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The Art of Testing Vendors

If there's one thing that I've seen in the last 17 years while working on the vendor side of the business, it's that there are often products and services presented to dealers that simply do not deliver what they promise. It's one of the reasons that I partnered with JD Rucker to form our own company. We wanted control to deliver results no matter what, something that we couldn't always promise when working for larger companies.

It's not that the various sales representatives or marketing departments at automotive vendors hope to rip off their customers. We all want our products to be amazing, but sometimes it's hard, particular for the larger companies trying to offer scalable solutions that can somehow serve their individual dealer clients. Then, there are the smaller companies who often bite off more than they can chew. In the competitive automotive industry, finding great products can be challenging.

Here are some of the things that I've learned that dealers can apply to help determine whether or not a vendor will be delivering what they promise.

Skip the Trophy Client Recommendations

Every vendor has a set of clients that they can count on for good references and good results. There's no need to talk to them. Find the ones that the vendor does not offer up. You can do this by checking the website for testimonials or case studies and then asking the sales representative for references.

Finding the other clients can be easy with larger companies but harder for smaller companies. Either way, compile your list of dealerships that the vendor is highlighting on their website and during their presentation. Ask for examples. THEN, ask for more examples. They should be able to do this on the spot. If they can't there's a potential problem (unless they're really, really small, in which case you might have to press harder).

It's okay to tell them what you're doing AFTER you've received their list of people they want you to talk to. Letting them know is important because it immediately lets them know that you're going to be aggressive in your monitoring of the results. Believe it or not, this makes a difference in how your account is treated. As sad as it is, the concept of the squeaky wheel getting the oil applies for most vendors, big and small. It's okay to be a little squeaky.

Request Month-to-Month Contracts and No Setup Fees

There are many dealers who have been doing this for some time. Some vendors simply won't do it. Despite the concept that a company that believes in itself won't need contracts or setup fees, there are still too many risks for some products such as CRM and DMS. However, most products that can be delivered on a monthly basis have few upfront costs other than a setup that normally falls within the cost collected for the first month.

With that said, it's not worth passing on a great product for the sake of contracts or setup fees. There are those who simply do not offer month-to-month contracts or that cannot waive setup fees. That does not mean that their products are inferior, necessarily, but making the request and putting out a little fuss is a good way to find out exactly what is entailed with the initial setup.

Ask Why Dealers Leave

This is a tough one and not every sales representative is prepared to answer this question. You might even want someone who isn't able to answer the question well so that you can ask to have the name of a couple of dealers who have cancelled recently.

Be careful. If you're looking for a perfect vendor you'll have to keep looking regardless of the segment. Nobody is perfect. Everyone messes up. Sometimes, the expectations are too high. Sometimes, there are things that happen that make a product or service ineffective. Sometimes, it's simply a matter of a new GM or ISM who came in and made a bunch of changes.

Speak to the Doers

The sales representative is trained to answer sales questions. Ask the same questions of the people doing the actual work. If you're strongly considering a company, ask for the customer service or operations people to be on the second call. They're more inclined to under-promise.

Put the Guru on Notice

Most companies have a guru or a "micro-celebrity" who represents the company at conferences or in the blogs. Get them on the phone and ask them to personally take interest in your cause. They do not want to get a bad personal rap against them in most cases and will help you to perform better.

Doing this goes beyond asking. This is where the power of reviews and public testimonials can come into play. Be willing to speak out whether they do a great job or a poor job and make certain they know about it.

Have a Panel Interview

When you're narrowed down to a handful of candidates, bring them all in together. Let them know that they'll be going head to head with other vendors. Get multiple people on your side to ask questions of everyone. The way they present their products will be different when they know a competitor or two is on the phone with them.

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There are plenty of things you can do to get the real picture, but the best thing you can do is to do a ton of research. That's not to say that you need to work slowly. Believe it or not, there are times when a dealership can do more damage than good by establishing up front that they'll be "high maintenance" clients. Keep it fair. Stay polite. Make great decisions.

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I wish that this was going to be a story about baseball. I really do. Unfortunately, it's a story about education and the art of the sales pitch as it pertains to vendors on the various automotive networks.

