psada fall 2011
DESCRIPTION
Official Publication of the Puget Sound Automobile Dealers AssociationTRANSCRIPT
The CappsAdvantage Nissan,BremertonPage 16
Why TV SportsAds Sell Carspage 11
Have MarketChanges AffectedYour Insurance?ppage 20
Clarifying JobExpectationspage 23
Reducing RisksWhen Remodelingpage 30
OFFICIAL PUBLICATION OF THE PUGET SOUND AUTOMOBILE DEALERS ASSOCIATION
Vol. 2011, No.4
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The Puget Sound DealerOfficial Publication of the
Puget Sound Automobile Dealers Association16101 Greenwood Avenue N Bldg 2100
Seattle WA 98133Phone: 206 542-3551Fax: 206 542-7561
Email: [email protected]
BOARD OF DIRECTORS 2012PresidentJim MorinoAcura of Lynnwood
1st Vice PresidentSara CarterCarter Subaru, Shoreline
2nd Vice PresidentSteve KleinKlein Honda, Everett
3rd Vice PresidentJim WalenFord-Hyundai of Kirkland
Trustee Position #1Dan Wilder, Jr.Wilder Auto Center, Port Angeles
Trustee Position #2Marc IkegamiDoug’s Lynnwood Mazda, Doug’s Lynnwood Hyundai, Doug’s Northwest Cadillac
Immediate Past PresidentJason CourterHonda Auto Center of Bellevue
PSADA STAFFJames R. HammondExecutive Director
Linda HalversonExecutive Assistant
Susan LeonhardiPrograms and Data Base Manager
Michele FoleyOffice Assistant
A Message from the EditorThank these great companies.They supported your industry in 2011!
InsidethisIssue
For information on advertising in this publication contact
Jim AitkinsBlue Water Publishers, LLC
360.805.6474
7 The Patient Protection and Affordable Care Act - Where Are We Now?
11 Sports In Seattle - Using TV Advertising to Score More Auto Buyers
14 The Speed of (Your) Money
16 The Capps Family - Their Fun Advantage
20 You and Your Dealership Have Changed
23 How Clear Are Your Job Expectations?
27 The New Battleground - Your Computer Vendor vs. Third Party Vendors
29 NADA - Assessing Used Vehicle Operations
30 How to Avoid the “Risky Business” of Dealership Remodels
34 The Telephone Doctor: Ten-Point Customer Service Self-Assessment Quiz
37 Adverse Action Legislation - Procedures You Should Have in Place to Comply
41 Coffee Break - Useless Facts
It is always nice to know who your friends are, right? Over the years we have seen a lot of companies that normally support our industry, slip away and stop investing in our business. But there are several “true-blue” supporters that never stop investing and believing in new car dealers.
State Farm Insurance just completed their sixth year as our naming sponsor for the Seattle Auto Show and has renewed for another five years. AutoTrader.com has also completed their sixth year of sponsorship and is a valued partner. BECU has been a strong partner for three years. We are grateful for our partnership with these major companies and the tens-of-thousands of dollars they contribute to the Seattle Auto Show each year. And, in 2011, The Seattle Times joined as a corporate sponsor contributing nearly $100,000 of in-kind coverage including its beautiful Official Auto Show Guide distributed to 1.2 million readers in its Sunday edition prior to the Show’s opening.
The above mentioned large companies and their support are critical to the success of the Seattle Auto Show. But, there are a few other loyal companies, who weren’t Show sponsors, who have also been contributing financial support to the Show for years. You will know them: Lela Yu at American Fidelity Assurance; Tom Pakar at Key AutoFinance; Rick Rekdal at Rekdal Hopkins Howard PS; and Duke Zieglmeier at Zurich.
When you see your representative from any of the companies mentioned above, thank them for their support. These folks believe in you and value your business.
Also, I would like to thank the advertisers of The Puget Sound Dealer. Without you this magazine would not be possible.
James HammondExecutive Director
Cover photo by Adam Buchanan
g
On the cover (l. to r.) Dean, Aaron andChuck Capps, Advantage Nissan, Bremerton
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You Talk. We Listen.At Ryan Swanson, we connect with people on a human level. That’s why our approach to helping
clients reach their goals is practical, straightforward and cost effective. It’s our no-nonsense way of
doing business that puts people first, like Brad Brotherton of Brotherton Cadillac.
Humanese Over Legalese. 206.464.4224 | www.ryanswansonlaw.com
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W?
When the Patient Protection and Affordable Care Act (“ACA”) was passed in 2010, no one was quite sure what impact it would have on insurance companies, consum-ers or employers. What everyone did know, however, was that the impact would be significant. Today, while some ACA programs have been implemented, much un-
certainty still exists. We have not seen many of the most important programs of the ACA, and no one knows what impact they will have.
Will the ACA survive?Since its inception, many individuals, companies and
members of Congress have sought to repeal the ACA. Thus far, even with the Republican majority in the House of Representatives, there is not enough politi-cal strength to fully repeal the ACA. However, the deficit fight of last summer, the Super Committee’s failure to come to a deal and the general consensus that spending on health care combined with the aging of our population render the current Medicaid and Medicare programs unsustainable all spell future political fights that could significantly change some or all of the ACA and its programs.
In addition, several legal challenges to the ACA have reached the United States Supreme Court, who
will hear oral argument early in 2012. The Justices plan to render an opinion before June 2012. It appears that the
Supreme Court will consider the individual mandate requir-ing all individuals to buy insurance as well as the ACA’s expan-
sion of states’ Medicaid program. The Supreme Court decision will have a huge impact on the viability of the ACA going forward. Of course, as
companies and governments experiment with programs to implement the ACA, they will discover which portions of the ACA work and which fail. Already, the CLASS
The Patient Protection and Affordable
Care Act
Where are we nowBy Kristin Nealey MeierRyan, Swanson & Cleveland
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program, which was to provide govern-ment long-term care insurance, has been effectively scrapped. It is likely that many changes to the ACA will come from innovation and experimentation within the current framework.
2014 – The year of reckoning for employers
For employers, the ACA’s require-ment that they provide health insurance coverage for employees begins January 1, 2014. As of that date, employers with an average of 50 or more full-time (or equivalent), non-seasonal workers must offer health coverage that covers at least 60% of costs and meet certain coverage requirements. If the employers choose not to provide such coverage, they will pay a fine of $2,000 per full-time em-ployee after the first 30. For example, if you have 50 employees and don’t offer coverage, you pay $2,000 x (50-30) = $40,000. The fine is triggered only if one or more of your employees receives a tax credit for health insurance.
Even if an employer with 50 or more full-time employees offers health coverage that meets the requirements, the employer will pay a fine if any employee accesses a tax subsidy or cost-reduction benefit for health insurance. In this case, the employer pays a fine of $3,000 per full-time employee who accesses the subsidy/cost/benefit. This provides the employer with an incentive to provide affordable health insurance coverage for its employees.
Based on this framework, each em-ployer will have to conduct an analysis to determine whether it makes sense to provide health benefits to its employ-ees. This analysis is not just a simple cost-benefit analysis based on the cost of the coverage versus amount of fines the employer may pay. The employer must also take into account whether health benefits are a way to attract and retain good employees, stay competitive, and maintain good morale. The analysis in-cludes looking at the type of employees,
their pay scales, and turnover. As all employers know, the cost of health care has been rising dramatically and will likely continue to do so. Each employer must engage in strategic thinking and analysis to determine what makes the most sense for the company.
There are other requirements the ACA places on employers as of 2014, including offering vouchers to qualified (low-income) employees, reporting, no-tice to employees and automatic enroll-ment. The resources listed at the end of this article go into much more detail on these requirements.
