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leadership solutions

sales & training solutions

marketing solutions

feature solution 12

08 SusanGivens THE PROMISE OF THE FRESH START

18 JackGarrity “RETENTION IS JUST A WORD”

20 JodyDeVere WHAT IS WORTH YOUR TIME, RESOURCES AND BUDGET?

10 MarkTewart THE PERILS OF SEVEN-CAR JOHNNY

KendallBillman TECHNOLOGY, CUSTOMER EXPERIENCE

AND THE MODERN DEALERSHIP

32 SeanV.Bradley IF YOU KEEP DOING WHAT YOU ARE DOING...

28 JordanBentley HOW TO KEEP YOUR CUSTOMERS FROM GETTING COLD FEET THIS WINTER

RudyMartin TAKING A LESSON FROM AMAZON

26 AdamRobinson THE MILLENNIAL WORKFORCE: A Key Driver to Maximize Industry Growth

42 DealerPanel MENTORING: Qualities of Effective Mentoring

44 ElizabethHanft MORE DOESN’T ALWAYS MEAN BETTER — WHY QUALITY IS CRUCIAL

38 TimByrd NEW TO YOU — 2016

22 BeckyChernek BEST DEALERSHIP PRACTICES FOR A BLOCKBUSTER NEW YEAR

16 SteveCottrell IT’S YOUR DATA: Manage and Control Its Access on Your Terms

30 BillWittenmyer URGENT LEADERSHIP: Why Winning is Better Than Beating the Other Guy

40 DalePollak THREE KEYS TO IMPROVE PERFORMANCE, PROFITABILITY IN 2016

DennisMcGinn HOW TO FLOW GROSS FROM

RECON TO YOUR BOTTOM LINE

14 JahonJamali RECALLS HIGHLIGHT DEALERS’ NEED FOR REAL-TIME APPRAISALS

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The New Year’s Resolution has been done to death. It’s common. It’s a cliché. It’s a joke.

And yet, no matter how jaded we become, it still holds an attraction. The idea of a fresh start — a clean slate, a blank page, a do-over — is a powerful one.

Give yourself permission to truly start with a clean slate. The catch is, however, that the slate starts to fill in as of January 1. The New Year doesn’t stay new very long.

There’s a thin line between a “fresh start” and “procrastination.” You can literally do anything “tomorrow.” The truly successful find a way to do it today.

Taking Stock of 2015Before you can plot where you’re going, you’ve got to take an honest look at where you’ve been and examine the results of your efforts. (Hint: The word “honest” is the key.) Make a list of the programs, the ideas and the initiatives you put into effect in 2015. How did they go? What worked? What didn’t? Who worked? Who didn’t? Then, apply a very potent word to that data: “Why?” Why did that program work? Why didn’t that initiative work? Why were your top performers doing so well? Why were those who were underperforming not hitting their marks? Was it their effort? Did they have the proper tools and training? What can you fix to get better results in 2016?

GoalsEver drive out to a friend’s new house, where you have some unclear directions, but you’re not quite sure where you’re going? Compare

how long the trip feels from your house to theirs against the drive back home. That’s the power of a vague goal versus a clear goal.

There’s an old saying that “You can’t hit what you don’t aim at.” Again, a bit cliché, but it’s undeniably true. Win or lose, having goals is the only way to measure your progress. Also, how do you know if you hit a target if you’re not sure which target you’re aiming for? Goals should be ambitious but not unrealistic; you want to motivate yourself and your team, not bludgeon yourself and them with expectations destined to go unmet.

While you can chart out goals for your company, involving your team members both in that process and in developing their own goals can be beneficial. Everyone wants to grow and become better and more effective, both in their careers and their lives (and if you find some who don’t, you may have found a problem you need to address going into the New Year). Encourage your team to set both personal and professional goals for themselves, and help them achieve those goals however you can. A more effective team member makes for a more effective team; a happier team member makes for a happier team.

Forgiveness“Not forgiving is like drinking rat poison and

then waiting for the rat to die.” — Anne Lamott

One thing the New Year allows us to do is to cross a finish line. It’s the beginning of a new period, to be sure, but we often fail to notice that it’s also the end of one, as well. Take the disappointments of the old year and leave them there. Learn from last year’s mistakes — both your own and those made by others. The past is done, and no amount of analysis will change what’s happened. When you drive, you look in the rear-view mirror from time to time, but the vast majority of your attention is directed through the windshield. Mistakes were made in 2015, both by you and by your team (if not, either congratulations are in order, or you didn’t take that “honest” hint earlier in this article to heart). 2016 is filled with opportunities; don’t miss them by holding onto grudges from 2015.

Simple and DifficultNone of this is particularly ground-breaking or paradigm-shifting news. But that’s the point. We all know instinctively what we need to do and what we need to change to make the future brighter than the past; it’s human nature, though, to be lured in by the promise of a “quick change” or an “easy fix.” The temptation can override our good sense, and in the enthusiasm of the New Year’s clean slate, it’s easy to go in filled with good intentions — intentions that peter out two weeks in. Take the long view, and know that short, well-thought-out steps can take you a long way in a year.

THE PROMISE OFTHE FRESH START

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THE PERILS OF SEVEN-CAR JOHNNY

I am sure you have met “Seven-Car Johnny.” You know the guy. He sells seven cars a month and, even with all that awesome production, has plenty of time to spread his expertise around to everyone within earshot. There is an old saying, “Be wary of advice and council.” I would invite you to consider that axiom the next time Seven-Car Johnny comes your way.

Let’s take a deeper look at Seven-Car Johnny. Good ol’ Johnny has tons of experience. He has seen every situation and he is so wise he has everything figured out. As a matter of fact, he has everything figured out for himself and everybody else. Seven-Car Johnny is a wealth of information. And of course, Johnny has been a manager before, as well, so he can tell you all about that.

Johnny knows exactly which customers will or will not buy. Johnny knows exactly how much gross profit can and should be made. Johnny knows the real value of every trade-in. Johnny can tell you exactly what is wrong with the advertising. If you need to know anything, just ask Johnny. Good ol’ Seven Car Johnny is like a walking, talking Google.

It seems like every dealership has a Seven-Car Johnny. This sounds harsh, but my advice to all dealership leaders and managers would be the following: Fire Seven-Car Johnny immediately. Once you fire Seven-Car Johnny, I want you, as leaders, to ask yourself how you tolerated him and allowed his cancer to spread for so long?

Seven-Car Johnny makes it his mission to absolutely destroy new hires. Johnny can crap out the attitudes of new hires so fast you would think he is competing in an Olympic event for it. Johnny, all by himself, creates a culture of doom and gloom. If Johnny were president, he would be social engineering the world. He would spread the wealth to everyone besides who is currently successful because, as he will tell you, they do not deserve it.

Johnny fights management tooth and nail everyday on everything. Johnny hates management and management hates Johnny. My question is, “Why the hell is Johnny still there?” Why on earth does almost every dealership have a Seven-Car Johnny and why do you put up with that?

We all know superstar performers can often be prima donnas, but Seven-Car Johnny? Stop it. Stop making excuses that it’s hard to get good people, so you cannot replace him. Stop saying you just need bodies. Stop tolerating a lack of performance and bad attitude mixed into one. Stop it. You get in life what you tolerate and allow, both good and bad.

To be successful, you have to “get out of your own way.” Start by getting Seven-Car Johnny out of the way and never allowing another “Seven-Car Johnny” to take hold of your dealership again.

For a free Special Report — “The Five Critical Measure of a Great Leader” — email me at the address above with the title “5 Critical Measures of a Great leader” in the subject line.

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In 1970, Manly Honda broke new ground and made national news when it became the first dealership to sell Hondas in the continental United States. In 2014, they broke ground again to begin the construction of their new state-of-the-art facility in Santa Rosa, California. This new facility sparked a renewed vision to put Manly Honda back on the national stage by becoming one of the top performing dealerships in America.

In just 12 months, Jeff Dantzler, general manager of Manly Honda, and his team have made this vision a reality. The store is now No. 1 in the zone in total sales volume (new and used combined) and is celebrating its new status as one of the top 50 Honda dealerships in the country. This is especially impressive given

the fact that Manly Honda achieved these goals without sacrificing profitability. Year to date, the store’s net profitability is up 138 percent.

General Manager Jeff Dantzler, with Brian Manly

GETTING STARTEDDantzler, a self-proclaimed Tony Robbins fan, applied Mr. Robbins’ “success leaves clues” methodology when putting the growth strategy together for Manly Honda. “When we made the decision to take this dealership to the next level, we began studying the dealerships that were already doing what we wanted to do,” Dantzler said. “We looked at stores like Paragon Honda in New York and Rick Case Honda in Florida. We even looked at stores selling different makes, like Henderson Hyundai in Nevada, and we began putting together the clues that would eventually lead us to where we are now. What we found was that all of these stores were using similar strategies. All of them were leveraging advanced market data to focus on in-market, lower- funnel customers. All of them were focusing their marketing on targeted media channels

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Perfect Prospect™ technology allows Manly Honda to focus marketing on ZIP codes that have the highest conversion rates and lowest cost per sale.

and all of them had a customer-friendly approach for generating sales in the service lane. This is a big deal, because they were converting customers before they began to shop. All of this really resonated with us, so we took what we learned and began rolling out the strategy for our dealership.”

