COVID-19 confirmed that you don’t have to be the cheapest to move pre-owned inventory. Inventory management expert says it’s time for a new approach.

By Darren Militscher

For years, auto dealers were told they had to price pre-owned vehicles at 92 percent to market to move them. Of course, dropping prices forces your competitors to lower theirs, and so begins the race to the bottom. The problem with that approach is it has sucked billions of dollars out of the automotive market, with dealers struggling to average $1,500 in front-end profit per vehicle retailed even before COVID-19 hit.

Dealership lot

The pandemic and the inventory shortage it caused confirmed that you don’t have to be the cheapest. In fact, many dealers started pricing vehicles at 115 percent to 135 percent to market and generated more gross profit than they have in years. They’re operating with less staff, less overhead, fewer days’ supply and making two to three times more gross per vehicle than before the pandemic.

Do we have to return to normal? Or is it time to reset the market and create a new normal — one in which dealers can enjoy healthy margins again? I would argue the latter, and the way to do it is with data — not just data from your local market but the transactional data from your store.

3 Inventory Categories

Every store and brand has a different customer profile. What sells well down the street may not sell well at your store. So, instead of pricing used vehicles based on what a model sold for 3 miles away, price it based on transactional data from your store and whether that model falls into one of the following categories:

1. Core inventory: A vehicle is considered core if you have sold three or more in a 90-day period at an above-average profit. More weight is given to the last 14 days, which is approximately half the average turn time of 35 days (or whatever your average turn time is).

If you’re a Nissan store, a pre-owned Altima is probably a core vehicle for you. If inventory data over a 90-day period shows you’ve sold four vehicles with an average turn time of 22 days and an average gross profit of $2,000, you don’t need to be the cheapest in town. Typically, I recommend pricing core vehicles at 110 percent to market. Again, since the pandemic caused inventory shortages, I’ve seen many dealers be successful pricing core vehicles at 115 percent to 135 percent to market.


Every parking spot in your lot is prime real estate, so fill up as many spots as possible with core vehicles. Knowing your core vehicles also helps with sourcing decisions. Just because Kia Optimas are selling in your market does not mean you should go to auction and overpay for one if it’s not a core vehicle.

2. Noncore Inventory: These are your one-off sales, typically trade-ins and mostly off-brand. Maybe you’ve sold one model in the last 45 days but haven’t been able to reproduce that sale. I recommend pricing noncore vehicles at 100 percent to market, because you don’t have enough transactional data to guide you.

3. Priced-to-Sell Inventory: Models in this category perform terribly. The goal is to move these vehicles as quickly as possible, so you can restock your prime real estate with core vehicles. If you’re part of an auto group, you might want to send this model to a store where it will perform better. I recommend selling vehicles in this category below market value. Cut your losses, move on and don’t restock.

Tactical Pricing Changes

Once you’ve priced your vehicle, the next step is to drive the market up. Do this by raising the price, then dropping it back down temporarily. Repeat. One used-car director I know raised the price of a vehicle $1,000 above asking every Friday for three consecutive weeks. Try raising prices just before the weekend, then dropping them back down during the week.

A benefit of this pricing tactic is you’ll have a few customers camped out on your vehicles, waiting for a price drop. When you raise the price, they’ll get confused. They may even call to ask why you raised the price. Explain to them it’s a market adjustment. The vehicle is in short supply and high demand. Then let the shopper know that if he or she can get to your store today, you’ll honor the old price. You’d be surprised how often and how well this tactic works.

We all have an important question to ask: Was the belief that consumers always buy the cheapest ever really true? Data from sales transactions since March 2020 indicates no.

I see an opportunity here to reset the market, draw a line in the sand and reclaim your gross profit margins. Use your inventory tool to help make intelligent pricing decisions, based on transactional data from your own store and your local market data. If this strategy doesn’t work for you, you can always rejoin the race to the bottom.

Darren Militscher is a nearly 20-year veteran of the automotive industry who serves as a Senior Strategic Growth Manager for DealerSocket. He started his career working on the inventory management solution that would become Inventory+. Email him at [email protected]

DealerSocket’s Over the Curb blog goes one-on-one with Tony Graham, Auto/Mate’s new executive vice president and general manager.

By Gregory Arroyo

“It’s not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages,” reads the famous quote Tony Graham has displayed on his LinkedIn page. Sourced from a renowned car company founder, it has served as the backbone of his 27-year career in the car business.

Graham officially stepped in as the new executive vice president and general manager of DealerSocket’s Auto/Mate on Aug. 24, bringing a proven track record of success to a business unit the company acquired in February 2020.

The senior business leader is no stranger to the DMS space. Initially recruited by ADP in 1993 as director of product marketing following a seven-year stint with NCR Corp., Graham spent the next 26 years working tirelessly on behalf of retail automotive dealers in a variety of leadership roles for the DMS provider.

