(nada) review

Welcome to the 2016 National Automotive Dealers Association (NADA) ReviewEdition 2

June 2016

ContentsIntroduction 1

#SODUMB – Social media mistakes dealers make 2

Learn and leverage the power of group operations 5

Create a blueprint: Thrive in today’s digital world 7

6 steps for success – How to stay ahead in a digital world 8

IntroductionThe 2016 National Automotive Dealers Association (NADA) conference was hosted in Las Vegas from 31 March to 3 April 2016.Following on from our previous publication, National Automotive Dealers Association Review – Edition 1, I am pleased to provide you with our second and final review.

Highlighted in this edition are additional takeaways from the conference, and learnings from two of the sessions, #SODUMB – Social media mistakes dealers make and 6 steps for success – how to stay ahead in a digital world.

Excitement continues to build for the 2017 NADA conference, which will be held next year in New Orleans from 29 January to 31 January.

John GavljakPartner – Automotive

1

Social media matters to dealers and Facebook is the market leader. Currently 74% (up from 69%) of car buyers are using Facebook and 75% of service customers are using Facebook.Based on a study performed by Digital Air Strike, 81% of car buyers and 83% of service customers said online review sites helped in their dealership selection process.

#SODUMB – Social media mistakes dealers make

General points#SODUMB #SOSMART

Not having a social media policy Social media is public and can be detrimental. Set up rules of engagement for public sites that employees must sign up to.

Social redirects on website Kill the links – you drive people to your page; do not give them opportunities to leave.

Only one person handles social All departments need to be in the social loop and encouraged to ‘participate’ in approved ways.

Social networks#SODUMB #SOSMART

Inappropriate or old content If it doesn’t help don’t post it. If it’s old update it.

Failing to proof read content It only takes a minute. Proof it. Google it.

Auto-sharing content If it’s going on twitter, create content for Twitter etc.

Fuzzy or wrong sized imagery Don’t reuse imagery where it doesn’t fit or looks bad.

Broken Apps If you have apps connected to Facebook, check them. If they are broken, turn them off.

Group pages You cannot afford to not have individual Facebook pages for each location.

Rogue pages Check all sites for rogue/duplicate pages. Do whatever you can to take them down.

Updating from mobile device Limit access to social sites. Don’t let employees or agencies use tools to link their own accounts with your business accounts.

Failure to respond Don’t waste leads and opportunities to show you care. Lack of response is worse than no site at all.

2

#SODUMB – Social media mistakes dealers make

Social advertising#SODUMB #SOSMART

Ad fatigue or old content Get more leads by keeping your ads fresher.

Not targeting ad audience Get qualified engagement by targeting owners and existing customers with Facebook’s robust ad targeting options.

Not staying up to date on new ad types New ad formats are created to help increase conversation – keep up and use them.

Not doing Facebook ads Learn about social advertising and how to guarantee strong campaigns.

Reputation#SODUMB #SOSMART

Only responding to the bad If you are responding to any, respond to all. Responding to every third positive comment is just as bad as responding to none!

I’ll pay you to take it down Be proactive and enquire from the customer what they are upset about.

5 star rating – good and bad If it sounds too good to be true, it probably is. Don’t create false customers to write reviews about your business.

At least reviews are not a 1 star review Have a plan to get reviews across the top sites to get a solid score – goal is at least 10 reviews per site.

Key learning points• Embrace social media

• Keep it relevant and up to date

• Ensure everyone in the dealership embraces it, it is not just the IT Manager’s job to update posts and information

• Make a plan to identify and correct mistakes

3

Learn and leverage the power of group operations

You could use the “closed bid” approach or “live bidding” – on the phone or on the screen.

Use it to sell your aged and/or unwanted vehicles.

Look to buy the stock that fills your need(s)

The benefits include: no additional auction fees, reconditioning goes through your shop and it increases retail efficiency.

Retail efficiency = how many of the cars that I have bought are sold as retail within 30 days?