HOW THEY DID ITThe complete strategy that Manly Honda currently uses took approximately nine months to put into place and rolled out in three phases. In phase one, they set up an analytics platform so that they could define what they call their “Perfect Market” and identify the prospects within their market who have the highest statistical probability of buying or servicing at their store. This allowed them to apply data-driven techniques to their direct mail campaigns. In phase two, they rolled out an aggressive digital strategy to increase conversion on search engines. Finally, in phase three, they implemented a comprehensive vehicle upgrade program. This program monitors Manly Honda’s database and automates communications so that both the dealership and the customer are notified when a new upgrade opportunity is detected. Customers automatically receive offers when they become eligible to upgrade into a newer vehicle for a similar payment, and the dealership automatically receives notifications when eligible customers are scheduled to visit the dealership for service.

“This process really opened our eyes regarding what we could do with data-driven marketing,” Dantzler said. “This is because it gave us visibility into things that we couldn’t see before – like the ability to see which ZIP codes were giving us the best ROI and the ability to separate low-funnel prospects from those who are just beginning the shopping process. The ability to effectively target customers who are low in the sales funnel gives us a lot of confidence, because we know that every dollar we spend today is reaching a customer who is going to buy this month.”

service program, an entire team of people stepped up to build what is now one of the most important programs in our store.”

The final step in Manly Honda’s new strategy was implementing their upgrade program in the service lane. Their goal was to duplicate the results from the dealerships they studied and convert 2 to 3 percent of their 3,000 monthly repair orders into upgrade sales. To do this, however, the sales and service departments would have to work together in a way that they had never done before. “You have to believe in something to see it work,” Dantzler said. “We saw the impact this program was having on stores like Paragon and Rick Case (two of America’s top 5 Honda stores), so the management team and I began selling the vision to everyone at the store. We used the success of the stores we studied as evidence that our goal was not a dream, then we aligned our processes and pay plans to pave the path to results.”

In their first month with this new process, Manly Honda captured 40 incremental sales out of the service lane. Within 90 days, the program had reached its target of 2 percent of ROs (60 incremental sales a month) and that number continues to grow.

“It is important to note that this is all new-found business,” Dantzler said. “We are not competing with other dealerships to win these sales. We are converting these customers before they begin shopping.”

“Our goal was to give dealers a system that makes upgrading a vehicle as easy as upgrading a phone,” said Budd Blackburn, co-founder of TeamVelocityMarketing.com, the company Manly Honda uses for its targeted marketing and upgrade program. “When implemented correctly, dealerships have the potential to upgrade up to 3 percent of their ROs every month. This can have a huge impact on a store’s profitability. Manly Honda is a great example of this.”

CONCLUSIONManly Honda is proof that success really does leave clues — clues that now lead all the way into Honda’s national top 50 ranking. The first Honda dealership in the continental U.S. is currently outpacing the nation in YTD sales growth by nearly 12X. New car sales are up 22 percent (40 percent since the implementation of their upgrade program), used car sales are up 25 percent, service profits are up 200 percent and the dealership’s overall net profitability is up 138 percent.

To learn more about Manly Honda and the strategies outlined in this article, email: successstories@autosuccessonline.com.

When speaking with Dantzler, it is obvious that he has a great deal of confidence in his marketing strategy. However, he is quick to point out that creating opportunities is meaningless if you do not have a team who can convert these opportunities into sales.

“I have to give my team all the credit for our success,” Dantzler said. “When we decided to take our business to the next level, they bought into the vision and literally brought it to life. When we needed to step up our Hispanic marketing, they made it happen. When we needed to dial in service, they did it. And, when we launched our sales-in-

“ WE USED THE SUCCESS WE SAW AT OTHER STORES AS EVIDENCE THAT OUR GOAL WAS NOT A DREAM... ”

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Last year, roughly 36 million used cars passed through dealerships or auction lanes for appraisal. With a complex variety of factors rapidly affecting valuations, dealers face pressure now more than ever to correctly appraise cars.

Industry factors, like recent recalls from Toyota and Ford — not to mention the Volkswagen diesel situation — only complicate an already volatile used car market. Larger economic factors and changes in consumer buying behavior also play their part in driving rapid market changes. While many dealers succumbed to the Great Recession, surviving dealers who now employ new technology-driven solutions are primed to stay ahead of the used car market.

Traditional Market Guides Help, But Variances PersistThe traditional staple of a used car manager’s arsenal consists of a stack of the latest market valuation guidebooks. These market guides, such as Black Book, NADA and KBB, now also compliment their valuation metrics with increasingly in-depth analysis — utilizing data from a growing list of sources to include auction reports, dealer statistics and robust market forecasting solutions. But real-time data is hard to derive, and wide variances persist across the major market guides.

Black Book or Galves? NADA or KBB? Each presents differing metrics based on region, vehicle type and the immediate needs of the dealership. Apart from the tactical battle to close a deal on the sales floor or source more inventory, the process of gauging broader emerging trends faces its own obstacles in variance.

A November 2015 article in the San Francisco Chronicle highlighted the variance issue across

the major guides. In addressing market reaction to the Volkswagen situation, the article pointed to differing assessments and approaches on the issue from KBB and Edmunds. KBB noted a 16-percent drop in auction prices for affected VW vehicles after the news broke, but KBB’s online valuation Website made no adjustment for the diesel VWs in question. A KBB analyst quoted in the article said, “We are taking a more wait-and-see approach … It’s an artificial market for these cars, it’s changing every week.” Edmunds’ auction data also showed a sharp drop, but not nearly as drastic as the KBB analysis. Edmunds’ data revealed an average auction price drop for affected VW diesel models at 8.6 percent — roughly half the decline in value as assessed by KBB.

For Inventory Management,Time is MoneyEach of the studies above provided important insight, but this type of variance leaves many dealers wanting a more precise and timely evaluation. After all, time is money.

These rapid market changes highlight the need to stay ahead of used car prices for both inventory acquisition and disposition. From the vehicle purchase on the auction floor to frontline-ready, speed to market and low acquisition costs dictate a dealer’s ability to profit. The same rule applies for wholesale bound trade-ins. Dealers don’t want to appraise a trade-in based on what they think the market might look like a week, two weeks, or later — when that car is offloaded into a wholesale channel by being sold at auction or to another dealer.

A large number of process-driven dealers now utilize a variety of other market valuation tools, in addition to the traditional market guides, to speed up the inventory acquisition-disposition cycle and more precisely appraise their trades. There are robust platforms now available to dealers that enhance and improve inventory management and deliver more precise vehicle appraisals.

Technology now meets the ACV (Actual Cash Value) DemandBut some dealers are now taking it a step further, by using technology to get rapid, real-time appraisals backed with firm offers to purchase those vehicles.

A mobile-based solution, for example, now delivers quick, easy and transparent valuations performed right on the sales floor. On a live trade-in, dealers get a cash-backed appraisal in only 10 to 15 minutes. Expert appraisers evaluate submissions via the technology and are able to place cash offers on each vehicle, leveraging both their expertise and a nationwide network of dealerships who might want to purchase that particular car, in an effort to get the most aggressive offer possible.

Technology like this can be extremely helpful to dealers when coupled with the expertise of experienced appraisers. Appraisers, with market intuition and an understanding of how importantly timely offers are, allow dealers to stay ahead of market swings by offering precise cash-backed appraisals and providing dealers with real-time ACV on each car. When it comes to accurate used car appraisals, no technology-based algorithm can make immediate cash offers — or understand current market conditions better.

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IT’S YOUR DATA:Manage and Control Its Access on Your Terms

It’s a new day for dealerships in the industry. “Big data” has paved the way for dealers to use their extensive consumer data repositories in strategic ways, tapping into emerging technologies and innovations that grows business and enhance the client experience.

Dealers have an opportunity to rethink their business models. A growing number already manage their data in a secure, compliant environment flexible enough to meet frequently-changing business needs while maintaining uncompromising data security.

Changing Business ModelsThe business model is changing in our industry, and big data is leading this charge. Dealers find themselves in a position to control data in a cost-effective manner that recognizes the value of unrestricted, but controlled, third-party vendor access to data, which spurs greater innovation. Overlooking this opportunity could deliver stiff consequences for many in the industry. Case in point: the story of Eastman Kodak. While the photography behemoth was first to develop the digital camera, it was slow to embrace the new technology. Steve Sasson, the Kodak employee credited with inventing the first digital camera, said in a 2013 Huffington Post article that, “… the fundamental business model … was undermined by the new technology…. In some ways, [the technology] cannibalized [its] already existing business....” Kodak’s “existing business,” however, was not where the industry was heading, based on technological advancements and consumer demand. Kodak was ultimately forced to file for bankruptcy.

We can learn from Kodak’s miscalculation. Big data and supporting technologies are changing how we do business. Organizations that recognize and embrace this will reap the rewards, instead of finding themselves stuck in a model that no longer fits the market.

There are issues for dealers to consider and questions that should be asked to ensure the security of dealers’ data repositories and to understand why the industry is shifting — and what the costs are if we don’t move forward.

