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Posts by Bill Playford
The Terminator franchise has been one of the most successful entertainment series in history, ranking up with the Toy Story trilogy, the Lord of the Rings trilogy, and even the original (and best) Star Wars trilogy. If you’ve been living under a rock, or are Amish, and haven’t seen the Terminator, it starts in the near-future where an artificial defense intelligence system becomes self-aware. After the scared military operators tried to pull the plug, the system (Skynet) decides that humans pose a threat, and summarily launches a nuclear assault on humanity. It’s just the type of stuff you want to talk about with your kids before bed. I’ll be back to the Terminator reference in just a bit.
As with last year, SXSW Interactive had some real face-melting presentations. Whether it was in the title or not, geolocation, virtual display of reality, speech recognition, gesture input, and artificial intelligence pervaded many of the sessions. What this means is that location-based services are about ready to go into overdrive. Although, I know a lot has been written regarding location-based services (LBS), including a recent piece by Joe Webb and DrivingSales’ Eric Miltsch, I got to hear about the future of these services from those who created them. I'm here to tell you, those services are not as simple as they seem.
At face value, these applications look like games, or a means to get hammered with your friends in Vegas. However, most of these tools have already moved beyond the game element, and are starting to drive value for retailers. The key thing you need to understand is that these platforms that we are using today are not permanent. The current technology still cannot support the true potential. Most of the LBS technology we are using today will be obsolete in a matter of months, and will be utterly antique within a decade. The millions of users who use LBS technology everyday will continue to jump from platform to platform because they find it valuable. So while I won’t get hung up on the platforms or the different services, I will tell you this: If you are not using LBS, you will be ignored.
Why would I make such a bold statement? The answer is simple: In just a matter of months, augmented reality hardware will be widely available. For those of you who have seen the Terminator, you will soon have the means to see like the Terminator. You will be able to scan objects by simply looking at them, with relevant data popping up in your vision to help you make decisions. Military jets have utilized this technology for a few decades, projecting critical data onto heads-up displays, and even a few cars have adopted this technology. Soon services such Wikipedia, Google, Facebook, Wolfram Alpha, and Foursquare, can, and likely will, supply their data directly onto your eyeball. People won’t just see a car lot anymore - they will see OEM information, vehicle data, pricing matrices, incentives, customer comments, and ratings - all without lifting a finger
Before you quit your job, realize that this technology can also be used to your advantage. Remember that CRM your manager has been bugging you about? What if that technology was leveraged in an augmented reality environment? Imagine if a customer’s name, current vehicle, time of last interaction, service visit frequency, website activity, family information, etc., appeared right next that customer as soon as you looked at them. How much easier would your job be? Would you start taking better notes if the information would automatically be recalled later? Would you terminate skating coworkers? I bet you would.
The good news for some, and the bad news for others, is that augmented reality will be available to the masses come Christmas time. Google will be offering glasses that will be connected to your Android device, and will project its Places and Latitude data into the users field vision at the end of the year. Other hardware and software is being evaluated, and will available next year. Contact lenses offering the same technology have already been tested, and will soon follow. Even without the glasses, there are already enough smartphones for nearly every man, woman, and child in the world, and the technology exists to automatically display alerts on those phones. The Internet age is just hitting its stride.
How do we prepare for this onslaught the future? By being better today. Claiming your dealership’s Foursquare/Places/Yelp/etc. location is the first step, and frankly it’s not enough. Understanding the users behavior is the next, and most crucial, step. Even without adding users as friends, you can still gather data about their destinations, achievements, tips, and how many friends they have. If you are able to “friend” them, you can uncover more useful information. Understanding how to navigate this information will allow you to see how your customers interact, what they may say about you, and find out how loyal they are to other businesses. All of this information needs to recorded. Right now people have to take the time to gather information about your dealership. YOU must begin capturing just as much data and developing just as much software before you get overrun as it will be the only thing to save you in the future. There is no avoiding it. Take advantage of today’s technology before customers can gather information automatically, tomorrow.
