Krietz Auto named NIADA CPO Dealer of the Year

By: Jeff Hatch

June 25, 2018

The following is an article by the Auto Remarketing Staff, which appeared on June 22, 2018, at autoremarketing.com. The full article can be found here: http://bit.ly/2Ish7EP

Award Recognizes Maryland Dealership’s Rapid Rise to Certified Pre-Owned Success

Krietz Auto, a dealership in Frederick, Md., run by Charlie and Kim Krietz and their sons, Charles and Cory, became the second winner in the award’s three-year history after Todd Hoagey of Auction Direct USA claimed the first two honors.

The award recognizes the quality of dealership operations, the vehicle certification process, the number of CPO vehicles sold and the dealer’s commitment to providing a better product and level of service to his customers and the community.

In accepting the award, Charlie Krietz, who founded Krietz Auto as an auto repair shop 35 years ago, choked up with emotion as he recalled his journey to success.

“The dream I had, the vision, going through the recession and the hardships we went through with the family ... to be here today, among a lot of great people, is incredible,” he said. “We’ve had a lot of help. ... but our hunger and desire to survive, the passion – it was there.”

When he had to pause to compose himself, Krietz apologized. “I’m a little passionate,” he explained.

While Krietz Auto has been in business 35 years and was Maryland’s nominee for the 2017 National Quality Dealer award, it was only a year and a half ago that Charles Krietz met with Mike Sims of NIADA CPO administrator Warrantech to discuss getting involved in the program.

“I got with my family and said, ‘I met a really good guy today, and I think this is going to be a really good thing for us,’" Charles Kreitz recalled. “Fast forward a year, and we’re standing here getting this award.”

Now Krietz Auto is among the top operations in NIADA CPO sales, at about 180 CPO units per month. The Krietzes certify 100 percent of their qualifying vehicle inventory and have made major investments in training their 50-member staff in CPO sales, marketing, digital merchandising and reward/recognition incentive programs.

As a result, the dealership has doubled its F&I gross margin per unit since launching CPO program.

Krietz Auto is also very involved in its community as a major contributor to local organizations and programs such as 4H scholarships, Toys for Tots and youth sports teams.

Charles Krietz invited his fellow independent dealers to get in on the CPO action.

“Hopefully, all you guys can learn all about the program,” he said. “It’s a really great program. Look into it — you’re not going to go wrong.”

Filed Under: Auto, award, certified, CPO, Krietz, NIADA, pre-owned, vehicle, Warrantech

Stand Out From The Background Noise

By: Jeff Hatch

June 22, 2018

One day as he drove to work, Chris Johnson noticed there were so many dealerships along the road that it looked like one huge car lot.
 
“You could not tell where one began and the other finished,” said Johnson, owner of 6th Gear Auto Sales in Fort Worth, Texas.
 
Johnson, who had established his independent dealership in 2011, knew he had a better operation than most. He had grown up in the business and had been taught by his father, a successful dealer.
 
The problem was how to distinguish his operation as special among the two hundred used car operations within a five-mile radius of his store.
 
The more he thought about the competition the more he thought the best way to increase his business would be to broaden his base from the used car row of Fort Worth to the national market by way of the Internet.
 
The problem was, he found the same clutter on the web that he’d seen on the street around his physical lot.
 
The same problem of how to stand out among all the car lots trying to be heard also exists on eBay, Carfax or any other of the many automotive listing services.
 
As Johnson studied the problem it became clear that if he wanted to stand out, whether on the street or on the Internet, he was going to need a certified pre-owned product.
 
Johnson had built 6th Gear Auto Sales from the ground up. He wanted to see the business thrive and provide income for his family and his employees for a long time to come.
 
“I realized that without being able to advertise certified pre-owned, I would lose the 60 percent of the market that is currently looking for the comfort of a certification program,” he said. “Sixty percent is a large segment. Not all of them know exactly what certified is and what it means, but they know it is something special and they want it – or at least the option of having it.”
 
Johnson knew to take 6th Gear where he wanted it to go, he would have to find a certified pre-owned program his customers could afford. He also knew his options were limited as an independent dealer.
 