How Secure Is “Secure?”Ensuring the security of confidential and private consumer data is not only critical, it is the law. The Federal Trade Commission (FTC) has made it clear that processes and procedures must be in place to safeguard consumer data. With this in mind, every dealer should ask, “What is my DMS vendor doing to ensure there is not going to be a security breach?” along with a follow-up inquiry to the DMS provider: “In the unlikely event that something does go wrong, what is your liability to us?” Many may be surprised by the answer.

Confronting Competitive Ambitions In a marketplace where data security remains top priority, and unrestricted, but controlled, access to consumer data is vital to the success of our businesses and emerging innovations, there are issues to consider regarding leading DMS providers. These companies offer “one-stop-shopping” experiences for dealerships, relieving them of managing and controlling their own data. But what is the true cost of these services to the industry as a whole?

Certification programs offered by these DMS vendors claim to provide dealerships with added security assurances and dissuade them from granting third-party vendors access to data. It has been suggested these costs are simply fees (referred to as “hidden taxes”) paid by third parties to maintain access to dealership data. Any review by these DMS vendors of third-party vendor solutions appears to be competitive in nature, with no focus on security; it is simply a fee paid to maintain the title of “certified.”

These fees have risen dramatically, with no evidence of what the increases provide. These increases affect dealership costs, because third-party vendors who pay the exorbitant prices to retain certification to access data cannot absorb the cost and are forced to pass them on to dealerships. This, in turn, affects the consumer.

The other cost associated with these fees is the stifling of innovation in the industry. Vendors that cannot or refuse to pay these hidden taxes are often threatened with interruptions to their data feeds. In other instances, smaller vendors

seeking certification are told to come back when they have a larger customer base. Still other vendors with competing solutions to those of these larger DMS providers have been told that it wouldn’t be right to empower another vendor in an already-crowded space. Third-party vendors are essentially forced to work solely with dealerships whose DMS providers do not impose taxes on dealer data. This reduces third parties’ market space significantly and suppresses innovation that, in an unrestricted market, may offer great value to our industry.

One of the scenarios above also brings up conflict of interest concerns. Some leading DMS providers actually have solutions in the marketplace that compete directly with third-party vendors. These are the very companies that determine whether third-parties gain (or retain) access to dealership data. This is a huge conflict, which has gone unchecked.

It’s Your Data — Maintain Control of It These realities should serve as a wake-up call. Dealers work to keep their consumer data secure and, true to their entrepreneurial spirit, want the best solutions available in the marketplace. They also want data control and ease of use of their DMS. The takeaway from all of this: It’s your data. Manage it on your terms. Today’s technology enables dealers to do this. Dealers can maintain their own DMS, gaining complete control over how data is used, who is accessing it and what they are accessing. Because dealers are on the line for breaches, they must keep a tight rein on this information. This approach also allows designated vendors unrestricted, secure access to data on your terms, and in a way that supports innovation.

Allowing this exchange to take place at the same cost for everyone levels the playing field, allowing emerging technologies to enter the marketplace, giving consumers more choice and letting the market determine who survives.

It’s a new day for dealers who see value in emerging technologies, seek to keep costs down and desire a better way to control access to data and maintain security. Are you in?

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JackGarrity partner at Dealership For Life \ 866.871.0240 \ jgarrity@autosuccessonline.com

Wikipedia defines “customer retention” as, “…the activity that a selling organization undertakes in order to reduce customer defections. Successful customer retention starts with the first contact an organization has with a customer and continues throughout the entire lifetime of a relationship.” But, how do you achieve that, exactly? Based on 10 years of working with dealers of all makes and models scattered across the United States, I believe it can be summed up in a single word: culture.

The dealer must be willing to refine the culture of his business and how it relates to the customer. Almost all dealers “think” they do a good job at customer satisfaction, but when compared against the nationwide dealer network, they are pretty much all the same. Consequently, the customer

perception of automotive dealers has not really changed much and, in fact, the perception was generally not that great to begin with. Changing the culture in the business model is essential in gaining a higher level of customer satisfaction, which results in retention rates that have not been seen before in the industry.

It is simply not good enough to design a customer-centric retention program without making sure that it includes the dealership staff. Getting 100-percent buy-in from every employee in the dealership is essential to achieving success with any retention program. You get engagement from your staff by training, monitoring and accountability.

Day One must include extensive group and one-on-one training by retention professionals who have the experience to establish a foundation of understanding that everyone can easily understand. Every employee must know that this new culture is a “game changer,” and that there is a new way of doing business in your organization. Without this basic foundation, your program will begin with a few successes, but not the overwhelming results you should be seeing from it. The amount of time you devote to this training defines your level of commitment to your program. Too little time, and your employees will see this as just another “annoyance” and will continue to do “business as usual.” I recommend that one to two days be devoted to retention training at small- to medium-sized stores in order to accomplish the goal of creating a new culture.

Beginning with the day after training, your staff should be implementing your retention program with every customer encounter. You ensure this is done by constantly monitoring their work process to confirm it includes at every interaction with a customer the mention of your retention program. This must be done on a recurring daily basis, and with the goal of 100-percent compliance by every employee.

Holding your managers accountable for fully implementing your program should be the new norm — and not the exception. This can be done by continuing training and focusing on the new retention program at every opportunity. It is crucial that the dealer principal and general manager be the driver of this program in order for it to become culture.

“RETENTION IS JUST A WORD”

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JodyDeVere CEO of AskPatty.com \ 866.849.9973 \ jdevere@autosuccessonline.com

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Women are in control of 60 percent of the country’s wealth, according to research conducted by BusinessWeek and Gallup. With this rising tide of the economic power of women, car dealerships need to devote more time, resources and budget to gain a larger share of this huge market.

Here are some basic steps and tools you will need in order to market effectively to women, gain their trust and, in turn, their business:

1. Integrate the message. Make sure the female-friendly message is consistent across your brand, from the showroom to the service drive, your Website and your Internet sales department. Signal to women in your marketing and advertising that you are thinking about them and their

needs and are striving to win their business.

2. Polish the approach. Treat and picture women as capable and professional in your online marketing and advertising efforts. Our society recognizes many valid roles for women, but this isn’t always reflected in ads — seldom are women shown in work settings, business roles or positions of responsibility and authority. Use real women, rather than the runway model ideal, as the benchmark for these graphic depictions of women. Girls and women in ads are often presented as beautiful, but these ads offer a very limited, narrow view of beauty.

3. Emphasize information. Having a blog that provides information about your dealership, employees, events, special offers, tips and community activities will help women learn more about who you are and how you can serve her needs.

4. Focus on relationships. Create relationships with your female customers by providing information and content on your Websites and in your marketing programs designed specifically for women. Set up a two-way approach, answering her questions, speaking her language and listening to her needs.  Provide content that interests women consumers — car seat safety, crash test ratings, car care tips and so forth.

If women influence 85 percent of all vehicle purchases, what percent of your marketing and advertising budget are you willing to devote to attract, sell, retain and increase loyalty with her?

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BeckyChernek president & founder of Chernek Consulting \ 866.626.8489 \ bchernek@autosuccessonline.comsa

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22 autosuccessonline.com/videos

With a new year on the horizon, now’s the time to look at some of the emerging trends that will shape how your dealership will perform in 2016. Here are some of the most effective F&I best practices to guarantee you a blockbuster New Year:

Meet the Customer at the Salesperson’s DeskThe benefits of this practice cannot be denied. Meeting the customer on their terms is a must. It avoids conflict and builds that all-important rapport that is the lifeblood of every auto dealership. It also allows F&I managers to confirm the accuracy of transactions, which reduces confusion and potential bottlenecks. Create a seamless process that begins the moment the customer makes the decision to buy and ends with finalizing the transaction.

Engage the Customer SoonerGetting finance involved early in the buying process prior to solidifying payments is essential, especially when working with customers who have a history of slow payments or poor credit. Every dealer bears the responsibility of helping the customer do the heavily lifting so they don’t land on a vehicle they can’t afford or be approved for. Platforms added to dealer sites engage the customer while they’re shopping on the Website, letting them browse dealership inventory and incentives, and helping them find alternative financing arrangements based on their credit. It also helps determine payment options and terms they’ll be approved for, and chops time off the hour-long wait in the dealership for approval. Many veterans see this as a violation of time-honored practices, but it’s an inevitability in the industry — and something finance managers should consider.

Create Online Tools for CustomersThe online customer finance manager is a new breed, facing a host of challenges to meet the customers on their terms outside of the traditional F&I setting. Developing the technology capable of presenting financing options and product offerings via Web-Ex or other platforms is vital to thriving in 2016. Giving buyers the option to communicate via online platforms will convert more customers and avoid undesirable scenarios, such as

customers walking onto the lot with a check in hand made out for the exact amount.

Offer Leasing OptionsIn case you hadn’t noticed, leasing is making a serious comeback. It represents a way to offer customers shorter terms, burying some of the negative equity and getting them into a new car sooner. Leasing is a sure-fire way to build retention, and is a great alternative to excessive terms. Cash-paying customers will want to consider the advantages. Understanding the mechanics behind leasing will be one of the keys to success in 2016.