State ExchangesThe ACA envisions state-based
exchanges as an alternative to employ-er-offered health plans that provide consumers with choice and the ability to compare individual and small group plans. The state-based exchanges are designed to be an online shopping experience that allows individuals and small groups to compare plans among different types of coverage and costs to enable consumers to choose the best plan for them. The ACA also requires states to offer a SHOP plan, a Small Business Health Options Program, to allow small businesses to pool together to buy insur-ance.
Not all states have started the process of developing a state exchange. If a state chooses not to establish an exchange, the federal government will develop and run that state’s exchange. Washington State has started the process by passing enabling legislation which es-tablished the Washington Health Benefit Exchange (“WHBE”) to govern the ex-change and initial rules for choosing the WHBE’s board and processes. Wash-ington State received a $23 million grant for its exchange, most of which will be used for the information technology portion, which is the primary expense of starting up the exchange. The details of the Washington State exchange will emerge over the next 18 months as the
WHBE determines how the exchanges will operate.
Wellness programsBy some estimates, up to 75% of
health care costs result from treating behavior-related health issues, such as diabetes and heart disease. As a result, many employers seek to lower their health care costs by providing incentives to their employees to adopt healthier lifestyles. These wellness programs are not new, but are codified in the ACA. While wellness programs are encouraged and can be successful, there are some legal pitfalls to avoid.
First, HIPAA (the 2003 legislation that governs dissemination of health information) and the ACA prohibit discrimination in health coverage based on health factors, including medical conditions, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, disability, or “any other health status-related factor…” It is important to design a wellness program that does not violate these laws. You are safe if you base your reward on participation in a program rather than health factors. For example, you can reimburse a gym membership, pay for a smoking cessa-tion program regardless of the outcome, or reward employees for attending a monthly health seminar.
If you do base the reward on health factors, you must ensure:
• The reward does not exceed 30 percent;
• The plan promotes health or prevents disease;
• Employees have the opportu-nity for reward once a year;
• The reward is made available to all; and
• The employee can obtain a waiver if he or she cannot participate
Wellness programs can also violate other employment discrimination laws. If the wellness program discriminates
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based on a disability (i.e. an employee cannot participate in the program because of a disability), it may violate the Americans with Disabilities Act (“ADA”). If the wellness program has a disparate impact on a certain gender or race, it may violate Title VII of the Civil Rights Act of 1968. Mak-ing participation voluntary or offering reasonable alternatives to employees who cannot meet the standards will go a long way in avoiding any legal hassles.
The ACA is comprehensive and complicated. The next few months, years, and probably even decades will change the landscape of how Ameri-can employers do business.
RESOURCESWashington State Exchange, including policy briefs
http://www.hca.wa.gov/hcr/exchange.html
Cartoon regarding fundamentals of law:
http://theincidentaleconomist.com/wordpress/the-health-reform-car-toon-2/
Department of Labor: The DOL has an FAQ sheet for employers (http://www.dol.gov/ebsa/faqs/faq-aca2.html) as well as a series of resources from the Employer Benefits Security Administration on health care reform (http://www.dol.gov/ebsa/healthre-form/)
National Association of Insurance Commissioners: The NAIC provides tips and information about insurance options for small business owners (http://www.insureuonline.org/small-business/)
U.S. Chamber of Commerce: This national business organization has a guide for employers (http://www.uschamber.com/reports/critical-em-
ployer-issues-patient-protection-and-affordable-care-act)
Small Business Majority: The Small Business Majority, a nonprofit advo-cacy organization, has a list of fre-quently asked questions specific to businesses and health reform (http://www.smallbusinessmajority.org/hc-reform-faq/) and holds listening tours around the country to help small business owners with questions about health reform
National Business Group on Health: This nonprofit advocacy organiza-tion represents the larger employers’ perspective on national health policy issues and has published a toolkit for businesses on health reform (http://www.businessgrouphealth.org/benefit-stopics/et_healthcarelaw.cfm)
U.S. Small Business Association: This governmental agency is an informa-tion resource (http://www.sba.gov/content/health-care-health-care-reform) for small businesses, small business owners and prospective business owners • Phone: 1-800-827-5722
1-800-827-5722 • Email: [email protected]
For more information you can contact Kristin Meier at 206-464-4224.
By some estimates, up to 75% of health care costs result from treating behavior-related health issues, such as diabetes and heart disease. As a result, many employ-ers seek to lower their health care costs by providing incentives to their employees to adopt healthier lifestyles.
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11
WWhat’s the last big game you watched on TV? That’s a question almost everyone can answer. Sports programming consistently draws huge television audiences, especially when fans are root-ing for their local professional or college teams. Nowhere is this more apparent than on cable TV, where entire networks are com-mitted to sports programming – all day, every day. As an auto dealer, these legions of sports fans are a prime target for your advertising message.
WHAT SPORTS FANS ARE WATCHINGSports programming consistently plays well
in the Seattle television market, which makes it a popular place to advertise. Nearly 3.1 mil-lion Seattleites have watched sports on TV in the last year1, and more than 80 of the top 100 cable TV programs each year are sporting events. In fact, the most-watched cable program of 2010 was the Holiday Bowl featuring the University of Washington Huskies. Last year’s Apple Cup on Versus, Mariners’ baseball on Root Sports and Monday Night Football on ESPN also drew enormous viewership to put them in the top rankings2. Keep in mind, this popularity contest stacks up these programs
By Jeff Kent Business Development Manager Comcast Spotlight – NW Region
in Seattle
Using TV Advertising to Score More Auto Buyers
SPORTS
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against all other shows on cable TV, not just athletic events.
Sports are not only popular, they are also unique – because they are one of the last forms of appointment TV. Viewers, including auto buyers, still schedule their time to sit in front of the television and watch these events live, rather than using a DVR to delay viewing. That means your ads are far more likely to be watched in real-time, within the frame-work of your advertising strategy and inside the promotional incentive periods you chose. Auto buyers see your com-mercials live, along with the event itself.
WHAT SPORTS FANS ARE BUYINGSports viewers are not just fans –
they’re car shoppers. There is a very close relationship between watching sports and buying automobiles. Sports viewers are consistently more likely to purchase cars, especially higher-end models. This trend can be seen nation-ally, and it’s even more prevalent in the Puget Sound region. Here, 93% of new vehicle buyers watch sports, which is 12% higher than the national market average3.
When you break down those num-bers by sports genre, you can see not only the impulse to buy, but also a will-ingness to spend top dollar. In Seattle, college sports TV viewers are 13% more likely to be purchasing a new vehicle in the next year, and 107% more likely to spend more than $30,000 on that new car or truck. Likewise, professional sports TV viewers are 18% more likely to buy in the next year, and 54% more likely to pay over $30,0004.
For auto dealers, advertising in cable television sports programming just makes sense. It’s like having a courtside seat – you put yourself there because that’s where all the action takes place.
CABLE IS THE NEW PLAYING FIELD
Cable is consistently growing, and this is especially true of sports program-
ming. In recent years a number of major national sporting events have moved from broadcast to cable. Some of these were huge losses for broadcast and unprecedented wins for cable. These programs are now more readily available and useful to you as an advertiser – espe-cially when you consider cable’s ability to target your message to a specific local geography. You have the ability to reach sports fans all across the Seattle DMA, or just in the specific geographic zones where most of your fans live – and where most of your new vehicle registra-tions originate.
Here’s a lineup of the top sports pro-grams that have shifted from broadcast TV to cable TV recently, and how they can fit into your advertising strategy:
• Monday Night Football – This is consistently one of the top sport-ing events on television. It moved from ABC to ESPN in 2006 and has been a top-rated cable pro-gram ever since. Monday Night Football viewers tend to be the consumers you want to reach. They are predominantly upscale married homeowners, and about half of them – 49.6% – have a household income over $75,0005.