Credited with launching CDK’s Minority Dealer Business in 1999, the executive turned his idea to establish the company’s presence in that segment into a highly successful business. Graham also served as executive sponsor of the company’s diversity and inclusion initiatives, which included the creation of the ADP Minority Summer Internship Program and implementation of the company’s first diversity council, employee resource groups, and diversity training. After leaving CDK Global in 2019, the National Association of Minority Automobile Dealers (NAMAD) honored him with its prestigious Lifetime Achievement Award.

“Tony was a trailblazer as an executive with CDK and ADP,” said NAMAD President Damon Lester. “What he’s been able to do — not just for nonminority dealers but advocating and assisting in the plight of minority-owned dealerships — is a testament to his character. If Tony says he’s going to do something, he’s going to get it done.”

Ernest Hodge, president and CEO of Atlanta-based March Hodge Automotive Group, added: “I’ve known Tony for well over 20 years. The guy has a tremendous amount of integrity and empathy for his customers and just has a real passion for whatever he’s doing. He’s just outstanding.”

DealerSocket’s Over the Curb blog caught up with Graham just before his first day in his new role. Discussed were a range of topics, from COVID-19’s impact on dealers to his family, passion for coaching, and what he brings to DealerSocket.

DealerSocket: I know you’re a family man, so let’s start there.

Graham: I’ve been married to my wife Beverly for 32 years, but we’ve been friends for 40. We met as freshmen in college.

DealerSocket: That’s incredible. You also have three adult children, correct?

Graham: Yes, I have two daughters and a son. My oldest daughter, Ms. Toni, is 30 and works in the automotive industry. She’s a very successful sales manager at a Mercedes-Benz dealership and was a world-class sprinter at the University of Alabama. She was a Division I All-American.

My middle daughter, Ms. Taylor, is 27. She ran track and tennis in high school, but she didn’t do sports in college. She’s my scientist and works for the city of St. Petersburg, Fla. My son Palmer graduated from college this past December. He was a three-sport athlete in high school and played Division I college football. He now works for The Pfizer pharmaceutical company.

DealerSocket: Sounds like an incredible family. You describe yourself as a senior business leader and champion of diversity. Can you tell our readers about the latter?

Graham: Unfortunately, there’s no short answer to your question, but let me try. I was recruited into the industry in 1993 by what was then known as ADP Dealer Services. At the time, the Big 3 car companies — Ford, General Motors, and Chrysler — really emphasized diversification of their dealer network and had clear definitions of how they defined diversity. The automotive industry wasn’t very diverse at the time, but the Big 3 wanted to change that.

So, when I came to work at ADP, I recognized the opportunity to do the same. I had a vision, came up with a business plan, and turned that idea into a highly successful business. And it was a well-defined plan that included employee resource groups, diversity training, and a mentorship and internship program.

DealerSocket: ADP initially recruited you as a product marketer, correct?

Graham: Yes, I started out as director of product marketing before being elevated to vice president.

DealerSocket: You also ran ADP’s Canadian business, right? I think I read you led the struggling operation to the No. 1 sales ranking in ADP’s portfolio.

Graham: I did. It was a great experience. I spent a little over 18 months in Canada. We had a lot of success, and we had a lot of fun.

But let me add one thing: When I left Canada to become general manager of ADP’s Midwest region, I retained oversight of the company’s minority business and women business. I did the same when I oversaw the company’s Southwest region. Even when I became Chief Customer Experience Officer, they didn’t take my dealers away. And along the way, I started to put more focus on dealerships owned and operated by women.

I mention that because when you start something and you’re growing and building, you become the face of that part of the business.

DealerSocket: I was going to ask about the women retail business you also helped start. How was that different from the plan you developed for minority dealers?

“The two things I’m most proud of in my career are the number of employees I helped develop and grow as a mentor, and, second, that I had experience working with the smallest to the largest dealer operations.”

Graham: Let me start by saying that big companies always try to blur the waters a bit by including women in how they define minorities. I didn’t think that was right. Women deserve their own plan and focus. And I was lucky to have a woman who I worked with for 26 years lead that business.

DealerSocket: So, why did you depart CDK?

Graham: Have you ever gone to a party and promised yourself you’d only stay an hour? Then you end up staying for three. I feel I stayed too long. Many of the people I worked with and counted on to serve my dealers had left, so, again, I stayed too long.

At the same time, I always had it in my mind that I would retire from CDK Global at 55. I overshot that by 12 months before leaving at the end of June 2019.

I also wanted to be closer to my mother and my mother-in-law in Alabama, so my wife and I sold our house in Chicago. My last day with the company was June 30 (2019), and I was living in Huntsville, Alabama, by August.

DealerSocket: What do you consider to be your most significant accomplishment at CDK Global?

Graham: The two things I’m most proud of in my career are the number of employees I helped develop and grow as a mentor, and, second, that I had experience working with the smallest to the largest dealer operations.

