Thinking Accessories

Dealers find new revenue through vehicle personalization, allow customers to be in the drivers seat.

As car buyers downsize to smaller cars and cross-overs, their appetite for personalizing their ride is still as large as their traded-in SUVs. Dealerships are scrambling to satisfy their customers’ desires for individuality through customization using innovative web-based tools and discovering a financial boon that is helping to offset an otherwise dismal economic climate.

“Dealership customers have come to expect a high level of customization and vehicle personalization,” says David Stringer, president of Insignia Group a provider of web-based accessory cataloging systems. “Just because the vehicle is smaller, doesn’t make it less attractive to personalize.”

However, dealers traditionally have found the customization process to be difficult and accessories sales to be a hassle. Poor cross-departmental communication practices frequently resulted in pricing and information inconsistencies. These inconsistencies complicated the accessories sales process, making it difficult to motivate dealership staff  to offer customers personalization options. Just ask Mark Polasek, parts manager at Ehrlich Toyota in Greeley, Colo. “Giving our customers the ability to customize their vehicles at the time of sale or service is a big part of our dealership’s offering,” says Polasek. “What we struggled with in the past is making that process easy for our customers and our staff.”

Polasek grew tired of trying to use out-dated paper catalogs, so he turned to the web and found Insignia Group. Using Insignia’s web-based accessory cataloging system, Polasek says that his sales and service staff have the information their customers want at the click of a mouse and can track what a customer wants through the car buying process. Polasek continues, “The web-based cataloging system is a pivotal component in our retail customers’ sales experience and complements the Toyota Signature Process in our dealership.”

Here’s how it works: After a customer goes to a dealership, he or she is offered an array of accessories through an electronic catalog and sales system that is available in every department. In the showroom, accessories are presented at the time of purchase as an affordable option for personalization.  In the service lane, accessories are presented as upgrades and performance enhancers. In the parts department, accessories are offered as a way to extend life and resale value of the vehicle. As part of the new vehicle sales process, accessories are rolled into financing. Once the customer fills an online shopping cart and submits an order, either at the dealership or from home, processing starts. Customers receive a coordinated response from all departments, with availability status and installation schedules. The system makes communication between departments seamless and fully tracks the sales process from start to finish.

According to the Specialty Equipment Manufacturers Association (SEMA, the industry body of vehicle accessories), personalization is big business - $36 Billion in 2007. Yet dealers are only scratching the surface of this marketplace: roughly only 10 to 17% are going through dealers, according to SEMA’s data. One of the barriers for dealers to this marketplace has been access to consistent information and the ability to price it accordingly. With web-based systems, this barrier is removed, and dealerships are able to put customers in the driver’s seat with personalization.

“Because customers like to be in control of their purchases such web-based systems give them the power to make choices without any added pressure from a salesperson,” said Mike Banaag, a parts consultant at Murray and Holt Motors in Bend, Ore., who uses the Insignia service.

“Dealerships and vehicle manufacturers are really searching right now to find ways to communicate with their customers,” says Stringer. “Web-based accessory tools do just that: allow the customer to dictate to the dealership how they want to personalize their vehicle, whether that’s at the time they purchase it or while it is getting serviced.”

Accessories: The Next Big Thing For Your Dealership

Three Reasons Why...

I had a very painful and disappointing realization the other day walking through a parking lot. I happened to notice a tricked-out Chevrolet Tahoe. It had rims, chrome mirror caps, door handles and a gas cap, side-steps. And then it hit me like a ton of bricks – the days of tricking out SUVs and trucks like this are behind us.

The full realization that the market is moving to cars is upon us – much faster than most predicted. The American culture is once again on the move. Conservation and fuel economy are kings right now. So what does that mean for the accessories and personalization business? Have I been wrong about personalization being the next best thing for dealerships?

Has establishing a process and making personalization part of your dealerships culture been a big waste of time? What a perfect time for Fixed Ops Magazine to run their “Accessories” Issue, because the answer is a resounding “NO”. In fact, the more you look at the options, where the car business is headed, and the prospects for dealership profits, there has never been a better time to get into the game. Here’s why:

Customer Expectations

I have three kids all under the age of 12. Their expectation to customize everything is astounding. Then there’s Gen Y, the age of young adults from 16 to 25. There are 80 to 100 Million of them, all entering the mass market, all with the same personalization expectations. This group didn’t know of a time before PCs. The influences of access to information, cut-throat competition, and the spectrum of consumers today makes it impossible to launch a product that is a “one-size fits all”.

Product manufacturers know this and are desperate to market to us how WE want to be marketed to. There are all kinds of computer-related examples of personalization but this idea runs through most, if not all, industries today. Why would the car business be any different?

In fact, it is not. Take a look beyond gas mileage and look at what manufacturers are competing with -- not to mention that each and every vehicle manufacturer has some accessory line up, whether it is a full line like GM’s, or a combination line of OE and Aftermarket like Toyota. Every car maker already knows that personalization is the future.

Manufacturers’ Response

Let’s start with the revolution of the Scion brand. I am using “revolution”, because by all accounts no other manufacturer has attempted to develop a brand and a vehicle exclusive for one segment of the market. Up to this point, most manufacturers built cars with various options, then MARKETED those vehicles to market segments. Meaning that car “X” has various options that appeal to younger buyers, such as ground effects or interiors, and then the same car “X” has different options that appeal to older buyers - leather seats, wood steering wheels, premium sound system. That’s not what the Scion was about. Toyota prepared three base vehicles that would appeal to Gen Y kids. Then these kids (or adults who wanted this kind of buying experience) picked the options they wanted when buying the car. If you didn’t like the Xb, too bad. But if you did, then you got to finish the car and pick it up at the dealership a few days later. No one other than Toyota wants to admit it, but this is the way cars will be built and sold in the future.

