#8 - Lukes NADA notes - Advertising

Alright, welcome to the Independent Dealer Podcast. Our next three weeks or episodes are going to be Luke's notes from the NADA Convention 2019. He's going to give us three different topics covering advertising, sales and pay plans. Right, Luke, how was it, man?

It's amazing if you haven't been to a convention. Nada might be a little big for all of us, but Niada is a great place to go too. But I've got three things that I took away that I thought I really wanted to share with you guys. Number one is what's going on with advertising today? What do we need to do better? What are we not doing? Number two, the sales process. How has it changed from a couple years ago? How's the Internet affecting it? How's social media affecting it? What can we do better to help the consumer? And number three is something I'm really interested in. Pay plans. Are our pay plans antiquated? Do they need to be updated? The 25% on gross just doesn't work anymore for millennials.

Right.

So how can we do better at this? How can we make pay plans work for our employees as well as us?

I like it, Luke. I'm excited. These are going to be three awesome weeks packed with knowledge. So let's get at it. All right, welcome to the Independent Dealer Podcast, the podcast for auto dealers to learn and grow together. Here are your hosts, Luke Godwin and Jeff Watson. All right, Luke, so we've got three different sections, topics, areas that we want to talk about from your NADA visit convention last week. Just first off, so we can preface this whole thing, let's help everybody that may not know. What is the NADA convention?

Well, the Nada convention is the new car store, the franchise dealer convention. It's held once a year and it is huge. Just every new gadget that could be useful in the car business. Every. A lot of new models are presented. The education is amazing. There's different tracks for fix ops, for social media, for management, but there's something for everybody. Now you'll say, hey, we're a bunch of independents. What do we need to be doing there? Well, what's great is that the franchise dealers get most of the new technology before we do. They get to test drive it. So it's great to be there. You learn a lot.

Okay, so you're saying it might be, you know, for the big boys, but as a big or small or medium sized independent, you're gonna go there and you're gonna find stuff that, I mean, you're gonna be able to use it. Plus you're gonna know what the big guys are doing, right?

Sure, sure. And you know, you and I, Jeff, we use, we use a pretty high end DMS and CRM. So you get some one on one interaction with people from, you know, from dealer socket, from, from Mannheim, from Odessa, pretty much whatever vendor you're using, Cargurus or Auto Trader, whatever, you can get one on one training with them at that time to figure out a problem you may have. So there's all kinds of solutions there.

So even from a networking standpoint, you go to the convention hall and the guys standing in the booth aren't just the low level convention. The guys that show up to nada are the upper management, sometimes owners of companies.

Oh, for sure. And so you get the high level managers at any convention at Niada, you get the high level managers. Carfax is, you know, Carfax, whether you like them or hate them, they're so easy for the dealer to talk to and discuss things and learn what they're rolling out and what you should be doing. Kathy Collins is amazing. She's kind of over, over dealers and she's always all the conventions, she's great to see. Everybody from TrueCar is there. If you use TrueCar, you can figure out what they're rolling out. Usually the CEO is there typically. So there's, there's all kind of things you can, you can learn from these vendors that you don't, you know, that you don't maybe get from your local rep. So the networking is crazy.

That's cool. Great, great. Well, good. Everyone should plan on attending. You know, I mean, I think conventions in general, whether it's this one digital dealer, nada, all those that go on every year, money well spent, right?

100%. If you don't come back with 10 things that could pay for your trip, you didn't do yourself justice by going to the convention. Every year I come back from Niada and just the amount of knowledge that I've gained and the amount of connection I've gained is tenfold on what I've spent.

Okay, so let's talk about that. We've split it up into three sections. We're going to cover one each week for the next three weeks. First, first off, let's go over advertising. So what were some of your top, top takeaways from advertising? We'll try to get into some of these a little deeper. Some of them we may have to say for future podcasts. But what would you say is an overall theme or what's happening in advertising these days.