Ignoring technological advances does not make them go away. Consumers take advantage of new technologies every single day. They buy a car every three years. By not embracing these changes, you accelerate the way these changes impact your business. You have created several opportunities for other companies to exploit your desire to keeps things the same. Don’t let the machines beat you. Take every opportunity to learn about new technologies on your own. Use change to your advantage. As it is with the Terminator, technology will just keep on coming. You can’t stop it.
Periodically, we receive an email or a phone call from an ISM wanting to know how to increase their closing ratio from 30% to 40%. I often have to bite my lip in order to prevent myself from laughing hysterically. Invariably, I start to ask how that dealership is measuring its closing ratio. However, as I am asking that question, I am always asking myself why isn’t there a standard equation for measuring closing ratio?
Let’s think about other forms of measurement, for a second. Although arbitrarily determined, units of measurement have been defined, agreed upon, and accepted for almost everything you can think of. Temperature, length, weight, sound pressure, luminescence, even spiciness, can all be measured. Why? Among many reasons, it’s a way of replicating a result. Imagine Shaq’s “pinch” of salt vs. your grandmother’s, and you’ll get the point. Without using standard units of measure, we can’t replicate the results that another has experienced.
If we can’t replicate the results of another’s success, how can we improve upon it? We’ve all been to conferences where one ISM tells another ISM that he’s closing at a 17.48% closing ratio, while another ISM is stating that they are closing at a 103% closing ratio, while another ISM walks up to them, and quizzically mutters that they are only closing 4%. Who’s right? They all are. Why? Because every ISM seems to have their own equation for calculating their closing ratio.
The simplest measure of closing ratio is sales divided by opportunities (leads) in a given time-frame. I refer to this as a Gross Closing Ratio (GCR). Many times, this simplest of closing ratios, yields a result that isn’t good for one’s self esteem (given the traditions of bigger is better bragging rights in the car business). Self esteem can be further battered by going to a conference, or from reading the different forums, where people can endlessly brag about their closing ratios without the substantiation of results and equations, or divulging their lead-source mix. So ISMs the world-around create complex equations to measure closing ratios that show impressive results so that they can feel like they can offer comparable results.
I have totally been guilty of this. When I first started in the business (before the magazines and forums), I came up with a formula to measure my monthly performance. I copied and pasted the data from the lead buckets in CarPoint (then AVV, and then BzTrack) onto a spreadsheet. I created an equation that netted out all of the leads that were not true opportunities that month (i.e., bogus contact information, people searching for credit approval, people who were 30+ days out, etc.). In my mind, I wanted measure myself against the guys on the lot, and I figured that they didn’t get the same “riffraff” I did. I would divide this number by sales, and miraculously, I closed as well as the most seasoned lot-guy we had. It also gave me a 11-13% bump compared to my GCR. Too bad I didn’t have an Internet forum to share my triumphs on.
However, as I moved on to corporate Internet process development, and then on to technology, I came to realize what the lack of standards really means. When I began to start reading the emerging automotive Internet sales forums, and especially after I started attending the conferences, it didn’t take long to realize that there were no hard-and-fast rules on how to calculate closing ratio. At the risk of causing a stir, I’d go as far as to say it borders on urban legend for some. Given the fact that I’ve analyzed data for well over 400 franchises, just counting the corporates, I’d say often times retail personnel and their management are presented the statistical outliers, as opposed to the norm. Since there is no universally recognized or sanctioned equation to measure automotive Internet sales closing ratio, everyone is right. This is tantamount to declaring myself the tallest person in the world, but not using feet or meters as a measurement, or offering any mathematical equivalent. Without agreeing on the math, we cannot objectively compare anyone’s results, let alone replicate them.
The automotive Internet sales closing ratio is just one measurement that could use standardization. I am hoping that at some point in my lifetime, or before the Yellowstone volcano erupts, we will have a sanctioning body to govern our automotive Internet sales standards. If you honestly want to help someone get better, be more transparent with your calculations so that they can better measure themselves against your success. If we all use the same math, and you’re still on top, then you can shout it from the rooftops. In the meantime, keep asking questions about how your peers are calculating closing ratio; what leads to include or exclude; what time-frames to consider. It’s OK to call BS. Let’s come up with an equation that everyone can agree upon. Here’s looking at you, shorties.