Let’s look at a little known GM fact. A Chevrolet dealer could at one time order the new 900 Silverado without a front grill! When the truck arrived on the lot, the customer could pick from several chrome grills available through the GM Accessory program. Now known as Vehicle Personalization Options (VPOs), dealers can now order vehicles that allow the customer to pick everything from different side steps to chrome wheels once the vehicle is delivered to the lot. And here’s the shocker: GM’s research shows these vehicles are on the lot just half as long as vehicles not accessorized! Personalization sells vehicles.

As we have seen gas prices return to Earth, miles per gallon will still be a marketing slogan and competitive battle grounds. But history has shown that America has a short attention span and memory. Hello? Didn’t we go through this same drive for fuel economy and conservation in the late 70’s and early 80’s? My point is that fuel economy and conservation will one day NOT be the competitive battleground of automakers. And if I can sell cars in half the time by letting customers choose their options, where do you think I will differentiate myself from my competitors? It will be in my degree of personalization options.

But where will those “options” come from? This brings us to another important player in the mix: aftermarket manufacturers. It is no mystery that vehicle manufacturers source products from accessory manufacturers. It’s also no shocker that many of the products offered through the aftermarket channel are identical or close to the same products manufactured for the OEMs. Yet there is this cut-throat battle raging between OE accessories and aftermarket. Yes, there are differences between manufacturers and ranges in product quality, but you better believe that right now accessory manufacturers are working hard to cut deals with vehicle manufacturers.

Many of the “standard” personalization accessories we know and love today will be made from several large players. The culmination of this “maturing” in the aftermarket will be more products offered by vehicle manufacturers that are produced with OEM “standards” and sold through the dealer channel for a competitive advantage.

Dealerships Seeking Profits

Most domestic dealerships are not fun places to be right now. Imports are feeling the pain, but the clouds aren’t as dark in most cases. If you are a Honda dealer, it couldn’t get any better – that is if you have cars. Despite what happens with gas prices within a couple of years, fuel economy will be old news. Everybody will be doing it.

You can also expect that quality will continue to rise and there will be less and less difference in “perception” of quality between the remaining domestics and the imports. So how will dealers compete? Price? Yes, but that will always be a factor and will usually only come into play once the customer is in the deal.

So how do you really differentiate a Camry, Accord, Taurus and Malibu? All are excellent quality; all are an excellent value, and all are gaining public perception as “great” cars. It must come back to personalization.

What is so great and yet so damning about the dealer accessories business is that it touches every part of the dealership. These days dealerships I visit have the desire to make accessories work. But what must happen first is to make the dealership work. Selling personalization throughout the dealership and online requires cooperation, participation and patience from Sales to Service to Parts and the Body Shop. The payoff can be and will be huge.

Originally published in Fixed Ops Magazine, Oct.2008.  Used with the permission of the publisher.

Building a Strong Accessory Sales Process

With shrinking margins and longer periods between vehicle purchases it is important that dealers find innovative ways to mitigate loss. It’s time to implement a process in your dealership that leverages accessory sales as “replacement gross”. This process should deliver higher profits, motivate sales commissions, strengthen brands, and increase customer retention. The challenge for many dealers however, is building a strong foundation for a lasting accessories program.

The first step is to lay a strong foundation for your accessory sales program with a clear process that becomes an integral part of your dealership’s culture. This process needs to incorporate every department; it should reward and reinforce participation with a clear and enticing pay plan.

Too often dealership processes come and go. Advocate your fledgling accessory sales program. Keep pushing. Don’t let it die-or languish. Appropriately reward everyone involved each step of the way. Formulate an easy way to track the success of your program without placing undue stress on your accounting department. Do this by incorporating the appropriate technological sales tools that simplify the process by minimize paper work, while providing rapid ROI. Don’t let your program turn into a hassle for anyone in the dealership. Your goal is to have your entire staff advocate and embrace accessory sales.

To ensure that your accessories process sticks, select an “Accessories Champion” and charge them with the success of your accessory sales process. Champions don’t have to be managers… it’s better if they aren’t. You need someone with discipline, enthusiasm and likeability. In many ways, your champion is selling the program as well as accessories. The right person is somebody who has a good relationship with, or can influence, the sales department. This may be a member of the sales team or ideally your Internet Sales Developer.

Make your accessory process success mantra “Repetition, Reinforcement, Rewards.” Accessories sales success is like raising kids. The only way to instill the values you want is repetition and leading by example. You must keep it out there until the entire dealership follows your lead and accessory sales become second nature. Every deal, every day. It’s the only way to put accessories in your store culture to stay.

Reinforce until your entire dealership keeps accessories top of mind/top of paycheck no matter what you say or don’t say. Repeat, reinforce and reward until everyone knows-and takes-each step of your accessories process without hesitation.

Boredom and the Art of Accessories Sales

By David Copp Stringer

I have a suggestion.  On the last Saturday of the month, go into your dealership and spend about an hour (hopefully its busiest) hanging out in the showroom.  Sit down, walk around - and watch.  What will you see?  Unless you work at an accessories-active dealership, exactly what my wife and I saw a few weeks ago when we replaced the family minivan.

How many customers are sitting around waiting?  And waiting?  And waiting?  With nothing to do and not much to look at except each other and everyone else sitting around doing the same thing.

That’s what my wife and I saw.  Bored customers, excited about their new vehicles - with no way to turn that enthusiasm into more dealership profits.