DealerSocket: The National Association of Minority Automobile Dealers sent you off in a very nice way before you did, honoring you with its Lifetime Achievement Award at its annual convention that July.

Graham: When I announced my retirement to my dealers, they said, “Tony, we want to recognize you for all you’ve done for us. And you know what? I’m the only individual that’s not a dealer or an official with a car company to receive that award.

DealerSocket: That’s amazing.

Graham: What I will cherish from that night was the presentation. The dealer was so emotional that he couldn’t get through it. He said, “You’re too young; you can’t retire.”

DealerSocket: Was retirement not for you?

Graham: I like to keep myself busy. I founded my consulting firm, T. Graham Business Consulting and Advisory Services, and worked on some business initiatives. I also served as an adjunct professor at Calhoun College. I guess you can describe my short time away from this great business as a moment of reflection. My financial advisor called it a “halftime.”

You spend the first half of your career trying to make a name for yourself. Then there’s the second half, which is more about purpose. What will they write on your tombstone, right? My hobby is helping people, and so many people need help — young people who, based on their environment and family structure, need a positive role model in their life.

DealerSocket: I think I read you dedicated 20-plus years to coaching and mentoring.

Graham: Outside of raising my kids, that’s what I get the most gratification from — to see kids who never thought about college become the first in their family to not only go but finish. So I’ve helped many kids get in and through college, then I helped them find their first job after college. They always ask, “What can I do for you?” My response is always the same: “There’s nothing you can do for me, but you can do for someone else what I did for you. That’s how you pay me.”  In my fraternity, Omega Psi Phi, Inc., we refer to that as UPLIFT.

DealerSocket: The world needs more Tony Grahams. So when did you get the itch to return?

Graham: I knew I wasn’t done, but I didn’t think I would actually come back to work for a technology company in the automotive industry. I started my consulting company and thought that would be my outlet. I guess I realized how much I missed working daily with my dealers, which I call friends.

At the same time, my phone started ringing with several prestigious offers from prominent automotive software companies. I decided to accept the offer from DealerSocket because I believe in the company’s core tenet of dealer-first and because I believe DealerSocket’s software is truly exceptional at helping dealers.

DealerSocket: Were you surprised by DealerSocket’s Auto/Mate acquisition?

Graham: I did have an idea that DealerSocket was going to be making some moves when I left CDK Global. Both DealerSocket and Auto/Mate were growing and taking market share, and I think a lot of people knew something was cooking. So, when the acquisition happened this past February, I wasn’t too surprised.

And I think it was a great move. Auto/Mate adds the missing piece for DealerSocket, which never had a franchised DMS. So, the acquisition immediately elevated the combined organizations, and I’m excited to be leading this because it represents an opportunity for dealers to work with a company that cares, is focused on customer service first and foremost, and spends a great amount of resources on innovation and investment in its software.

“Whether you’re a small dealer or a large dealer, COVID-19 has impacted you. And you had to change the way you conduct business; you had to change the process. You had to get creative.”

DealerSocket: So, what’s the approach?

Graham: That’s a great question. First, let me say that I have a lot of respect for Mike Esposito. He, Larry Colson, and the rest of the Auto/Mate team built a tremendous organization with an incredible culture, core values, and a dealer-first focus on everything they do.

With that said, I think the model is you first have to come in to listen, take in all that information, assess, and formulate a plan. As I said, Mike, Larry, and the other leaders have built a great company with an incredibly dedicated and talented team. So, I want to get to know the people and what drives that organization.

DealerSocket: So, it’s not a matter of dusting off the old playbook?

Graham: Let me answer your question this way: I love sports, but these days I enjoy watching them more than actually playing. Every year in the NFL or NBA, there are about four coaches that lose their jobs. Candidates come in to interview and present what they will do if they are named coach. I think that’s counter-intuitive. If you’re a defensive coach but don’t have the personnel to carry out that scheme, how will it work?

Yes, I have playbooks. But again, the model is you first have to come in to listen, take in all that information, assess, and formulate a plan.

DealerSocket: How does COVID-19 impact things?

Graham: Whether you’re a small dealer or a large dealer, COVID-19 has impacted you. And you had to change the way you conduct business; you had to change the process. You had to get creative.

Now everyone has to position themselves for the post-pandemic, which means the question becomes: How do you ready yourself? And I believe dealers have a window of 18 to 24 months to turn the answer to that question into a strategy powered by technology.

Dealers need to embrace technology more than they ever have, because it can be a competitive advantage. But here’s what I know about dealers: They do want innovation, good tech. But what they value most is service and support.

That’s why I’m proud to join a company that was proactive in its support of dealers through the pandemic. These are exciting times, and I’m ready to get to work. But at the end of the day, I’m back with my friends — my dealer friends. And they are going to be glad to see me.

A new study reveals a potential starting point for dealers who are just now dipping their toes in the digital waters.