Revamp Your MenusMenus are evolving, taking on new and interesting characteristics — such as electronic versions that allow customers to peruse their choices via an iPad instead of poring over old-fashioned printed menus. Given the uptick on leasing, electronic menus are fast becoming a favorite among dealers for their ease and functionality. Menus should be accessible and must conform. Far too many times, dealers insist they aren’t able to present a lease menu due to software errors or challenging operator controls.

Teach Sales and Finance toSpeak the Same LanguageBeing part of a team requires every member to have a comprehensive understanding of how the other communicates. This creates synergy and fosters consistent practices. It’s not about every person for themselves anymore; it’s about developing a culture that lives and breathes fairness for the customer and bridges the gap between departments.

Work Better With Nonprimeand Subprime CustomersNonprime and subprime business is not going away anytime soon. In fact, it’s still at an all-time high. For this reason, the better equipped you are to work with subprime customers, the more cars you will sell and the greater your retention will be. If your processes don’t support the subprime customer, chances are these deals will fall through and your competitor will snatch them up. A solid process facilitates faster approval times and ensures customers are paired with vehicles they can afford, while also

providing for value-added products such as a service contract and gap protection.

Determine Core Menu ProductsBased on Varying FactorsSelling menu products is the future, but that future is in jeopardy without ascertaining what core products make sense based on things like demographics and vehicle selections. When considering your menu, less is always more. Cluttering a menu with endless products only confuses the customer, which ultimately undermines its benefits. Consistency in product offering is a must.

Keep an Eye on ComplianceThe need to adhere to compliance is as important today as it ever was. Keep your menus intact. Ensure you’re itemizing all product offerings and disclosing payment differences in each product presented. Menus should be clear and transparent if you are going to achieve fairness for your core customer base. A final declination discloses the products purchased, and those declined will match the final contract. There are several software solutions that help auto dealers reduce risk.

Overcome Objections — In AdvanceKnow what to say before you say it. Studying word tracks and knowing your content inside out is essential. According to author and sales trainer Jeffrey Gitomer, the best cure to overcoming objections is prevention. Prepare yourself in advance to address common customer concerns and objections. This starts by listing out the most common objections you face, studying your past responses and thinking creatively about how you’ll answer them in the future. Word tracks prepare you for the inevitable. It’s like having your own built-in GPS to keep you on track.

Check Your AttitudeAchieving high performance means having a great attitude — even when the chips are down. Everyone experiences down days. Even the best of us are not immune. It’s what you do during these times — remaining positive, brushing up on the basics and brainstorming creative solutions — that says everything about you and your success.

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KendallBillman senior vice president of AutoAlert \ 866.892.1447 \ kbillman@autosuccessonline.com

A recent study from Gartner research indicated 89 percent of companies expect customer experience to be the proving ground for every business in 2016. Providing customer experience and service that meets and exceeds expectations is critical to growth and profitability. Dealerships with a plan to capture mobile markets, and take their showroom online where customers begin the buyer journey, will be ahead of the curve.

Successful dealerships must move away from reactive customer service strategies toward adopting more predictive strategies to capture consumers and maintain customer loyalty. Dealerships with comprehensive customer experience management capabilities are able to connect with, and respond to, customers with the right messaging and solutions at the right time. Viewing your dealership customer experience through the eyes of the customer is more critical than ever before. And delivering the seamless, positive brand experience customers demand requires an engaged and empowered team working together. Is the customer experience your dealership delivers designed to not only capture the sale, but also retain customer loyalty and inspire brand advocacy on behalf of your dealership? Let’s take a look.

Where to StartIf your dealership isn’t already on the path to developing strategy for a top-notch customer experience, now is the time. Let’s start with what we know about how consumer behavior has evolved. Mobile searches will exceed desktop by 2017. Customer relationships begin with the first interaction with your brand, and that is most likely to happen online. Here are a few key areas where your dealership must execute well:

• Mobile is where it’s at. Automotive shoppers overwhelmingly have their first interaction with your brand via their mobile devices. In a recent survey, 91 percent of U.S. consumers confirmed their mobile devices are more

important to them than their automobiles, and even their deodorant! For dealerships, this means taking a good look at your Web presence. Is it responsive and mobile-friendly? Are you leveraging mobile ads? Are customers able to view inventory from their mobile phones? The answers to these questions should be “yes” — and dealerships must actively seek opportunities to leverage mobile technology.

• Interactive chat is getting smarter. If you are utilizing interactive Website features such as customer service chat, steer clear of total automation. Today’s consumer demands a more personalized interaction, so make sure your tools are up-to-date and leave the desired first impression.

• Customer feedback is more powerful than ever. Today, customers are going online and sharing their dealership experiences — good or bad — more than ever before. Are you actively listening and responding online? If you have yet to develop a strategy for capitalizing on the opportunities to connect with consumers, through both negative and positive reviews, add it to your to-do list today.

• Customer experience is personal. Your dealership works hard to build relationships with consumers so they turn to you when it’s time to buy. But are you able to leverage data insights allowing you to meaningfully interact with them before they reach out to you? Becoming a resource for your customer early in the buyer journey is a win for both you and

your customer. Shopper insights and existing connections to your brand empower your sales team to connect with confidence. Having the ability to create a meaningful first interaction with consumers is the doorway to an excellent customer experience.

• Your customers are multi-channel users. There are various ways to stay in contact with consumers, but a recent study shows 53 percent of those ages 18 to 34 prefer to use electronic media — like email, texting or social media — rather than the phone for consumer interaction. So, if you haven’t already, plan to adopt technology that will enable you to communicate with customers via their preferred method in 2016. If you don’t, your competition will.

• Connect in real-time via social media. Forward-thinking dealerships are utilizing social listening tools that allow them to discover in-market customers and answer their questions in real-time. Those who are doing it well are delivering the customer experience today’s consumer expects.

• Texting is trending. Texting ranked even higher than social media when it comes to receiving flexible and personalized responses, with 75 percent of respondents from a HeyWire Business survey confirming they prefer text communication with customer service representatives than social media.

Dealerships looking for the competitive edge in 2016 and beyond must evaluate their technology integrations in light of the information provided here, make upgrades if necessary and develop strategy to re-engage employees and leverage data insights for the coming year and beyond.

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26 autosuccessonline.com

We might not have a crystal-clear view into the future of vehicle technology or the economy, but we most certainly know where the future of the auto workforce is going: the Millennial generation. By 2025, they are expected to make up nearly 75 percent of the workforce, according to the Brookings Institute. Browsing the Internet and listening to your colleagues, you may hear whispering (or yelling) about how lazy, egotistical and selfish this generation can be. But, in order to move into the future with lower employee turnover rate and increasing sales, it’s necessary to dispel the common myths and identify the strengths of this generation — there really are a lot — and learn how to employ, engage and retain them.

Why You Need to Attract Millennials Let’s start with the facts. According to the most recent NADA Workforce Study, industry employee turnover rose in 2014 by 4 percent due to lower unemployment and an increased number of Millennial new hires. Unlike their Baby Boomer parents, without certain workplace benefits and atmosphere (we’ll get into those later), Millennials do not feel an obligation to stick around. Given the increase in Millennial workers and their expectations for work, it is imperative that dealerships adapt to this reality to create a skilled and consistent workforce that can perform at a high level.

Understanding the MillennialWorkforce and How to Attract Them Regardless of what you’ve heard about Millennials, they’re a group of technologically-inclined and innovative young people — they just have different, evolving expectations of what it means to be an employee. Here’s what they want:

• Consistent training and a career path — They want to learn and progress. Providing training that will let them grow in their roles and progress in their careers is a key way to show that you’re invested in their future, and convince them that they should be invested in your company’s future.

• Clear expectations and regular reviews — The Millennial generation wants near-term gratification. Make sure they know exactly what you expect from them on any given task, and regularly let them know how they are progressing with regular check-ins and informal feedback. Once-a-year reviews with unclear goals will not keep them engaged or committed to your dealership.

• Reasonable work-life balance — Whether this means promoting work-life integration, offering tools and opportunity for mobility or flexibility, or changing the way you staff your store’s shifts – Millennials, more than any other generation, demand to have and enjoy their personal time to pursue interests outside of work.

• Superior company culture — To keep this generation engaged, they must feel connected with the organization in which they work. This is important for retaining Millennial workers, and it’s becoming increasingly clear that it’s essential to the overall success of your business. Creating enthusiasm for coming to work, by encouraging healthy relationships and clearly defining your company’s values and purpose, will attract good workers. Furthermore, once hired, a positive company culture may make them think twice about finding a new job.

Creating Recruitment ProcessesWith Retention In MindRetention is a critical issue for many dealerships, and addressing the matter starts at the moment you begin recruiting potential employees. When it comes to recruiting top talent, the most important factor is ensuring you have a consistent, clearly defined hiring process that not only results in hiring an employee but reduces the risk of turnover and poor performance. A poorly defined recruiting process will damage the bottom line due to the amount of money lost in reduced sales from a bad hire or open position. Consider the following:

• Treat job candidates the same as you would treat potential customers — Be responsive and enthusiastic. If a highly-talented job candidate doesn’t sense that you care, they’ll quickly seek out a fast-acting, more appealing dealership. As previously discussed, Millennials respond well to instant gratification — if you’re not the first to act, you’ll lose out.