Our time at the dealership was minimal.  We knew what we wanted, called our local dealer and did the deal over the phone.  Kati and I didn’t set foot in the store until it was time to sign the papers and switch the plates.  You still would have seen us there, staring at each other and those around us doing the same thing for the 20-30 minutes it took to process the paperwork.

Not surprisingly, a friend of mine had a similar, probably more typical buying experience.  Unlike my wife and me, she didn’t know which model she wanted and didn’t have a local dealer she knew well.  She did things the old fashioned way, helped along by dealer, manufacturer and commercial websites like KBB, Consumer Reports and Edmunds.com.

She took six weeks test driving six different models.  She visited at least two dealers selling each brand (two US, two Imports).

From the start, even though she wasn’t sure which model she’d buy, she did know she wanted a few accessories included in the deal:  upgraded sound, self-dimming mirror, rear bumper guards, bigger wheels and maybe a few other, nice-to-have-but-not-necessary items.

She told each dealership up front she was a buyer, which model(s) she was interested in and which features she had to have, whether or not they were Standard on the models she was considering.  At each dealership she sat around, alone mostly (after the third store, her husband stayed home) for 20-60 minutes while the salesperson and tower did their thing.   

Even knowing she was a buyer willing to add profitable accessories to store coffers, the dealerships had nothing to pique her interest in even more goodies.  There were displays hidden in the far corners of the showrooms, but she usually had to find them herself.  There were model brochures, of course.  The had lists, limited pictures and no prices.  None had the accessory range or showcase that could have impressed her enough to make the dealership even more money.

Not too surprising, we both had the same showroom experience.  We both had the same reaction:  “Why am I sitting here bored when I could be choosing accessories to make the new car mine?”  In my case, I showed the salesperson one of our accessory sites on her computer.  Her reaction?  “That’s so cool – how did you find out about it?” 

My friend did something similar.  Through our association, she was familiar with point-of-sale accessory sales sites.  At each dealer, she asked the salesperson why they didn’t have something she could do while they were taking care of their business and told them about mine. 

Without exception the sales people were enthusiastic, saw dollar signs escaping their pockets and explained that sadly, they had nothing to do with store policies and business rules.

Both of us bought new cars.  We both had our own financing, but she rolled an extra $1000+ in OE accessories into her deal.  Accessories she had to ask for and that were never suggested by any salesperson or SM involved in her search.  More potential profits were lost because her husband might have stayed involved (and maybe talked her into leather) had there been something interesting and “instructive/constructive fun” to prevent the boredom and discomfort of staring at other bored – and increasing impatient – customers.

We both saw lost opportunities: single women (they’ll feel the dealership’s concern for their safety when someone offers an extra alarm and safety bundle).  Families with young children (an interior protection package will safeguard their investment where a family with kids needs it most!).  Young swains out to buy their first pick-up or SUV (the only thing hotter than this vehicle will be you when you crank up this super premium system with monster bass!  Just add it to the sale when you finance!). 

These customers could have easily become dealership Service Bay and Parts loyalists, appreciating an approach to their personal vehicle needs.  And to the attention their personal wants got, as well.

The moral of the story?  My dealer might have increased his profit with accessory sales had Kati and I been sitting in front of a computer screen oogling all the neat stuff we could get.  My friend’s dealership made accessories money in spite of themselves.  Both could have made even  more from all the other customers waiting around staring at each other instead of playing with an accessories configurator and liking what they saw.

Back to your experience, when you tire of watching people watching each other, walk up to a few of them.  Casually ask how they’re enjoying their new vehicle buying experience.  Ask if they’d like to have something interesting and entertaining to do while they wait.  Ask others if the vehicle they’re considering has absolutely every little thing they’d like on it, do they have plans for add-ons, would they consider adding an item they like if it weren’t standard equipment? No hard sells, just ask questions. I think you will be amazed.

Even if you don’t talk to customers, you’ll have to agree those folks look like they’d eat tacks than sit around a car dealership.  Giving them the opportunity to pass time browsing the aisles of a colorful and interactive store accessories catalog will at least give them something entertaining and informative to think about.

What would a customer friendly accessories catalog do for the end of the store where the real money is made? 

My friend traded with a small dealership without huge parts and accessory inventories.  She had to wait a few days to get her accessories installed.  In the meantime, she got to know their Parts Manager and is developing a comfortable relationship with the back end of the store.  They’re all getting a piece of her accessories money.  And if I know her, she just might be crazy enough to travel 27 miles to the dealership for service because she appreciates their efforts.  Who knows?

My point is that keeping customers waiting is painful.  Keeping them bored (and therefore feeling like the wait is even longer) can be critical.  Keeping them engaged and getting them invested in their “just right” new vehicle, however, will make you a very healthy profit.

Originally published in Fixed Ops Magazine, Nov. 2007.  Used with the permission of the publisher.

Take Your Sales Manager To Lunch

By David Copp Stringer

If you have one of the few examples of a great relationship between Parts and Sales, this article isn’t for you.

The rest of you, pick up the phone and call your Sales Manager.  “Jack (or Jill), let’s have lunch tomorrow.  My treat.  How’s 11:30 sound?  There’s something I’d like to discuss outside the dealership.  I’ll explain then.  Yeah, I’ll come up there.  Great!”

You just did the number one thing to increase dealership profits and help your dealership sell more vehicles.  The icing on the cake - you’ll sell more accessories in the process.

I realize if you work in the typical dealership, you might no be lunch buddies with your SM.  This relationship is critical to your dealership’s success.  I see fractured and antagonistic relationships between Parts and Sales Managers in organizations all across the country.  In many cases, there’s a strained relationship with the General Manager, as well.