Social media is not dead. It's not going to die. The Internet's not going away. You got to make it work, guys. And we're going to be talking, I don't know, we may not be talking to people who don't have websites, but you know, I go to auction every once in a while and there are people that don't have websites, which blows my mind. I don't understand how you sell cars on a website, but that's just me. So number one, social media is not dying. Internet's not dying, guys. Get on the bus. Make sure you have a very mobile friendly website. You'll know that Traffic is about 80, 20, 80, 80% on your mobile device, 20% on the desktop, and hardly anybody's looking at it with a, with an iPad or tablet. So you don't really need to be worried about that.

Okay, so you need to have a digital presence. Definitely start at your website level, right? Because you own that. It's not going away, right? You're gonna have that. Now you could argue about, you know, having a Facebook presence presence or a car gurus or cars.com or using a third party, you know, intermediary to get to the customer, but those do come and go, right? I mean, car gurus will jack up their prices. Facebook might become irrelevant some, you know, to the shop or to where the attention is. But your website is your brand. You own it.

Your website is the portal to you and to your company. If your website's not the best out there, redo it, blow it up. If you, if you got a buddy down the street that decided he's going to build you a website and it's going to be the best thing, let me tell you right now, it is not. Vendors are there in the marketplace that cater only to car dealers and that's where you need to be.

Any specific trends you saw there when you were in the convention hall, that stuff that's kind of new products or stuff that you would say, hey, that's on the horizon, like this is something we need to be aware of.

There is all kind of stuff out there. And for some reason, you know, Google's so great, it just wants to sign me out every once in a while. But the trend that you need to be aware of is. Your website has to be, it's got to be better than your competitor. You've got to be, it's got to be your virtual showroom. Now it's, it's not that it needs to be this Virtual showroom. Not that you have to hire another piece to make it your virtual showroom. What you need to do is be interactive enough with your consumer on your website so they understand the feel of your dealership. And that might be. I might went a little weird on that. But if your customer shows up at your dealership, they should expect the same thing that they got from your website. You understand what I'm saying there? If you're advertising a price on your website, that price should match the sticker at your dealership. If your website says, hey, refinance a person this way or that way, when they get to the dealership, they should get the same feel. And if you don't, there's a disconnect. Remember that customers nowadays, and this is a figure that's thrown out there. And you can believe it or not, but anywhere from this is consumers. Now, they either visit 1.2 dealers or 1.8 dealers when they actually buy a car walking onto the showroom floor. But that Customer may visit 17 to 21, virtually. Right?

Mm.

Your closing rate should be higher, your up traffic should be lower. But you're, you know, if you're closing those people when they step on the floor, if everything that you said on the Internet matches everything you do on the floor, the chance of you selling that up, go. Go up astronomically. So just make sure it's all there.

And you know what, that, that's what kind of strikes me is just so obvious. I mean, think about the way that you shop. You know, I don't show up to every Walmart, Target, Best Buy, you know, whatever it is. When I'm looking for a product, I search it online. I find the best place, the best location. And whether that's through Amazon or whether it's running to Target, I go there once, you know, I'm not going to hit every single store. So why would we expect our car buyers to be any different? Right? They're going to research us online, they're going to compare our website and our pictures and the quality of our Toyota Camry against the guy across town. And then they're gonna come show up to see if that's real, you know, and if there's a consistency in the message and the feel of the dealership.

Exactly, yeah. You can't say any better than that.

So from a practical standpoint, what should we have on our, you know, to stick with the advertising theme, what should we have in our website? Are there things you would give us, recommendations? I mean, do we need to have the walk around videos in our website, do we need to have 360 photos? Do we need to have, you know, videos of the employees introducing themselves, our salesmen talking about who they are, our products, our company background, like, you know, what is it? Pictures, videos, text, you know.

So what you should have, number one, is a great picture of that car. And in my opinion, some people are going to say, how many pictures are too much, how many are too little? I like about 45 pictures of each car and I like each car to be set exactly the same. If you go to my website, you'll see that. And what it does is give consistency to what the customer is looking at. So that's number one. Number two is there's new companies out there. Not new anymore, but Flipcar and different Flipcar, whatever it's called. Anyway, they have 360 views of inside the Car. Those are great. You don't have to spend that money though. Does it sell more cars?

