Google Encrypts Searches By Default – Cripples Google Analytics

Posted on October 21, 2011 by Arnold Tijerina

On October 18, 2011, Google announced via its blog that it is setting the default search settings for all people signed into their Google accounts to an encrypted search.

What does this mean for you? It means that your Google Analytics will no longer tell you keyword data on any person which clicked through to your site while logged into their Google account. This is very crippling from an SEO standpoint as keyword data is vital in your SEO and conversion efforts. Knowing what people were searching for that lead them to the link that they clicked on which brought them to your sight is valuable information to any company’s marketing efforts.

Keep in mind that Google has offered the encrypted search setting for a while now. The key difference is that consumers would have had to go into their setting and manually change this to an encrypted search and, really, who would really do this? Now, it’s encrypted by default, and, using the same logic, which consumers are going to go into their setting and change it to unencrypted? I believe most people would choose to give out less information than more given the option (which they’ve always had). However, I also believe, just like with Facebook privacy settings, that most people will not go into the settings and change them or learn them for that matter. The average consumer lives by default and if the default is now encrypted, it just means that your Google Analytics reports will contain less key information in them.

There is only one exception to this withholding of keyword conversion data. Encrypted keyword data will still be provided to Google Adword advertisers. That’s certainly a value add to entice more businesses to use Google Adwords and a way to leverage and monetize information for Google.

What are your thoughts?

(Originally published October 20, 2011 on Dealer magazine)

Industry Summit: A Peek into the World of F&I

Posted on October 17, 2011 by Arnold Tijerina

This week, I had the privilege of attending the Industry Summit – which includes 3 conferences — the F&I Conference, the Special Finance conference and the VSCAC conference. These conferences focus mainly on F&I and special finance topics. In this age of internet shopping, however, credit-challenged shoppers are also researching on the internet – whether it’s typical online car research or they’re searching for financing assistance online – so I wanted to see what advice and tips I could learn to share with our audience.

I was quite surprised to find that finance companies are interested in penetrating the franchise dealer market with hybrid “Buy Here, Pay Here” programs. Dealers lose many car deals each month due to the inability to secure financing for their customers. The idea is that the dealer would carry the note for 90 days, then these companies would purchase the notes for $.60 on the dollar. If structured correctly, and with the right program guarantees and commitments to buy these loans from these companies, a dealer could potentially pick up a decent amount of deals they otherwise wouldn’t be able to keep on the road (or put there in the first place).

An example given to me was of a franchise dealer who amassed a $22 million portfolio which he could cash out at any time while making a $5 million net profit. I could see this as an alternative method of financing – a last case scenario – for franchise dealers who are selective in whom they carry notes for or a new way for dealers with a high demographic of these customers to gain more deals and market share. Whether they choose to carry the note past the 90 day period is entirely up to them and, if structured properly, could mean extra profit and deals each month. Many stereotypical “Buy Here, Pay Here” lots went under during the hard times we’re just emerging from and this is a great way to capture market share quickly. I could see many customers who would feel more comfortable and willing to participate in a program like this offered by a franchise dealer versus the small used car lot that these programs typically exist at.

One of the most popular and well attended sessions was a Marketing and Advertising Dealer Panel regarding special finance with Scott Falcone, dealer, World Hyundai Matteson and Tom White Jr., general manager, Suzuki of Wichita. Many of the dealers in the audience wanted advice on how best to operate a special finance department including how to handle & identify those customers early in the process. Scott Falcone said that instead of treating special finance customers differently, they handle all customers as if they were special finance from an investigative standpoint. Tom White agreed saying that the most important question they ask on the meet & greet is regarding source and that usually helps identify those customers who may need special financing assistance.

Scott addressed another question regarding what to do to keep that special finance customer distracted while you are waiting for a call back or bank approval. He strongly suggested that dealers test drive those customers who can’t buy cars. By doing that, they get excited and are more likely to work with you with a co-signer, etc. and they get excited.

Both dealers do spot-deliveries and an audience member asked: “What’s an acceptable take back percentage?” Tom White said that his goal is an 8% take back on spot deliveries. If it’s more than 8%, then they are being too aggressive. If it’s less than 8%, they are not being aggressive enough. Tom White went on to share that their BDC only makes outbound calls on credit leads. Once they started that program, special finance sales went from 12 per month to 39. The retail sales department works all other leads. He went on to say that “the days of being able to take a credit app or look at a credit report are over. Computers are doing the underwriting. Send the deals in. Don’t think or guess.”

The exhibit hall was mostly filled with F&I product companies although I did see a few familiar faces.