By Gregory Arroyo

I recall a conversation I had with an industry attorney during the early days of digital retailing. Technology vendors believed the Digital Age had arrived, while dealers were saying, “Not so fast.” My question to my attorney friend was, “What’s the holdup?”

He said the problem is dealers aren’t treating digital retailing as an experience — that customers should be rewarded for taking that path to purchase. He suggested that dealerships with separate facilities for fleet sales should consider directing digital buyers there vs. the showroom.

He then relayed his recent experience purchasing his second vehicle from the same dealership. He called the store, explained that he was a willing buyer who simply wanted to update to a newer model, and negotiated the deal over the phone. Expecting the red-carpet treatment for essentially being a rollover, he felt disappointed when he discovered he’d have to wait like the other customers in front of him.

That conversation came to mind when I came across Urban Science’s “Around the Bend: How COVID-19 Impacts the Next Normal for Dealers,” a report based on an online poll of 1,506 adult consumers. It serves as an update to the firm’s August 2019 report, which served as a reality check for digital retailing.

The 2019 study, which included responses from 2,001 consumers, concluded that car buyers weren’t ready to ditch the dealership experience because they still want to kick the tires and take a test-drive. Respondents also said they still needed someone at the dealership to guide them through the process.

I wrote about why I think that represents an opportunity for digital retailing in an April 2020 blog entry, “Digital Retailing’s True Test.” However, I’d like to share an even greater opportunity revealed in this year’s updated study.

See, while the report did show that a majority of consumers still believe buying a car is too big of an investment not to see (81%) or test-drive (79%), it did show that 67% would be more open to buying online if it was a brand or dealership with which they were already familiar.

Again, my convo with my attorney friend came to mind, but so did a discussion I had with a DealerSocket Strategic Growth Manager. He said the main reason some dealers fail to realize the full potential of data mining is because they don’t have a dedicated process. Well, based on that stat from Urban Science, maybe digital retailing represents a missing link.

Take those data-mining campaigns targeting customers approaching the end of their lease or who qualify for smart payment offers. The emails could contain links to a landing page that explains your offer and a link to a streamlined buying process powered by your digital retail tool.

Back in April, another DealerSocket Strategic Growth Manager told me about a Pennsylvania-based dealer group that was rewarded for having a service-drive sales process when the pandemic forced local officials to limit dealers there to appointment-only sales that concluded with service-drive deliveries.

Before the pandemic, the process delivered 100 units a month behind two dedicated salespeople, a sales manager, and an F&I manager, who actually has a dedicated desk (with enough privacy) in the service area. The reason for that is the group wanted that buying experience to feel different and free of pressure.

The group equips the sales team with its inventory management tool’s mobile app (Inventory+) to feed appraisers with scanned VINs and photos of every car that comes into service. The appraisers then prepare a package that includes a vehicle history report, documentation on the vehicle’s going price in the local market, its fair Kelley Blue Book value, a check voucher for an amount over that value, and the salesperson’s business card.

Signage in the service drive lets customers know they can get a free vehicle evaluation by texting a specific number or talking to their service advisor. All customers get an appraisal, but the hand-raisers represent high-value targets the sales team engages.

However, even customers who don’t bite get the appraisal package. They also get enrolled into a CRM-powered campaign that includes email and a phone call — the latter scheduled for the day after the customer’s service visit to ensure satisfaction and to revisit the offer sheet.

I can see three potential opportunities in that process for digital retailing to have an impact. Maybe it’s a kiosk in the service area loaded with a digital retail tool like DealerSocket’s PrecisePrice; perhaps it’s tablets. Whatever the case, digital retail should be a part of those follow-up efforts, whether it’s a link in an email or guiding customers through the process over the phone and emailing a link to their PrecisePrice deal.

And just maybe that buyer’s journey you create in the service drive serves as the entrance for sales opportunities your data-mining efforts generate.

While 93% of respondents to the Urban Science study expressed some concern with an entirely online purchase process, more than two-thirds said they were comfortable shopping online, signing paperwork digitally, and negotiating price and terms via email, chat, or phone.

Recently, the individual leading the digital drive for one of the largest privately-owned dealer groups in the United States addressed DealerSocket employees over a Zoom call. He talked about COVID-19’s impact, inventory shortages, the group’s efforts to build that clicks-to-bricks experience, and how consumers still need to be educated on what digital retailing is. What caught my attention was his response to whether he believed consumers still want the showroom experience.

“Absolutely … Only a small group of individuals want the Carvana model, and we’re going to be there,” he said. “But most customers want to step foot in a brick-and-mortar shop. If they want to get their payment, we’ll do that and meet them in the showroom.

“So, we believe a critical point in that process is that showroom experience,” he added. “You shouldn’t lose a customer who completed things online because you told them it would take 45 minutes, but it takes us three hours.”

A case could be made that the most critical dealer tool throughout COVID-19 has been the CRM. So why isn’t it included in the digital-retailing discussion?

