I was taking a pleasant Sunday drive down a scenic Georgia highway with my wife, Debbie, and our puppy when, without warning, the Rav4 in the next lane swerved toward us, forcing me onto the shoulder. It’s not cool to piss off the Alpha Dawg. I stepped on the gas in hot pursuit, fully prepared to give some fool a piece of my mind. Believe it or not, I can be a scary individual when the suppressed redneck in me bubbles to the surface. Have I mentioned I grew up on Jacksonville’s Westside and I’m always heavily armed?
We caught up to the offending perpetrator and I prepared to unleash a man-sized portion of verbal road rage on them. I rolled down the window and — Whoa! It was just a teenage girl, staring at her phone, texting away with both thumbs and, presumably, using her knees to steer. I looked back at Deb. Without another word, I rolled up the window and we drove on by.
Distracted driving is an epidemic, and it appears to be getting worse. How many idiots have you seen answering texts and emails when they should be driving? I’m no fan of overregulation, but I am all for strict hands-free phone laws. These people are dangerous.
Unfortunately, the manufacturers aren’t helping the situation. Buckle your seatbelts, folks. Our ride is about to get wilder.
Keep Your Eyes Off the Road
The world is infatuated with gadgets, gizmos and apps. We are so mesmerized, hypnotized and synchronized with our devices that many drivers are operating vehicles in a semiconscious, zombielike trance, unable to steal more than the occasional glance at the road ahead.
The public wants and demands more of the same gadgetry in their cars, and the factories seem all too happy to oblige. Some manufacturers now actually display parts of your Twitter stream on the dash. Next-generation Hyundai systems will replicate your smartphone screen without all the apps.
The complexity of operating today’s cars is now compounded by the big, new touchscreens designed to emulate smartphones. Onboard computers and voice-activated technology are accelerating in complexity and transforming new vehicles into full-fledged mobile devices. Some are even capable of building a complete data profile on the driver, including buying habits and favorite restaurants. Your next car will order your morning latte, pay for it in advance and give you the quickest route to Starbucks — all the while recording and reselling your information to a hungry data market.
Federal lawmakers and a host of government agencies are looking for a cure, but the epidemic may already be beyond their control. There has been a lot of discussion in the insurance industry, and it appears they are not amused either.
The distracted-driving potential of these new systems makes sending a text message seem harmless. At least you can hold your phone up in your line of sight. Operating a touchscreen requires the driver to look away from the road and down at the dash, focus on the screen and wait for it to change as they swipe across it.
As we discussed last month, driverless cars are at least a generation away, if they happen at all, and the youngsters getting licenses today were born with cell phones in their hands. It will be interesting to see if the government has the nerve to try to get between the voters and their toys.
The Hits Just Keep on Coming
The Federal Trade Commission is still sweeping and rampaging, investigating and prosecuting dealers for deceptive advertising and deceptive trade practices in general. In June, the latest story concerns two Las Vegas dealerships, Planet Hyundai and Planet Nissan. Both dealerships were charged with deceptive advertising and violations of the Truth in Lending Act.
You can read about the details in any of the automotive trade publications, but the real story is in the fine print. … Or should I say, the lack of what was in the fine print.
Confused? Allow me to explain. You see, way back in Biblical times, an advanced civilization developed in the Eastern Mediterranean city of Phoenicia. The Phoenicians were a brilliant and industrious people who are credited with a number of inventions, including paper, glass and fine fabrics and dyes. But they are most famous for inventing the phonetic alphabet, which rendered hieroglyphics obsolete.
Shortly afterward, the Phoenicians were sued by the predominant dealer associations of the time, whose membership felt the new alphabet was not conducive to chariot sales. They were able to settle out of court when the ancient attorneys representing both sides came up with a compromise: They invented the asterisk. From that day forward, whenever Phoenician chariot dealers ran an ad in the local newspapyrus, a big asterisk at the top would lead to a little asterisk at the bottom, which would precede a disclaimer explaining why the information at the top was complete and total bullcrap.
That’s the way vehicles have been sold ever since, or at least since I got into the business 39 years ago. Well, guys and gals, I’m sorry to have to tell you that is never going to work again.
And by the way, the manufacturers are equally guilty of relying on the almighty asterisk to sell vehicles. Nobody has any problem with a low monthly payment that requires a big down payment in cash or trade, but that has to be disclosed in conspicuous print rather than buried in or blurred by fine print. People like to lease vehicles, but they don’t like leases disguised as ridiculously affordable purchases. The word “available” has become a red flag to regulators. They assume it means “available, but probably not for you,” and they’re usually right.