I really don’t want to dredge up the hows or whys these negative relationships develop.  I’ve just seen enough in my automotive accessories career to know the friction is at best, counter-productive.  At its worst, it can freeze up the inner workings of the entire dealership – something the stress of today’s market realities alone can make difficult enough without shutting down communications between two key departments.  What we need to do is repair a weak relationship – or capitalize on a good one.  What’s the one true thing you can say about every Automotive Sales Professional (selling or managing) on the planet?  What they care about most is selling.  It’s what they do and how they’re supposed to do it.  And the way they do it is always paved with “What’s my end of it?”

As you know, Sales jobs – and Sales peoples’ natural inclinations – are highly competitive and personal reward-centric.  The trick is to enlist these traits, which some may perceive as unsympathetic, to actually strengthen the relationship between your store’s front- and back-ends.  Doing so doesn’t just build Sales, Accessories, Parts and Service success – it builds internal, whole dealership success in ways that can withstand all today’s world market throws at it.

To get there, you must remember it’s All About Them.  The key is understanding that nothing you discuss, propose, suggest, etc., has anything to do with YOU.  It’s all about them.

By inviting your SM to lunch, you’ve already shown how important they are to you – and the dealership.  By going to their office beforehand, you announce it to everyone in their department, as well.  That cryptic tease, “…there’s something I’d like to discuss outside the dealership…” isn’t just feeding curiosity - it’s feeding ego.

Bring a program, promotion or accessories idea you’ve been kicking around, but haven’t had an opportunity to launch to the meeting.  The example I’ll use is a “trade-in” promotion.  There are literally thousands of ideas that, when based upon your store and your market, will work.  This isn’t meant to be a one-size-fits-all promo idea.  The point is to have an idea to present based on “what’s in it for sales”. 

At a favorite lunch spot that’s far enough from the dealership to minimize interruptions, sit at the most quiet table you can find.  If you feel like grandstanding how important lunch with the SM is to you, take out your cell and turn it off.  After the opening small talk, offer the observation that as part of the dealership team you know that keying into their efforts could help yours.  Say you have an idea that sells his vehicles and your accessories, starting with the customers Sales has already sold who come back for service. 

Everything should be slanted so Sales is in the driver’s seat.  Tell him you want to run an “Accessories Trade-In” promotion that will add the same accessories already on the trade to a new vehicle.  For trades without accessories, suggest a $500-$1500 accessories “allowance,” figured on new vehicle popularity, inventory and profitability.

Then pull out a piece of paper.  Nothing fancy – more pencil-noodled than computer-generated.  As you open it, talk about how you want to increase accessory sales by tying it in to increased new vehicle sales.  Then hold up the paper with these words (or something similar) scrawled across it:

“Trade this vehicle for a new (dealership and brand here) before your next regularly scheduled maintenance and we will match all accessories on it at (decide this with your SM) Wholesale, No Additional Cost, with Free Installation, etc.!  Ask your Sales Associate how!”  Sign your own name/title.  Better yet, cross out your name and put down the SM’s.  “I think it may be stronger coming from Sales, don’t you?”

Remember, it doesn’t have to be my promotion.  But it does have to work for both your local market and your dealership.  Then ask if your SM has any ideas that could help.  If they do, listen.  I’ve learned it doesn’t matter where a good idea comes from.  Admitting that is one of the underpinnings of strong, mutually innovative and beneficial relationships – exactly what we’re trying to build.
  Whatever promotional offer you propose, show some basic math.  Say you think a Sales/Parts/Service Spiff is in order.  Ask what they’d recommend.  See how fast they go for it. 

That piece of paper?  Suggest you print it up and leave it on the seat of every car coming out of service.  Maybe on removable stickers slapped on the customer’s present vehicle accessories.  Suggest using Service Drive posters, too.  Ask if you can post some in the showroom.

Marketing your promotion is vital.  Does he/she think that’s enough?  Should it be promoted with lot signs, radio, TV, some kind of promotional prizes or giveaways?  Ask their opinion of your applying tactics you’ve seen them use.

No matter how successful (measured in Accessory Sales figures) your promotion is, you will have done two critical things.  One, started a collaborative relationship with your Sales Manager.  Two, put accessory sales in the center of your dealership’s culture of selling new vehicles (see Fixed Ops June, 2007, “The Cultural Exchange…”).

Yes, you and your SM will spend some money, but you’ll be building communications, trust and respect for each other as you build your dealership brand.  The returns will bring more vehicle sales.  The promotion will show your community that your dealership customizes cars.  Customers get the accessorized vehicle they want at a price they like.  Sales people sell more vehicles and make more money doing it. 

More importantly, you and your Sales Manager will have proven, once and for all, that it’s not successful unless it’s successful for the whole dealership.  That there is more than one route to vehicle sales.  More than one route to Accessories, Parts and Service sales.  Perhaps most importantly, that Sales and Parts aren’t two separate departments in opposition.  They’re players on the same team who can work together for the greater good of the entire dealership.
Isn’t that what Fixed Ops Success is all about? 

Originally published in Fixed Ops Magazine, August 2007.  Used with the permission of the publisher.

Thinking Accessories: Thinking Price

Selling the extras benefits all of the fixed ops departments
By David Copp Stringer

For four years now, my professional life has been thinking OE Accessories.  Thinking about how they can bolster dealership profits or how accessories can distinguish one store from the next, as well as one brand from the next.  A lot of my focus is on changing the mentality of dealerships to realize the many benefits of a well-executed accessories selling process.

Working closely with most GM ADIs (Accessories Distributors and Installers), several Ford Accessory Distributors and about 600 Dealerships of just about every make and model, the single most discussed Accessories topic among dealerships is Price Thinking:  how to price OE accessories competitively, to compete with aftermarket add-ons; and how to spread that markup so each department gets a piece of the pie.