The large groups aim for 90%. What is your retail efficiency?

Group Trading: Proven ProfitsMid-Atlantic Group (25+ Locations) Group Trade SummaryModel Year #Group 1/15 - 12/31

1994 1 Average Odo 41,891

2000 1 % Core/Non-core 22.55% 77.45%

2001 % Retail/Wholesale 67.03% 22.27%

2002 Avg Age Sending 58

2003 Avg Age Receiving 54

2004 Avg GP Sending ($206)

2005 26 Avg GP Receiving $716

2006 31

2007 54 Total Frontend P/L $2,050,456

2008 72 Total Backend P/L $2,262,685

2009 Auction fee savings $1,277,000

2010 Total Pack Adjustment $766,200

2011 Sending Dealer P/L ($589,353)

2012 598 Total Profit $5,766,988

2013 728

2014 549 Auction Profit/Loss ($4,582,056)

2015 149

2016 3 Group Trade Benefit $10,349,044

Total Units 2860

Over $10M

benefit

71% 2012 or newer

Michael Waterman,National Sales Director – DealersocketMichael’s presentation focused on the best practices from top performing automotive groups in the United States.

DNA (“Dealers Natural Ability”) is a powerful thing – use it.

• What is your dealership’s sales history/performance?

• Which models do you:

– Sell faster?

– Sell for a higher price resulting in higher front end and higher back end gross?

Best practice: Group trading – proven profits

4

Learn and leverage the power of group operations

• Dealerships do not rely on one person’s value of a vehicle

• Knowing an exit strategy at the time of appraisal is key to profits, especially if the car is on a sister store’s Buy list

Goal is to raise win rates and minimise exposure to wholesale loss. Clients have achieved a wholesale profit

Service lane appraisals • Single Store – Multi Franchise

(AutoMall)

• Started in 2013

• Cost of start up $1,500 (signage)

• Utilise Service Advisors

• F & I Manager

• Two Salespeople

The approach• Appraise cars as they enter the

service drive

• Do not approach customer while they are in the service area – remember they are there for service

• Soft and informative

• Let the customer initiate the process

• Ask for payoff, payments etc.

• Soft follow up call

The delivery• Printed Appraisal Voucher

– Date of appraisal and odometer/pics

– Vehicle information

– Current cash value

• Current Red Book valuation

• “Xchange” Packet good for up to two weeks or certain number of kilometres

Marketing• Signage in service area

• Signage in waiting area

– “Xchange” Available

– Free appraisals

– Text number to get help now

• Stickers and signage at checkout

• “Xchange” Packet Delivered with RO

The results

2013

Traded/sold 456 units

Bought 45 units

2014


Bought 91 units

2015


Bought 118 units

Progress

254 Units Bought

177 Retailed

$432k Gross Profit

77 Wholesaled

$20k Gross profit

2,262 Total units

$5m Gross Profit

All from a $1,500 Initial Investment

• Leverage your Service Department

• High volume of opportunities every day

• Soft approach – Customer Drives

• Do the maths

– 50 RO’s per day

– Over 15,000 per year

Best practice: Centralised appraisal

Best practice: Service lane appraisals

5

Create a blueprint: Thrive in today’s digital world

Paul Whitworth, Vice President, Business Operations, Software GroupThis presentation combined dealership performance data, industry research and best practices focused on the creation of a blueprint to align technology solutions with business realities.