So many people have dedicated so many hours to trying to figure out ways around the spirit of the law. Now, the government agencies and regulators are closing every gap and loophole until there is very little way out but to do it the way it’s supposed to be done. The Asterisk Age is over. The Compliance Age has begun.
To Infinity and Beyond
Whenever Buzz Lightyear, star of the “Toy Story” movies, would take to the sky, he would cry, “To infinity and beyond!” Well, that’s all well and good for Buzz, but it’s a terrible strategy for car loans.
The latest report from Experian Automotive shows that the average term has hit an all-time high and one out of every three new-vehicle loans sits somewhere between 75 and 84 months. Compounding the devastation is the fact that more deals are being made with negative equity added to the balance of the next loan.
Longer terms and higher carrybacks — coupled with dwindling cash down payments — have buried the average car buyer. They’ll be married to their vehicle for at least five years before we can even begin to shovel them out of the hole we dug. Seven-year loans are unconscionable and so are the excessive overadvances you and your finance companies are adding to your customers’ loans to put them on the street.
There are several reasons why the average registered vehicle is more than 12 years old. Yes, the quality is greatly improved, but the other cause is strictly economical. Car ownership in America has experienced a paradigm shift along with changing consumer attitudes.
Owning a car throughout the life of a long-term loan is painful, because when the owner is ready for something new, they know they’re stuck. Then, years later, when it’s finally paid off, they are not anxious to jump back into another finance situation. Maintenance starts to look like a safer bet.
On top of that, another shift took place when the manufacturers began extending the number of years they stayed with the same body styles on the same models. Have you noticed how little your SUVs have changed since their last redesign? Some of them haven’t even received a real, noticeable, full-body facelift in 10 years. It’s not like the old days, when manufacturers changed sheet-metal designs frequently. It’s sort of like asking your customers to buy the same vehicle they have now (albeit with a massive touchscreen).
I have never said this before, but I believe leasing is the answer. That’s right! We need to seriously rededicate the industry to a sane and sound leasing initiative, or new vehicles are going to continue to get harder and harder to sell.
The Search for Service
I was visiting a dealership website that listed sample DealerRater reviews for its salespeople. One five-star review caught my eye. To paraphrase the reviewer, “We loved our salesman, Bob. He was knowledgeable and courteous. We visited the dealership twice and he was patient and answered all our questions and showed us a selection of cars. Even though we bought a similar car elsewhere, we would recommend Bob to anyone as one of the best salesmen we’ve ever dealt with.”
I almost died laughing. Congratulations, Bob! You’re the best salesman who couldn’t close the deal. That wasn’t the only problem. Like most dealerships, the only information about service on this store’s website is a phone number. How many times do I have to say it? Fixed operations is a separate department and it deserves a standalone website.
Folks, if you live and work in a competitive market, I guarantee your cookie-cutter website is killing you. Do you seriously believe any Web provider can maximize search results and digital marketing for more than one dealer with the same brand in the same market? Did you bump your head?
Regardless of which web designers you’re doing business with, the overwhelming majority of dealer sites are what I call “sales-intensive” — you are promoting new- and used-vehicle sales with barely a mention of your service department. It’s buried, de-emphasized and unprioritized. Why?
In case you haven’t noticed, other companies are marketing service aggressively, and I’m not just talking about competing dealerships. Cars.com, Edmunds, TrueCar and other lead providers are lining up to get into your service department’s business. Your last virgin profit center is under siege and, frankly, most of you are unprepared to deal with it. Either get moving or get your ass handed to you again.
The writing is on the wall, the Web and the TV. I’ve written several articles about “RepairPal,” Cars.com’s new service and repair referral partner, which — in my own personal experiments — throws gas station repair shops and carwash oil change places in the same barrel as your service department. Have you seen their commercials? I’ve seen plenty. “Never Pay More Than You Should,” they say. “Know the Cost of Parts and Labor,” they add, and, finally, “Revolutionize the Cost of Car Service and Repair.”
If any vendor is telling customers that a dealership should be price-competitive with their network of local garages, they’re forgetting how much you’ve invested in quality technicians, ongoing training and the most modern and up-to-date tools and equipment — certainly much more than Joe’s Tune-Up, Lube and Tire Shop.
