in a way where they know what they’re supposed to do … you regularly let them know how they’re doing … and you quickly correct unsatisfactory behavior … you can have a workforce [that’s much] more productive.” Dealers properly using their program, she said, can increase their per-employee revenue by up to two or three percent.
Dealers using KPA’s HotLinkHR are assigned certified HR professionals and have access to employment and labor attorneys. The HR professionals help dealers implement the software, answer questions as needed, and do annual reviews for dealers to ensure they’re using the program correctly. For dealers with legal questions (e.g., if they want to fire a person but aren’t sure if it could get them in legal trouble), they can call one of the attorneys and don’t have to pay extra for basic legal advice.
A World of Training
Training sales staff is a never-ending challenge. Michael Rees, president of A World of Training, said online sales staff and management training was created to “offer clients training similar to the training we do in-house … and save them the expense.” The training is comprised of various videos covering the full sales process, most of which are four to five minutes long, and includes a set of videos dedicated to management. “I’m a firm believer that, a majority of the time, the managers need training as much as, if not more than, salespeople.”
While online training is pertinent, he feels as though it is best utilized as a supplement to in-dealership training. “I didn’t think it was going to replace [in-dealership] training per se. The best [dealers] use it really as a backup.”
Rees added, “The thing with online training is it takes an awful lot of effort in-house to make it work.” To help ensure employees use the online training provided by A World of Training, employees must take tests after each segment, as well as a comprehensive test once all segments are completed. Also, there’s full reporting, so dealers can see whether salespeople passed and how they responded to questions. Dealers can set what’s considered a passing grade for the tests, but he said, “I always encourage them to set it at 100 percent … Let’s make sure we get it right to begin with.” Employees can view sessions and take the tests as many times as they want/need.
Once they’ve passed the tests, salespeople then have access to a role-play section of the training with telephone simulations. “When they play the video, it’s a picture of a phone … ringing and the salesperson has to answer it. They’re given multiple choices on how to answer … When you scroll over the answers, it speaks those answers … if you get it correct the customer speaks … then the salesperson goes to the next stage,” Rees explained. The simulation goes through all the steps on how to answer a sales call professionally. He added, “If at any time the salesperson gets it wrong, it hangs up and [the salesperson] has to start again.”
While many dealers train salespeople on general sales techniques and product knowledge, there are various situation-specific topics that salespeople can be trained on. The online training platform Cardone On-Demand includes about 1,100 segments of content created in the last 16 months with today’s car buyer and economic environment in mind, according to Grant Cardone, automotive sales training expert and CEO of Cardone Training Technologies, Inc.
The sessions include brief videos, some of which are as short as 40 seconds, and the longer ones are only two to three minutes long. “We’re trying to capture people’s attention … these videos are very short, very specific, very targeted,” he said. The curriculum is broken into four sections: 1) the fundamentals of selling, 2) the road to the sale, 3) the close, and 4) closes and objection-handling techniques.
The first three sections of the curriculum cover different stages of selling fundamentals and correspond with levels of certification. Cardone said the different levels of certification help encourage salespeople to use the tool “because people like to reach higher levels of achievement.” The fourth section drills down to very specific topics. For example, there are several short videos on how to deal with the customer who says, “I’ve got to talk to my wife,” as an objection to closing.
DealerPro, Virtual Training (VT)
Properly trained service advisors and managers are an asset to any dealership. One company which offers fixed operations training is DealerPro. The company’s Virtual Training, VT for short, consists of about 40 different training videos, lasting about four to five minutes apiece, geared towards service advisors and managers.
DealerPro CEO Don Reed explained the reason for keeping the videos short: “Sitting somebody in front of a monitor for 45 minutes … just puts them to sleep.” To keep their attention and help them learn, the videos are interactive and include a bit of humor. Each video is considered a “chapter,” and at the end of each chapter is a short quiz to ensure employees understand and retain the content. If they fail a quiz, they must redo the chapter.
Reed added that management should hold employees accountable for using the program. Managers can track how many times each employee has used the tool, how many times they completed each chapter and whether they passed the quizzes. If a service advisor is struggling on a chapter, the dealer and/or service manager can see exactly which question(s) the advisor missed, so additional explanation or training can be given. He said, “Online training, whether it’s ours or anyone else’s, is going to be a lot more successful if it’s supervised,” he said. “You don’t just sit an employee down in front of a monitor. You need to have management involved and working with these employees on that training.”
With properly trained managers and advisors, service departments can see a shift in repair orders, said Reed. “We would expect any service advisor and/or management team that successfully completes the training and follows the recommendations on the training … to improve by anywhere from 0.4 to 0.5 of an hour per repair order.”
Vol. 9, Issue 3