“There are not many national programs to choose from,” he said. “The factories have their programs but they are exclusive to franchises – and they’re way too expensive.”
 
Eventually, Johnson came across a program that was tailor-made for his operation – the NIADA Certified program.
 
“First off, it was a National Independent Automobile Dealers Association program,” he said. “Since I was already a member of the association, that made me feel confident.
 
“When I found out it was backed by Warrantech, the same people who handle General Motors CPO and Mazda’s and Bentley’s programs, I knew this would be the program for us.”
 
Johnson’s employees love the changes that have come out of becoming an NIADA CPO dealership.
 
“It has been a culture change for us,” finance manager John Frymire said. “People see the certified cars on the Internet and because there is a warranty protecting them, they don’t mind coming from a long way away to buy our cars.”
 
There has been a big change in the inventory because the cars are selling faster. Johnson said he had 90-  to 120-day turn of inventory before the CPO program – now he is at 47 days and is working toward turning his 70-car inventory in as little as 30 days as his operation becomes more known for having certified pre-owned inventory.
 
“The news is spreading like wildfire on both the Internet and in the community,” 6th Gear salesman Elvys Agreda said, “and that is good for business.”
 
Want to stand out from the background noise in the used car market? Just ask Chris Johnson how adding NIADA Certified Pre-Owned vehicles changed his business.
 
ABOUT THE AUTHOR: William Carr is a longtime auto industry veteran in sales management and training and the regional training director for Warrantech Automotive, Inc., administrator of the NIADA Certified Pre-Owned program. For more information on the NIADA CPO program, visit www.niadacertified.com/dealers.

This article originally appeared in the June 2018 edition of Used Car Dealer magazine and can be found online at: http://www.omagdigital.com/publication/?i=502218&ver=html5&p=28

Filed Under: car, Carr, Certified, CPO, market, NIADA, Pre-owned, vehicles, Warrantech, William

The CPO Playbook

By: Jeff Hatch

January 24, 2018

Make the Right Call for Your Certified Pre-Owned Program By Getting Your Entire Team on the Same Page

How do you build a top-tier certified pre-owned marketing program in your independent operation?

You build it from the ground up.

That means you start with the basics – a good partner to help you with your program and train everyone on their role in the process.

When Peyton Manning was quarterback of the Denver Broncos, he would yell “Omaha” as he waited for the snap.

Manning’s voice made the entire stadium tense up in anticipation of what was coming. Most important, his teammates snapped to a state of mental preparedness. When the snap came, they could react without thinking. 

The offense has the advantage over the defense – the offense knows what’s about to happen.

Every player knows his responsibilities and if any of them fail to carry out their assignment the play won’t work. Because they have a plan, the team moves in unison, beginning at the sound of the quarterback’s voice.

That can happen in your store. You can make is so everyone knows what to do when you call the play. 

When your staff knows which part of the playbook is being used and what everybody’s assignments are, the store becomes a team.

Manning was able to get buy-in from his teammates because they all knew the situation. Some plays are designed to get one tough yard and some are after a big gain. 

When everyone knows the situation and the goal of the play, they can carry out their duties with a more dedicated commitment.

So why are you calling the play for a CPO program?

Even if you know the answer to that question it might not be obvious to your employees.

The answer, really, is easy – to keep up with the competition.

The popularity of certified pre-owned is not showing any signs of slowing down. In fact, CPO sales set records for six consecutive years, and when the final numbers are tallied for 2017, they’re expected to break the record again.

Certified pre-owned vehicles are becoming more desirable even though fewer than half of all customers know what CPO entails. 

According to Autotrader’s 2014 CPO research study, 60 percent of car buyers said they’d like to look at a CPO unit while making a used car selection, but only 48 percent actually knew what it means for a vehicle to be certified. 

Those customers most likely don’t know the difference between warranties that come with a vehicle and extended service contracts that are purchased.

That leads to several conclusions about how to maximize the value of a CPO program.

Customers have heard of CPO and feel it is a better option. They also know it’s usually backed by a warranty for some period. 

The statistics tell us that to get the full value of a CPO program dealers should not rely on what customers think they know about certified pre-owned. A full presentation and explanation allows salespeople to create a need for the program.