By Gregory Arroyo

It’s interesting how much attention the trade press has paid to digital retailing, especially when most dealers I talked to are quick to credit their CRM for helping them navigate this period of social distancing.

But I get it. The CRM isn’t the new shiny object like digital retailing is, and COVID-19 certainly reignited the digital-retail discussion. However, I challenge anyone to question the importance of appointment-setting during COVID-19, especially for dealerships located in markets where sales were limited to appointment-only. It’s an art that predates the CRM, but, thanks to that critical front-end tool, appointment-setting has become a science for some operations.



See, what often gets overlooked is just how often CRM providers update this critical tool. In DealerSocket’s case, the cadence is every two weeks. And the focus of late for DealerSocket is appointment-setting, with texting now a key component, thanks to dealer feedback.

Take the California dealership I spoke to in mid-April. Every internet lead received gets an initial opt-in text. If there’s no response within a few minutes, the following text message — one that garners a response 70% of the time — is sent: “We just received your internet request, and we have a few questions. Do you prefer a call or a text?”

By the way, that dealership logged 26,617 sent and received texts in March.

Then there’s Rashad Tillman, who manages a centralized BDC for a two-rooftop independent group in Southern California. With a keep-it-simple approach, he operates under the belief that a successful road to the sale requires five yeses from a customer. The use of DealerSocket’s SocketTalk texting tool usually accounts for two of those yeses, starting with the opt-in text.

“All we’re looking for is a reply. Once we get one, we’re in control,” Tillman says. And once a customer opt-in, the following text is sent: “We received your lead for the [make and model], which we have available. Do you have time today to test-drive the vehicle.”

“That usually results in a reply,” Tillman says. “I’ve been working with DealerSocket’s CRM for seven years now, and I figured out real early that texting is now the primary form of communication. So, we try to eliminate as much conversation as possible.”

In March, Tillman’s 20-member team sent and received 59,402 text messages through the CRM’s SocketTalk texting tool, with two members logging 2,900 sent and received texts for the month. Tillman notes that texting accounts for 80% of his department’s activity when working a lead, which is he says knowing how to configure DealerSocket’s CRM dashboard correctly is critical to making sure no opportunity falls through the cracks.

With DealerSocket’s CRM, managers don’t have to dig into the solution’s reporting tools to keep tabs on their team’s lead-handling activities. Merely creating a dashboard widget for web leads allows managers like Tillman to keep tabs on every opportunity and every text or email exchange. That’s where he says most managers go wrong. They have the talent and skills, but they resist to allow technology to augment their abilities.

In fact, the use of technology is how managers like Tillman are keeping their dealerships in the game when today’s car buyers are shopping more brands, more vehicles, and more dealerships than those car-buyer studies predicted they would four to five years ago. The latest data on that front comes from a study commissioned by Urban Science, which showed that the average car shopper is considering 2.6 brands, visits 2.5 dealerships, and submits, on average, three lead forms.

So, regardless of whether your BDC staffers or sales teams are selling appointments or demonstrating to customers a willingness to be shopped to win their business, converting a lead into an appointment requires a CRM-driven process that doesn’t end once the customer says “Yes.”

The best part of a CRM-driven appointment-setting process is you can automate every step of the way. In the case of DealerSocket, our CRM’s Campaign Manager allows you to assign your operation’s best word-tracks to a BDC staffer’s scheduled response to an inquiry, as well as automate appointment reminders, confirmation communications, and follow-up. Then there’s the CRM’s Business Rules automation tool, which allows managers to initiate activities such as vehicle prep and enrollment of customers into appropriate campaigns.

And that’s why I think the CRM needs to be included in the digital retailing discussion. Think about it: When the customer structures a deal through your website’s digital retail tool and submits the lead, guess where that opportunity lands? The question dealers need to answer is, what does the experience look like when it does.

Gregory Arroyo is the former editor of “F&I and Showroom” and “Auto Dealer Today” magazines. He now serves as senior manager of strategic content for DealerSocket. Email him at [email protected].

Data from DealerSocket’s Inventory+TM team reveals profitable opportunities for dealers who stayed the course.

Field reports in May confirm what DealerSocket’s April snapshot of appraisal trends seemed to indicate — that a high degree of pent-up consumer demand could create a small window of opportunity for dealers to generate higher gross profits on the sale of used inventory.

May Appraisal Trends

Retail Demand Resets Market

Purchase appraisals, or wholesale/auction vehicles evaluated by dealers, fell to their lowest level the week of April 6. Since then, appraisal counts for this category have increased by 114.7%. In May alone, purchase appraisals rose 135%.

The pick-up in activity reveals that retail demand is once again setting the market, with the guidebooks in catch-up mode due to auction closures in March and Apil and dealers on the hunt for pre-owned vehicles core to their dealership and available at the right wholesale price.
of their core inventory,” Black Book stated in a recent report, adding that dealers are hesitant to get stuck with vehicles they don’t traditionally stock in a depreciating market.