A couple weeks ago, I was brought in to consult with a dealer group on the East Coast. As with most people, I passed the time by reading a book. On this particular trip, I read the Lean Startup by Eric Ries. One of the concepts that is used throughout the book, is the Pivot, and the practice of pivoting. In essence, pivoting is understanding your original vision is flawed, gathering all the information gleaned while discovering the flaws, and moving in another direction to maintain a growth trajectory. In layperson’s terms, it’s setting off in one direction, realizing you are lost, and remembering the land marks you passed to get back in the right direction. Without realizing it, we pivot continuously throughout our daily lives, however we rarely apply that concept to our businesses.
On the flight home, I realized that many dealerships have never pivoted since they created their Internet operations. The management took (what they understood at the time to be) best practices, and utilized what resources they had available to build an Internet program. For some, it was round-robining the leads to the traditional sales staff. For others, it was creating an Internet Department. Yet others, thought a BDC would work best for them. From an outsider looking in, it looks like many dealerships ordered the Processus du Jour and are still suffering the from the indigestion.
Let’s eat something a little more digestible. We were all taught from a young age that plants need sun, soil, water, and air to grow. If that were really the case, we could take that free fruit basket that your lead provider sent you for Christmas, dump it out behind the employee parking lot, and grow a lush orchards of biblical proportions. If you’ve utterly failed at gardening like me, you understand that soil composition, species, climate, shade, moisture, insects, ground cover, nurturing, and many other elements play a critical role in the success or failure of a garden (luckily my wife loves to garden!). Simply taking seeds, and planting them in the soil is not enough. Sometimes a transplant will suffice, while other times, you have to till everything under, and wait for next year. Gardeners make hundreds of pivots every growing season to maximize the fruit of their labor (shameless pun), just like car dealers should be making hundred of pivots to maximize human resources, tools, customer service, and Internet market growth.
Operating a car business online is not a decision: It’s a commitment. You can’t just align your staff, create a department, throw the seeds in the backyard, and expect immediate success. You need to make mistakes to learn. You need to pivot when know you’re heading in the wrong direction. Just because it works for someone in your 20 Group, doesn’t mean an orange tree is going to grow in Wyoming. Make a commitment, fail fast, learn from your mistakes, and make the necessary decisions before it becomes too expensive, or worse, becomes too late.
Now go make your garden grow!
As the vilification train continues to carry-on full steam ahead (not going to mention the hated company du jur), I ask myself, why aren’t dealers looking at themselves in the mirror? No one holds a dealership at gunpoint to utilize their products. I know I rant about this a lot, but when are we, as an industry, going to take responsibility for our own actions? We research every facet of our business, yet don’t take the time to research the people we do business with. For an industry that practically invented selling, we get duped all of the time.
Instead of grabbing our torches and pitchforks every time an outside company wants to disrupt the car business, let’s instead think of all of the reasons companies want to replace automotive sales people (they regularly get outside funding to do this, for $#&@’s sake). Let’s reflect on why the general populace has such a skewed and negative prejudice towards the dealer community. Let’s stop thinking in terms of PVR and start thinking total lifetime value of a customer. Let’s lift ourselves up.
Whether we like it, or not, the world has changed. Pandora’s box is already open. We can’t go back. Let’s embrace the continuing change in buying habits (REMEMBER: Every minute, people gladly pay more not to shop at Walmart, eat at McDonalds, or drink Maxwell House). Let’s add value. Let’s earn our money. Let’s set a benchmark in reputation. Let’s take away all of the negative ammunition anyone can use against us (venture capital money, or not). Let’s stop being the victim.
The best days are ahead of us, friends. Are you going to be a driver or a passenger?
It occurs to me regularly that many times we are rewarded in the life for things that we may or may not deserve. We slip into a close parking spot after someone just drove by it. We get pulled over for speeding and avoid a ticket. We use gambling winnings to pay down debt. In many situations we can do everything wrong, but in the end, we still receive a reward for our actions.