Now a couple of fun things…

The coolest “interaction activity” in the hall was, by far, the large game of Jenga constantly being played in the ETE REMANbooth. I “almost” won that darn game. We ended up standing on chairs just to place the next piece on top but, in the end, the employees won. I still smile when I think how brilliant that game was for them. Everytime a game was lost, a ton of 2×4 planks came crashing down causing a lot of noise which could be heard in the whole hall and attracted a lot of attention.

And the coolest swag:

… a sweet car from our friends at DealerTrack! Thanks again for the car! My 5-year old has been playing with it NON-STOP since I got home.

Thank you to all of the people involved in inviting me to the conference – Ed Bobit, Dave Gesualdo and Greg Goebel – it was a privilege to attend and get an insight into the world of F&I and special finance.

(Originally published September 30, 2011 by Dealer magazine)

Dealers In California May Be Forced To Change The Way Salespeople Are Paid

Posted on July 29, 2011 by Arnold Tijerina

In a class action lawsuit filed on June 21, 2011 against AutoNation (Santa Clara Superior Court, entitled Lilly v. AutoNation, Case No. 1-11-CV-203569), attorneys are claiming that AutoNation is in violation of the California Labor Code by misclassifying commissioned sales reps as exempt from overtime and, in addition, issuing deduct vouchers post-sale for losses in commissionable gross due to repair or service costs incurred.

It’s standard practice in California to consider minimum wage as a “draw” against commissions. This hourly wage is only paid if the salesperson’s commissions for any pay period are less than commissions earned (ie. they would get the higher of the two amounts – commissions or hourly wages). Many dealers “settle up” at month end with the salespeople meaning the view the commissions/hourly wages on a monthly basis (versus a pay period). California labor law mandates that overtime be paid for any hours over 8 in a DAY, not by 40 hours in a week. (ie. If I worked 12 hours the whole week but all in one day, I would be due 4 hours overtime even though I only worked one day that week.)

We all know that salespeople work A LOT especially hungry ones. Many salespeople who aren’t making a ton of commissions will make sure they work a lot of hours to insure that they get a decent check in the first place. Of course a salesperson that is getting paid hourly too many times has a short lifespan within a dealership.

Now onto the deduct vouchers. Dealers in California pay commissions in one of two ways: upon approval, or upon funding. Most dealers pay upon approval. This is designed so that salespeople don’t have to wait forever to earn their paychecks and dealers don’t have to cough up minimum wage while the salesperson has unpaid commission vouchers pending funding. It’s also pretty common that grosses decrease post-sale for many reasons: a dealer has trouble with funding and/or has multiple approvals, spot-deliveries based solely upon credit, repairs and due bills completed post-sale, unforeseen bank fees, option contracts cashed in, back-end product cancellations, etc.

Typically, since vouchers are issued upon approval, those vouchers are issued based upon the gross at the time of delivery and/or approval and included in the salesperson’s check for the next pay period. If dealers cannot issue deduct vouchers for loss in gross, this will force dealers to restructure pay plans as something that was spot-delivered with a high front-end gross that gets cut back due to financing issues or any of the other reasons mentioned above, could go from a nice voucher for the salesperson to a mini. If the dealer continued to pay in the way that they are now, and could not issue deduct vouchers, they would risk losing money by issuing commission vouchers prematurely.

Then you have to consider that a sales manager would be forced to structure the deal differently taking into consideration potential cut-backs to take into account the future inability to issue a voucher. The only way to structure a new pay plan without risk to the dealer would be to issue the voucher upon funding which would open the dealer up to the possibility of having to pay the salesperson hourly wages (including overtime), while the salesperson had unissued commission vouchers pending funding. A salesperson who knew how to game the system and/or a passive F&I manager could further complicate things while awaiting stipulations from the customer.

In any case, dealers in California need to watch this pending litigation carefully as it could have a great impact on how they compensate their sales staff and, if the lawsuit is successful, would open up ALL dealers in California to future lawsuits for the same reason.

Right now, AutoNation is the only target, but your dealership could be next.

(Originally published July 22, 2011 on Dealer magazine)

Why The First Car Dealership Groupon Failed

Posted on July 21, 2011 by Arnold Tijerina

In a first, a dealership in Michigan partnered up with Groupon to offer Groupon’s first car buying groupon. The deal offered was $500 off the purchase of a vehicle for $199. Keep in mind that Groupon typically takes 50% of the price of the offer (in this case about $100) if the Groupon is successful (ie. meets the minimum purchase requirements). So in the event that the minimum of 10 deals were sold, this promotion would have cost the dealer $1,000. Not bad.. IF 10 cars were sold.