Data from DealerSocket’s Inventory+ team shows a 20% week- over-week decline in total appraisals the week of March 16, when most stay-at-home orders took effect. Trade appraisals, or appraisals that occur on a customer’s trade-in, were down 26% during the same period, while “Purchase Appraisals” on wholesale and auction units plunged by 35%, according to the data.

Overall, appraisals were down 34.4% from the first week of March to the first week of April. However, activity has trended up since.

Window of Opportunity

Inventory+ users in the Northeast, where some markets remain limited to appointment-only sales as of early June, are reporting either record-setting months for April and May or year-over-year increases in terms of pre-owned sales counts and gross profits. And that momentum seems to be carrying over into June.

Trade appraisal counts appear to confirm strong consumer demand, with the number of trade appraisals (evaluation of consumer trade-ins at the dealership) increasing 27.8% in May after bottoming out in early April due to the impact of shelter-in-place orders. Since April 6, trade appraisals have risen 97.9%.

Consumer appraisal counts offer an even brighter outlook, as consumers continued to initiate vehicle evaluations through online lead forms during the height of shelter-in-place orders.

The apparent retail demand is now rewarding dealers who resisted the urge to offload aging units, as inventory shortages are allowing them to get higher asking prices with little to no negotiation. Some dealers, according to field reports, are even pricing units they’ve had since March like it was Day 1 on the lot.

The going theory is consumers camped out on vehicles of interest through the COVID-19 period between March and April, hoping for a price cut that never materialized.


As the old saying goes, make hay while the sun shines, and the sun is still shining in terms of a dealer’s opportunity to generate higher front-end gross profit. However, that window of opportunity won’t stay open for long, with wholesale value normalization expected in the next three to four weeks. The guidebooks, by some estimates, are about a month to a month and a half behind.

For now, dealers need to hit the reset button on their aging strategies and pump up retail prices, especially on three-, four-, and five-year-old vehicles. The exception is late-model units, which should be priced and advertised around factory new-vehicle incentives. Lease returns and the expected flood of rental units should refuel inventory levels, but not until the wholesale prices for those market-returning units fall to a more reasonable level.

DealerSocket’s Over the Curb blog visits with a longtime industry veteran who had a lot to say about digital retailing and what’s holding it up.

By Gregory Arroyo

Judy Greeby spent more than two decades working retail before making the jump to the provider side in 2006. Asked for her take on digital retailing, she says, “I would absolutely love to have Judy Greeby, Strategic Growth ManagerDealerSocket’s PrecisePrice in my store. It would be all over my site: ‘Getting your best price and creating your own deal is as easy as 1-2-3.’”

For the last 13 years, Greeby has served as a Strategic Growth Manager for DealerSocket. During a recent chat about how dealerships are navigating the COVID-19 pandemic, she shared a few thoughts on digital retailing and how dealers can shorten the learning curve for consumers, who she believes are still intimidated by the tool.

She likens the problem to a dealership she worked for when she first entered the business. Located in a tough neighborhood, the dealership was secured by a black, wrought-iron fence that wrapped the facility.

“I used to tell that dealer, ‘You shouldn’t paint the wrought iron black if you want people to see through it,’” she says. “And when people pulled in, they felt trapped. Same thing with the website.”

The problem is car buyers are trained not to hit those call-to-action buttons unless committed to a purchase, she says, as they know most CTAs lead to a lead form. “We need to help customers understand how simple and how non-obligating it would be to use these digital retailing tools,” she says, adding that dealers need to be careful about gating their digital retail experience too soon.

“Let the customer get through parts of the process or the entire process,” she says. “At some point, they’ll say, ‘Here’s a payment I can afford. Let’s move forward and click.'”

Thinking out loud, Greeby also wonders if those digital retail CTA buttons need to be replaced by pop-ups that encourage customers to try the tool. “I was just talking to a GM about this the other day,” she says. “He clicked on one of his store’s websites and said, ‘Look at this. It asks the customer to click here for the best price, then below that is their PrecisePrice digital retail button.”

We agreed that if anything is redeeming about COVID-19, it’s that the period has helped move the digital retail conversation beyond whether it’s a good idea to move parts of the finance process upstream. And I have a feeling those learnings will be on display during our industry’s recovery, which, according to several market watchers, is officially underway.

Greeby did share one recommendation outside of the digital retailing discussion, and it’s one I’d like to close this blog entry with because it speaks to the current environment. She suggests that dealers have their detail teams certify when a vehicle is cleaned by placing hangtags inside that read: “Sanitized on May 5, 2020.” That single step, Greeby believes, will go a long way with today’s skittish consumer.

“The physical inventory on your lot needs to be your No. 1 priority right now and making sure your virtual showroom is up to snuff,” she advises. “That means getting cars cleaned up, and doing all I can in terms of merchandising.”

Gregory Arroyo is the former editor of “F&I and Showroom” and “Auto Dealer Today” magazines. He now serves as senior manager of strategic content for DealerSocket. Email him at [email protected].