I equate this activity to the way airlines treat air travel. When you boil it down, the airline’s job in the equation is to get you to a destination (it doesn’t have to even be the one on your ticket), alive and unscathed. It doesn’t matter when you get there, or even how you get there. Wherever “there” may be, if you make it, the airline chalks up a W.
What happens to you, personally, physically, or emotionally, doesn’t really matter in the equation. If you have to wait three hours longer than intended to board the plane, it doesn’t matter. If they run out of water on the flight, it doesn’t matter. If your connection is cancelled, requiring a day or more of layover, it doesn’t matter. If your luggage is lost, it doesn’t matter. If you have a nervous breakdown on the flight, as long as you don’t appear to be a threat, it doesn’t matter. As long as the plane takes off and touches down without disintegrating in the process, the airline chalks up a W. The passenger chalks up an L.
This same scenario, albeit less dramatic, takes places every day at car dealerships around the nation. Despite dropping the ball repeatedly throughout the entire sales process, if a vehicle (any vehicle) rolls over the curb, it’s a W. Like the airline passenger, it doesn’t matter how the customer was treated, how many members of the staff they had to talk to, how much money was lost throughout negotiation, how many “promises” had to be made throughout hours of back-and-forth, if a transaction was made, sales people are slapping high-fives and exchanging back pats.
I refer to this is as “just get ‘em in” syndrome. By the simple act of convincing a potential client to come down to the dealership, if the collective effort of the dealership sells them a car, it is somehow a victory, no matter the pretenses. “Just get ‘em in” syndrome has been stunting the growth of Internet operations since day one.
For many, the initial draw of the Internet side of the business is the precision of the numbers, and the perceived scalability of operations. Unlike walk-in traffic, demand can be predicted, and even supplemented if need be, to maintain a relatively steady stream of interested parties. Advertising sources are plentiful, and direct actions can be attributed to impressions. Every month’s activities can be broken down and analyzed to look for deviations in patterns. It has always been imagined to be a sales machine.
If an Internet sales strategy is executed properly, it should act as a sales machine. However, with all of the capabilities the Internet has to augment any dealer’s business, like a machine, it’s only as precise as the quality of its components. If a machine is working properly, it repeats the desired results, over and over, with little deviation in quality. When the individual parts inside the machine begin to fail, the repetition of desired results begins to fail. Some consider maintenance vital, and proactively fix or replace components to preserve precision. Some use duct tape and a magic marker to mask results. Some use bonus miles to apologize for rude flight attendants. Some just get them in the door.
If your dealership truly wants to be successful on the Internet, it should stop focusing on the final destination or the end product, and instead focus on what it takes to get there. If you’re thinking in terms of machines, think about all of the actions it takes to create a perfect widget. Think of all of the precise measurements, the wear and tear on tooling, and the sequence of inputs workers have to make. If everything falls within spec, you have successful results day-in and day-out.
If you’re thinking in terms of air travel, think about a free entrance to the Platinum Club. Then, think about a free upgrade to first class, an on-time departure, and an early arrival. When you deboard the plane, the senior pilot then offers you a sincere thanks, and a firm handshake. Think about everything going better than expected. As a passenger, everything went the way you wanted it. For once, it’s you who gets to chalk up the W.
After a couple weeks of decompression from Vegas, I’ve had a few sleepless nights to think about what I learned (remembered?) from my trip. It seemed that calls for branding were even louder than last year. As I listened to said calls, I looked around the room to gauge reactions. Some people nodded in approval, while others looked at each other with a quizzical look on their face, while others mindlessly tapped away on their iPhones. Over the years I’ve had many great discussions regarding branding strategy (When Business People Go Wild, I know). I went on a bit of a tirade on the subject last year, and it looks like it’s time for another one. It’s pretty clear that branding needs to be empirical. If you can’t touch it, feel it, smell it, taste it, then you can’t pass those senses along to potential clients.