• Pac-12 Football – The division is
two teams stronger and coming to a cable network near you. A new deal begins next September, slating 70 games to air on cable and leaving only 10 for broad-cast. Viewers will be watching on ESPN, ESPN2, ESPNU, FX and the soon to be created Pac-12 Net-work. The championship game will alternate each year between ESPN and broadcast. As anyone living in Washington can tell you, Husky and Cougar fans are very serious about their sport, fiercely loyal to their favorite team, and committed to watching every game. Seattle residents who have
attended or enjoy following other Pac-12 schools watch their teams with the same dedication and enthusiasm.
• Bowl Championship Series – The
BCS moved away from ABC and FOX and began airing exclusively on ESPN in 2010. It consistently draws large numbers of viewers, and in 2010 the ratings spiked as Northwest favorite University of Oregon played for the national championship. The BCS Series is a consistently valuable advertising resource that becomes even more valuable when local teams land a spot at or near the top.
• NCAA Basketball Tournament – The big change came this past March, when a whopping 41 of the 67 tournament games aired on cable networks TNT, TBS and TruTV. For now the finals remain on CBS, but beginning in 2016 TBS will share coverage of the Elite 8 and Final 4. This, too, is an example of a sporting event where local teams consistently shine. Gonzaga and UW often make it into March Madness, so watch for these golden advertising opportu-nities.
• Major League Baseball – Four
years ago TBS became the exclu-sive home for the MLB Division Series. The network alternates hosting the American League and National League series every other year; next year it’s the ALS. The Seattle Mariners consistently deliver strong local ratings each and every year, and the local loyal fan base continues to tune in with passion and interest.
• These M’s viewers have money to spend, too, with more than half of them earning an annual household income that tops $75,0006.
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• NASCAR Sprint Cup – The majority of the Sprint Cup series, about 20 races, air on TNT and ESPN. This switch happened last year. NASCAR fans are notori-ously serious about their sport, and have an obvious affinity for all things auto, which makes them a good target audience for your dealer-ship.
• NFL Net-
work – The NFL Network has just been made avail-able for ad insertion in the Seattle area and this is a huge new opportu-nity for auto dealers. Each week Thursday Night Football kicks off the weekend for thousands of local viewers, offering eight live games each season in No-vember and Decem-ber. These matchups are another way to reach eager and affluent fans much like those who watch Monday Night Football. In fact, 64% of Puget Sound area NFL Network viewers have a household income over $50,000, 64% are married and 66% own their home7. You can also target these desirable viewers through the NFL Net-work’s other programming: NFC /AFC Playbook, NFL Gameday, NFL Replay, NFL Total Access and live coverage of the NFL Draft.
GET IN THE GAME TO REACH AUTO BUYERS
Given the quantity and variety of sports programming available on cable, auto dealers have many options for reaching local customers. As we’ve seen, Seattleites are watching sports religiously, so they will see your ad-
vertisement. They are ready and willing to buy a new vehicle, so they will pay attention to your commercial.
Most importantly, they are motivated, so they will act on your message. Use the power of television, and particularly cable TV sports programming, to score your next sale.
1 Scarborough Seattle-Tacoma DMA Mar10-Feb11. Base A18+ Sports watched on broadcast or cable past year: Any. HH plans to purchase a new / used vehicle in the next year: Yes.
2 Nielsen Seattle DMA Live+3 DMA equivalent household rating
3 Scarborough Seattle-Tacoma DMA Mar10-
Feb11. Base A18+ Sports watched on broadcast or cable past year: Any. HH plans to purchase a new / used vehicle in the next year: Yes.
4 Scarborough Seattle-Tacoma DMA Mar10-Feb11. Base A18+ Sports watched on broadcast or cable past year: Any. HH plans to purchase a new / used vehicle in the next year: Yes.
5 Scarborough Data Seattle DMA Mar09-Feb10 Adults 18+ cable subscribers: Sports View Cable TV Networks PsYr: Monday Night Football
6 Scarborough Data Seattle DMA Mar09-Feb10 Adults 18+ cable subscribers: Sports View Cable TV Networks PsYr: Seattle Mariners
7 Seattle/Tacoma DMA-Syndicated-Mosaic, Mar10-Feb11, Scarborough; Base: Adults 18+
Sports viewers are not just fans – they’re car shoppers. There is a very close relationship between watching sports and buying automobiles.
AAs many of you know, I have been directly involved in the retail automobile business for a long time. It hadn’t occurred to me until recently when I was going through my collection of old Automobile trade magazines just how long it has been. Needless to say, in the past 40 years many things have changed in the crazy business and it will serve no purpose here to talk about those changes. It also occurred to me that many things remain the same today as they did all those years ago. For as long as I can remember, we have all been trying to grow our individual businesses and gain a larger portion of the “market share”. It was about turnover then and it is still about turnover today (The Speed of Money).
Have you ever wondered how one of your competitors always seems to be able to deliver more vehicles than you? Or how someone in your “20 group” was continuously selling 1 to 1 (or more) used to new? Or how they grossed more per unit than you? Or how they were able to experience little or no “wholesale pain”? The answer to this is almost always directly related to turnover. The turnover of your money is what must happen before any profit can be generated and the more quickly your money turns over, the better the result. It’s always been about the turn, both then and now. We all know that the “quicker turners” gross more. That goes for both the new vehicle department as well as the used. This is no secret.
The intent of this article is to clearly depict how costly it actually is for your operation to hold vehicles beyond the “Maximum Turn Guide”. The term, “Maximum Turn Guide” refers to the amount of time in days where your best return on investment happens. We all know that used vehicles are a depreciating asset from the moment of acquisition and the time held has a direct correlation to the amount of return we gener-ate. In all of the studies I have ever seen or conducted, the first 30 days of life on the lot are, by far, the days of our best retail opportunity. We refer to this time period as the “Maximum
of (your)Speed
TheMoney
By Scott Dreisbach
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Turn Guide”. As any used vehicle manager knows, an impor-tant part of their job is to continually put vehicles on the lot that retail quickly. The more of this that can be accomplished, the better off the store is. Often times, however, we end up choosing, (or having to) to retail out of a unit that didn’t turn as quickly as we had hoped. The purpose of this article is to demonstrate that we are better off taking a wholesale loss, and re-investing the money in a quick turner than to try and avoid a wholesale loss by retailing out of a vehicle that was probably wrong for the inventory on day one. The truth is, when we retail out of a vehicle we are essentially taking a good cus-tomer and putting together a poor deal just to cover a mistake that we made on the day of acquisition. Big box retailers have long known the speed of money concept and you will not find inventory in these stores that does not move at retail. The “shelf space” is far too valuable. If an item moves well, they stock more of it. If it doesn’t move well, they phase it out and try something else. This is a continual process and the basics of precise inventory management are clear.First we must make some assumptions. 1) The average retail turn rate is 30 days or less. 2) The average front-end retail gross profit is $1,800.00. 3) The average commission on this deal is $450.00 (25%). 4)Average re-detail cycle is 30 days. 5) Average re-detail cost is $75.00.
Example 1. Holding a used vehicle for 120 days and ultimately “retailing out” of the vehicle
Day 1 investment = $10,000.00Day 30 re-detail $75.00Day 60 re-detail $75.00Day 90 re-detail $75.00Day 120 Sale Price $9,000.00Less detail costs $225.00Less commission $300.00 (Flat)Net Cash $8,475.00Gain or Loss $-1,525.00
Example 2. Wholesaling the vehicle at 60 days and re-investing in “fast turning” inventory.