We continue to think about all of you, our customers and partners, during this difficult time. This pandemic has caused deep challenges across our industry and for all of us, and I hope you know that DealerSocket continues to be here for our dealers. Our goal has been to strike the right balance between being prepared for our dealers and the market when our industry recovers and offering discounts to help our dealers as much as possible during this difficult time. 

We will get through this, and we will get through this together. We are committed to fighting through this with you. We are beginning to see the first signs of positive trends as we climb out of the depths of the COVID-19 pandemic, and this has us all hopeful for the future.

In April, we heavily discounted our software for our dealers. In addition to our discounts in April, we have decided to offer the following DealerSocket billing reductions for May for all of our dealers:

We have already sent out our May invoices, so next week you will receive a credit memo for the above discounts. With that said, similar to our discount package last month, there are some basic qualifying terms listed below.

In addition to these discounts in April and May, DealerSocket continues to offer our customers several promotions and free months of certain software products to help you navigate this crisis. Our offers include promotions for:

Since we are adding promotions and various resources for dealers often, please view DealerSocket’s latest information by clicking here, and, as always, please feel free to reach out to your Customer Success Manager with any questions or if we can help in any way:

If you are not yet an Auto/Mate DMS customer, I hope you know that we can reduce your DMS bill significantly during these challenging times as well as into the future by switching to Auto/Mate DMS. We have several bundled packages that include our Auto/Mate DMS product combined with other DealerSocket products to support you.

Thank you for partnering with DealerSocket. I hope you know how much we value and appreciate your loyalty, partnership, and your business.

I wish you, your families, and your team members health in these unprecedented times.

Sejal Pietrzak
CEO and President
[email protected]


Details regarding our COVID-19 relief package:

We’re excited to announce that Steve Zadoorian and Dave Druzynski have both taken on new, expanded roles at DealerSocket! In their new positions, Steve and Dave will ensure that DealerSocket and Auto/Mate customers and employees continue to benefit from an emphasis on customer support and company culture.

Steve Zadoorian

Steve Zadoorian has been named Senior VP Operations and Customer Care at DealerSocket. In his new role, Steve will lead the Installations and Customer Support teams for both DealerSocket and Auto/Mate. Under Steve’s leadership, Auto/Mate achieved a customer retention rate above 95 percent and has received multiple consecutive DrivingSales Dealer Satisfaction awards. Steve’s commitment to customer satisfaction has also helped to build Auto/Mate’s Net Promoter Score (NPS) to +59, a score that’s nearly double the software industry average of +31.

“My first goal is to integrate the support service teams so we have a common process; and also make sure we have a well-integrated and cohesive implementation process for new clients,” said Steve. “I look forward to bringing our teams and best practices together and ensuring that our customers remain highly satisfied.

Dave Druzynski has been named Vice President, People and Culture at DealerSocket.

Dave Druzynski

In his new role, Dave will oversee the development of company culture and employee satisfaction. Under Dave’s leadership, Auto/Mate has received ten consecutive “Best Place to Work” awards by the Albany Business Review, and nine consecutive “Top Workplaces” awards by The Times Union.

“Employee happiness has always been a high priority at Auto/Mate and I am thrilled to work with the DealerSocket team who shares that same belief. Rather than just have one company’s culture consume the other, we plan to identify the best aspects of both cultures and merge them together as one team,” said Dave.

Dave and Steve will continue to operate from DealerSocket’s Albany, NY office.

The car business isn’t the only industry operating outside its comfort zone. That’s why it’s OK that the industry’s at test-drive deliveries and service pickups and drop-offs.

By Gregory Arroyo

Over a two-and-a-half-day period to open the last week of March, the percentage of consumers who said they shopped and purchased online increased from 30% to 47%. However, “things haven’t been easy breezy” for those digital consumers.

According to the article I came across, more than 30% of those shoppers reported an issue with their purchase. They either couldn’t place an order (16%) or had to wait days for their order to be ready (17%).

The data, sourced from CivicScience and its survey-reporting platform, was published in Food Logistics, a magazine for the global food and beverage industries.

Yeah, we’re not the only retail segment operating outside of our comfort zone due to COVID-19. For supermarkets and their customers, that means a few speedbumps on that road to the sale.

For example, what if the brand of product a customer ordered is out of stock? Do you notify the customer of your dilemma, or do you make an executive decision and grab the more expensive brand and eliminate a few items from the customer’s order to make up the difference?

I’m guessing those were the questions swimming through the mind of my in-store shopper during my wife and I’s first online grocery-ordering experience. And he made an executive decision on at least two occasions.

Instead of the two gallons of milk we ordered (Hey, I have a growing boy), we got a gallon of the more expensive brand.

We also didn’t get the 16-pack of fruit roll-ups I wanted. Instead, we got a box of six.

And instead of the two packets of Tollhouse cookie dough I wanted, we got one pack of Simple Truth’s plant-based product.