Defining a brand is hard, which is probably why so few companies do it well (I’m going to go a little academic on you, so consider yourself warned). Webster’s has a few definitions for brand: a mark made by burning with a hot iron to attest manufacture or quality or to designate ownership; a printed mark made for similar purposes (trademark); a class of goods identified by name as the product of a single firm or manufacturer (make). Our oft quoted pal Seth Godin goes further, stating: “A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another. If the consumer (whether it’s a business, a buyer, a voter or a donor) doesn’t pay a premium, make a selection or spread the word, then no brand value exists for that consumer.” In his newest book, “the End of Business as Usual,” Brian Solis came up with 9 Criteria for Establishing Brand Essence: Focus, Feeling, Individuality, Experiential, Consistency, Credibility, Longevity, Personal, and Portable. If you stayed awake long enough to read these different definitions you probably realize that it’s safer to take the 30,000 foot view.
Since we all can’t be Nike or Apple, let’s do an exercise. In Guy Kawasaki’s book “Enchantment,” he mentions his “Enchantment Hall of Fame” to get one’s creative juices flowing. He lists the following categories: car, Macintosh, airline, city, book, political leader, actress, engineer, TV host, female blogger, male blogger, singer, parenting, architecture, and clothes (I’ve included Guy’s list, as well as my own, below). I’m going to hijack Guy list for the purpose of example. Please proceed carefully: it’s not the fastest car, the hottest actress, the best band, or clothes you aspire to own. Just answer the questions (if you’re too cool for school, feel free to skip ahead):
|Car||’65 Mustang||Ferrari 288 GTO|
|City||Istanbul, Turkey||London, UK|
|Book||“If You Want to Write,” by Brenda Ueland||“Infinite Jest,” by David Foster Wallace|
|Political Leader||Nelson Mandela||Harry S Truman|
|Actress||Queen Latifah||Natalie Portman|
|Engineer||Steve Wozniak||Adrian Newey|
|TV Host||Mike Rowe||Jeremy Clarkson|
|Female Blogger||Jenny Lawson||Amber Naslund|
|Male Blogger||Robert Scoble||Christopher S Penn|
|Singer||Corrinne Bailey Rae||Layne Staley|
|Parenting||Adopting Children||Natural Biology|
|Architecture||Antoni Gaudi||Frank Lloyd Wright|
|Clothes||Aloha shirts by Anne Namba||Brooks Brothers|
I agree that some of these categories aren’t things that readily come to mind, however that’s why its an exercise. I’m also not going to argue with Guy Kawasaki because he has a bajillion followers in seven different galaxies, and more than 100 pages of reading after this passage. But let me ask you, can you can you give me at least five reasons why you chose your pick? Here are some easier ones for you:
|Restaurant||III Forks Austin, TX|
|Hotel chain||Marriott (JW)|
|Sports team||The Detroit Red Wings|
Take all your picks, and start asking yourself these questions:
- How do your choices/products make you feel?
- What memories do you have associated with them?
- What are you consuming?
- Where are you consuming it?
- If you have the choice, why are you buying it there?
- Do you feel a twinge of guilt when you do not go with your picks?
- Do you get a feeling of disappointment when something changes?
- Do you feel the need to share with someone at the company when your expectations aren’t being meant?
- Who are you buying it from?
- Where was it made?
- Who made it?
- How was it made?
- Who started the company?
- Where was the company founded?
- Do you ever go with the cheaper option?
If you can’t possibly answer these questions on a regular basis, it’s time to start. Let’s face it: these are gut-questions. These are also the same questions your customers have about you, as well as the products and services you sell. As consumer-facing automotive sites continue to consolidate, and the reliance on social media becomes stronger, the amount of differing opinions will continue to shrink. You need to understand the fundamentals of branding before it’s too late.
Learning what it takes to exude brand from everything you do, takes a great deal of time, consistent effort (ask Tracy Meyers if it happened overnight), and a ton of energy. Hopefully, by going through this process (and practicing) you will not only have a better understanding of your own tastes, but will begin to understand all of the dimensions of a strong brand. Continue updating your hall of fame. Who knows, maybe next year you will be the one doing a brand presentation.
When I flipped on the TV this morning, I was greeted by an infomercial purporting the next breakthrough in fitness training. We’ve all seen them before, promising dramatic results in 90 days; working where others have failed before. Despite the fact that these infomercials have been dominating American morning and late night television for decades, the rest of the world still calls us fat.