Day 1 investment = $10,000.00Day 30 re-detail $75.00Wholesale selling price at day 60 $9,000.00Amount to re-invest $8,925.00Investment sells in 1st 30 days $10,725.00Less commission $450.00Reinvestment amount $10,325.00Investment sells in 1st 30 days $12,125.00Less commission $450.00Net cash $11,675.00
As you can clearly see, the cash flow gain by concentrating on turning the money puts you ahead in this simple example by $3,200.00 in the same time period. It is not always about the profit but it is always about the turn. The speed of your money will determine how much profit will be there. Increase the speed of the money and you will definitely increase your bottom line.
Increasing the “speed of your money” is simply having more of the right product on the lot more of the time and less of the wrong product taking up “shelf space”. This sounds easy and with a well thought out system, it can be accom-plished. At the very least, develop and implement a system that will separate your sales, gross and inventory by categories of vehicles (small cars, mid-size cars, sporty cars, etc.) and by model years within each category (used vehicles) or specific model numbers within each new vehicle sales category. Your stocking guide should include your target supply number for each type of vehicle (45 day supply for used and 60 day supply for new) based on the actual sales rate, not a forecast. This stocking guide number should then be compared to the actual total availability for each category. If you are long or short in any category, develop an action plan with your managers to correct the condition. Daily vigilance in seeing that your action plan is being implemented is vital. In reality, most managers say they are “too busy” to manage, or even look at, such a sys-tem. They “don’t want to get bogged down in details”. If that is the case in your store, make a change. Either in the man-ager, the current process, the manager’s thinking or invest in an inventory management system that will be believed in and used. There are several good ones out there, mine included. The benefits of this type of investment will far outweigh the cost. Increasing the “speed” of your money and a bigger bot-tom line will be the result.
For more information contact Scott Dreisbach-Vice President,Valuinsight, Inc., 561-368 -7810 X108 or at [email protected]
Scott Dreisbach
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Aaron Capps
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TheirFunAdvantage
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IIt’s quite a challenge to wrap a mission statement, a company culture, and a lifestyle into just four words. It was easy for Aaron Capps.
“The fun starts here.”
A visitor to Capps’ two dealerships along Bremer-ton’s Auto Center Boulevard would quickly agree. It’s more than a catch phrase on a website banner: every-one at Advantage Nissan and Advantage Autoworks looks to be having fun in the car business, and three decades of success would indicate that their customers have also enjoyed the experience.
An hour spent with Aaron and his two sons, Dean and Chuck, is filled with jokes, laughter and good-natured teasing, a reflection of a tight-knit family that enjoys what they do and passes the good times around. For the senior Capps, the love for cars - and speed - started early.
“My dad raced cars in the Midwest before he brought us out to Bremerton looking for work,” says Aaron. “He got me started fixing cars and by the time I entered the auto shop program at West Bremerton High I was a pretty good mechanic.”
He was also a pretty good athlete with collegiate potential in both track and football. By graduation, however, he had chosen the car business over college. With the hands-on experience of working at the Dunn
Ford dealership, Aaron opened his own business – AC Automotive – which operated successfully for the next seven years. Still, as he was building his new enter-prise he was continually drawn to his true passion: auto racing.
“I raced modified dirt cars all over the Northwest, travelling and racing on the weekends and then coming back to work Monday morning,” he says. “I finally decided that if I was going to be a real race car driver I needed to make a total commitment, so I sold the busi-ness and we moved to Indianapolis.”
With the focused dedication that later drove him to success in business, philanthropy and community ser-vice, Aaron immersed himself into the challenging and often dangerous world of USAC-level auto racing. He connected with legendary racecar builder Grant King and when he wasn’t “wrenching” for a racing team he was racing himself. He had a one-room apartment across the street from the Indy track but often slept in the shop or his truck.
“During the season we worked pretty much 24/7,” he says. “It was a great experience – for nine months
By Craig Chastain
Dean and Chuck Capps
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out of the year for five years we were a part of the greatest sport in the world.”
Ultimately, Aaron returned to the Northwest with his young family and began to build a life and a business in his hometown. He worked in the service department for Bill Smith Oldsmobile, Cadillac and Toyota – still racing on the week-ends – and in 1981 he purchased the Thomas Lincoln-Mercury franchise. His time behind the wheel of a race car would begin to wind down as his dealership heated up.
The 30+ years that followed brought the highs and lows, challenges and changes that all dealers experience. Aaron Capps had the added advantage of a supportive family, includ-ing his wife, Pat, and two sons who shared their dad’s love for cars.
“Chuck and I both started young working on the lots washing and prepping cars,” says Dean. “Our dad has always led by example – he’s a great teacher, a terrific grandfather (Chuck has two small children while Dean has one young son) and the hardest working man we know.”
Indeed, a review of Aaron’s contributions outside the showroom reveals the heart and pas-sion of a man who loves his job and his commu-nity. A longtime board member of the YMCA, he’s a regular contributor to their youth programs and fundraisers and recently financed the construction of new handball/racquetball facilities. (No surprise - he plays racquetball frequently and, yes, competitively.) He contributes vehicles each year to the Great Duck Race, part of Silverdale’s Whaling Days, and is a very active Rotarian.
His major focus these days is the Bremerton Motorsports Park, an initiative to bring a world-class, multi-use motor sports facility to 250 acres of Port property. The plan includes a quarter-mile drag strip, a 2+ mile road course, BMX and moto-cross tracks and more – an ambitious project that moves closer to reality each day under Capps’ leadership.
Aaron, Dean and Chuck believe the Advantage dealer-ships have continued to maintain strong sales despite economic downturns for several reasons, not the least of which are loca-
tion, location and location.“This is a Navy town,” says Aaron. “The government pay-
checks and the economy have been steady and consistent while a lot of the country is hurting.”
In addition, the dealerships have adapted to new technolo-gies led by Chuck, an admitted “tech geek,” using the internet to reach and inform present and potential clients. Dean heads up the pre-owned sales division whose growth is evidenced by the expanded facilities across Auto Center Boulevard from the Nissan store.
The sales experience in the Capps’ dealerships is warm, friendly and accommodating by design.
The Advantage team knows their Kitsap county customer.
“Our clients still like to negotiate and they know what they want,” says Dean.
“Nissan gives us terrific products to sell – compacts, se-dans, SUV’s, trucks, even the new electrics,” says Aaron. “They even flew me down to Vegas to test drive the new GT-R sports car on the racetrack.”
The executive, philanthropist, speed junkie and committed gear head gets to drive a supercar really fast.
Sounds like fun.
Dean, Aaron and Chuck Capps
Phot
o by
Ada
m B
ucha
nan
Who watches sports on TV?
Source: Source : Scarborough Seattle-Tacoma DMA Mar10-Feb11. Base A18+ Scarborough Data & Reports are protected under the federal Copyright Act and are the registered intellectual property of Scarborough Research & Arbitron, Inc. Any use of the Scarborough Data is subject to all limitations and qualifications contained in the Report. Sports watched on broadcast or cable past year: Any. HH plans to purchase a new / used vehicle in the next year: Yes.
To learn more about cable TV sports advertising contact Jeff Kent.
206-270-4748 [email protected]
Over 3 MILLION people in Puget Sound
www.comcastspotlight.com
In Seattle, 87% of people who plan to purchase a vehicle are watching televised sports.
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You and Your Dealership Have Changed
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IInsurance. Few words in the English language have such a simple meaning yet can be so hard to fully understand.
Unfortunately for dealers, life insurance can be one of those topics that inspire nega-tive emotion, stress, and a general sense of distrust. This is partly due to the actuarial complexities that go into the products. The other reason is that far too few insurance agents stick around after they receive their high up-front commissions to help their clients track and monitor the policy that was put in place.
Strange, isn’t it? After all, would you set up your business to sell your customers vehicles and then not be around to service those vehicles over their life cycle?