For example, at Auction Direct USA, one of the nation’s most successful CPO dealerships, salespeople walk customers past an education wall that teaches them about Auction Direct, NIADA and their partnership in the NIADA Certified Pre-Owned program. 

Sales is about giving enough information to allow customers to arrive at the conclusion you want them to. That definition requires your salespeople to have knowledge of what the dealership’s program includes.

With that knowledge your salespeople can provide customers information that allows them to consider the value of the CPO program when weighing your dealership’s vehicles against the competition’s. 

The economy continues to grow, allowing more people to be able to buy a vehicle. That alone is going to create a spike in business.

To capture more than their share of that market, independent dealers must be ready to compete for every deal. 

Analysts agree a majority of used vehicle buyers are interested in at least learning about CPO.

That means if you do not have a CPO program, you are left fighting for the scraps among the minority of customers who don’t know about or are not interested in CPO. And it allows new car franchises and sophisticated independents to dine on the more lucrative segment of customers who are searching for certified pre-owned vehicles. 

You need to let your team know why the CPO play was called. The people who represent your programs to the public need to know it will allow the store to stay competitive and will make marketing to the entire spectrum of the used car business viable. 

Once the people who will make your program a success know why you are setting up a CPO program, the next question to answer is, “Why that one?”

So how do you choose which program to bring into your dealership family?

Factory programs are fantastic – but they’re not an option for independent dealers. OEMs only certify their branded vehicles exclusively through franchise stores.

Even if independents could get in on the factory CPO programs, they have their issues.

Just a few years ago, for example, the margin for CPO vehicles was as much as $2,500 more than for other inventory. Today, according to research by iseecars.com, it’s more in the $750-$1,200 range.

That’s still a good return, but when you add in the average price of reconditioning a used vehicle to factory CPO specifications – including expensive items such as factory floor mats and four matching tires – most of that profit for OEM programs goes to expenses that don’t increase the customer’s satisfaction with the vehicle.

Indeed, factory programs are so stringent with their qualifications that they only certify their brand at a factory store. Which is why some new vehicle franchises have begun to use independent programs to certify their non-factory inventory. 

Without a factory program what are you left with?

There are three main ways to certify a vehicle. OEM programs are one. Independents can also self-certify through a service contract company. 

Or they can find an independent organization willing to certify the dealer’s CPO process.

The best-known national certified pre-owned program for independent dealers in the NIADA Certified Pre-Owned program, sponsored by NIADA – an organization with more than 70 years of history whose mission includes promoting ethics in the used car industry. 

When NIADA wanted to bring its reputation and expertise to the CPO world it looked for a partner with the ability to certify pre-owned vehicles as well as experience and financial wherewithal to back those vehicles with a strong warranty. 

The exhaustive search for a program administrator led to The Amynta Group and its wholly owned subsidiary, Warrantech. 

“The best thing about that is it’s the same administrator General Motors and Mazda use for their extended service contracts and CPO, giving independent dealers’ customers the same service a new vehicle franchise would give,” said Warrantech’s Natalie Suarez, director of NIADA Certified. 

As a result of NIADA’s partnership with The Amynta Group, Suarez said, “we are able to provide a high-level, complete marketing program for independent dealers.” 

NIADA’s program, Suarez said, “is designed to give customers the kind of service in the event of a breakdown that’s usually reserved for new car dealerships, elevating the independent dealer in the customer’s eyes.

“And the more repeat and referral business dealers can generate, the less they spend on conquesting new customers.”

One of the first car salespeople in America was a man named Eddie Rickenbacker, who was best known as America’s most decorated flying ace, earning the Medal of Honor in World War I. He also raced in the Indianapolis 500, helped design a vehicle that bore his name and founded Eastern Airlines. 

Rickenbacker always said he learned while selling cars that you had to find your advantage and move continually towards that advantage, a philosophy that allowed him to survive countless dogfights over France. 

“The one thing I know for a fact is every lot has the same vehicles and the prices are pretty much the same, so if you want to differentiate yourself from the pack, you better provide something no one else does,” longtime auto dealer and advertising pioneer Bob Catterson once said. “If you can’t do something special the only other choice is price, and price prohibits sales, not makes them.”