A traditional Parts Department operates at a 25-40% above cost on replacement parts to their own Service Department or the Independent Installation/Service Shop down the street.  All too often OE Accessories are treated the same as Replacement Parts; the same markups are applied.  In my history with accessories, wrestling a Parts Manager out his (or her) comfortable 25% markup on accessories is like pulling a T-Bone away from a Rottweiler.  I get a lot of disbelieving - and often combative - stares.

Breaking out of this comfort zone is the first step in implementing a winning pricing strategy for OE accessories.  It is also the most popular topic of discussion I cover when working with dealerships from any number of manufacturers.

The most common argument is the “hassle” factor.  They raise the hassles of stocking and ordering OE Accessories, but their biggest objections center on the hassle of dealing with sales staffs sporting an I’m-Not-Gonna- Waste-Time-Pushing-OE-Accessories-I-Don’t-Make-Money-On Attitude.

Nor should you.  So that Traditional 25% Parts markup on OE Accessories ends up 25% of Nothing.  But it’s still less hassle, right?

If you’re a GM dealer, the Hassle Argument doesn’t work anymore.  The GM ADI network solves most of the hassle issues (expect for the sales staff issue, but we’ll get to that).  Ford Dealers have a similar partner in their Ford Accessories Distributors.   

Mopar and Import Dealers may have to stock a few more Accessories, but if you pay close attention to what your customers are looking for, that stock will fly out the door as soon as it hits the shelf.  While you may not be completely free of some OE Accessories hassles, if priced right, profits should render those hassles moot.

The next step in changing Price Thinking has to do with the Mentality of Volume.  Again, Traditional Thinking invades here with the idea that replacement parts are “usually” sold.  Someday, somebody is going to need that alternator, “so I can afford to hang on to it until I get my price.”   

OE Accessories are not like parts.  While the “need” for them may be strong, it’s typically an emotional need.  Their vehicle will still get them to work and play, accessories or no accessories.  Vehicle accessories should therefore be thought of as Impulse Items -- not Parts.  Dare I say, almost like Fashion Accessories and like Fashion Accessories, should be sold in high volume, on lower margins. 

I said lower margin, not low margin.  Lower margin means the dealership is pricing accessories based on brand and value, not on lowest price in town.

What’s the magic number for parts managers on accessories?  On average: 15% and 10 % if you’re really in the game.  Based on the market and competition, your goal as Parts Manager should be to have a total retail price to your customers of not more than 40% over dealer cost.  Not less than 35%.  (This is true of all brands.) 

Getting brand specific, GM and Ford Dealers should break down their markup somewhere around 15% for the Parts Department and 25% for Sales.  Mopar has a very competitive MSRP and we recommend dealers reduce their price slightly off MSRP.  But no more than 5% - just enough so customers think they are getting a bargain.  Imports also have very competitive MSRP pricing, so as long as demand remains high, we typically recommend staying right on MSRP.

Why are we asking parts managers to “give up” so much of their margin?  Accessories sales depend on sales people and service writers.  You must get them In Game, and the only way to do that is with $money.  Even then, it isn’t guaranteed a sales person will be motivated by $200 a copy selling DVD headrests.  At least, not until they have a month where they make more on OE Accessory Sales than car sales.  We see this happening increasingly as Dealerships turn to OE Accessories as a way out of shrinking New Vehicle Sales Margins.

So still not convinced?  If you dig your heals in at 25% - no lower, how about this: Charge your sales and service departments a full retail 40%, then pay Sales Staff and Service Writers a commission on all OE Accessory sales of around 10-15%.  Same game, but now you’re paying Sales and Service Writers directly.  We have parts managers who are handing out checks at weekly sales meetings. Talk about impact. Sales and Service Writers are the ones who will change your accessories bottom line, realizing for your dealership an entirely new stream of profit and customer satisfaction.

Yes, there’s one big piece of the puzzle that you’re probably thinking I missed -- service and labor, right? Equally as vital and worthy of another installment, but now that we have the foundation of pricing built we can begin to shape how the entire dealership, Thinks Accessories.

Originally published in Fixed Ops Magazine, January 2007.  Used with the permission of the publisher.

It’s Your Choice: Myth vs. Reality in Online Sales

By David Copp Stringer

There’s a big misconception about Internet based accessories catalogs and Internet sales.  All too often, these web-generated tools are equated with a dealership’s online parts site.   

Online parts sales offer branded parts at the going rate.  They’re great for neighborhood repair shops and DIY mechanics.  Order online or by phone.  Pick up at the counter or have it delivered.  What you deliver – whether at your counter or to their garage - is Parts.

Pricing is pretty standard.  You don’t need an alluring interface, lots of interactivity or a big sales staff.  Parts customers want parts.  All they need is an updated catalog listing what you have, what’s special order, what costs what.   

Nothing unusual there.  No one expects online parts sales to increase profits on new vehicles, bring in customers for service and installation or to drive in-store retail sales.

Web generated accessory catalogs, on the other hand, don’t serve the local repair industry.  They aren’t designed to bring customers to your parts counter for a new battery or gas cap.  And they’re not a profit center for just the parts department, either.   

They’re internet based because it’s the best tool to keep the catalog constantly, correctly updated.  If this could be done in print, it’d be a lot easier for dealerships to accept.  But OE Accessories are constantly added and discontinued.  As a matter of fashion, there is continuous development of new OE and Aftermarket products.  Combined with each dealership’s need to apply its own pricing structure and business rules, this makes it virtually impossible to keep a printed piece updated and to-the-moment current.