The good news about life insurance is that, when properly aligned with your busi-ness, personal, and estate planning goals, it can increase the likelihood that you’ll achieve those goals. The key is to find an advisor who will be there to help monitor the situation and recommend adjustments periodically—just as you do every day with the assets in your dealership.
This lack of alignment can also be a hidden risk, since these goals often change over time. A large part of this risk is attributable to policies that are in jeopardy of “lapsing” as a result of their underperformance relative to original insurance projections.
The original policy may have made several assumptions (mortality expense, adminis-trative charges, rate of return) that require you to pay a level premium for a specific period of time. But it doesn’t take an economist to recognize that we’ve experienced significant economic events over the past decade that could have very easily thrown these assump-tions off and therefore put your policy in jeopardy of no longer achieving your goals. Typically the policies most susceptible to these swings are universal life, whole life, and variable universal life insurance.
What other insurance risks should you look out for? Here are a few additional com-mon issues that arise:
By Justin Fisher, CPA, AIFA, MBAFinancial AdvisorMoss Adams Wealth Advisors LLC
Markets Have Changed Has Your Insurance Policy Kept Up?
You and Your Dealership Have Changed
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• Your insurance agent fails to meet with you every year or two to present an “in-force policy illustration” that shows you, based on current assumptions, whether your premium should remain the same, go down, be paid longer, or—the more likely scenario—go way up, given recent economic uncertainty and stock market volatility.
• Your policy is outdated given the new and more innovative insurance products in the marketplace today.
• Your policy has insufficient cash accumulation to meet deferred-compensation payments at executives’ retirement date.
• Your policy is expensive relative to what’s available today.• Your policy type—whether term, whole life, universal life,
or variable universal life—isn’t appropriate given your goals.
• Ownership and beneficiary designations aren’t aligned with your business, personal, or estate planning goals.
• Your policy’s death benefit isn’t aligned with the current valuation of the business as stated in the buy-sell agree-ment.
• Your policy is structured under a stock redemption (in which the owner and beneficiary is the company) when it may be more advantageous to structure it as a cross-purchase.
If these issues sound alarming, it’s because they are. In many cases, once a problem is identified, it’s too late. If you feel the call to action but are hesitant to call an insurance agent for fear of being sold more life insurance or receiving poor advice, there’s still hope. Similar to our busi-ness, there are a number of fee-only insurance consultants in the marketplace who can provide bias-free advice. Here’s what to look for and ask:• It’s good if the firm reviewing your insurance has consul-
tants with the CLU (Chartered Life Underwriter) designa-tion. This is the highest insurance designation attainable, and it shows a rigorous commitment to the industry, techni-cal expertise, and a high ethical standard.
• If the consultant charges a fee, what does it cover? A re-view of existing insurance? Buy-sell agreements? Deferred compensation agreements? Estate planning documents? Insurance recommendations?
• Can the consultant shop your insurance to any nonpropri-etary insurance company?
• How will he or she coordinate the income, gift, and estate
tax issues of your current or proposed insurance?• How does the consultant service his or her existing insur-
ance policies?• Is the consultant both securities- and life-licensed?• Can he or she provide at least three references of clients
like you?• If the consultant charges a fee, can he or she waive this fee
if you choose to place insurance through the consultant?If you’re ready to review your life insurance and have
selected a professional advisor to assist you, start by revisiting the original purpose of the insurance. Review your business, estate, and personal financial plans. Refreshing your familiarity with these plans, and how insurance originally was meant to play a role, is a helpful first step. You may find that these plans need minor tweaks before you begin the review of your life insurance.
Once you’ve done that, the advisor you’re working with will request a current in-force policy illustration from the insur-ance company. He or she will then look to see whether your policy will stay in force until maturity if you keep paying the same premiums you are now. If not, then the advisor should further analyze the situation to determine what premium will be required to take the policy to maturity.
The advisor will then compare your existing policy to what the insurance marketplace currently has to offer—an important step given the litany of products that are out there. Finally, once a proper review is completed, the advisor can sit down with you and help you decide what, if any, changes to make.
It’s critical to understand the important role insurance plays in your overall personal
and business planning. After all, the more informed you are, the better decisions you tend to make. By following this process, you can help your insurance align with your goals—and not those of the insurance company.
Justin Fisher helps owners of closely held businesses, institu-tions, and high net worth individuals identify and meet their financial goals. He can be reached at (253) 284-5267 or [email protected].
Insurance Few words in the English language have such a simple meaning yet can be so hard to fully understand.
“ ”
By John Strom
T
Smart Management
This is the second in a series designed to help you look at how you manage key aspects of your business. Each piece offers some insight, some suggestions and a short assessment of that area. The first covered Operational Systems. This second covers Job Expectations.
For anyone to succeed in any endeavor they must know what is expected of them. Clearly stating and effectively communicating the expectations for a particular position in an organization is done in many ways, but begins with a job description. Traditional job descriptions have been largely ineffective. Lengthy, cumbersome, and often incomplete, they have focused on duties and tasks, attempting to describe what to do. Today’s more effective job descriptions take a different approach – focusing on responsibilities and accountabilities for results, leaving the task descriptions to other documents (policies, procedures, systems, etc.). This change of focus makes these job descriptions much more practical in daily operations, effectively removing the “it’s not my job” excuse (It is your responsibility). Well-conceived and well written job descriptions contain:
• Position Title – Following a good “Titles & Expectations” format (e.g. Sales Consultant not “Salesperson”; Technician not “Mechanic”, Administrative Assistant not “Clerk”, etc.)
• General Responsibilities – A simply one-sentence description of the overall focus of the job.
• Hiring Specifications – Required and desirable qualifications of the job holder.
• Reporting Relationships – To whom the position is directly responsible and accountable (no more than one!) and with whom they work closely.
• Specific Responsibilities – The specific responsibilities of the job (e.g. “develop new business” not “make five prospecting phone calls per day.”).
How Clearare Your Job Expectations
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• Measurements of Effectiveness – The specific, quantifiable results measures that are used to gauge job performance effectiveness (e.g. profit produced; number of client contacts, etc.).
Rather than restricting, this type of job description frees people to act, allowing them to achieve the desired results “their way” (within guidelines). They contribute to a positive corporate culture and employment experience by removing ambiguities involving each employee’s role. These job descriptions are also “living documents,” used as the basis for the regular job performance appraisal. A manager’s job is to get the most productivity out of each employee. Success begins with clearly stated expectations.
The Bottom LineResponsibilities-based job descriptions …… clearly state what is expected of each employee,… free them to work toward the achievement of shared objectives, and
… foster the creativity and initiative that leads to greater success!Use the Job Expectations Checklist on the next page to
inventory your current status. It is recommended that each manager complete a checklist for their area of responsibility.
John Strom has been helping retail automotive managers improve their performance for over 25 years. He has held a number of management positions in both single-point and multiple franchise operations, including General Manager. His company, Strom & Associates, is a member of the Performance Development Group. To learn more as about their services, visit www.perdevgrp.com.
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26Peterson sullivan llP
a Winning team
Get a CPA firm with a winning record
on your team.
Peterson Sullivan LLP, one of the nation’s most successful specialists in auto dealership accounting, serves more than one hundred dealers in the Pacific Northwest. We are one of only a few CPA firms approved to perform audits for GM Motor’s Holding Division. And we are the only Washington State member of the exclusive AutoCPA Group.
Following are only a few of the many areas where we are trusted advisors to our automotive industry clients:
• Cashcontrols • Internalcontrols• Costsegregation • IRSreportingrequirements• Dealershipvaluation • SalesandB&Otaxconsulting• Estateandsuccessionplanning • Taxplanning• Financialstatementanalysis
We believe strongly in building long-term relationships with our clients. We aim to understand your business so well that our advice becomes indispensable. Please contact Kevin Allison to see how we may assist your business needs at (206) 382-7777 or by email at [email protected].