• Double-check the language in your job listings — You put substantial effort into making your car listings appealing to customers, and jobs are no different. Without realizing it, your job listings may contain certain language that alienate your ideal candidates. Do your postings put your dealership in the best light? Do you provide information about career paths, benefits and your culture? Great job postings encourage the best candidates to apply and drive diversity that matches your customers. In particular, considering the male-dominated nature of the automotive industry, scaring away female applicants is damaging. To avoid this, remove words with masculine connotations that make your dealership sound like a boys’ club — for example, “rock-star,” “ninja,” “assertive,” “aggressive,” etc.

• Don’t go with your gut; instead, employ a smart hiring system — Your emotional feeling about an employee based on a resume or quick phone call can be misleading. You need to have clearly spelled-out, objective criteria for each job opening. With every bad hire, you reduce employee morale through regular turnover, waste time and money on training and have to start the recruitment process all over again.

Without an understanding of the upcoming generation of workers and a game plan to hire and retain them, you will struggle with turnover and run out of top talent to hire. Implementing the steps to attract and retain Millennials now will ensure the future success of your dealership.

THE MILLENNIALWORKFORCE:A Key Driver to Maximize Industry Growth

888.431.6928 | eleadsales@eleadcrm.com | www.elead-crm.com© Data Software Services, L.L.C. 2015

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JordanBentley national sales manager for Callbright \ 866.865.3175 \ jbentley@autosuccessonline.comsa

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28 read, listen, watch, share, succeed.

FIND OUT MORE AT www.dealerappvantage.comOR CALL US 877-531-2777

This Holiday Season reach your customers anywhere!

Buying a car is a commitment — whether it’s the consumer’s first time around the block or not. To help them feel better about making such a hefty commitment, you’ll need to give your customer relationships some TLC.

Not sure what I mean? Allow me to explain.

Make a Good First ImpressionBefore getting serious with a dealership, customers have to experience an initial attraction. This spark usually occurs when they’re gathering information about your dealership online. To make your prospects feel warm and fuzzy, your Website has to be top notch.

First, evaluate the usability of your Website. Is it easy for consumers to find what they want, or do they have to hunt down what they’re looking for? You’ll also need to make sure that your branding standards and inventory are up to date. Once you’ve made a good impression on your Website, you need to court your consumers so they’ll say “I do” to your dealership.

Put Your Best Foot ForwardSo your Website and digital marketing reeled in the customer; what could go wrong now? Well, if you get complacent, a lot can go wrong. It all starts with a ring… of the telephone. Missed or mishandled calls will quickly turn off your prospects — even after you’ve wooed them with your online presence.

To make sure your employees are upholding the customer service standards of your dealership, train them thoroughly. You can start by recording your best employees’ phone calls to use as training tools. Once new employees have learned your customer service practices, you can enforce them by using speech-recognition software to identify key words and phrases in their phone calls,

such as “ma’am,” “sir,” “thank you” and “have a nice day.” Just like that, you’ve impressed your prospect once again.

Keep the Spark AliveCongratulations! Your prospects are feeling good about the relationship, and they’re ready to commit. But that doesn’t mean that your job is done. You have to keep things interesting to keep the relationship strong. The best way to do that? Ongoing promotions just for them.

Send special discounts and offers to customers to make them feel valued. This could be something as simple as a discount on a tire rotation or annual service. You can even go so far as to personalize prerecorded voice messages with the customers’ names and unique vehicles. That way, you’re sure to win their hearts — I mean, business.

Give me a call or shoot me an email for more tips on giving your prospects and customers a little TLC.

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30 autosuccessonline.com/news/blog

I spent one morning looking up various definitions of the word “urgency” in hopes of helping our team grasp what that means in the work environment. Utilizing an ancient text — a hard copy of the dictionary — I found the word itself invokes emotion. At its core, “urgency” is the “quality or state of requiring immediate action or attention.” It’s not necessarily working faster and longer; it is the intensity and the desire to meet an issue directly. Couple “urgency” with “leadership,” and you have created a remedy for ridding your organization of complacency. Change management expert Dr. John Kotter contends the urgent method is about the way you attack your day or a problem to get to the finish line first, or in our case, first to market, by minimizing the complacency success breeds. Urgent management is driven by emotion as much as it is intellect. The shift from the arrogant attitude of “we know best” must be made to make existing processes better and, in the midst of crisis, urgent leaders see an opportunity on the horizon, and not an obstacle.

Let’s be clear on what urgency isn’t. Urgent change management isn’t reactive. Urgent leaders don’t act out of fear, panic or intimidation from competitors — it’s driven by the desire to win by attacking issues incrementally every single day. In other words, urgent management provides a permanent mindset of constant forward movement. In his book A Sense of Urgency, Dr. Kotter found that most professionals equate “urgent” with its close cousin of “crisis.” There’s this belief that without a “burning platform,” you can never make change happen.

Can you teach urgency? Simply put — no. Urgency is an innate emotion. You can coach one with leadership potential to embrace their communication style, to be a better listener and to be mindful of the impact their words and deeds have on motivating their team. Combining basic leadership qualities with urgency and you create an atmosphere where winning is a necessity — a non-negotiable. The path to winning is a constant, consistent resolve to tackle problems with immediacy — once again — every single day.

The successful organization can easily fall into the habit of maintaining the status quo — the idea of “if it ain’t broke, don’t fix it,” or the propensity to leave certain problems alone and they will work themselves out. In fact, success can blind us to the complacent atmosphere that infiltrates an organization because it is doing so well. Urgent management is based on the belief that every single day we start with the mentality that there are big opportunities

and big problems that need to be tackled now — not when we feel like it, and not when we can fit them into our daily schedule.

A customer service-centric mentality and focus shapes the urgent leader’s goals and drive. They make sure they know their customer and move quickly to meet their changing needs. By pushing the need to tackle problems to the side for others to handle during times of success, you’ll have the negative outcome of your competitors meeting the need of your customers. In other words, rigidity breeds opportunity for your competitor.

Winning takes on a more specific outcome than just beating your competition. The concept reminds me of a scene in the fourth season of the television show The West Wing. Deputy Chief of Staff Josh Lyman challenges Communications Director Toby Ziegler regarding their different approaches to return President Jed Bartlet to the White House for a second term. Josh tells Toby, “He wants to win,” while Toby “wants to beat the other guy. And that was a real problem for [him].” Urgent leadership makes the distinction, as well. Winning in urgent leadership is introspective — focusing on excellence every day while staying true to a company’s identity, goals and strategy. Beating someone is a reaction to the competition’s position — a “keeping up with the Jones’” approach to business. Is your company equipped to execute the competitor’s approach — let alone improve upon it and excel? Beating the competition in urgent management focuses on an outside-in leadership approach; it’s a “one-hit wonder” approach that provides short-term success.

Collectively, the tenets of urgent leadership provide continuous improvement, and the sense that panic won’t drive the decisions and the actions made by leadership and the front-line team.

Urgent leaders need to win. They instill winning attitudes and approaches in their team. When winning occurs, the celebrations are quick and the urgent attitude of “what’s next” takes over. It includes an objective internal measurement of the progress made from the day before and how well you won at tackling an issue. Measuring the daily achievement helps keep the goal of winning on track. For the urgent leader, measuring the movement and holding team members accountable for lack thereof fulfills the leader’s role in urgent leadership: attacking issues when they arise and moving the team forward all day every day.

Notice I didn’t say the action of the urgency needs to be big every day. Urgent leaders and teams need to make some impact, any impact to move forward to the goal of winning. Sustained action is better than reaching the top and feeling as if you’ve reached the pinnacle; that’s when complacency sets in — also known as the “anti-urgent” leadership model.

Be mindful of the roles and skill sets that need an urgent attitude. Not every person in your organization needs or possesses the stamina to move at a breakneck pace to get everyday tasks completed. For those in research and development where being meticulous is key to the overall success of a project, the key for the urgent leader is challenging the team just to make some movement forward every single day. Urgent leaders embrace the methodical steps of those team members tasked with creating and executing the specifics, and view them as a solution rather than a stalemate to progress

Choosing the right team members for any leadership philosophy is tantamount, but even more so in urgent management. Hiring right in the first place creates a huge cost saving. If your organization wants to cross the finish line first, it is your urgent-focused leaders who will get you there.

And finally the commitment to making and inspiring big change every day must be the “new normal” for the organization from top to bottom; it is a mindset, a shift in culture, that leads to changes that matter and creates long-term impact for the company and the customer for the better.