It might.

It might not. Maybe in the independent space, it may not. It may if you're high end independent. But a walk around video is so simple. We've been doing these for probably, I'd say almost 10 years and we've kind of gone away from them a little bit just because there are times, the time spent there is a little much. But if you have the time to do a walk around video on each car, do it. Put that on your site. But the one thing the customer may want that we're not even thinking about right now is a personal one to one FaceTime of that car. So what I'd probably recommend more than the walk around video is for your website to say, hey, if you're truly interested in this car, contact us. We'll FaceTime you. We'll walk around the car so you can see exactly what we're looking at. You can do that with FaceTime, you can do it with Skype. There's all type of ways to do that, but that gives it a little more personal branding. And also it's a little more interactive with the customer. And I think we all have time to do that.

So more from a sales standpoint, our salesmen need to be educated and have the tools to give them a walk around. And whether that's live a FaceTime or even sending them a video like hey, here's that Acura you were talking about. You know, here's a 60 second walk around where I point out the good, you know, the okay and the ugly of this car so that you know, I'm being transparent and you know, when you show up, you're getting exactly what I advertised. I mean, it seems like a win win, right? It's gonna help the customer be more confident in coming to your lot. Plus it's gonna introduce them to the salesman. And it's also gonna eliminate any objections I showed you in the video that had a scratch right here. Like you shouldn't be surprised.

You know, you're exactly right. It's about transparency. It's about the interaction between the consumer and the. And the salesperson that's never going to die. Even though consumers would rather text back and forth, a lot of times, they still, at this point, still need to be in the dealership to buy a car. Not every deal, but a vast majority of deals still. I think it's like 98% of deals still close in the dealership. So just remember, if your salesperson, your sales staff can really get good at that walk around. You've got a leg up on every other dealer around because the consumer sees exactly what they're looking at.

Okay, so making sure our websites are on point, making sure we're using technology, what else did you take away from the convention?

How important DMS information is? And for y' all out there who may not know, dms, DMS is dealer management software. And most of us are running DMSS, and there's probably 100 out there, who knows, but there's probably five real main ones. But that is information on cars we have already sold, right? So let's mine that data. Is your CRM data? Is it important? Yes, it's important, but let's think about it. You've got all this information in your CRM that is just from leads, people who call in who've not interacted with you before. Now. Some of them have, of course, but, you know, is that data the most important or is your DMS data the most important? Because those are people who have bought from you before. Those are the people who trust you. Those are the people that want to do business with you. So mind that data. And I'll just give you an example of what we do. We could take and send Christmas cards to everybody in our CRM, right? But what a company that we've used kind of made sure we did was farm that DMS data. So we pull it from our dealer management software and also our shop management software. We pull that data, we, you know, we kind of wash it out and figure out what we're doing, but then we send cards and coupons to those customers and you'd be amazed at what that does. And I've never really thought about the process and it's never really come to my mind, but how important that DMS data is. Farm it, use it, coupon those people, give those people offers they can't refuse.

I mean, it makes sense. Everyone knows birds of a feather flock together, right? And so whether you're a buy here, pay here, or whether you're just wanting to sell minivans to people, you know, your best sale is a referral. I think if anyone went and looked at their referral sources, their sales from last month, large majority should be repeat referral. Right.

We went over this in the last podcast. You know, mine's almost 70% of referrals and repeats. So I'm spending all this money on 30% of my new business. So remember, farm that data.

Yeah. And that leads us. I mean, I had this conversation with a buddy just yesterday about, man, we spend so much money looking for new customers through Cars.com and Facebook and billboards and TV and print and man, and it's. It's the ones right under your nose. They're sitting right inside your dealer management software. How do you get better at it? What's your referral program look like? Do you pay bird dogs? Can you pay bird dogs? Can you pay referrals? Do you have a way of promoting that? You know, it's huge. Of course, of course. What else you got for us?