Peterson Sullivan. Driving your success.
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By Paul GillrieThe Gillrie Institute
TThe New Battleground
A Dealer’s Right to Choose Third Party VendorsDealers have different needs and preferences. In an
unrestricted market, vendors will thrive when dealers find value in their added functionality and disappear when that ceases to be the case. Our dealer clients have been incensed by the efforts of some DMS vendors to prevent them from choosing companies that they believe augment the profitability and efficiency of their businesses. As advocates for dealers in the technology arena, we know that if the variety of options available in the technology marketplace is restricted, innovation will cease and dealers’ costs will rise.
The Problem: By strictly controlling how your network is accessed
and modified, a computer vendor can not only monitor your usage very closely (to its own benefit) but can also prevent or seriously complicate your dealership’s access to a more comprehensive or lower cost solution offered by a third party vendor. No dealer can afford to give up this sort of competitive advantage in this market.
Why Is This Happening Now?Networks used to be difficult to configure and hard
to maintain. As a consequence, DMS vendors never had a problem convincing dealers that only those with access to arcane technological secrets could manage their networks. Because networks have now become much simpler and because the tools to manage them are readily available, more dealers began to move away from the computer vendors’ expensive and inflexible infrastructures and take control locally, using whatever solutions worked best in their stores. Some DMS vendors, seeing both easy revenue and tight control slipping away from them, have taken action to halt the movement to more nimble and economical competitors.
Your Computer Vendor
Third Party Vendorsversus
The fundamental changes in the automobile business over the past months have forced dealers to modify long held opinions and relationships.
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What Should You Look For?It began when your DMS vendor
suddenly expressed an urgent concern about the security of your data. They then suggested that, as a precaution against insidious infiltration of your network, they have decided to restrict access to only their “approved and certified” third parties. Under this scenario they will become the sole custodian of your data and, by controlling those with whom you can do business, eliminate that pesky competition. You may find that you are directed to employ only their partner firms which, freed from the pressures of a free market, can now charge you whatever they please. As always, it comes down to increased revenue for the vendor and additional expense for the dealer.
If you balk, you will be told that you could use any vendor you like so long as that vendor is willing to be certified and pay the required access fees to your DMS provider. You may also be told that you can bypass your DMS and push the data to a third party yourself from a non-network PC. While this is theoretically possible, we have yet to find a dealer who is willing to support this cumbersome, time-consuming and error-prone process. Additionally, no dealer wants to pay for a comprehensive, costly DMS system and then hire additional staff to manually circumvent it.
One of the bigger third party companies was recently told that these fees for certification would amount to about $700.00 per month per dealer location. When you do the math, you can’t help but conclude that this is all just another ruse by the DMS provider to hijack your data along with your money! Could it also be a way to make competitors uncompetitive, thereby driving them out of business? You know, of course, who it is who will eventually pay for less competition and increased fees, don’t you?
What Kinds of Services Do Third Party Vendors Offer To Dealers?
Dealers have turned to alternative vendors for a myriad of services. As long as the market is free and open, more solutions will continue to evolve. Listed here are some, but certainly not all, of the areas where dealers have found satisfying extra-DMS relationships.
• Networks • CRM• F&I Menus • Desking• Electronic Repair Orders &
Dispatching • Web Filtering • Phone Systems (VOIP & other)• Managerial Report Generators
and Custom Written Software
• Impact Printers & PCs• Utilization Training • Archiving & Archival
Scanning • Interfaces With Finances
Sources • Marketing, CSI & Service
Reminder Calling • Database Cleansing &
Maintenance• Paperless & Laser- Based F&I /
MV Forms• Signature Capture & Virtual
Contracts• Web Hosting & Web Marketing
What Can You Do?Remember: “It’s not who owns your
data but who controls it that is crucial”Your goal should be to maintain
control and keep all of your options open while controlling costs. How do you do it? Dealers must be pro-active at contract time. Don’t sign the standard boilerplate or agree to terms that don’t advance your goals. If you know what to ask for, you will find that you can forge a much better contractual deal than you are initially offered.
If you fail to take the necessary steps to avoid losing control, you will eventually find that you can’t do business with the third party firms you want to use or, alternatively, you will be forced to bear the cost of the additional fees that your DMS vendor will charge. Address the issues with specific written addenda before you sign a new contract. You may find you need some professional help to anticipate how some terms may be applied. Remember that the other side does this every day and you are therefore at a distinct disadvantage if you go it alone. When it comes to evaluating the terms of a DMS contract, it is imperative that you understand not only the language of the contract but also the long term effect and the manner in which each clause has been historically applied. Seemingly innocuous language has been used as the justification for the wholesale abrogation of dealers’ rights over the term of the agreement. Make sure you completely understand the substance and the underlying reasons for each clause to which you agree.
You may feel pressured and feel you have no choice, for example, when a vendor representative insists that you can only use that vendor’s own networking or archiving, Reps may be very persistent because it is a question of
“exit barriers”, control and, of course, added revenue for the vendor. Don’t cave to the pressure when the issue is one you feel is important. You should be able to find a way to get what you need. After all it’s your business and
your money! Make the decisions yours and be sure you can live with your choices down the road.
Remember: “It’s not who owns your data but who controls it that is crucial.”
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And Finally…Vendors are becoming more strident
in their demands that you acquiesce to their demands. One has already introduced a drastic measure that demands the correct answers to several personal information questions that must be answered each time you or your staff pull information from YOUR OWN network.
Be prepared to reassess your position regarding a particular vendor if you are unable to negotiate the protections you feel are essential. Can you live with the terms to which the vendor will agree? It’s your call – if you are not comfortable with the responses you received or if you still feel exposed, it may be time to tell them you just can’t do business on their terms – and move on. Don’t let them trivialize your concerns. Give in on issues that are crucial and you may be sorry later on. You may be told that you are being petty or your requests are unwarranted. Ask them then to accommodate you, considering the “insignificant” nature of your request. If they still resist, draw your own conclusions. Why are they so unwilling to bend if there is no validity to your apprehensions? The fundamental changes in the automobile business over the past months have forced dealers to modify long held opinions and relationships. Another vendor may be more willing to give you what you need. Explore all of your options and be open to change!
For more information you can contact Paul Gillrie, Paul Gillrie Institute, 1-800-576-6959 or [email protected].
R
Running a dealership would be easier if your cash moved as fast as the vehicles you sell. Unfortunately, some of your cash is going nowhere fast. And some of it is on the fast track to depreciation—stuck in “park,” sitting on your used-car lot.
Used-vehicle sales helped many dealers survive when new-car sales took a nose dive. Many customers want or can only afford a used vehicle. Do you have the right mix of vehicles to offer? Are you tying up capital with vehicles nobody wants to buy?
According to NADA Academy instructor George Grabowski, “A rule of thumb is a 45-day supply of used vehicles with no vehicle in stock longer than 60 days. Prices usually drop dramatically when we start getting in the 40- and 50-day cycle.”
The sooner you sell the inventory, the quicker your capital finances a fresh supply of used vehicles. NADA’s guideline: Turn over used-vehicle inventory 12 times a year.
Grabowski said, “Let’s not wait 60 days. Let’s get rid of a used car now so that we minimize our losses at the auction and buy something that maybe we’ll sell. We want to turn that inventory.”
In class, Grabowski emphasizes setting parameters. “Do they have a policy?” is his first question. His answer: There should be a policy to review the used-vehicle inventory every day.
Sometimes managers focus too much on gross and not enough on cash flow. Sometimes they ignore the cost of that vehicle sitting on the lot day in and day out.
Grabowski gave an example: “Let’s say it costs $30 a day to keep the car on the lot. If you keep it for 90 days, that’s $2,700. If you sell it, and you hold $2,500, you’re thinking, ‘This is great. I made $2,500 gross profit.’ But the department actually netted a loss of $200.