Calling the NIADA CPO play for your store creates that competitive advantage over other independent dealers – and it allows you to compete with new car franchises for their used vehicle customers.

NIADA adds to that advantage with CPO partners that include some of the biggest names in the industry, such as Carfax, eBay Motors and SiriusXM Radio, adding credibility with customers and making your inventory more visible on search engines. 

Not to mention The Amynta Group, which has earned an A rating on A.M. Best’s rating system as one of the most stable companies in America and an A+ rating with the Better Business Bureau. 

Once all the people in the store know their part in running the play, it is important for everyone to flawlessly execute his or her assignment.

As legendary coach Vince Lombardi once said, “You can’t coach a player who hasn’t been trained.” Before they can execute the plan, your staff must be trained. 

Whoever is responsible for certifying vehicles must understand how important it is to properly communicate the condition of each vehicle to management.

If it costs too much to bring the car up to CPO standards, management needs to know. And the certifying technician needs to know that not certifying a vehicle also has a cost to the dealership. 

The technicians who inspect the vehicles need to be shown the deeper importance of their work to the sales process.

In the CPO process, credibility is extremely important. Customers must believe in the concept of the inspection process. If customers do not believe there has been an actual technician touching the car, they will doubt the value of the warranty and that will negate any certification advantage. 

Sales must use the NIADA certification checklist in the sales process. 

The sales department should leave a copy of the checklist in the glove compartment of the certified vehicle. The salesperson will pull the checklist out during the walkaround or demo ride and go over how the inspection affects the customer’s ownership experience. 

The tech’s role is to check every box individually to give validity to the checklist. He or she can help sales even more by adding extra details, such as writing the actual numbers for tire tread and brake pad width.  

When the behind-the-scenes people who help sell vehicles realize how much the little things they do help the profitability of the store, their work ethic is increased.

Salespeople have the job of being enthusiastic about the program.

W. Clement Stone once said, “A positive attitude increases the likelihood of a good outcome.” That means being committed to the belief that what the store is providing the customer has value helps accomplish the task – in this case, the task is maximizing profit and sales volume.

How did Peyton Manning always perform at a high level and get his teams to perform with him when he called his plays?

The team started from the ground up, making sure everyone knew the play, their role in the play and the goal the play was meant to accomplish.

If everyone does their job, from the inspection process to sales and finance, having a great CPO option allows independent dealers not only to keep up with the local competition but to be competitive with dealers across the country via the Internet.

When you have the advantage, you become a difficult team to compete against. 

ABOUT THE AUTHOR: William Carr is a longtime auto industry veteran in sales, management and training and a regional training manager for Warrantech Automotive, Inc. administrator of the NIADA Certified Pre-Owned program. For more information on the NIADA CPO program, visit www.niadacertified.com/dealers

This article originally appeared in the January 2018 edition of Used Car Dealer magazine and can be found online at: http://bit.ly/2DyhBHN 

Filed Under: Carr, contract, CPO, dealer, dealership, extended, independent, NIADA, service, team, William

All In

By: Jeff Hatch

July 07, 2017

Getting Your Staff On Board With Your CPO Program Begins With Asking Five Key Questions

So you’ve decided to enter the certified pre-owned business. Now how do you get your staff involved in order to make sure the project actually makes a difference to your bottom line? 

Fact is, most programs started by dealerships turn out to be stop-and-start affairs. The initiatives work fine when they are new, but once the spotlight is off they fade away into the darkness. 

There’s an old saying in golf that you can’t win a tournament on Thursday, but you can lose it that day. Another golf adage says on that first day you set yourself up for success on Sunday.

That’s how it is with any program started in a dealership.

The watchers and waiters predict the demise of the program and then watch it die because no one participated – specifically, them. Then they brag about how they knew this program would never work.

But an effort from everyone could have made the vision a reality. That’s why it is essential to get buy-in from everybody in the store at the beginning and reinforce that commitment throughout the entire process. 

Everyone must understand the mission, because anyone who is not engaged can be the clog that causes the program to fail. 

Getting buy-in starts way before opening day. 

It is important in the acquisition of buy-in that essential people are made to feel like part of the initial decision-making process. The earlier they feel part of the process, the harder they will work to make the program a success. 