Twenty seconds later, I flipped the channel to something else. The first commercial that came on was for a revolutionary new supplement that works within seconds, and “changes lives.” What really hit me was the bold yellow letters stating that is was doctor recommended. Would a medical doctor really publicly recommend something without FDA approval? Please…
My generation has been bombarded by these commercials for our entire lives. Biggest, largest, most, greatest, best, number one…we’ve heard it 1,000,000 times before. We have no choice, but to be skeptical. Person in a white lab coat claiming to be a doctor, seen it. D-list celebrity endorsement, heard it. BS, smelled it. We’ve nearly gone deaf from the boy crying “wolf.”
Falling into the abyss of ubiquity is now measured in seconds. Continuous radio bombardment has just become noise, that is, if you listen to terrestrial radio anymore. DVR has all, but killed TV commercials. Have billboards regained their impact from the fifties? How about those sandwich board spinners? How about the people on the side of the road freezing/roasting in the company branded t-shirts? Balloons? Inflatable gorillas? Gorilla suits? Do any of these things get your attention anymore? Not only are these “me too” techniques tired, but they simply blend into the texture of everyday life.
It only took a few generations, but advertising fads are over. Now many will groan that (the much maligned) social media is a fad (as was the Internet). I’ll be the first to say that many of the Facebooks, Twitters, and Foursquares of the world will collapse, be acquired, or evolve into something else. However, the visibility and amplification these companies have given John and Jane Public have utterly disrupted media as we know it. We no longer have to depend on clever marketing from Manhattan to tell us what we want. With the few strokes of the keyboard we can get advice from folks all over the country about where to eat, where to visit, and where to shop. Folks just like you and me. If they were alive today, guys like Marconi, Tesla, and Farnsworth would probably be pretty perturbed by this.
However, unlike most guys, Marconi, Tesla, and Farnsworth would’ve taken the time to learn how to use these social channels before jumping in headfirst. Despite the writing on the wall, many car dealers still stick to the establishment; cranking out TV and radio commercials touting the newest, biggest, mostest, and bestest. Those who’ve heard about many of the new-media services, have taken to cranking out posts touting the newest, biggest, mostest, and bestest. These “leading edge” dealers seem to be more concerned about being on the new-media services, as opposed to reaching out to those who turn to these emerging services as respite in the first place. Keep chasing people with stuff they don’t want to hear, and they’ll just keep running away.
The alternative is to embrace the paradigm shift. Open your arms to those who are tired of being chased. Take off your white lab coat, and become a person. Fire the D-List celebrity, and promote yourself. See through the whizz-bangery of technology, and use it as a common thread to connect to people. Turn off your inflatable gorilla, and tell someone the story about it. Stop looking for something to believe in. Become someone to believe in.
How often is it that your non-automotive friends want to do something related to your automotive career? Besides helping take a few layers of rubber off a new Camaro SS, probably not that often. Needless to say, I was pleasantly surprised when some of my non-automotive friends enthusiastically asked me about going to the Driving Sales Executive Summit. That’s right: the same folks that silently plead for me to shut up about the car business actually want to attend a conference for the car business.
Despite the fact that this will read like a commercial, it’s not intended to. The fact of the matter is that I support any retail automotive event that seeks to help dealer personnel become better at what they do. While some events cover the basics, and others seek to introduce new solutions, DSES always offers a glimpse of the future. Moreover, it seems to take into account the consumers’ angle. Since I’m pushing a decade in the car business, and my experience is 99.9% digital, I don’t like being stuck in the echo-chamber. It’s one of the few automotive conferences that get me excited (and oddly enough, doesn’t have a military theme).
What makes it exciting? Two words: thought leaders. While other conferences take pride in featuring automotive legends, DSES consistently features up-and-comers from the business community at large. Although some may call it highbrow, it’s a place where you might get social media advice from someone with 900,000 followers versus someone with 900 followers. You might get business advice from leading business school faculty versus someone who inherited a turnkey operation. You might get technology advice from those who work in Silicon Valley versus those…who are, um…really good sales people. It offers the perspective of business professionals speaking about automotive versus automotive professionals speaking about business.