“So, this is the type of analysis that you don’t just do one calculation and you’re there,” he said. There’s more to it. You have to dig deeper.”
In assessing your used-vehicle operations, determine:√ How old is too old?√ How many do you have?√ How did you get those vehicles? √ Who bought them and why? √ Did you spend too much at the auction or on reconditioning?√ Did you buy a vehicle that doesn’t match your target market?
Assessing Used Vehicle Operations
Is Your Cash Stuck in “Park”?
How to avoid the “Risky Business”
of Dealership Remodels
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WWhether it’s an Original Equipment Manufacturer (OEM) required branded facility remodel or an owner driven make-over, all remodel projects present uncomfortable elements of risk to the dealership owner.
Unlike some car deals, remodel projects sim-ply do not come with “money back guarantees” for dealership owners. Unfortunately, this can add up to quite a difficult decision amidst an un-stable economic backdrop. Certainly, there is also risk in doing nothing while market competitors are moving ahead with their facility remodels.
We may not be able to offer an economic crystal ball but we can provide some time tested, helpful advice that will add value to any construc-tion project and take some of risk out of the busi-ness of remodeling.
KNOWLEDGE IS POWER
Research - Do as much research on your project as possible before you begin. Make Calls - Call other dealership owners you know who have done a remodel similar to the one you are contemplating.
Websites - For OEM programs, visit the website and read everything you can about the process and see if they can provide contact information for dealership owners willing to answer questions about the program.
Call Experts - Talk with design professionals that have proven auto dealership experience. They should be able to answer all your questions, help you evaluate your dealership’s needs, and provide you preliminary budget estimates. Design profes-sionals working within this niche will also have: • the best database of experience to pull from
in solving design dilemmas, • value engineering solutions to save money, • tactics for working with and around OEM
program requirements and,• they’ll have specific information about
products and materials best suited for auto dealership industry development.
Know Thyself It is very important to take time and evaluate
your dealership facilities’ strengths and weakness-es. Sometimes owners have been there so long it is hard to see the facility objectively. Try seeing each space through the eyes of a potential cus-tomer then as an owner. Talk with managers and staff in each department and ask them about the efficiency and experience of the space they work in. This is usually very enlightening and, usually results in at least several requests for pink walls and Italian tile. Just remember, the goal is to find your dealership’s strengths and weaknesses so as to protect and enhance the areas of strength and omit or redesign areas of weakness. This basic information will help owners clearly communi-cate their important remodel project goals.
By Michelle HeckerHecker Architects, PS
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You have the PowerDon’t simply take designs you are given – if they don’t
feel right. Dealership design concepts are generated in two ways -- either an OEM design consultant or an industry design professional. Either way, you must evaluate the designs provided and assess if your specific strengths and weaknesses have been addressed in the designs. Many OEM design programs are performed by consultants who simply do not have enough time at the dealership to invest much thought into the individual needs of the owner. The unique needs of the owner should be integrated by the selected design professional and submitted with final construction plans in any OEM program. Also, an experienced dealership design professional will know which OEM programs allow design deviations from the “program requirements” and how to request them for an owner.
Find an advocate for your needsWhen hiring a design professional remember to try and
find an advocate to represent your needs. This professional is someone who will communicate your project’s goals profes-sionally to all parties involved and who always pays attention to deadlines, budgets, product specifications and all schedules important to you and your business.
The Devil is in the DetailsThe service packages of architects and design-build
construction companies can vary greatly. So, when bidding a project it is worth the time and effort to try and perform a fair comparison of similar types of contractors. It is important to ask a lot of questions and dissect each proposal in detail in or-der to understand the differences to get a true “apples to apples” comparison of price and service. Not taking this step can be a costly misstep when hidden expenses appear later in the project.
Better Safe than SorryAlways ask for and check references before hiring any key
construction related professionals. This seems like a no-brainer but this is frequently overlooked and can cause serious con-struction project remorse. Ask for references and make sure they are current and for a similar project type. Also, it never hurts to ask a construction contractor for proof of their ability to acquire a performance bond. This step can help sort out any construction firm with a troubled past.
Micro-Manager WarningOnce you have selected a design professional and a con-
tractor it is important to let them do their jobs without too much interference. Micro-management of any construction project can quickly lead to miscommunications, change-orders, project delays and cost overruns. Also, it is best for owners to commu-nicate their thoughts or concerns directly through an established
path, usually with the construction administration manager or architect. This small step will help keep communications clear and flowing in the right direction, instead of developing into a frustrating triangle.
More Security OptionsJust in case they are needed, there are further options com-
monly used to provide security to an owner that construction will actually be completed and, most importantly, at the agreed upon price. A variety of surety instruments are available for use, however the following are most common for dealership projects utilizing the competitive bid process.
• Performance Bond - is a statement by a surety company that obligates the surety company to complete construction on the project should the contractor default.
• Labor and Material Payment Bond - protects the owner from liens against the property or litigation by unpaid sub-contractors and material suppliers.
Good Vibes – Pay OffCustomers may forget what was said to them at the auto
dealership’s door by a salesperson, or even all the little nice things done for them during a visit, but they will never forget how they generally felt while visiting your business. So, an investment in making your dealership look confident and feel good…is never wasted.
Michelle is a Senior Planner with Hecker Architects. For more information about this article or to find out how Hecker Architects can help with any business construction or remodel project, please call (360) 479-5459, e-mail: [email protected] or on the web at: www.herckerarchitects.com
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TInvest three minutes in the health of your organization by
completing this Ten-Point Organizational Self-Assessment Quiz.
To gain greater insights, you’re welcome to distribute this assessment to others in your organization. When completing this evaluation, think about your experience, your co-workers’ experience and most importantly, how you’d imagine your
customers might answer each question. Select a number from 1 to 5.
Ten-Point Customer Service Self-Assessment Quiz
By Nancy FriedmanThe Telephone Doctor
1. Our entire staff has been comprehensively trained on the tech-niques needed to handle, defuse and retain angry customers:
2. When handling calls from our customers, all our team members employ a uniform, effective greeting:
3. When an employee has a performance shortfall, our managers are trained to implement a proven coaching process:
4. Customer contact employees at our organization know how to pres-ent negative information in a positive way:
5. Our team is skilled at knowing how and when to use a variety of questioning techniques in their customer interactions:
6. New employees are well educated on issues such as dress code, limits on personal calls and steering clear of office politics:
7. Our customer contact employees do a great job of rapport building and making our customers feel like friends:
8. When a team member is having a «bad day,» that negative emotion is NEVER obvious to a customer:
9. At our organization, co-workers are always treated as well as we try to treat our outside customers:
10. Customers are usually astounded by the high level of care they receive from our team:
Disagree 1 2 3 4 5 Agree
Disagree 1 2 3 4 5 Agree
Disagree 1 2 3 4 5 Agree
Disagree 1 2 3 4 5 Agree
Disagree 1 2 3 4 5 Agree
Disagree 1 2 3 4 5 Agree
Disagree 1 2 3 4 5 Agree
Disagree 1 2 3 4 5 Agree
Disagree 1 2 3 4 5 Agree
Disagree 1 2 3 4 5 AgreeTotal Score: ________
45-50 - If this is an accurate assessment, we’d like to congratulate you. If your customers rate you this high, you’re obviously doing many things very well. We’d like to speak with you about establishing a long-term plan to ensure this level of excellence continues.
27-44 - Most organizations rate themselves in this range, about average, but still not excellent. How would your customers likely answer the same evaluation? We invite you to learn more about our solutions so we can help you close the gap between where you are now and where you should be.