The deal failed. Why?

In my opinion, there are several reasons.

First, any kind of “deal” needs to have value to a consumer. This deal didn’t have that because consumers “expect” to negotiate with the dealer and $500 off the purchase of something that could cost $10,000-$40,000+ is just not “enough.” The deal itself cost $199 so, in reality, the consumer is only receiving a $301 discount.

Second, the offer needed a minimum of 10 people buying it for any of the 4 people that DID buy it to be able to use it. Since only 4 people bought it, those 4 people were never charged the $199 and the offer was never “live” for them to use. Obviously, if someone is willing to commit to spend $199 to get $301 off the price of a car, they are not only planning on buying one, but they are planning on buying it from THAT dealership. Seeing as the deal quantity wasn’t satisfied, you now have at least 4 people who think that either A) the deal isn’t a good one; B) something is wrong with the dealership; or C) all of the above. I highly doubt Groupon would provide the dealer with the names & contact information of those 4 people as that would circumvent Groupon getting any of the money.

Third, this Groupon, being the first of its kind, got some great press yet, when contacted, the General Sales Manager didn’t respond to inquiries. Those would have been golden opportunities for some exposure they wouldn’t have been able to buy. Rather than “seize the moment,” if you will, and take advantage of those opportunities, the General Sales Manager chose to engage potential buyers of this deal straight on Groupon in ways that, I feel, would have DETRACTED from the perceived value and may have actually discouraged customers from participating. Here are some of the comments he left:

VALUE GUARANTEE OFFER!!!!
In the unlikely event that we are unable to come to an agreement on a vehicle purchase/lease, for whatever reason, I will honor your voucher toward $199.00 in our service, parts or body shop departments. Purchase accessories, have routine maintenance done or have those annoying dings, dents and scratches repaired.

So, now the General Sales Manager is saying pay $199 for the coupon and, even if you don’t buy a car, I’ll honor the coupon in our parts, service or body shop… in the amount of $199. Where’s the value there for a customer? That’s just pre-paying for things. Give me $199 and you can have $199 worth of “stuff.”.

William P visited our store yesterday. He selected and test drove the vehicle he was interested in. He worked out all of the pricing details with our sales staff until he was satisfied with the pricing. He THEN AND ONLY THEN explained he had purchased the Groupon voucher but needed a vehicle immediately. We reduced his amount due by $500.00 and honored the voucher in order to accommodate a customer. He took delivery today. We’re still confident that the sales requirement will be met.

This comment was left BEFORE the Groupon was satisfied (ie. 10 deals were sold) which further reinforced the fact that customers really didn’t need to purchase the Groupon to get the $500 discount since the above referenced customer, who may have “committed” to purchasing the Groupon, ultimately was never charged anything for the Groupon since the minimum quantity sold wasn’t met, making the Groupons invalid.

So, while customers are bantering within the comments of the deal over the true value of the Groupon, the General Sales Manager chose to try and convince everyone it was a really good deal and that they should buy it by making statements that detracted from the value of the offer and, at the same time, failed to take advantage of the free exposure. There were almost 50 articles written about this offer. All of which could have been turned into golden PR and marketing opportunities for the dealer – if the dealer had responded.

This is a perfect example of why you should carefully analyze any deals/social media offered on such a large scale. Many dealers have website pop-up coupons that have the same offer “$500 off a car.” In fact, this particular dealer has a STILL LIVE “special offer” pop-up which features the Groupon offer (even though it’s now expired), even further detracting from the value of the Groupon.

I’m not surprised that this offer failed. Groupon is ultimately in the business of making money. Since the deal r
equirements weren’t met (meaning nothing was sold), Groupon didn’t make any money further reducing the chance that they will participate in any future similar Groupon offers by dealers.

If you’re considering trying to run a deal via social media or bulk offer sites (ie. Groupon, Living Social, etc.), you need to make sure that the deal is truly a good value for the consumer and only offered via that promotion. The dealer could have leveraged this deal in many ways even if they didn’t sell any cars from it. As you can see, while this deal is not available to buy anymore, it still exists in internet-land both on their website and via search engines and it’s even on the first page of a Google search for “Lafontaine Auto”. This is almost as bad as having a negative review because it plants the seed to a prospective buyer that $500 off a car at your dealership isn’t worth $199, which, by extension implies that a $301 discount isn’t valuable.

Don’t jump into social media unless you know what you’re doing. If you do, your promotion can backfire, just as this one did.