Cliff Banks
Cliff Banks has been involved with the automotive industry for nearly 20 years and has covered the industry for Ward's for nine years. He is an award-winning...more
On the hunt for used vehicle inventory? Here are some tips from Consultant Tony Albertson, a used-car specialist with NCM and Associates, that he provided for a story in our Ward’s Remarketing 150.
Hire an offsite buyer to beat the bushes for vehicles. It’s OK to pay the buyer anywhere from $200 - $500 for each vehicle but tie the compensation to how fast the vehicle sells.
Provide specific instructions on which vehicles you need. Don’t let the buyer buy off the cuff.
Advertise everywhere you buy used cars.
“It’s what made Carmax famous,” Albertson says. “They will buy the used vehicle, even if the customer doesn’t buy a vehicle from them.”
Maintain close ties with other local dealers who might be wholesaling vehicles you need.
Leverage your customer database. Create a direct mail campaign to customers in your database offering to buy their vehicles.
You also can target your marketing to customers owning vehicles you need. Be sure to personalize the letters or emails for each customer, Albertson says.
Another critical piece — if you’re paying for inventory management software, such as AAX, VAuto or FirstLook, use it. It may take some effort, but it’s worth it.
Don’t give up on the auctions. If you’re not already using the online auctions and services, you likely will find it increasingly more difficult to secure used-vehicle inventory.
Sites such as Manheim’s OVE.com and Manheim Simulcast or AESA’s LiveBlock or DealerBlock allow dealers to conduct all of the pre-auction and pre-sale research, acquire inventory before it even reaches the auction and trade with other dealers.
A Minneapolis Business Journal Reporter called me the other day to tell me Twins catcher Joe Mauer had just bought the land on which Denny Hecker’s Southview Chevrolet (now closed) sits. Once his story printed, Mauer’s brother Bill called the reporter to say he had bought the land, not his brother Joe.
The source for the story was the Mauers’ grandfather who claimed Joe was setting Bill (who had been a sales manager at Southview) up with the dealership. Bill declined to say how he paid for the land.
Bill (or Joe) Mauer reportedly is trying to get the rights to the GM franchise, but the auto maker is blocking the plate, so to speak, in true Mauer fashion. For the record, Joe Mauer grew up in the Minneapolis region and is the best catcher in Major League Baseball today, and potentially will be the best catcher in the history of the game once he retires. In other words, he’s a Minneapolis icon.
A couple of years ago, this would have been a no-brainer for GM. But now, the world is much different. Unfortunately for Mauer, this is one hit he likely won’t get.
GM is in the process of eliminating about 1,300 dealerships (not counting Saturn, Saab and Hummer). Anyone getting a GM franchise today is going to have to have a proven track record of running a dealership.
For Bill, being a sales manager in the Southview dealership actually could be a strike against him. It was part of Denny Hecker’s empire which suffered a specatular collapse late last year. In fact, a grand jury right now is deliberating whether to bring charges against Hecker. He allegedly has defaulted on approximately more than a billion dollars in loans along with having a DUI in the last 12 months.
In other words, working for Hecker is not something to put on the resume when trying to get a dealership.
Another issue is that athletes in recent years have a had a poor track record owning dealerships. Several years ago, Mel Farr, a former Detroit Lion and Ford favorite, watched his automotive empire collapse. He targeted the subprime market, a tough one to succeed in.
In February, former Houston Oilers defensive lineman Ray Childress shut down his 40-acre auto mall in Texas while New Orleans Saints running back Deuce McAllister closed his Jackson, MS, Nissan dealership in March after filing bankruptcy.
Michael Jordan’s Lincoln Mercury store in North Carolina also closed earlier this year although, his Nissan dealership still is going strong.
One group of athletes that have done well in the auto business are race car drivers. Roger Penske has the second largest dealer group in the world while Rick Hendrick, owner of Hendrick Motorsports, owns more than 60 dealerships across the country. There are several others.
For now, it looks like Mauer will end up owning an expensive used-car lot.
After Kelley Blue Book’s relationship with AutoTrader.com ended prematurely this June, it immediately devised a strategy to take on the industry behemoths, AutoTrader and Cars.com.