26 or below - Congratulations on recognizing a shortfall. You’ve taken the first step on the road to improvement. The next critical step is begin steps to fixing it.
For more information about this article, contact www.telephonedoctor.com
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36
FProcedures You Should
Have in Place to Comply
Federal law prohibits discrimination in any aspect of a credit transaction. Under the Equal Credit Opportunity Act (“ECOA”), you cannot treat a credit applicant less favorably because of color, religion, national origin, sex, marital status, age, or because the applicant relies on social security, welfare, or other public assistance. This law also requires you to give a notice, called an “adverse action notice,” under certain circumstances, such as denying a request for credit. A related law, the Fair Credit Reporting Act (“FCRA”), also may require you to give an adverse action notice (which may be combined with the ECOA notice) if a credit report or information from a third party other than a consumer reporting agency (“CRA”) is involved in an adverse credit decision.
You should adopt policies and procedures to ensure that you are: (i) sending out timely and proper notices as required by the ECOA and the FCRA, and (ii) maintain-ing proper records. You should implement a policy that, at a minimum, includes the following:
1. A requirement to notify customers who apply for credit about the action you take—whether you accept, reject, make a counteroffer, or determine that the application is incomplete. Your policy should require that you give this notice within 30 days of receiving any credit application.
2. Adopt adverse action notice proce-dures to ensure that you send ad-verse action notices when required. You should have a policy of sending notices whenever you are involved in mak-ing the credit decision or setting the terms of credit
and adverse action is taken. If you send out simpli-fied adverse action notices, designate a finance manager who is knowledgeable about adverse action law and trained in your dealership’s adverse action notice procedures to respond to all customer requests for a specific statement of reasons.
3. Adopt and implement record-retention policies. In particular, ensure you keep records stating, or otherwise record, the specific reason why you did not provide financing on the requested terms. Your record retention policy should also include procedures for disposing of records as required by other applicable laws and regulations that are not discussed in this guide.
4. Adopt a formal practice of allocating responsibility for sending out adverse action notices. For ex-ample, consider including a statement in the dealer/finance source agreements that the finance source is responsible for sending out its own adverse action
notices.5. Conduct periodic, internal audits
to ensure compliance with the policies and procedures you adopt.
This article is adapted from NADA’s A Dealer Guide
to Adverse Action Notices.
Adverse Action Legislation:
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SB-22503(Text&Graphics)
Every business worries about how the numbers are affecting their bottom line. Whether it’s growing your latest sales numbers or trying to minimize your expenses, one number that you want to be sure to focus on is “125.” With profits shrinking and costs rising, employers are taking a second look at their Section 125 Plan to see if they are taking full advantage of this tax code.
Maximize Your PlanIt’s not often that you can add more and pay less at the same time, but it’s a reality when it comes to maximizing your Section 125 Plan. By adding Flexible Spending Accounts (FSAs) to your Section 125 Plan, you can increase your savings by decreasing your taxable payroll cost. The more employees you have participating in a Health FSA and/or Dependent Day Care Account, the more dollars you’re putting into your bottom line. So not only can your employees save money, but you’ll see tax savings as well.
Health FSAs and Dependent Day Care Accounts allow your employees to direct a part of their pay, on a pre-tax basis, into a special account that can be used throughout the year to reimburse them for eligible medical expenses and/or day care costs. Because their money goes into these reimbursement accounts before FICA, and federal and state income taxes are withheld, you pay less payroll taxes*. It’s that simple.
Your employees are your most valuable asset, but in today’s economic climate you may not be able to afford increasing their salary. However, by maximizing your Section 125 Plan you can increase their take-home pay and/or give them additional benefit dollars.
Don’t Go It AlonePSADA’s relationship with American Fidelity Assurance Company gives you access to one of the industry’s leading Section 125 Administrative Service providers. Their 25 plus years of experience has earned them a level of professionalism that you can rely upon.
They offer FSA recordkeeping services, Health FSA Debit Cards, and a uniform risk coverage policy for Health FSAs. The uniform risk coverage allows you to increase your employees’ FSA contribution maximum, while limiting your exposure on any unpaid contributions. As part of our services, [we/they] ensure resources are in place to cover your employees full expense reimbursements, even if their account has not accrued enough money to pay the expense.
Partnering with American Fidelity gives you an array of employee benefit options through:• A broad portfolio of supplemental insurance products,• Administrative Services that include Section 125
Administrative Services**, Flexible Spending Accounts, and Health Savings Accounts, and
• Enrollment solutions that include individual benefit counseling, group education meetings, electronic benefit enrollment, and enrollment reviews.
To learn more about maximizing your Section 125 Plan today and the advantages of partnering with American Fidelity call:
* Please consult a tax advisor for information regarding your specific tax situation.**American Fidelity is a Section 125 Plan service provider, but not the Section 125 Plan Administrator.
Lela YuDistrict Manager
1-877-967-5748, ext. # [email protected]
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• The original game of “Monopoly” was circular.
• The sentence “the quick brown fox jumps over the lazy dog” uses every letter in the English language.
• The word racecar and kayak are the same whether they are read left to right or right to left.
• TYPEWRITER, is the longest word that can be made using the letters on only one row of the keyboard.
• A snail can sleep for three years.
• Women blink nearly twice as much as men.
• Shakespeare invented the word “assassination” and “bump.”
• A giraffe can go without water longer than a camel can.
• Blue whales weigh as much as 30 elephants and are as long as three Greyhound buses.
• Most elephants weigh less than the tongue of the blue whale.
• Butterflies taste with their hind feet.
• Mosquitoes are attracted to the color blue twice as much as to any other color.
• If one places a tiny amount of liquor on a scorpion, it will instantly go mad and sting itself to death.
• Ants stretch when they wake up. They also appear to yawn in a very human manner before taking up the tasks of the day.
• Bees have five eyes. There are three small eyes on the top of a bee’s head and two larger ones in front.
• Caesar salad has nothing to do with any of the Caesars. It was first concocted in a bar in Tijuana, Mexico, in the 1920’s.
• A raisin dropped in a glass of fresh champagne will bounce up and down continually from the bottom of the glass to the top.
• Celery has negative calories! It takes more calories to eat a piece of celery than the celery has in it to begin with.
Coffee Break
Useless Facts
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• You burn more calories sleeping than you do watching television.
• The two longest one-syllable words in the English lan-guage are “screeched. & strengths.”
• Barbie’s measurements if she were life size: 39-23-33.”
• The word ‘pixel’ is a contraction of either ‘picture cell’ or ‘picture element’.
• Cat’s urine glows under a black light.
• On the new hundred-dollar bill the time on the clock tower of Independence Hall is 4:10.
• All 50 states are listed across the top of the Lincoln Memo-rial on the back of the $5 bill.
• Charlie Brown’s father was a barber.
• Nutmeg is extremely poisonous if injected intravenously.
• Of the six men who made up the Three Stooges, three of them were real brothers (Moe, Curly and Shemp.)
• Only 1/3 of the people that can twitch their ears can twitch only one at a time.
• The largest city in the United States with a one syllable name is Flint, Michigan.
• On the cartoon show ‘The Jetsons’, Jane is 33 years old and her daughter Judy is 15.
• The state with the longest coastline in the US is Alaska.
• Spot, Data’s cat on Star Trek: The Next Generation, was played by six different cats.
• “Underground” is the only word in the English language that begins and ends with the letters “und.”
• The housefly hums in the middle octave, key of F.
• Mr. Snuffleupagas’ first name was Alyoisus.
• Maine is the only state whose name is just one syllable.
• A cat has 32 muscles in each ear.
• An ostrich’s eye is bigger than its brain.
• Tigers have striped skin, not just striped fur.
• There are 22 stars surrounding the mountain on the Para-mount Pictures logo.
Coffee Break continued on page 41
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