As you start to plan the fall conference season, and you are forced to pick & choose, evaluate what you need to get better at. Do you need to get a broad spectrum of basic concepts? Do you need solutions that can be implemented today? Do you need to evaluate new tools? Do you need to learn more about changing consumer habits? Do yourself a favor, and evaluate the speakers and their content before you decide which conference to choose from. Better yet, ask your non-retail-automotive friends (I know you have a few) who would they rather see. After all, you are not selling cars to car salespeople: You’re selling cars to real people.
Post script: I have to give a shout-out to the folks at the OTHER conference for cajoling Erik Qualman into being the keynote speaker. Since you are probably like me, and will be attending both conferences, you’ll get to see Gary Vaynerchuk, Aaron Strout, Jason Falls, and Erik Qualman speak (along with the usual suspects) in the same week! Who needs SXSW?!
Let’s say that you’ve had a persistent cough for two weeks, but haven’t had time to go to the doctor. You finally break down, and go to urgent care one night because you’re not getting any better. After waiting four hours, you finally get seen by a guy in his early twenties with acne still on his forehead. After going through some cursory checkups, he tells you that you have syphilis. He hands you a prescription slip with someone else’s name on it, and wishes you well. Given that you haven’t been to Bangkok lately, and that you’ve never cheated on your spouse in the thirteen years of your marriage, you decide that maybe you ought to get a second opinion.
If you’ve read some of our recent blog posts, you probably know that Joe Webb and I have gone off a bit on those who are new to consulting. Trust me when I say it’s not meant to personally attack anyone. Unlike the medical world, there is no certification, title, or otherwise, to indicate one’s level of expertise. In fact, there is no state licensing to make sure that you are sound to practice. There is no governing body who administers examinations, or confers expertise. Instead, we have resumes and word of mouth. That’s it folks.
Many of us in the dealer, consulting, and vendor world have spent a tremendous amount of time educating ourselves. Besides the obvious attendance at retail auto conferences, we sit in on webinars, read books, and some of us even take classes. While some were educated at the school of hard knocks, others learned (and survived) in active combat, and still others have excelled in postsecondary education. Because all we have to rely on is resumes and word of mouth, there is no way to distinguish those of us who have dedicated ourselves to mastering our craft, and those who haven’t. More specifically, there is no way to distinguish between those who are in it for a quick buck, and those who are in it because they care about the condition of retail auto.
Because there is no way to formally differentiate between the practicing experts and the self-proclaimed experts, the dealer loses. The dealer loses on beta-quality technology sold by a good salesperson. The dealer loses on vendor-driven training administered by people who have never sold a car before. Most of all dealers lose money on (one nefarious consultant after another) consultant who have nothing to offer other than their level of expertise. If the dealer loses, then everyone loses.
This is probably the same reason why so many vocations have adopted formal licensing. Think about all the professions that require passing an examination to practice. Everyone from physicians and attorneys to hairdressers and tattoo artists have to pass at least one administered exam. Why? Because someone who did not care about their practice (or reputation) swindled someone out of money, gave someone septicemia, burnt someone’s scalp, or gave some unsuspecting schmuck syphilis. Organizations were born to make sure you didn’t eat rancid meat, get electrocuted by your lamp, or use snake oil as a cure. Most commonly these organizations, laws, or entities evolve to make sure the consumer is protected.
As I commonly posit, why should we be any different? Why aren’t we working harder to create a governing body to allow those who want to become certified as experts take an examination to do so? I know individuals have tried to do so in the past, however this is bigger than one person. It’s time that we put our egos aside, and work together towards something for the greater good. I know there are many true professionals out there who would like to demonstrate their knowledge. I know many more who would seek the protection of an umbrella organization. We need to give them the opportunity to do so.
I’m not beginning to say that I have all the answers. What I can say is that if this organization is going to exist, it can’t be a club (the last thing we need is another Good ‘Ole Boy Network). It can’t be an offshoot of an existing organization, rooted in the traditional ways (old habits die hard). It can’t be formally sponsored (it’s already too hard to cut through the vendor noise). It can’t be easy to join (take a look at the requirements from the Project Management Institute or the CFA Institute). It can’t be governed by a few, because nobody has all of the answers.