KBB is launching a pay-per-performance model (also called pay-per-lead) directly contrasting with the subscription models of Cars.com and AutoTrader. It’s a gutsy move, perhaps born out of some measure of desperation.
Kelley has the brand and the consumer visits, but it lacks the inventory and, some say, technological prowess to be successful. It is partnering with Vast, however, to provide it with the necessary technology. Vast’s goal is to create a network of lead providers that collectively will be powerful enough to force Cars.com and AutoTrader.com into the pay-per-lead model.
My guess is, dealers will continue doing business with Cars.com and AutoTrader in the subscription model, but certainly will play with Kelley and others pushing the pay-per-lead model.
Recently, I’ve heard several comments alluding to the fact that CRM (customer-relationship management) is dead, or at least is at a point where people are tired of talking about it. There is a notion among many dealers that vendors have over-promised and underdelivered. It might be dealers are expecting too much.
Ask for a definition of CRM and you’ll get 10 different answers. The problem is, automotive retail is a complicated business with a lot of moving parts. Add to that, dealers will have different goals or objectives for their CRM initiatives, and that makes measuring the return on investment difficult.
In the store, it’s easy to get bogged down in the details of the process, and if there isn’t a well-defined goal, dealership personnel get CRM-fatigue. Before long, you’re writing a check for a solution that sits on the shelf that never gets used.
Enough of the problems, what are some solutions? It’s not giving up on CRM — now, more thn ever, you need to find ways to drive both sales and service traffic. There are several simple solutions.
Here are some creative things dealers have told me they have done the last 12 months that have helped business. Nothing earth shattering — nevertheless, there may be some nuggets for you.
First, market to customers in your database. You already have the relationship with them. Offer something of real value on the service side. You can generate a ton of service traffic and repair orders with simple campaigns marketing to folks that haven’t been back to your store within the last year.
To do that you should find a solution that integrates easily with your dealer-management system. Being able to pull data from your DMS and integrate it with information in your CRM tool is invaluable.
Many of you are looking for used-vehicle inventory. CRM can help you do that. Create a list of vehicles you need, and then send targeted offers to people in your database that have those vehicles. Make it a special invitation, not a generic direct mail piece.
I know Cash for Clunkers probably is a dirty word right now in your stores. It was an intense program while it lasted and nobody wants to even mention the term now. But there has to be a way to continue leveraging those sales, and even the people who didn’t qualify who left the store without buying.
Offer a special service incentive for people who bought cars using the the program. Some dealers are planning a Cash for Clunkers after party a few months from now to generate service business. It doesn’t have to be a Clunkers party — it could be a party or picnic celebrating anything.
Tie into the local sports teams — whether it’s college, professional or high school. For example, offer free oil changes or car washes if the football scores 40 points. You can go in so many directions with this.
All of these things can be defined as CRM. The point is, be creative and aggressive now. Business is there, but it needs prodding.
Good luck, and if your store is doing something unique that is working, I’d love to hear about it.
William “Skipper” Beck died Friday, September 11, when his Cirrus SR22 crashed at the Rock Hill/York County Airport in North Carolina. Beck was the only one on board.
The plane apparently had engine trouble at takeoff, prompting Beck to return to the airport when the plane went down.
Beck, 49, was a longtime car dealer whose Beck Automotive Group appeared on the Ward’s Megadealer 100 ranking for several years as one of the top dealer groups in the country. Beck ran the group with his younger brother, Bobby, but in recent years had been selling the group’s stores.
Beck sold his Charlotte-based Mercedes store, Beck Imports, this spring to the Hendrick Automotive Group (Sonic Races to Avoid Bankruptcy.)
Last year, the Becks sold Prestige Ford in Garland, TX, one of the country’s top dealerships, to Randall Reed.
Beck held a 5% ownership in the NBA’s Charlotte Bobcats and was instrumental in bringing the basketball team to Charlotte. Beck was known around Charlotte for his philanthropy, but was in the process of moving beyond a difficult legal situation arising from soliciting a prostitute involved in the high-priced Hush Hush call girl ring.
Ward’s Dealer Business Editorial Director Cliff Banks shares his views on emerging trends and technologies that promise to help dealers sell more vehicles.
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