So we just talked about the on demand walkarounds. One thing that I don't really understand, but was talked about a lot, and there might be more people out there that understand it, but was these AI bots, these artificial intelligence bots that can be hooked to your Facebook page or your Google page or whatever type of platform you're using. But in essence, customers don't really care about FAQs, frequently asked questions on your website anymore. They don't care about that. Right. What they care about is knowing what time your service department opens. You know, what time can I schedule an oil change appointment? What time can I schedule to come look at a car? Well, apparently these AI bots and Jeff, you may know something about this that I don't, but they can be configured in such a way that your frequently asked questions can be responded through a chat using your AI bot. So this is something, I think, some emerging technology that we all need to keep our eye on. I don't know how important it is right this second, but it sounds like it might be the new thing coming. So maybe let's do some reading on that and maybe. Maybe figure out what's going on.

Yeah. So we use one called ManyChat that ties into our Facebook advertising. So when someone contacts us through Facebook messenger, they can opt in to our chatbot. Right now, we're just kind of in the collection phase, where we're collecting subscribers, but there is a track where they can click on a button and it'll say, yeah, you know, why are you here? What are you looking for? And you give it options, and if they say certain words or type certain words back to you, it'll give them kind of a preset response. You do have to build these bots out to give them kind of a track or, you know, a route for your customers to go through. So I think, you know. Useful. Yes. Confusing? Very. And to be honest with you, I feel like by the time us independents get it figured out, the big guys will probably have spoiled our customer base. Because if you get on and you go to try to chat with customer service at, AT&T or T Mobile or somebody, and, you know, you're interacting with a bot that's giving you a bunch of canned responses, it's gonna. It's gonna be just like those automated phone prompts. You know, I think that was.

I think that was part of it, though. I think that this artificial intelligence is getting better every day. So at some point, I think you're gonna be chatting with one of these bots and not realizing that you're actually chatting with a bot. And I think that's what we're trying to get to.

That. That. That could be a cool point. Yeah. Once we get to that point where it's actually, you know, you can't decide. You can't even tell who you're talking to at the dealership. That'll be awesome.

I think I was listening to a Freakonomics podcast not long ago, and they did a survey using different artificial intelligence and personal people chatting with each other. And I think, in general, a person could not decipher which between which one was a bot and which one was an actual person. So it's coming. We just need to be ready for it.

All right, we'll keep our eyes out for that. Maybe that'll be a future podcast. Let's find someone who's a pro at it and get us educated. All right. Anything else you want to share with us today?

Yeah, and this is a real interesting topic, and it's maybe not easy to talk about, but there are some of you. Some of you out there have salespeople that are rock stars.

Right.

And some of us might be rock stars. Maybe we have this big online Persona that's really not me. You know, I'm on Facebook, but I'm not posting. I'm not doing a lot of those things. But we may have, you know, these millennials, or maybe not even millennials. Maybe we've got these baby boomers that have developed this real group following what.

We call, what we call a personal brand.

Personal brand. They may have developed this, and. And that's great. Those people may kill it in the dealership. They may, you know, they may sell 30 cars a month, but they may be taking all your leads. They may have developed their own website that these leads come into, and they may not be entering that information into your CRM. And when they leave you, they're going to take those customers. So I'm not saying not to get your employees out there in front of people, because I really think that does matter. But what you need to be aware of is that if they're sending all of their leads to their own website, they own those leads. So what I would recommend is have a policy in place that you feel comfortable with and that the people you hire feel comfortable with, and how they are personal branding. What I was told is there's some websites out there where you can have. Where you can build your own lead generator, essentially your personal CRM. And it's, you know, it's 150amonth or so. But I would encourage, if you want your people to do that, maybe find a way to build that website or pay for that website. So you still own those leads, and you're not. When that customer, when that salesperson leaves that. They're not taking your leads.