It is important to understand that every vendor in our industry has a responsibility. This is a tough business. Those of us who have been on the other side at the dealership level receiving pitches from vendors know that they come hard and they come often. It's part of the game. This is one of the most competitive industries out there from both perspectives - dealers competing against other dealers and vendors competiting to earn their business.

The internet in general and these networks, blogs, and webinars in particular are the tools we need to succeed at both levels. For dealers, it's an opportunity to learn ways to improve business, harness best practices, and bounce ideas against others in the industry. For vendors, it's a chance to hear what dealers think about certain topics, what they want out of products, and to what degree they want assistance versus direct help.

These venues are for mutual education. They're for dialogue. They're for ideas. They're not the place to pitch your products.

Some would say that education is worthless if it doesn't yield increased business at the vendor level. That's a different argument altogether, but I can tell you this much with a certainty...

If you help dealers by giving them tips, techniques, strategies, and advice that helps them with their business, they will be more inclined to look to you when they need your services.

It works. I see it every day. I don't have to pitch my social product to get calls and emails from dealers wanting to know how I can help. I simply post information as it comes to me that can help dealers succeed with or without my help. Some will do nothing with the information. Some will take it and apply it themselves. Some will take it and inquire about ways I can make it easier or do it for them.

As I said, it's the responsibility of every vendor in this industry to take the knowledge that they gain from their bird's eye view of things and translate it into ways that can help in the trenches at the dealership. The market is too questionable and the competition level is too high for anyone to hold their cards too close to the vest. It doesn't help the industry. It doesn't help dealers.

It doesn't help you.

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Let's face it. Websites are becoming a commodity in the automotive world. Most quality website vendors are putting out solutions that are good enough to work well. Few are coming up with innovations that can differentiate them, and those differences are relatively small in the whole scheme of things. The difference between a good and a great website is minimal when translating it to increased sales.

The reason for this is that consumers are becoming increasingly impatient when in car shopping mode. It's not that they don't spend as much time doing it as before. It's that they are doing most of their research on websites other than a dealer's site and only visiting when they're ready to look at live vehicles. At that point, they're going straight to inventory or specials and deciding from there whether to consider doing business with a dealership or not. If you have the right inventory items that they're considering, a bad website isn't going to keep them from contacting you. Conversely, if you don't have the vehicles they're seeking, an amazing website isn't going to coax them into doing business with you.

Websites are websites. Some are better than others and have strong conversion tools, but the real arena through which dealers can move the needle is in the quality of their digital marketing efforts. One of those efforts, search engine marketing, is arguably the greatest opportunity for advancement because it translates into more visitors, more leads, and potentially more sales when done right.

The biggest challenge that dealers with OEM-mandated search marketing products face is in defining competition. From the OEM's perspective, a Ford dealer's competition is the Chevy dealer down the block and the Honda dealer around the corner. They want search exposure that can take sales from the other brands. This is a good and noble cause, but unfortunately it's not the most practical target for individual dealers and dealer groups.

From the perspective of the Ford dealership itself, their primary competition isn't the Chevy dealer and the Honda dealer but rather the other Ford dealers in the area. It's how they're graded; we all see reports every month that tell us how we're doing against other dealerships in the area that sell the same brands. It is for this reason that OEM-mandated search marketing, as affordable as it is, simply isn't the best way to improve sales. At the dealership level, the lowest hanging fruit for increased business is by taking sales from the real competition, namely the other Ford store a few miles away.

As mentioned, there is one advantage to the OEM-mandated search marketing: it's cheaper. It's often paid for in whole or in part and can act as a check box on your marketing. "Yep, we're doing SEO and PPC. The OEM is taking care of that for us."

Unfortunately, that's really the only advantage. It's designed in most cases to keep every dealership inside their own little box. Reaching outside of the direct market area is a no-no for companies that work for the OEMs. In fact, they're goal is to keep the boxes neat and tidy.

When the search marketing is focused at the dealership level, it's a completely different strategy. The goals have changed; it's not that a Ford dealer doesn't want to take market share from a Chevy dealer, but that's a heck of a lot harder than taking a deal from the Ford dealer down the road. Let's say there's a dealer in a small town a few miles from you. They're the only Ford dealer in that town. Everyone in town knows them. When they want to do business with that dealership, they'll search for the dealership by name.