The next time someone approaches you about how to improve your business, think of all the licensed and certified professionals you deal with on a regular basis. Think about the police officers you know, the teachers in your kids’ classrooms, the EMT that gave you CPR training, and the electrician who wired your garage. Think of all of the training they went through, and the continuing education they’ll have to go through. Then ask yourself: Don’t I deserve the same?
If you happened to study business in college, or are a corporate strategy junkie, you’ve probably heard of Michael Porter. If you haven’t heard of him, Porter is an esteemed Harvard Business School professor, served on Ronald Reagan’s Commission on Industrial Competitiveness, authored nearly 20 books (Amazon carries thirteen of them), and has published countless articles. Most would agree that Porter’s prophetic work has laid the foundation for the last 30 years of competitive strategy. I’d have a poster of him on our bedroom wall if my wife would let me. While Porter’s work has spawned numerous books, essays, and academic articles, I want to concentrate on one key piece: core competency.
Simply put, a company’s core competency is what only that company can do best. Ideally, this particular factor is not easily imitated by its competitors, and can be leveraged widely through many products, in many markets. For example, ADP was able to adapt its payroll technology it developed in the 50s for use in multiple industries, in multiple markets, and plays an integral roll (like it or not) in the car business. The better a company understands and develops its core competency, the more dominant position it will have in its market.
A lot of things happened long before you got into the car business. Slow, unreliable, cars made a dealership on every corner practical during the time franchise laws were written. An onslaught of foreign competition flooded the markets during the seventies because the domestic car business wasn’t prepared for rampant inflation and a decade of oil crises. The widespread suburban sprawl of the last twenty years has only paved the way for upstart competition that never existed across town. Oh, and that Internet “fad” happened, too. You can’t count on your location, your OEM, or having the most/newest/cheapest/bestest cars in town. In a 100-year-old business, it’s all been done before.
What hasn’t been done before? You.
You are an individual. You’ve collected years of rich life experiences that make you unique. Nobody can replicate you (scientifically, maybe, but not your personality), just like you can’t copy anyone else (unless you want to be known as a fraud). You are not the cheapest available option (and neither is Apple, Nike, Ducati, or John Deere, by the way). You have values, you add value, and people gravitate towards you because you possess certain qualities. Understanding these qualities not only allows you to transact with customers, but it will allow you to mentally connect with them, as well.
Many of us fall into the of trap copycatting. We feel that if we follow in the footsteps of someone we know, or a brand we admire, we can achieve the same success. How did Microsoft do with the Zune (you’ll never get that $200 back)? How’s IBM’s PC business working out for it (congrats, Lenovo)? How’s Buzz doing for Google (that buzz you hear is Twitter laughing)? Even the best companies can fall short when they fail to connect with the customer by straying too far from what they do best.
Let’s be honest with ourselves. It’s easy to read articles, attend webinars, attain OEM certifications, and comb through blog posts. Reading and retweeting the latest Seth Godin or Guy Kawasaki post only takes two clicks. Simply following the pack doesn’t create any hurtles for someone who just wants to copy you. In fact, it makes it much easier for them to follow. If everybody is following best practices, you aren’t creating any distinction to set yourself apart to the customer.
Instead, use best practices to create a foundation for you to build on. Understand the philosophy of the author or presenter. Frame it in the context of who they are, where they’re at, what they know, and more importantly, what they stand to gain. Now focus it through your lens. Apply it using your words, your emotions, your experiences, your research, to your customers, in your market. Measure your results (every variable you can think of, not just what’s required), and discover where you excel. Use these strengths as the bedrock on which to build your core competency.
Unfortunately, Michael Porter is too busy solving global issues (seriously) to turn his attention to the auto business. It doesn’t mean you can’t. Understand those qualities that your competition can’t emulate. Don’t count on someone else to carry you to success. Dedicate yourself to recognizing and measuring your strengths to feed your core competency. Be proud of what you do. Blaze a trail that no one can follow, create an unbreakable bond with your customers, and build a fortress that no one can knock down.