URGENT LEADERSHIP:Why Winning is Better Than Beating the Other Guy

“At its core, ‘urgency’ is the ‘quality or state of requiring immediate action or attention.’ It’s not necessarily working faster and longer; it is the intensity and the desire to meet an issue directly. Couple ‘urgency’ with ‘leadership,’ and you have created a remedy for ridding your organization of complacency.”

http://www.dealermade.com

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SeanV.Bradley CSP, founder & CEO of DealerSynergy \ 866.648.7400 \ sbradley@autosuccessonline.com

I know you heard that phrase, “If you keep doing what you are doing, you are going to keep getting what you are getting.” I can’t count how many times I have heard dealers say, “The definition of insanity is doing the same thing over and over again and expecting a different result.” The crazy part is that I know this, you know this and I know you know this, but dealers still “keep doing what they are doing.” It is December 2015, and the year is almost over. You need to seriously think about what 2016 is going to yield for your dealership. What are you looking to accomplish in 2016? How many units do you want to net increase? How much additional net profit do you want to generate? How much do you want to reduce your average cost per sale in advertising? How much do you want to increase your employee retention and satisfaction? How much do you want to increase your average sold units per salesperson?

Here are some scenarios and ideas on what you can do immediately to set up for a powerful 2016: • Do you realize that 92 to 99 percent of Americans go online before they step foot into

the dealership? Do you also realize that NADA 2015 data says that the average person who buys a car only visits 1.2 dealerships? That means that the phones and Internet are the new “showroom.” Do you still have your entire paradigm focused on the old way of marketing, staffing and selling cars? If you realize this, or have known this for a long time but still neglect to do anything about it, then you need to do something immediately. It is not going to magically change itself.

Solution — Reach out to a consulting company that has expertise in Internet sales, BDC, phone sales and digital marketing. But more importantly, make sure they have experience with showroom as well and making all departments work cohesively together. Don’t make excuses of time, cost or anything else you can think of to validate why you are continuing to settle for mediocrity when you know that, if you can just change your model, you can immediately be more successful and profitable. Just think of all of the revenue you are not making by procrastinating. Even if you never utilized a consulting firm, don’t be scared. Professionals of all industries who want to evolve utilize consultants or coaches to get to the next level.

• Are you aware that, by 2017, more than 70 percent of all Web traffic will be video? As a matter of fact, Google prefers video content more than any other type of content and its algorithms favor optimized video — and will give preeminent placement accordingly. Video on a Google search page is clicked 53 times more than static content. Video emails have a 200 to 300 higher click-through rate compared to static emails. What is amazing is that more than 75 percent of all businesses do not have a video strategy. They do not create relevant, useful and unique video content and feel that they do not need to — and do not plan to. That means that dealers who understand all of this and create and implement a video strategy will have an “unfair” competitive advantage over other dealerships.

Solution – Immediately start a video production (content creation) strategy and start to utilize your unique, relevant video content for: Website content and narration, social media content, “How to videos,” reviews and testimonials, emails, tours (complete with drone footage), walk arounds, comparisons, search engine optimization and more.

• Do you know that your current (conventional) advertising and marketing strategy is not working, and is not effective? Can you truly track to see what you are actually getting? Or, you know that you are overpaying on Autorader.com or Cars.com and you are not getting the right amount of leads for your investment? Are you tired of hearing about “VDP,” impressions

and all the other excuses on why you should keep paying for PPC and online classifieds without the data to back it up?

Solution – Do something about it. Stop paying for it. It’s like that fable, “The Emperor’s New Clothes” by Hans Christian Andersen. Stop pretending like this stuff works. Stop pretending that this stuff is useful. Get rid of it. If you don’t know what to do or how to get rid of it, or if you do get rid of it, you don’t know how to replace it, then find a consultant who specializes in marketing, advertising and absolutely digital marketing. Such a consultant will be an expert in digital marketing forms including Video Search Engine Optimization (VSEO), organic SEO, paid Facebook advertising, social media, PPC, display and banner advertising, retargeting, behavioral marketing, third-party leads and online classifieds, special finance marketing, digital public relations and other forms of online and digital marketing.

Whatever you decide to undertake, develop a trackable, quantifiable and transparent marketing and advertising strategy that can cut your cost per lead and cost per sale down while simultaneously increasing your leads and sales. This is not impossible; it is actually very simple for a skilled consultant who does not have ulterior motives to put together.

The bottom line is that life is way too short to waste time with things that are not effective or things that do not contribute to the growth of your organization. In 1999, a wise manager gave me the book Who Moved My Cheese? by Spencer Johnson. It was an amazing book that prepared me to always evolve and never get left behind and succumb to Darwin’s “Natural Selection.”

If you would like a free strategy session or assistance in helping you put together a tactical plan to get prepared for and to crush 2016, please email or call me.

IF YOU KEEP DOINGWHAT YOU ARE DOING...

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http://www.mydealerworld.com

lsDennisMcGinn founder & CEO of Rapid Recon \ 866.268.3582 \ dmcginn@autosuccessonline.com

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If you still run your recon department on “gut feel” and not metrics, you’re losing money. Metrics — hard performance data — is the roadmap to moving hidden treasure in your recon department.

Manage recon by the facts and you’ll flow significant gross to your bottom line. This article explains how.

How’s Your Recon?Every week, I talk to dozens of dealership managers. These conversations convince me that gut-feel management continues to rule recon. The solution is explaining how recon metrics influence gross.

When the used car manager measures results using retail gross dollars, and not true gross dollars, a false outcome is painted. True gross results when two key recon metrics are subtracted from retail gross, which are holding costs multiplied by each vehicle for each day it is in recon.

Because many managers aren’t clear about holding costs, they tell me their recon is running efficiently, when it’s likely not. A large Midwest dealership believed it was managing a five-day recon cycle, which when metrics were applied showed them at 10 days.

Unfortunately, a 10-plus day recon is common, and doing nothing to shorten the cycle is a gross-killer.

Reduce Holding CostsA typical store that sells 100 used vehicles a month at an average time-

to-market (TTM) cycle of 10 days incurs $384,000 a year in absorbed gross due to that long cycle and daily holding costs. Reducing the TTM cycle to a very achievable four days radically frees up gross with no expense cutting or selling more cars.

Here’s the math, using a holding cost of $32 per day per unit (suggested by NCM Associates’ 20 Group clients): 100 cars per month X $32 per day X 12 months X a four-day recon cycle equals $153,600 in holding costs, not $384,000 from a 10-day cycle as in the previous example — a difference of more than $230,000 in freed-up gross.

The vast majority of dealerships with a “four-day” TTM dialed in actually started with an average recon cycle time of more than 10 days, so that $230,000 per year in added gross calculation shows a conservative result.

Opportunity KnocksTechnology makes automating recon processes so much more predictable, measurable and efficient. The steps below to improved recon operations, however, can be executed manually, with data from your dealer management system.

Here’s a plan for isolating gross from recon so it can flow to yourbottom line:1. Open your eyes — Understand recon as an assembly line: Vehicles

move along as individuals perform functions on them. Anything that disrupts this flow — waiting for parts approvals, forgetting where a car is parked, over-conditioning — add days and costs to recon. Where can you remove or streamline bottlenecks and delays?

2. Watch the clock — Focus on productivity. The rapid flow of cars through recon to standards is the key metric. Approve a more costly part if its ready availability means getting the vehicle frontline ready sooner. Set a daily goal of completed vehicles — and pay techs according to that goal, not hours. Time is not a friend of recon, so shave time where possible.

3. Talk back — If you’re the used car manager, I encourage you to promptly talk back to your service or recon manager when they call, text or email needing spending approval. Every day’s delay is $32 less gross margin — a delayed approval is not just wasting time; it’s wasting dealership resources.

4. Pre-approve repairs — Dealers can eliminate cost from recon by getting the used car manager to agree to a pre-approved spending limit. Access 24 months’ recon reports from your DMS. Categorize repair costs by mileage ranges — under 20K, under 50K, over 75K, etc. Average dollar recon repairs for those vehicles by category; these are recon’s pre-approval spend levels.

5. Share the flow — Recon tracking on spreadsheets, whiteboards or Post-It notes shares with others the work in progress, but keeping these static reports fresh and accurate is difficult. Software that structures recon processes and holds personnel accountable for time and production goals improves flow, visibility, communications and time-to-market. It tracks where vehicles are in the process — even those forgotten in a far corner of the lot — so no car gets left behind.

Managers who focus on reducing days in recon to reduce holding costs are often surprised at how much efficiency can be driven into, and cost out of, recon. Shoot for a four-day (or less) time-to-market and watch gross flow to your bottom line. Let me know your results.

HOW TO FLOW GROSSFROM RECON TO YOUR BOTTOM LINE

34 autosuccessonline.com

Call Us Today! 404.276.4026 | becky@chernekconsulting.com

Don’t Settle for Less! You Can Be More and Earn More! Take the lead!

Your F&I Performance Matters!

January 19th through January 21st, 2016Workshop Facilitated by Rebecca Chernek

9:00 AM – 5:00 PM Hosted by Hilton Garden Inn,

Atlanta NorthPoint

• Increase product sales significantly• Limit your exposure• Reduce the F&I bottleneck• Bank relations are still important — how to get hard deals bought • Enhance customer buying experience• Shorten delivery time• Learn how to ask the right questions that capture the business• Are you ready for mobile devices?• Is your menu keeping you up at night?• The many faces of menu selling and why some will lead you astray• Leasing is back — are your prepared?