It’s becoming increasingly clear to me that the vendors and the independents are moving in on the last free-market profit center, injecting themselves once again between you and your customers, reducing your profits and charging you for it. All the while, they’re saying it’s a good thing and calling it a “tool.” Well, let me say this: If you fall for that, then you’re a “tool” yourself.
“Shows what you know, Ziegler,” you say. “I have plenty of information about fixed ops on my website, and our service bays are hopping.”
OK, smarty, let’s put your online presence to the test. Step onto the battlefield (a.k.a. Google), enter the name of your city, your brand, and the words “engine repair.” I’ll do it with you and see if the place where I bought my last vehicle, Jim Ellis Chevrolet, comes up. “Atlanta … Chevrolet … engine repair” … enter!
How did you do? Only one dealer showed up in my long list of paid and organic search results, and it was Jim Ellis. But, like most dealers, their website includes hundreds of pages of inventory but only one (very generic) page for service with a couple of click-throughs for service specials. They do have a “Schedule Service” button, but you wouldn’t find it if you weren’t looking.
Don’t get me wrong. Jim Ellis is among the best of the best. Even so, I find their offering inadequate. My search also yielded a paid result for AutoNation Chevrolet. That’s a start, but it led me to a very generic page that informed me the dealership offers good service by certified technicians. It’s not going to inspire anyone to take action.
The rest of the ads on the results page were for independent referral services like Mechanic Advisor, which will lead to you such notable establishments as Mr. Transmission and J&L Auto Service. Judging by the photos, both appear to be two-bay garages with oil-change pits. But I will say this for J&L: They have a comprehensive website complete with glowing customer reviews, up-to-date specials and coupons and detailed descriptions of their services.
And did I mention the first page also included an ad for RepairPal?
You have invested untold thousands in your fixed operations department and you know your vehicles belong in your bays. So why are the Jiffy Lubes of the world kicking your butt on a daily basis?
Truthfully, even the best dealerships leave a lot to be desired. So to start, I am strongly suggesting you break free and get a second sales website in addition to the cookie-cutter site the manufacturer makes you use. Secondly, I suggest you invest in a separate, robust service department website that is up-to-date, with constantly updated specials and easy navigation. If you want to include the phone number to your sales department, I won’t talk you out of it. But don’t fall into the sales-centric trap.
If I were a dealer, my websites would be responsive and mobile-maximized with a high emphasis on conversion. You can remain complacent and keep on doing what you’ve been doing as the vultures circle and steal your profits, or you can get proactive now and start building and promoting a web presence and SEO strategy that is bulletproof. Make your service department website content-rich. Make it a resource of great information. Make stars of your service techs by shooting and posting instructional videos on maintenance and basic repairs.
Finally, tell your Web designer that Jim Ziegler said they need to get you organic SEO positioning over the unworthy competitors crowding you out on Google.
I am more excited going into the next few months than you can imagine. In August, Debbie and I will be attending the Dealer Socket User Summit in San Diego. Last year, this event was incredible. We’ll be exhibiting and introducing my new training-on-demand series, so I’m in the process of editing more than 250 modules, including sales, sales management and F&I training.
Then it’s onto September and the annual Industry Summit at the fabulous Paris Las Vegas, brought to you by this magazine, F&I and Showroom and the good people at Bobit Business Media. I’ll be presenting “Profit Masters,” a special program that drew a big crowd of dealers and senior managers last year. Everyone in that room left with a crash course in dealmaking and the time passed quickly. Best of all, admission is free for any Industry Summit attendee.
Later that month, Debbie and I will head to Detroit’s Greektown Hotel-Casino for Internet Battle Plan, then down to Orlando, Fla., where I will be honored to serve as the keynote speaker for the American Institute of Certified Public Accountants (AICPA)’s annual convention, where I expect to make friends with CPAs as well as dealership controllers.
I know you’re busy too, but take a moment to drop me a line via email, Facebook and Twitter, or use Google to search for the Alpha Dawg Blog. Don’t worry, you won’t have any trouble finding it.
President and CEO of Ziegler SuperSystems
Jim Ziegler ranks among the industry's most recognized and honored trainers, consultants, authors, speakers, and forecasters.View Bio
Jim Ziegler ranks among the industry's most recognized and honored trainers, consultants, authors, speakers, and forecasters.View Bio