That starts with a clear enunciation of the problem we are trying to solve. If there is no problem to solve, then why start a new endeavor? 

Usually the problem is the need for more sales, more profit or a combination of both, which translates into the continued success of the store. 

The different departments will look at new programs in a much different manner. But they all must be brought in, because unless they see a process that has benefits to them and their department, they will not be part of its success.  

In the sales model of Harold C. Cash and W.J.E. Crissy, two college professors who wrote an often-cited work on sales psychology, the findings showed while it is important to have a proper introduction, the need awareness module is the most important part of the sale, because it opens the door to a solution. 

Unless there is an awareness of the need for a product or service, the call to action – which is sales – will go unheeded. 

Clearly laying out the need will help the department heads arrive at the conclusion you want them to. 

The old car guys always defined sales as “giving the customer enough information to allow them to arrive at the conclusion you want them to.” Once they buy into that conclusion, they will be sold and it will become their program. 

So how do you accomplish that? 

As renowned leadership authority Stephen Covey said, you need to begin with the end in mind.

In a speech to the graduating class of the Harvard Graduate School of Education, dean James Ryan claimed that there were five essential questions that must be asked of any enterprise to find the motivation for long-term success. 

The first of those questions is: Wait, what? That’s about slowing down the flow of information coming in and gaining clarity about the project. 

The employee team must understand the idea before they can advocate for the program. Or, as Harvard sociology professor Rakesh Khurana said, “You must emphasize inquiry before there can be advocacy.” 

The team may say they are behind a program to make the owner happy, but until they can think like the owner and understand how certified pre-owned can create a different outcome for the future of the business, there will be no dedication.

“Wait, what?” is the question that must be asked once you arrive at the conclusion that you need a certified pre-owned program to be competitive in the marketplace and create a long-term commitment with your customers. The reason is that a long-term commitment is what millennials are looking for when they buy cars. 

So the answer to, “Wait, what?” is, “We are going to sell the same vehicles, purchased from the same locations – so there is no change in your vehicles – but with a guarantee from you that the customer is going to have a worry-free ownership experience. We establish that worry-free experience by providing a warranty on our vehicles, even the vehicles with 140,000 miles on them, if they pass inspection.” 

What happens with your staff when you’re explaining your desire to change your relationship with your customers? They hear Charlie Brown’s teacher: “Wah-wah-wah-wah.” Then you hit on something important. Suddenly, it’s, “Wait, what?” 

That’s right. This is how we are going to compete with new car franchises for customers and dominate the local competition – by giving our customers more and elevating our reputation in the community. In other words, we are going to unlevel the playing field.

As your salespeople settle back into reality, the next question is, “Who is going to pay for this relationship?” 

Certainly, creating an environment that will allow customers to feel comfortable with the purchase of cars from your lot will create repeat business in the long run. But who pays in the short term is what salespeople fear the most. 

The quick answer is, like everything in the car business, it is paid for by the customers. Salespeople sell from invoice – since the warranty cannot be charged for, certification becomes an invoice item. 

More importantly, offering a warranty creates value in the upsell. Most of the dealerships in the NIADA Certified Pre-Owned program report upsell numbers of 65 percent or better. 

“With 65 to 75 percent of the customers buying the upsell service contract, it isn’t hard to see how quickly this becomes a profit center,” said Natalie Suarez, national director of the NIADA program for administrator Warrantech. “Keep in mind that with NIADA if the customer buys the upsell, the dealer does not pay for the certification warranty.” 

That means that with a concentration on selling extended service contracts, the customers pay for this program along with providing a new source of gross profit. 

The service department’s concerns come from their fear of the unknown. Those guys know about programs that pay 80 percent or limit repair charges, making every repair a fight with customers and the claims department. 

To get service buy-in, find a program that pays retail parts and labor. 

Surveys show customers currently using the dealership’s repair facility will repeat their purchase with that dealer almost 65 percent of the time when they’re ready to purchase a different vehicle. If your certified program allows a disappearing deductible – which brings customers back to your facility – it has the dual benefit of creating more profit in service and selling more cars. 