“I would highly recommend Becky Chernek for all finance and insurance training. In my 30 years in the automobile business she is the strongest trainer that I have had the opportunity to work with. I will not put a finance manager in the office until they have been through Becky’s program. Her program has doubled my back-end gross and product sales and has kept us compliant. She is an asset to anyone that is involved in her training.” Jamie CobbVice President/Dealer, Gwatney Automotive Chevrolet, Buick, GMC

"One of the big differences Rebecca Chernek brings to her training is that she ties the front end desking process to work with the F&I process like an engine and a transmission working together. Her training produces ‘instant offense: gross, product sales and compliance all at the same time!’" Scott BoggasGM Honda Kentucky Dealership

Register Now, Space is Limited. 404-276-4026 | ccilearningcenter.com

Rebecca Chernek,President, Chernek Consulting, LLC.866-894-1899

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RudyMartin managing member of AutoMark Solutions \ 866.409.6755 \ rmartin@autosuccessonline.com

This is the time of year when most of us are shopping for holiday gifts for our friends and family. If you’re reading this, chances are you’ll buy many, if not most, of those gifts online. Why will you do this? The answer is quite simple really: It’s convenient and easy. Amazon, the planet’s most dominant online retailer, is successful because today’s consumers demand a fast and easy shopping experience — and Amazon delivers it. Consumers know they can find what they are looking for, check reviews and prices, narrow down their selections and make a purchase decision in a matter of minutes.

So, the question we need to be asking ourselves is: Is this how consumers also feel about car dealership Websites and the shopping experience they provide? Of course not. In fact, I think it’s fair to say that we, as an industry, consistently deliver exactly the opposite. Why must the process of online car shopping be so different from the one Amazon provides? I have news for you: It doesn’t.

Today’s consumers desperately want an easier and more pleasant car shopping experience. It is time we provided it. Online shoppers should be able to enter their contact information, trade-in, incentive eligibility and credit rating information once — and only once — to

instantly gain access to all the information necessary to make an informed buying decision. The displayed information needs to include the estimated trade-in value, selling price (including applicable incentives), as well as monthly finance and lease payments, based on their credit worthiness, on any and all vehicles they choose. Let’s face it: consumers don’t visit dealerships to shop for cars any more. The shopping is done online before they ever visit your showroom — and whether they step foot into yours will be determined by the experience they have with your virtual showroom. If you don’t provide them with the tools they need to shop online, someone else will. Amazon provides shoppers with an easy,

intuitive buying experience and consumers reward Amazon by buying from them time and time again. Should a dealership’s Website work this way? The answer is “yes.”

Consumers today are conditioned to expect all the information needed to make a buying decision be available to them quickly and easily. Amazon has blazed the trail and shown us the way. All we need to do now is accept that the days of telling customers, “Come on down and we will see what we can do,” are over — and that’s not a bad thing. This is actually good for both you and the consumer. Transaction times are quicker and negotiations are less adversarial. Your customers are going to come in ready to buy with realistic expectations. The quicker, less-painful sales process has them leaving happier. All of this will help you sell more and retain more of those you sell. The days of cracking skulls may be gone, but so are the days of cleaning up the mess. Dealers who embrace this change and dedicate themselves to serving their customers will dominate in the years to come.

TAKING A LESSONFROM AMAZON

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The same goes for your dealership.Hiring the right people matters. To learn more visit Hireology.com/AutoSuccess

2016

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TimByrd founder & president of DealerRE \ 866.347.6022 \ tbyrd@autosuccessonline.comsa

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What is your plan for 2016?

We have all heard the saying, “If you are not growing, you are dying.” If you are a savvy dealer, you are not hunkered down in a defensive posture. You are on offense, taking it to the competition.

One of the greatest advantages these savvy dealers have today is that most other dealers are sitting around tolerating — or even enjoying — the status quo. They are doing the same things they have always done, depending on the wind and pretty much getting the same results — at best.

You cannot continue to do the same things and expect different results.

I have two ideas that will have an immediate impact: 1. A new reinsurance program with accelerated profit access. I elaborated on this in last month’s

issue of AutoSuccess, for your reference.

2. Improved systems and process, which I will address in this article.

Trainer Eric Melon says the problem most dealers have is a lack of systems and processes that are geared to success. The problem is aggravated because turnover is killing our industry. We spend thousands of dollars trying to recruit salespeople, and once we have them, we are not making sure their training and development is a priority. Dealers are banking way too much on finding the right individuals and not enough on implementing the right processes. Are dealers constantly hiring the wrong people, or are they hiring the right people, but because of the lack of development, accountability and structure in their own organization, they become the wrong people?

According to NADA, the No. 1 reason a salesperson leaves a dealership is due to sales managers. This is the nature of our industry.

The majority of salespeople are looking for customers who they don’t have to sell. They want the easy sale because they are not confident enough dealing with the educated buyer. That’s why many dealers’ closing percentage continues to decline. Sales mangers keep looking for salespeople who they don’t need to develop. “If I could only find salespeople who could just do their job,” is the lament. The fact is, if you want to slow down your turnover and create a higher level of success in your organization, you must develop your middle management.

Do you have a business development center (BDC)? Many dealers want it and the factories are pushing it, and yet most BDCs are a failure. Why? Because in most stores, they are the overlooked stepchildren to which the entire dealership has to make a behavior change. Managers must become proactive instead of reactive. To thrive, they must manage the process daily. The BDC must not only have the responsibility to manage phone and Internet traffic, but also follow up with the customers who left without buying. What about your customers who are not using your service department? Who is calling them? What is your plan to get them back in?

If training is important to you, because you want to optimize your business and want long-term continued success, allow me to share some lessons from decades of experience: 1. Find a company that provides a full curriculum of courses, not just general training. This

allows each specific dealership department to be addressed, giving you and your staff the tools you need to excel in any market condition.

This will give your dealership cohesion, instead of having multiple training companies for

multiple issues. Your store will no longer be made up of isolated teams, but of one team working in concert together.

2. Find a company that has a full-time, formalized training center for your staff, with classrooms, role-play rooms and a BDC.

Online training, or training held in hotel

rooms and conference center rooms cannot compare to a state-of-the-art formalized training facility.

3. Make sure trainers provide digital course notes that your staff can have available at a moment’s notice to refresh, encourage and reinforce. This ensures lasting results.

4. For the highest level of accountability, make sure the training facility has the capability for you, the dealer, to join in and/or monitor any training session live via the Internet.

5. Find a company that provides proven professional trainers with experience working in retail within their respective departments.

Trainers without real-life experience may deliver a good-sounding pitch, but cannot hold a candle to trainers who are actually qualified to step in and do the job they are training you for.

If you are looking to dominate your market, it’s vital to make some changes. Training and development of your personnel with a system that teaches, cultivates and encourages cohesiveness will lead to greatness. Everyone has product, and most think they are good. However, “good” is the enemy of great — so says my friend and automotive business guru Dave Anderson. Strive to be great and you will dominate the landscape.

Including an accelerated profit access program to your improved systems and process will help ensure that you will be annihilating the status quo in 2016!

NEW TO YOU — 2016

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lsDalePollak founder of vAuto \ 866.867.9620 \ dpollak@autosuccessonline.com

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I have bad news to share about the upcoming year.

It’s not that 2016 won’t be good for dealers. Most signs suggest we’ll have another robust year of new and used vehicle sales.

But here’s the problem: Dealers won’t necessarily be making more money in 2016, even if they’re able to sell more new and used vehicles than they did in 2015.

I make this prediction based on three factors that will shape dealer destinies in the coming year:1. Margin compression — The past five years have seen front-end

margins decline by double-digit percentages in new and used vehicles — a trend that will no doubt continue in 2016. This ongoing margin compression owes to ever-increasing levels of competition, operational costs and price transparency in the auto retail market.

2. Supply/demand imbalances — As we’ve closed out 2015, we’ve seen rumblings that factories are purchasing demand for new vehicles by increasing incentives. On the used vehicle side, everyone’s aware that wholesale supplies are growing, a rise that’s expected to continue in 2016. Both trends will make it difficult for dealers to maintain, if not surpass, the level of new/used vehicle performance and profitability they achieved in 2015.

3. Market volatility — Dealers who over-rely on F&I income will face increased profit pressure as captive finance companies, lenders and regulators reduce dealer discretion in loan mark-ups. It’s also likely that dealers will face difficulties if interest rates rise, or if the economy takes a hit from as-yet unforeseen circumstances in the coming year.

In light of this outlook, I’ve been encouraging dealers to take an

honest, no-holds-barred review of their dealership operations. The goal is to identify, and then work to eliminate, operational

inefficiencies that currently impede dealership performance and profitability — and will only get worse if left unaddressed.

Here are three areas that often pose efficiency challenges for many dealers:• Inventory age — Aging units remain a persistent problem in both

new and used vehicles for many dealers. As the market becomes more challenging, dealers will need to become even more age-aggressive. In new vehicles, this mandate means striving to retail at least 50 percent of your inventory in 60 days or less — a bigger challenge (and opportunity) for dealers who traditionally haven’t regarded aging new vehicles as a problem.

In used vehicles, I advocate that dealers maintain at least 50 percent of their inventory under 30 days. The best-performing dealers actually retail half of their used vehicles in this timeframe.

As dealers become faster and more efficient new/used vehicle retailers, they typically find that speed minimizes the risks from inventory supply/demand imbalances and maximizes total dealership profitability.