Section 1: The digital future: A data-driven perspective• e-Commerce is coming

• Traditional channels matter less

• Third-party sites critical

• Shoppers browse and buy online

• Accuracy and honesty online (credit scores, trade-in values)

• Shopping cart e-commerce is unlikely in auto retail

Personalised, value-added experiencesARE STILL IMPORTANT

49% 37%

Source: Autotrader Millennial Research, 2013 Mckinsey & Company, 2013 Retail Innovation Consumer Survey

OF MILLENNIALSrely heavily on salesperson for

information

(41% Gen X, 38% Boomers)

OF SHOPPERSsaid product expertise is the most important element of

the dealership visit

6

Create a blueprint: Thrive in today’s digital world

Section 1a: Dealership experience matters in digital marketplaceBuyers still look to salesperson for information

• 49% of Millennials, 41% of GenX, 38% of Boomers, Autotrader Millennial Research, 2014

• Positive ownership experiences drive future sales

• Technology helps deliver positive experience (72% gain in service satisfaction using tablets)

Source: Goodie/iMillward Brown Shopping Study

89%

89%

82%

59%

83%

81%

77%

69%

62%

57%

56%

43%

40%

37%

37%

32%

26%

53%

38%

35%

27%

19%

Dealer visit

Test drive

Salesperson

Family & friends

Dealer sites

Manufacturer sites

Search engines

Third-party sites

Professional review sites

Consumer review sites

Regional dealer sites

Classified/Listing sites

Video sites

Social media

Newspaper sites

Action sites

Family and friends

TV

Newspapers

Magazines

Fliers and brochures

Radio

Digital beats traditionalSources used when shopping for vehicles: IN PERSON

Sources used when shopping for vehicles: ONLINE

Sources used when shopping for vehicles: OFFLINE

7

6 steps for success – How to stay ahead in a digital world

Find your ‘blue ocean’ – which niche can you dominate?• Assortment “the largest inventory in the area”

• Sales process – “one simple price, experience the difference”

• Customer segment – “proud to serve you in 10 languages”

• Product speciality – “world’s largest Chrysler Ram Jeep dealer”

For many dealers, this means focusing more seriously on your local market

Best customers location

Distance from Dealership Best Customers Average Customers

< 15 kms 65% 49%

15 – 35 kms 20% 24%

> 35 kms 15% 27%

01

02

03

04

Source stock and merchandise: The right cars at the right prices• Use market data to recognise opportunities for pricing leverage

• Use technology to broaden search and improve matching

• Price to market to create traffic and create right buying dynamics

Be the most effective digital marketer in your niche• Distinguish low vs high ROI digital efforts

• Make website, CRM and chat high priorities

• Maximise digital spend first, then go traditional

• Treat social media as supplementary to high ROI channels

Build a disciplined adaptable sales process• The funnel is dead

• Need flexibility, but also disciplined processes

• Multi channel communication is critical

• Must tightly integrate with your digital marketing presence

8

6 steps for success – How to stay ahead in a digital world

05

06

Focus on retention and repurchase

• Make service retention a higher priority

• Turn each service visit into a positive, loyalty driving experience

• Build your digital strategy on retention, repurchase foundation

Embrace technology as a source of competitive advantageReshape your process:• Buy the best

• Design a custom suite

• Choose a proven solution

• It’s a business decision

Service retention drives dealer profits, butWE DON’T FOCUS ENOUGH HERE

40% Service and

parts

19% New

vehicles

24% Used

vehicles17% F&I

Source: Xtime; 2013 NADA Data Book

Sources of Dealer Gross Margin Service Retention

Years of ownership

80%

63%

47%

35%26%

18%13%

1 2 3 4 5 6 70%

10%

20%

30%

40%

50%

60%

70%

80%

9

About Pitcher PartnersPitcher Partners is a full service accounting, auditing and business advisory fi rm with a strong reputation for providing quality advice to privately-owned, corporate and public organisations.In Australia, Pitcher Partners has fi rms in Adelaide, Brisbane, Melbourne, Perth, Sydney and Newcastle. We collaboratively leverage from each other’s networks and draw on the skills and expertise of 1,000+ staff , in order to service our clients.

On 1 November 2015 Moore Stephens Sydney and Pitcher Partners Sydney merged to become a new Pitcher Partners Sydney practice. The combined expertise and resources means that clients will benefi t from greater infrastructure support both locally and nationally through the Pitcher Partners association.