The “Wait, what?” answer for service is, “We are going to cover people for a longer time, giving them a better car-buying experience and creating at least two new profit opportunities.” 

Getting your team together early and laying out the need awareness with “I wonder” starts a collective discussion that leads to the conclusion you desire. 

For example: I wonder what would be the result if we developed a reputation for giving used car customers a new car experience. I wonder how we could accomplish that. 

When the staff is involved all the way from “I wonder” to program inception, it is hard for them not to be engaged.    

The next question in Ryan’s process is: “Couldn’t we at least…?” Couldn’t we at least look into a program? Couldn’t we at least lay out the parameters of what this would look like? 

Once that is opened, you get past the original disagreements and dissenters and move on to mapping out a process, even if your staff is not entirely sure where you are going to finish with it.

Next is: How can I help?

John Kennedy stirred the country by saying, “Ask not what your country can do for you. Ask what you can do for your country. Not what America will do for you, but what together we can do.” 

In this case, everybody needs to ask, “How can I help?” 

It’s instinctive in humans to help out. There is a human function called the rule of psychological reciprocity, which means we treat others as they treat us. Asking the staff for help creates a desire for them to put an effort into the final decision. It gives them a feeling of importance and empowers them by recognizing their expertise. 

The dealer asking how he or she can help and the staff asking themselves about their path to success and how can they play a vital part in it can lead those who buy-in to do extraordinary things to ensure the continued success and viability of the program.

The final question is, “What truly matters?” 

“This is the question,” Ryan explained, “that gets to the heart of your own beliefs and convictions.” 

Allowing the staff to participate in the certified pre-owned journey to its conclusion is the way to capture the future of your market – because CPO is the future of the used automobile market. 

Your staff is likely to adopt the program as theirs and as imperative to their future. When your staff shares what truly matters and what is your heart’s desire, your ideologically synchronized management team becomes a powerful force in the market place. 

So how do you set yourself up to win on Sunday by the way you play on Thursday? 

First, get the right program – one that pays retail parts and labor, and has an unremitting drive for customer service as shown by Better Business Bureau and other monitoring agencies. 

Quite simply, you have to have a program to compete with factory certification programs. The strength of the factory programs is name association with the manufacturer of the automobiles being purchased. That is tough to overcome. 

But by using a nationally known entity backed by the same organization that operates the OEM’s programs, you can give your program credibility.

Once you have the right program, set your dealership up to succeed by assembling your key people – managers, finance, service, used vehicle buyers and the person who will be doing the certified vehicle inspections – and spending quality time together debating and analyzing the five questions: “Wait, what?,” “I wonder,” “Couldn’t we at least…?,” “How can I help?,” and, “What truly matters?” 

When you arrive at the conclusion that the success of everyone and the dealership is tied to capturing the future, and the CPO program you’ve picked will help in accomplishing that goal, you’ll have developed a program that will continue paying dividends well into the future – and a team dedicated to keeping the process going.

ABOUT THE AUTHOR: William Carr is a longtime auto industry veteran in sales, management and training and a regional training manager for Warrantech Automotive, Inc. administrator of the NIADA Certified Pre-Owned program. For more information on the NIADA CPO program, visit www.niadacertified.com/dealers

This article originally appeared in the May 2017 edition of Used Car Dealer magazine and can be found online at: http://bit.ly/2tQIYLK 

Filed Under: Bill, Carr, certified, CPO, customer, dealership, NIADA, program, service, vehicles

Spread The Word

By: Jeff Hatch

May 10, 2017

To Succeed in the Lucrative CPO Market, You Need to Make a Commitment – and Make Sure Your Customers Know It

As many as 60 percent of all pre-owned customers are interested in seeing a certified vehicle, and the CPO market continues to grow – 2016 was the sixth consecutive year of record CPO sales. 

Those statistics lead to an important question dealers should be asking themselves: “How can I get my share of that segment?” 

It’s simple. Find a certified pre-owned program you like and start advertising. 

When starting a certified pre-owned program, it is best to remember a saying I once read in a fortune cookie: “Who saw the antelope jump in the forest?” 

That might sound silly, but it points out that while few of us will ever see an antelope jump in the forest, everyone can visualize it because they have read and seen pictures. No event can be widely known and accepted unless it is publicized with a message broadcast to the public.