• Transaction times — I would encourage dealers to aim for average new/used vehicle transaction times of 90 minutes or less. At traditional, negotiation-based dealerships, this benchmark may seem completely out of reach. If so, strive to reduce your average transaction time by 25 percent. Dealers who reduce transaction times see two key benefits. First, they provide a more satisfying experience for customers, who have long wanted an easier, more convenient way to purchase cars. Second, they enable their sales associates to sell more cars in less time, which increases their production and profitability.

Dealers achieve transaction efficiencies by re-thinking the stages or steps in their sales processes, and shifting a greater portion of each transaction online.

• Employee turnover — It’s not uncommon for dealers to see at least 50 percent turnover in their sales teams — a statistic that suggests dealers would sell more cars and make more money if they weren’t always trying to fill empty seats. I would submit the industry’s persistent turnover problem results from a mismatch between candidates, job responsibilities and the in-store culture that greets them on their first day of work. Dealers who address this problem have reinvented their hiring process, invested in management and mentoring programs, and implemented clear-cut career paths that pave the way for longevity and loyalty.

I should note that these areas of inefficiency are not the only ones that merit attention and scrutiny. Each one, however, represents an opportunity for dealers to improve their performance and profitability as retailers, and to capitalize on the challenges and opportunities in the months ahead.

Here’s to hoping that everyone has a great holiday season and an even better New Year!

THREE KEYS TOIMPROVE PERFORMANCE, PROFITABILITY IN 2016

“...I’ve been encouraging dealers to take an honest, no-holds-barred review of their dealership operations. The goal is to identify, and then work to eliminate, operational inefficiencies that currently impede dealership performance and profitability — and will only get worse if left unaddressed.”

DO YOU KNOW YOUR SHOPPERS? WE DO.

CALL US TODAY FOR A DEMO!

800-221-6920

View the status of customer profiles from any web-based CRM.

See the online shopping behaviors of your in-network customers.

When ProfileFuze is integrated with FuzeShield, view previous reviews a customer has written.

Message any dealership employee about a customer deal in progress.

Uncover existing social connections to customers within your dealership.

Expand your reach to include insights about in-market consumers outside your network when the FuzeCast App is integrated with ProfileFuze.

Develop messaging to in-market consumers based on the makes and models they are shopping.

Match top 3 searched vehicles to your dealership’s inventory.

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AndrewDiFeoChris Saraceno Kamran Johnson

parttwo

THEDEALER PANEL

MENTORING:Qualities of Effective Mentoring

The mentoring relationship can be beneficial for both parties — a way for those new to the experience to learn from someone else’s first-hand knowledge, and for those with experience to examine the validity of their own methods. For it to work, though, proper expectations and qualifications must be met.

Last month, we asked our panel about their own personal experiences with mentoring and what they believe the benefits can be. This month, we’re taking a look at what they believe makes for a good mentoring situation, and what the role of the dealership should be in such relationships.

AutoSuccess: What are some qualities that an effective mentor should have? What are some qualities a student should have to best take advantage of the mentoring opportunity?Chris Saraceno, VP and Partner of Kelly Automotive Group: The mentor you choose should excel in the area that they’re mentoring you in. For example: You would not want to choose a person who is overweight, out of shape and who smokes and drinks as your fitness mentor. You want someone who’s in great shape. You want a mentor who lives what they are teaching, a person you can look up to. Likewise, you wouldn’t want a business and finance mentor who is unemployed and has no money.

You want someone who excels; they have to walk their talk. As a student, you have to have the desire to excel in the area you’re asking them to mentor you in. If you have no interest and you don’t want to be a standout in that area, it’s a waste of their time. It’s a waste of your time if you’re not interested in being the best in that area. Once you decide that you do want to be the best, you have to be open-minded and be a good listener. Make sure you take notes, and ask, ask, ask lots of questions.

Andrew DiFeo, GM of Hyundai of St. Augustine: Some of the qualities an effective mentor should have are patience and humility to recognize that it’s not about the mentor, but it’s about the student. They should be able to put themselves in the shoes of the student to see from their perspective what kind of education and knowledge they’re passing along, and make sure the student not only understands the knowledge they’re trying to transfer over, but how to also implement it on a day-to-day basis in their place of work.

From a student’s standpoint, again, humility is very important, putting their ego aside and really having an open mind to what the mentor has to say. Sometimes, as younger people, we think we know how the world runs, but we can’t really know how the world runs until we’ve experienced it, and experience takes time. Mentors have usually lived it multiple times and can draw on those experiences to transfer over to the student.

Kamran Johnson, Sales Manager at Circle Audio Long Beach: To get the most out of the mentoring relationship, both the mentor and mentee should be focused and willing to listen to one another. To succeed, the mentor must have some level of empathy, while the mentee must have a real desire to succeed.

AS: Should dealership leadership take a role in setting up a mentoring program? If so, how would that best work?CS: The answer is “yes,” but it’s also easier said than done. When you do it, it’s important that you have specific, written guidelines, behaviors and daily actions that you expect of the mentor and of the person they’re mentoring. You have to meet on a consistent basis. If you’re the leader and you choose somebody to mentor a new sales consultant or a new manager, and you put those specific guidelines down, then you’ve got to follow up and inspect what you expect. I’ll constantly ask questions, such as, “What are you learning?” or, “What else do you need?”

AD: It would definitely be of benefit to the organization and the staff for the leadership of the

dealership to set up a mentoring program, certainly for the new hires of the dealership, and for some of the employees who have been earmarked for bigger and better things within the organization, as well as some of the employees who, for whatever reason personally or professionally, have fallen by the wayside. A mentoring program is a way to pick them back up and get them back on track and focused on fundamentals of the business, and I think it would work best with long-term employees who have shown a desire to grow in the organization. It’s a great opportunity for employees wanting to move up to show the executive leadership that, “Hey, I can be a mentor and can coach and lead people, and when it comes time for a leadership position, now I have the experience of being a mentor as one of my qualifications.”

KJ: Every dealership is different, and should take their own approach to a program. You can’t force a mentee who doesn’t want it to listen, just as you can’t force a person to be a mentor who doesn’t want to give somebody their time and effort. That being said, however, it should definitely be encouraged at all dealership levels.

Next month, we’ll finish up our discussion about mentoring by getting our panel’s advice for those about to enter into a mentoring relationship, from both the learning and the teaching perspective.

If you have questions or are a dealer who would like to be considered for the panel, please contact us at thepanel@autosuccessonline.com.

“As a student, you have to have the desire to excel in the area you’re asking them to mentor you in. If you have no interest and you don’t want to be a standout in that area, it’s a waste of their time. It’s a waste of your time if you’re not interested in being the best in that area. Once you decide that you do want to be the best, you have to be open-minded and be a good listener. Make sure you take notes, and ask, ask, ask lots of questions.”

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44 read, listen, watch, share, succeed.

What are your metrics of success? That seems to be one of the most common questions today when trying to learn more about what drives someone’s business focus. In other verticals, the metrics can vary significantly based on the size of the company, the products they sell, who their competition is and so forth. But, in the automotive industry, the magic answer to that question is almost always, “Selling more cars.”

When focusing on this metric, we all have spent our time and efforts on leads. Whether dealers are advertising their dealership, sending out an email campaign, bidding on keywords across a variety of platforms, running commercials or highlighting promotions, the goal is to generate leads, leads and more leads. Why? Because leads can convert to car buyers and — ta-da — to selling more cars.

Every day, dealers strive to reach a customer who is closer and closer to signing on the line than ever before. When advertising, dealers have to constantly juggle clicks versus leads.

This is due to the fact that there are a lot of sites out there — and I mean a lot — that promote endless traffic volume and yet all they produce are clicks (that you pay for), with very little conversion into sales. A dealer is then left asking, “What the heck did I get for my money?” The problem with high-traffic volume — that isn’t automotive specific — is that dealers don’t always know what kind of traffic they are getting. That said, the important metric here is quality. The quality of the traffic is often far more important than the volume, because the better the traffic quality, the higher the likelihood that the lead will actually do what it is supposed to — convert into a car sale.

Many companies out there promote high-traffic volume as a way to lure dealers into working with them. However, in my experience, what they really do is simply high-funnel branding. That’s great if a dealer is looking to build brand awareness; but, if a dealer is looking for low-funnel customer engagement, they won’t find it with a vendor whose traffic isn’t automotive specific or whose

traffic doesn’t have purchase intent.

This mixture of quality traffic and volume is something that sets various companies apart from one another. In fact, organizations that focus on low-funnel consumer engagement are the ones that are most critical to a dealership’s success. No matter the size or the location, and no matter the brand or the inventory, to maximize the dealer’s advertising dollars, a focus on low-funnel, relevant consumers with purchase intent is key. Therefore, it’s important to work with companies that provide quality leads and a strong source of traffic that is vetted and confirmed to help sell more cars.

So, the next time you’re looking at your advertising strategy and wondering what you’re getting for your money, ask yourself if the money you are spending is being spent in places that are truly relevant to your target audience, and that your vendor is bringing you the return you want and deserve. If not, it’s probably time to find a new one.

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