Pitcher Partners is also an independent member of Baker Tilly International, the eighth largest network in the world by fee income. Our strong relationship with other Baker Tilly International member fi rms, particularly in Asia Pacifi c, has allowed us to open many doors across borders for our clients.

Our commercial services to dynamic businesses

Financial essentials• Accounting and Business

Advisory Services• Audit, Risk Management

and Assurance• Internal Audit• Recovery, Turnarounds

and Insolvency• Tax advice and Compliance

Planning and growth• Business Consulting

and Commercial Advice• Business Performance Improvement• Business Structuring• Corporate Finance• Corporate Governance• International Business Advisory• Investment Advisory Services• Succession Planning• Superannuation Services• Tax Consulting• Technology and IT Consulting• Valuations

Our private wealth services• Estate Planning• Family Offi ce Management• Investment Advisory Services• Philanthropy Services• Succession Planning• Superannuation Strategies• Tax Advice and Compliance

Industry specialisations• Automotive• Education• Retail• Professional services• Health and aged care• Manufacturing• Not for profi t• Property and construction• Government and the public sector• Agriculture• Food and beverage• Hospitality

$3.8bnWorldwide revenue 2015 (USD)

141Countries

28,000+Partners and staff globally

100+Partners nationwide

1,200+People nationally

Pitcher Partners is a national association of independent fi rms.Liability limited by a scheme approved under Professional Standards Legislation.

Sydney

240+Total Sydney staff

29Sydney partners

810

Firm locations

MELBOURNE

John Brazzale | Managing Partner+61 3 8610 [email protected]

ADELAIDE

Tom Verco | Principal+61 8 8179 [email protected]

SYDNEY

Rob Southwell | Managing Partner+61 2 9221 [email protected]

BRISBANE

Ross Walker | Managing Partner+61 7 3222 [email protected]

PERTH

Bryan Hughes | Managing Partner+61 8 9322 [email protected]

NEWCASTLE

Michael Minter | Managing Partner+61 2 4911 [email protected]

Pitcher Partners has the resources and depth of expertise of a major fi rm, but with a smaller fi rm feel. We give our clients the highest level of personal service and attention. That’s the diff erence.

Pitcher Partners is a national association of independent fi rms. Liability limited by a scheme approved under Professional Standards Legislation.

911

Key

24Asia Paci�c Firms

28North America

Firms

62European Firms

36Middle East and

African Firms

15Latin America

Firms

Baker Tilly International is one of the world’s leading networks of independently owned and managed accountancy and business advisory fi rms united by a commitment to provide exceptional client service.

Every day, 28,000 people in 141 countries share experiences and expertise to help privately held businesses and public interest entities meet challenges and proactively respond to opportunities. International capability and global consistency of service are central to the way we work.

Our globalreach

GlobalExperts across a wide range of industry and business sectors, each Baker Tilly International member � rm combines high quality services and in-depth local knowledge.

154 independent � rms come together across four geographic areas. Sharing knowledge and resources, our business approach brings together the power of the global network to deliver exceptional results to clients globally.

12

Key

24Asia Paci�c Firms

28North America

Firms

62European Firms

36Middle East and

African Firms

15Latin America

Firms

LocalPitcher Partners is an independent member of Baker Tilly International. Our strong relationship with other Baker Tilly International member fi rms, particularly in Asia Pacifi c, has allowed us to open many doors across borders for our clients.

13

NADA Report 2016 Series 2_130716

MELBOURNE

+61 3 8610 5000 [email protected]

ADELAIDE


SYDNEY


BRISBANE


PERTH


PITCHER.COM.AU

NEWCASTLE


Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation.

Get in touch...

John GavljakPartner – Automotive

+61 2 8236 [email protected]

John TaouilManager – Automotive

+61 2 8236 [email protected]

mailto:[email protected]

http://pitcher-sa.com.au



http://pitcher-wa.com.au

http://pitcher.com.au




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