That’s the message of that supposedly ancient Chinese proverb. If you want your program to succeed, you must be ready to broadcast your commitment loudly and constantly to everyone.

When deciding on a CPO program, the gains must be weighed against the costs. And the best way to achieve a positive in that equation is to make a full commitment to the program. 

Your commitment needs to be accepted by everyone involved – your employees, customers and even the people you get your inventory from. 

In order to broadcast that commitment, you must analyze why you are starting this project in the first place. 

In the car business it is always about profit, which usually comes from selling more vehicles or making more on the ones that we sell. For dealers, that is the purpose of a certified pre-owned program.

The logical first step is to analyze what commitment you are making. 

In some cases a dealer will be changing his market niche to a certified pre-owned inventory or elevating his inventory to more current models. Most dealers, though, will still be acquiring the same type of inventory, and will most certainly be getting it from the same places. 

For them, the commitment isn’t to better cars or inventory. Rather, it’s to providing a better ownership experience for the customer. 

CPO accomplishes that by backing what customers purchase in a manner that gives them the peace of mind that they did the right thing by buying the vehicle from the dealer that they purchased from. 

That’s a long way of saying the commitment is just the right thing to do.

And if you are going to do the right thing, you might as well do it the right way. When looking at CPO, you need to have a program that follows three main criteria in governing the quality of the warranty. 

First, you must have an administrator that has the capacity and desire to pay claims promptly. That is easily ascertained by looking at the administrator’s other customers. You’ll want to partner with someone who has partnered with the giants in your industry. 

Second, the idea of CPO is to sell more cars and create more repeat business. That means the CPO program you commit to must have an unremitting drive to customer service. 

Remember, the customers who interact with your claims administrator are going to be in what is for them a crisis situation. When it comes to encouraging repeat business, it’s here the difference in warranty companies is felt. 

The third criterion is name recognition. Not simply because the name is recognized, but because the name is known or can be explained as synonymous with high ethics in the used car business. 

Once you have found that, you’ll have something worth broadcasting.  

When a dealer makes a commitment to any program, it is critical to the success of the program to broadcast it to the widest audience. The beginnings of success depend on how this project is presented to all parties. 

Studies show that resolutions of any kind made in quiet are not as successful as those that are written, posted and told to as many people as possible.

Kevin Corley, owner of Second Chance Auto in Charleston, S.C., recently made the CPO commitment. He chose to use the NIADA Certified Pre-Owned program because it provided the necessary three criteria.

Since General Motors and Microsoft had done due diligence on the administrator, he felt he could trust it to pay claims. He found the principles NIADA was founded on mirrored his. And he saw the NIADA shield would be recognizable in his advertising media, helping to brand him as a certified pre-owned dealer.  

Once Corley had made his commitment, he wanted to make sure that everyone knew what he now represented at his car lot. 

“Kevin is so excited about representing this program,” said Mike Sims, an NIADA CPO program representative, “that we actually baked a cake.” 

Corley demonstrated his commitment in a meeting with his entire company. In that meeting, he expressed his wish for the employees to embrace the program – and he capped the meeting with the aforementioned NIADA-themed cake. 

He explained that when you start a program with a special event like the cake ceremony, the employees know it is different – and a very important.

Once he had announced the program to his people, Corley immediately wanted to get the word out to his clients. So he broadcast the announcement of his new program on his number one marketing tool, Facebook Live, from which he can broadcast his entire operation to the customers – from coming off the truck through make-ready to on the lot. 

The result?

“We had 363 likes from broadcasting the cake ceremony in a matter of minutes,” said Corley. “The thing is, if they are watching on Facebook Live, they are in the market to buy a car, whether they know it or not.” 

Second Chance Finance Manager Milan Edwards said the Facebook broadcasts make a big impact on consumers.

“By the time customers watch a car go through the inspection process – the cleanup process, even pulling the car off of the truck – on the Facebook Live broadcast, they are ready to belong to something special,” she said. 

“Since the store has been involved with NIADA Certified Pre-Owned, we’ve sold 26 vehicles. Nine of those were CPO deals that would have gone somewhere else had we not notified our constituents of our commitment to this program.” 