Add to that the disastrously misguided idea that web based dealer accessory catalogs are there to drive internet sales for just the Fixed Ops Manager’s departments and it’s no wonder there are disgruntled dealers wondering what the big deal is.

I see it time and again – dealerships sign on with a web-based service, only to become bitterly disappointed when they aren’t exactly overwhelmed by online sales.

In truth, nothing could be farther from it (the truth, that is).  No matter how well designed the site is.  No matter how correct the data.  The purpose of an online accessories catalog is absolutely not to drive Internet sales.  Don’t buy into that myth.  Once you do, I guarantee you won’t be successful.

If you’re looking to make money on your web based accessories catalog, you must accept it for what it is and for what it is not.  That’s the only way you’ll get what you pay for.  And the only way it’ll make money for you.

Before I go any further, I think it’s time for another reality check or two.  The first one deals with Parts Department profits vs. Whole Dealership profits.  Accessory Sales bring profits into the entire dealership, not just Parts. 

The second realty is about online accessory sales in general.  With very few exceptions, customers who surf the web for their accessories have two thoughts in mind.  The first thought is “I want something.”  The second, driving thought is “I want it as cheaply as possible”.

People who shop for accessories online are browsers first and bargain shoppers foremost.  They’ll order from the far regions of the country to save a few bucks.  Offer free shipping, they’ll beat your door down.  Then they’ll install it themselves or worse, hire someone who’s not you to do it. 

They never meet you or your sales staff.  Never enter your dealership.  They won’t buy regular service or consider you “their” dealership and seek you out come New Vehicle Time.

What do you get when competing for this kind of buyer?  You sell a part dirt cheap.  If you make anything, it’s on shipping.  Whatever mark-up you add to what the big brown truck charges is about the only profit you’ll see.  With or without your glasses. 

You’re a nameless, faceless and cheap thrill.   As for repeat sales, as soon as they find their next item cheaper somewhere else, it’s adios amigo.

A good online accessories catalog lets you charge retail prices as per your dealership business practices.  It brings customers in - and back - for sales, installation, service and replacement.  Each time they come in you have another opportunity to become a happy habit.  Take care of them, protect your relationship internally, you have a potential life long customer for every department.

The best online catalogs get customers into the dealership and once inside, build on the in-store sales experience.  As important as aligning their expectations, dealers should respect the catalog’s real purpose as far more important than faceless, price-driven online accessory sales. 

By creating online sales that require in-store visits to sales, service and parts, these online catalogs help build the best kind of customer loyalty.  They encourage the habit of returning to the same  dealer for parts, service and eventually, their next vehicle. 

To which they will add accessories from your Internet generated accessories catalog at in-store retail pricing - not discount-driven web pricing.  For which they will require routine maintenance as well as the kind of service that requires a healthy dose of - what else?  Parts. 

Treat these customers right.  Respect and train for the online accessories catalog that helped drive them into your parking lot.  Once you’re a habit, you will have earned their loyalty.  Of course you’ll be the first dealer they see when it’s time to start the cycle all over again.

Dealerships - and Fixed Ops Managers - who look to their web based accessories catalogs for Internet accessory sales or worse - as strictly a Parts Department profit center - will never be happy with their returns.

Before you decide upon a web based accessories catalog, you need to first examine your motives and let go of mythful thinking.  First, you must differentiate Web Based Accessories Catalogs from Online Parts Sales.  Stop thinking of the catalog as a driver for more Internet sales.

Perhaps more importantly, you must also stop thinking of accessory sales as a route to more profits for your Back End Kingdom vs. more profits for someone else’s Front End Domain.

You must instead look at the Whole Dealership’s profitability.  When dealership profits are up, yours are, too.  When your Internet based accessories catalog is a front-end sales tool, it builds new vehicle sales and spiffs.  It also adds installation and accessory income to Fixed Ops.  Parts and Service get more opportunities to meet customer needs by upselling more accessories, installation and service. 

In short, it builds positive customer-whole dealership relationships.  All of which can add up to increased earnings for everyone in the dealership.

Try to get all that from anonymous, strictly online sales tools. 

Post your comments. Let me know how fast you let go of the myths.  And how fast you profit from their reality.

Originally published in Fixed Ops Magazine, September 2007.  Used with the permission of the publisher.

The How of Accessory Sales Success

By David Copp Stringer

After years in the Automotive Accessory Sales Building business, I’m glad industry experts, movers and shakers are encouraging dealers to get into Accessories Sales. Something that delivers higher profits, motivating sales commissions, strengthened brands, increased store recognition, etc., is smart forward thinking.

Accessory Sales can recapture “easier money” lost to shrinking margins and longer periods between vehicle purchases. More importantly, Accessory Sales isn’t about just selling pricier vehicles. It’s the first step in building long-term customer-to-parts-to-service-to-return-sales loyalty. 

How do you get started? What tips, techniques, methods and madness bring Accessory Sales Success? Which attitudes, misunderstandings or myths pop the profit balloon, keeping you from starting? How do you motivate Management, Sales, Fixed Ops, etc. to keep the faith?

Glad you asked. 

Consider a situation ripe for accessory sales intervention: I call it the “Chrome-Plated 15 Minutes.” Picture your showroom with customers sitting at tables and sales desks and wandering the showroom bored. It’s not hard to image. Dozens customers cooling may be cooling their heels right now with nothing to do but wish they were done.

What if I said you could entertain customers and build profits at the same time? Skeptical? Why? You have a captive audience. All they need is something profitable to keep them busy.