Yeah, I mean, it does speak to an overall data integrity question for your dealership. Are your salesmen using personal emails? Are they using personal cell phone numbers? Are they using those types of things where they've got your data, your customers, you paid to get them here most of the time, and they're channeling through their own personal place where if they do leave, they go to another dealership, they start their own, they take those with them. Right. One thing we've done, one thing I've tried to do, is build a brand around an inanimate object. Right. We have a small puppet at our dealership, and I haven't done it well. But my theory was I don't want my brand to rest on me because I don't want to be the one in front of the camera, and I don't want to always have to be here. And I, and I don't want my brand to rest on a salesman that may or may not be here next month. But I want it to rest on either the name or some sort of an object that will always be here. We picked a puppet which has its own kind of built in flaws, but whatever that is, you create that connection and the association with the customers that they can kind of endear. So I guess my question for you, Luke, would be, where is that fine line between building your car lots brand, which is kind of a, you know, it's an object, it's a thing, and building your salesman? Because you do want these people to be comfortable with who they're going to come talk to. You want them to know Travis and what he's like and his quirks because they're going to come buy from him, you know, and that's really where that customer ties to your dealership is the friendship they've built with your salesman. So where's that line?

So that's for everybody to decide. My takeaway and my opinion on this is, you know, I think your idea of building an object, that that's your brand, that's great. That's not what we do. But the problem with what I do is I am the brand and our family is our brand. And so if I go to sell it, it's gonna be a little difficult.

Right.

And I do sometimes have to talk to customers because they need to see me. And if we do, if our sales staff are developing videos they're posting to our YouTube channel, not their own personal YouTube channel. All leads must come into our CRM. You know, if, if we got this rock star that had this different Persona, I'm just not sure they would fit into our dealership. So I'm not sure that I'm the right person to say that I want to be the rock star. Right. My friend Tracy Myers, you know, he go back, go back years to, I think one of his first books is you are the brand, stupid. And if you look at our website, I am the brand. Godwin Motors is the brand. And it kind of ties back into what we first started talking about with your website mirroring, you know, walking into the front door. Our website is full of pictures of our staff and it's really a family oriented type situation. Now you do get staffed at lease, but those pictures stay with you. Just remember to direct. Your salespeople have a policy in place that, yeah, you don't mind them self branding because they should, but you Own the leads. Content that is made at the dealership goes on your YouTube channel on your Facebook page. And I think if you stick to those and what you feel comfortable with, everybody will win.

I like it. I like it. Yeah. Make sure you've got a tab on what's going on with the salesman. Decide which brand you want to build and keep it in house. Right. Keep it yours.

Sure. And one other thing on that. When you're talking about keeping a tab on them, you need to. If they're doing something out there on Facebook or on Twitter, on Instagram that you're not comfortable with, there's a problem there. Make sure you're on top of what they're doing if they are using your company as their brand as well, because that could get you in a lot of trouble, and it could also tarnish your brand. So be aware of what all your staff is doing on the Internet.

Yeah, I could see it'd be a real slippery slope if they're logging into their personal Facebook to promote cars or post things, and all of a sudden they get down a rabbit hole of what their friends are doing. You know, you're going to mitigate that by saying, hey, you know, if you're logged into Facebook, it better be our company Facebook, and you better be responding to comments and inquiries and emails and, you know, probably just maybe keep some channel, keeps them a little more focused. So building a brand. Well, great stuff, Luke. Good. Give us a little bit of a teaser what we're going to talk about next week.

Next week, it's still. We're still talking about what happened at ada, but next week's going to be sales process. We all believe that the sales process has changed. Right? We believe that because of social media and because of the Internet, the sales process has to change. Just remember this. The sales process has not changed. It's still consumer salesperson, consumer business responsibilities. And those things need to stay the same. We just need to up our game and be better at customer service and be better at the sales process to make it easier for the consumer.

Okay, I'm excited. I'm excited. I can't wait. So Luke's top three takeaways from the NADA Convention, 2019 Part 2. We'll see y' all next week.

See ya.