Donald Holt, Edwards’ associate in the finance department, pointed out that only one of those nine early CPO sales was hesitant to extend the warranty protection with an extended service contract.

“And her husband was a mechanic,” he said. “Once they know the program, it is not selling to get them to do the upsell. It’s just filling out the paper work.”

Making sure the public knows about your commitment to their vehicle purchase is important in driving customers from the Internet to your car lot. 

Having vehicles marked as certified pre-owned on your dealership website is a good start. A deeper dive is using a CPO program that coordinates with websites such as Carfax or eBay. When you post your CPOs and they show up at the top of the selection criteria because of certification, it allows you to charge into the growing millennial CPO market.

Dealers can also broadcast their commitment to CPO by emphasizing the program in their lot decorations.

“NIADA Certified is actually a full marketing program that allows the dealer to maximize exposure to the public of his certified pre-owned program,” Sims said, including numerous marketing materials to dress the lot for the success of the program. 

Corley’s business partner Derrick Middleton said the pole banners provided by the NIADA program “create an atmosphere or excitement and tell the customer we have cars that have been given special consideration.”

And that excitement, combined with a strong CPO program, can give independent dealers a boost in their competition with franchise dealers for market share, said Natalie Suarez, national director of the NIADA program for administrator Warrantech. 

“Those dealers who fully commit to a program such as this find that the more they promote the certified pre-owned concept, the easier it is to compete with the local new vehicle franchises for certified buyers,” she said. 

“When they are part of the NIADA program and use their online and on-lot methods of marketing their vehicle as certified, dealers see an increase in all traffic – phone, Internet, appointment and walk up.” 

Dealers who have been successful in implementing programs such as NIADA’s say it is extremely important to get the information out to your potential customers before they are looking so they know they can find a certified pre-owned vehicle on your lot. 

And, they say, it is equally important to continue to broadcast the program’s benefits once the customer is on the lot. 

Auction Direct USA is one of the nation’s largest used vehicle operations, with stores in Rochester, N.Y., Raleigh, N.C., and Jacksonville, Fla. In 2016, its managing partner, Todd Hoagey, was named NIADA’s CPO Dealer of the Year. 

Broadcasting its commitment to NIADA Certified Pre-Owned has been incorporated into the dealership’s sales system. 

When customers arrive at Auction Direct they are met by a salesperson who “walks their wall.” The wall shows the story of the store, including how and why Auction Direct adopted its marketing system. And it all starts with the commitment the store makes to the customer through the CPO program. 

“Starting the sales process with the certified pre-owned explanation is integral in establishing a trust between us and our customers,” Hoagey said. “It makes it clear up front that this store is special and the customer can feel safe with our process.” 

One way to advertise the program is to dress the cars on the lot to identify them as having gone through the 125-point inspection required for NIADA certification. That can be accomplished with windshield banners that are visible from the street, as well as mirror hangtags that remind customers the vehicle has been through a special process and therefore is provided with coverage that most pre-owned vehicles don’t have. 

So who saw the antelope jump in the forest? 

Almost no one. But through broadcasting the beauty of the event, everyone knows about it. 

When you broadcast in all of your media – Internet, newspaper and radio/TV ads, on your cars, in your sales process – you can get that all-important bump in sales. 

“Once customers know about this program, why would they shop anywhere else?” Second Chance Auto’s Milan Edwards said. 

The key is making sure your potential customers know about the program and your commitment to their ownership experience. That includes consistent messaging and using identifiable logos that flow throughout your advertising, allowing you to be successful by branding yourself as a dealer customers can count on.   

ABOUT THE AUTHOR: William Carr is a longtime auto industry veteran in sales, management and training and a regional training manager for Warrantech Automotive, Inc. administrator of the NIADA Certified Pre-Owned program. For more information on the NIADA CPO program, visit www.niadacertified.com/dealers

This article originally appeared in the May 2017 edition of Used Car Dealer magazine and can be found online at: http://bit.ly/2q1lEsz 

Filed Under: automotive, Carr, certified, CPO, dealership, NIADA, pre-owned, sales, William

Displaying results 1-5 (of 10)
 |<  < 1 2  >  >|