Check out your OE’s accessory displays. Then spread them around thick. Placed in Parts, Service and Sales, POS (Point of Sale) displays get customers thinking accessories. Hard not to when a big, beautiful accessory cutout is all you have to look at.

No room? Try the hallway, service, outside restrooms – everywhere customers wait. Better, supplement POS with the real thing. Attached to a show vehicle or tastefully displayed auto-dimming mirrors, backseat theaters and chrome anything help customers relate accessories to day-to-day driving pleasure.

Buyers can also be inspired by dealer-branded online accessory catalogs showing decorative and useful accessories on the model of their choice. With/without encouragement from sales, an excited buyer can happily personalize their purchase and roll it into the deal.

Any other time, $1-$2,000 wheels could be hard to swallow. Rolled into the vehicle purchase, they’re affordable. And accessory buyers have an immediate need to cozy up to Parts and Service, giving you a better chance to make them customers for life.

More and more people fulfill new vehicle accessory fantasies every day. Why send buyers to the local chop shop or www.IwantAccessories.com?

Take that first step. Talk to Sales and Fixed Ops. Set up displays, look into online accessory catalogs. Decide how your business rules will apply to your new accessory business. Then champion accessory sales in your dealership(s).

By champion, I mean plant the Accessory Sales seed in every corner of your dealership. Plant it, nurture it, don’t let it die.

As to what system will work best for you, how to implement, encourage staff and customers and how to keep it up – keep reading my columns. I’ll give you my methods and share how successful dealers do it.

If Accessory Sales Success means changing the way you do business, it also brings back your profits. Something every dealer out there wants, regardless of nameplate.

The Cultural Exange Your Parts Department Needs

By David Copp Stringer

The products are on your shelves. You have a great e-catalog everyone in the dealership knows and uses. You read my last article and have done all 8 of the steps I suggested (yes, I am shameless). Your Sales and Service Managers are on board and psyched. 
You met with the sales and service staffs.  They’re excited, motivated, into it – right out of the gate, accessories sales rise fast.  Again, at 30 days.  At 60, they’re still holding strong.

90 days in, it hits.  You can’t ignore it  - accessory sales seem to be tapering off.  A fresh supply of sales people have replaced those seeking marriage or greener pastures.  Service writers are settling into their safe, steady routine.  They’re selling like they used to – but all they’re selling is service.

While the air leaks slowly from your accessories balloon, dust settles on your vent visors
It has to hurt.  Maybe even make you mad.  One of the most frustrating experiences a Parts Manager or Fixed Ops Director can have is not being able to sustain a solid accessories program.  Even with all the right pieces, there’s no guarantee your accessories program will be a long-term success.

Faced with the possibility, you could ask if it’s even worth trying.   And if you do, how do you keep that accessories balloon inflated and climbing?
Is $34 Billion “worth it?”

We’ve all seen the numbers - they’re pretty hard to ignore.  We also know dealers get very little of it (according to published SEMA research).  So.  Is it worth it?  Is it worth bucking the trend?  Worth grabbing those numbers by the horns and move heaven, earth and the dealership toward higher spiffs and greater profitability?

Yes.  In my opinion – and in the opinion of hundreds of successful dealers nationwide  -the answer can only be Yes.  The opportunity is there.  My only question?  How do we go after it without it’s becoming yet another program-of-the-month?

Culture, Culture, Culture
We’ve been working with a very large dealer group.  They’ve been piloting an accessories program the last few months.  Like all new programs, it was exciting at first.  After two months the pilot store’s/pilot stores’ sales leveled off.  In one case, they even dropped slightly!  I called the Director of Parts Operations to see what was going on.  “We’ve got to change the culture,” he said.

I’ve heard customers and colleagues alike call today’s accessories business eerily like F&I’s early days.  Some of you may not remember how F&I was scoffed at 30 years ago.  Not so today – F&I is a valid dealership business center.  A business driver and key source of dealership profits.  Selling financing is an important part of today’s industry culture.  To make accessories success stick, the same thing has to happen again – just a lot faster than in 30 years.

In many dealerships the dilemma comes down to this:  who will carry the accessories torch?
Sales is mainly interested in moving vehicles.  Never mind that SEMA research shows accessories actually help them move faster.  Most sales departments don’t admit – or respond – to it. 

Service Departments have a similar take called Just serve the vehicle.  Accessories sales and installation is a significantly small percentage of their P&L. 

Parts Departments, however, supply both Sales and Service.  It will naturally fall to Parts to carry the torch.  For a successful, sustained accessories sales program that’s  generous to all, the Parts Manager will have to change their dealership’s culture. 

Change our what? How?
What does it mean, exactly, Change the culture?  There may be better definitions of an “Accessory Sales Culture”, but my guess would be a seamless, whole dealership acceptance that accessories sell as casually – and as potentially profitably – as picks in the store’s Final Four pool.
The first step in changing any kind of culture has to do with proving it works for the good of everyone involved.  Oh, you say, it worked the first month – and the second.  Why would sales, parts and service employees who were better paid when they sold accessories, stop?
It hadn’t become a habit.  It wasn’t thought of as being part of the routine.  Part of the warp and weave of their work day.  Done subconsciously and often enough to be second nature. 

Natural Selling Through Process Development
The path to culture change and a sustainable accessories program is through the development of a process within the dealership.

Originally published in Fixed Ops Magazine, June 2007.  Used with the permission of the publisher.

NADA Rolls into Lucky Seven Accessory Sales Program

By David Copp Stringer

By now, everyone has put Las Vegas and NADA 2007 behind him or her—or at least has tried.

For me, not everything that happened in Vegas stayed there. While I may have left the Superbowl outcome in Vegas, I cannot forget all the dealers and fixed ops managers who came to our booth with a single concern. I can still see them in full-color mental reruns.