Consumers who search for the dealership by city are looking for an alternative. They know about Bob Ricky's Toyota in the heart of town. If they do a search for "Somewhereville Toyota Dealers" or "Toyota Dealers Near Somewhereville", you'll want your dealership to pop up. People that do searches like that are trying to find someone else from which to buy their Toyota. If they wanted to buy from Bob Ricky's Toyota, they would have searched for "Bob Ricky's Toyota". They didn't. They want someone else. They want you. If you're ranked for that search, there's a good chance they'll check out your website to see if they can do business with you instead of Bob Ricky.

Unfortunately, the OEM-mandated search marketing products aren't designed to help in this regard. In many ways, they're designed to prevent this from happening.

If your goal is to beat the competition, your competition, then don't look to the OEM's search marketing company. Don't just check off the search marketing box and call it a day. Explore your options and see if there's a way to improve your search marketing to focus on helping your dealership the best way you can, by being aggressive and getting your dealership in as many relevant searches as possible.

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There's a trend in the automotive industry that is alarming. We hear this scenario played out almost every day and it normally manifests itself into one of two stages:

  • Stage 1: The Fresh Tech Hunter - When a dealership is tired of the limitations of their various vendors, they often go hunting for a replacement that has the latest and greatest automotive internet marketing technologies at their disposal.
  • Stage 2: The Better Treatment Hunter - When a dealership is tired of slow response times and vendors pointing their customers towards tutorials about how to fix their own problems rather than fixing it for them, they go hunting for a vendor that acts like it wants to keep their business by treating them better through customer service and tech support.

Why can't it be both? What happened to the days when vendors were forced to have strong technology and amazing customer service rather than today's trend which seems to force dealers to choose between one or the other?

Here are the descriptions of both types of vendors:

 

The Technology Trendsetter

It's the nature of the beast. Search, social, lead generation, website design, mobile, CRM - it seems like the technology is advancing too fast for most vendors to stay fresh. As a result, the bigger vendors are the ones who have the resources to keep their technology at the top. Unfortunately, they fall into a catch-22; by being large enough to have the resources to stay ahead, they are also faced with the big-boat-syndrome of not being agile enough to make swift adjustments when major changes occur in things such as the Google search algorithm or website coding advancements.

Having proven technology that works today and that will continue to work tomorrow is the only real solution for dealers that want to stay ahead of the curve.

 

The Customer Service Company

Technology is great, but it comes at a price. All too often, the vendors that are large enough to have the resources to develop the best technology have not been able to scale their customer service and keep it personal. Moreover, the trend towards the coveted big contract changes the focus of the vendor; when they land an OEM contract, their client is no longer the dealer. They now answer to the OEM. This is bad news for customers service at the dealership level.

Smaller companies tend to hold each individual client at a higher value than larger ones and must do whatever they can to keep their customer service at its highest level. Dealers might love technology, but if you can't fulfill their needs at a personal level and treat them as more than just a number, they'll still leave.

 

Have Your Cake and Eat it Too

This is where the advice comes into play. Don't get wooed by technology alone. Don't settle for second-rate technology just for strong customer service. It's challenging to fill both shoes, but for a dealership to be truly satisfied with their vendor, they must take the time to find out how both sides of the coin work for that vendor.

This is where vetting comes into play. When taking a pitch from a vendor, be sure to write down all of the things that impressed you most about the technology. Test it out by finding dealers that are using the technology. Don't find 3 or 4. Find 20. Then call them. All of them.

When you call the other dealers, be certain to focus on the customer service component. The technology is important, but if their dealers have to waste too much time trying to get changes done to their website or are unable to have consultations on a regular basis with an expert at the vendor, they're probably not the right vendor for you.

Dealers no longer have to settle for anything less than the best of both worlds. For too long, they've trusted their vendors up until the point that they get fed up with the technology not working, the customer service falling short, or both. If you truly vet each potential vendor partner for both criteria, the result will be much better in the long term. It's not an easy process, but nobody likes switching vendors all the time. Find the right one right now and enjoy a long and mutually beneficial relationship with them.

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