Why? They all expressed the same thought—and it was a full 180 degrees from what I heard at NADA/Orlando 2006. For the first time in all my years of thinking accessories, I didn’t hear “Why should I care about accessories?” Just about all I heard was, “Yes, we are trying to get into the accessories business … but I’m afraid we’re not doing a very good job of it. We need to do better.” What a change in just one short year!

If I talked to you in Las Vegas or if you just think your accessory sales could be better, you’re the reason I’m writing this article.

Here, then, is my “Lucky Seven Program for Accessory Sales Super Stardom.”

1. Know you can do better.

No matter how much you’re making in accessories sales, you can always make more. It’s no accident many of the large dealer groups are shifting business models to increase sales of—and often expect the lion’s share of profits to come from— fixed ops and accessory sales.

2. Be a champion or find one.

Like any successful program, accessories sales must be championed throughout your dealership. You (or your appointed person or even an entire department) must become the program’s lead cheerleader and policy driver.
Too often dealership processes come and go. Your dealership accessories champion must ensure that your accessories process sticks. Champions don’t have to be managers. You need someone with discipline, enthusiasm and likeability. In many ways, your champion is selling the program as well as accessories. Make sure your champion is someone you’d buy from.

3. Think product, product, product.

If you’ve read any of my previous Fixed Ops pieces, you know experience has led me to believe that OE accessories give both the best value to the customer and the highest profit potential to the dealership.
This might run counter to conventional wisdom that aftermarket products are less expensive and, therefore, perhaps what customers prefer. But OE accessories have been proved a valid and highly profitable channel (see Fixed Ops Magazine, November 2006). Whatever direction your store takes, you must have what your customers want. Whether it’s rear-seat entertainment, wheels, cargo management or exhaust systems, be sure you have a stocking strategy and supplier to help drive your business with the right products and availability.

4. Maintain consistent pricing.

Centralized, standardized-throughout-all departments pricing is key to a successful accessories program. This necessitates creating a matrix for consistent retail pricing with a delivery system so all departments—and personnel—are pricing from the same page. It must be reflected on your dealership’s Web site, flowing backward and forward through sales, service, parts and management.
Nothing will sack your accessories effort faster than sales’ quoting one price while parts quotes another. Whether you prefer an integrated e-catalog with custom pricing features or printed pricing notebooks, make sure the tools your staff uses are up to date and accurate. Even if it means daily manual updates. (How you price accessories can get dicey; for my thoughts, see Fixed Ops Magazine, October 2006.)

5. Be armed with ammunition.

Your sales force, service writers and parts staff need tools that help them sell accessories to new and existing customers. Full color product sheets and brochures, e-catalogs, “hero” cards and/or pocket reference guides should be available to all, in ample supply for both staff and customers.
Because prices change, promotional sales come and go, it’s best not to include printed prices in sales materials–but do leave space for write-in accessories, installation and tax costs, as well order status, install/delivery dates, etc.
To make it more personal for the customer and easier to assign sales commissions, leave space to attach cards or write in names and phone numbers. Customers buy what they see. And they’d rather buy from someone they know.

6. Dress your mannequins.

A dealer once told me that putting vehicles in the showroom without accessories is like walking into a department store full of naked mannequins. Sales people, service writers and parts personnel don’t just need ammunition, they need props— something real to help customers visualize what their fully accessorized vehicle will look and “feel” like.
Putting accessories on show vehicles sells more accessories and more vehicles. According to our dealer customers, the biggest problem you should have will be keeping your best-dressed mannequin vehicles on the lot.

7. Display and merchandise.

Featuring the accessories themselves in your showroom and service waiting areas does two important things: It announces loud and clear that you’re in the accessories business and it reminds employees you’re floor-space serious.
That it also suggests to customers that the accessories they love on your mannequin vehicle will look just as good on what they’re driving—it’s icing on the cake. Especially since accessories displays in waiting areas announce that you’re the one to go to for installation, too.

Crazy 8 Bonus Roll:
Show me the m-o-n-e-y. The Lucky Seven Program has definite, proven steps your dealership can take to cash in on the popularity and profitability of Accessory Sales. Yet in the final analysis, it’s the person that makes the sale. Whether that person works in sales, parts or service—or body shop, fleet sales, detailing, whatever—the one tried-and true way to motivate accessories sales is sharing the wealth.

First, accessories sales must be credited by the originating department. Equally important, each dealership employee who sells accessories must be rewarded, regardless of title or department. Nothing motivates or says success like money. With lowered margins on fewer sales, sales people can make more from accessories than from the sale of the vehicle itself.
When you get serious about increasing accessory sales and go at it with:

• A solid plan.
• An integrated and accurate whole-dealership system.
• Motivated personnel.

… then your entire dealership can find accessory sales trumping vehicles profits.

It’s a new ballgame, and your accessory sales program should make you a winner.
The industry—and your dealership—must move away from the mentality of “vehicle sales are my only chance for success.” On reflection, that 180-degree NADA shift from “Who cares about accessories?” to “How can I do better at it?” is no surprise. The time has come. Run with it.
That said, what I’d like you to remember is this: You’re not in the accessories game until you try. Trying is the most important step you can take.
If you’re not comfortable with creating— or subscribing to—an integrated whole dealership accessories sales system, choose one department to initiate your accessories sales push. Pick one, whether it’s sales, parts, service or a separate accessories department. And start. If you’re not as successful as you’d like, keep reading Fixed Ops Magazine for clues. You can tell me how you did at next year’s NADA.

Originally published in Fixed Ops Magazine, May 2007.  Used with the permission of the publisher.