Understanding the moment, we didn’t get mad, but we did have questions. Unfortunately, our shopper appeared, loaded our groceries, handed us our receipt, and disappeared without saying a word.

That’s the real reason the Food Logistics article caught my eye. The stats it contained reflected my experience. My order took a few days longer to get than initially promised, and the online experience was problematic.

So, yeah, I think a lot of industries are figuring it out, discovering potential speedbumps, and making adjustments along the way. That’s why it’s OK that, when it comes to digital retailing, we’re still at at-home test-drives, and service pickups and drop-offs.

But let’s not be in this situation again.

That was my takeaway after a recent discussion with Darren Militscher, a Dealersocket Strategic Growth Manager operating in the Northeast. He believes COVID-19 moved up our digital timeline by 18 to 24 months.

I believe there are two things in play right now — learning to operate outside of our comfort zone being one of them. The other is equally important to our digital future. And it has to do with the research I wrote about last November in “Why Digital Retail Is Like the Autonomous Vehicle.”

The inspiration for that blog entry was a poll of 2,001 U.S. consumers The Harris Poll conducted in February 2019 on behalf of Urban Science. Seven out of 10 respondents said they would never buy a vehicle without a dealership, which led Urban Science’s analysts to conclude that younger car buyers still desire the knowledge of a well-trained F&I professional.

The reason is finding the lowest price on some third-party lead site is one thing, but how does that price translate into a monthly finance or lease payment? An F&I manager can definitely help, but so can a digital retailing tool.

Folks, that’s what’s in play right now. There are customers right now wondering how General Motors’ recent financing offer — interest-free financing for 84 months and up to 120 days of deferred payments — means to their payments. I’d bet that’s even true in states where showrooms were forced to close.

Like my wife and I during our first online grocery-shopping experience, car buyers need to learn the process. By the way, that plant-based cookie dough wasn’t half bad.

Gregory Arroyo is the former editor of “F&I and Showroom” and “Auto Dealer Today” magazines. He now serves as senior manager of strategic content for DealerSocket. Email him at [email protected].

With threat actors working overtime, DealerSocket’s head of information security offers three tips to keep your dealership’s and your customers’ data protected.

By Gregory Arroyo

Greg Tatum has a warning for dealerships everywhere: Cyber threat actors are working overtime. Noting a definite uptick in suspicious activity since COVID-19 hit Europe in late February, he adds:

“Threat actors are actively searching for new targets through a number of different mediums. Things like social media platforms are a very popular target for information gathering that can be used in an attack.”

Tatum serves as DealerSocket’s head of information security. He joined DealerSocket nearly four years ago from a security services firm that works with companies in much more sensitive environments than automotive. I’m talking about healthcare and government contractors, sectors that see billions of attacks each year. So, yeah, we have the right guy on the job.

“DealerSocket spends a considerable amount of effort protecting our customers’ data,” he notes. “It’s part of what we do just to make sure our customers’ customers’ data is protected.”

Tatum isn’t the only one sounding the alarm. The FBI issued its own warning on March 20, noting that scammers are leveraging the COVID-19 pandemic to steal money, personal information, or both.



Just last week, the National Automobile Dealers Association reported that attackers are now putting up COVID-19-related websites that prompt visitors to download an application to receive COVID-19 updates. But you don’t need to download the app, as the site installs a malicious binary file as you contemplate whether you should.

The attack method uses AZORult, software that originated in Russia approximately four years ago to steal data and infect the breached computer with malware.

Tatum also alerted me to a new phishing campaign that pretends to be from a local hospital notifying recipients that they have been exposed to the Coronavirus and they need to be tested.

But it’s not just phishing and ransomware attacks. Business email compromise, or BEC, is also on the rise. That’s when a cyberthief breaks into a legitimate corporate email account and impersonates an employee to get the business, its partners, or other employees to send money or sensitive data to the attacker.

“In this climate we live in today, this is part of business,” Tatum says. “This is part of what we have to deal with as consumers of technology.”

Tatum, by the way, is available to help. He advises DealerSocket customers to contact their Customer Success Managers to get connected. In the meantime, he offers the following four tips to safeguard your organization and your customers’ data:

1. Stay Committed to General Security Awareness

The following is general security etiquette your teams should employ:

2. Separate Work and Personal Data

Use company-issued computers and mobile devices for work purposes only. If you don’t have a company-issued device, be sure to check your company’s policies about using personal devices to access your organization’s data or networks.

Additionally, consider creating separate user accounts. Never use your work email for personal reasons or vice-versa. This segregation helps the company maintain the confidentiality of the data it collects and helps you maintain your privacy.

3. Secure Your Home Network

Update your router’s username and password immediately and use a strong, unique password. And never use the same password for your network and your router. Note that most routers ship with default login credentials that are public knowledge.

4. Don’t Forget About Physical Security

The comfort of your own home is no reason to forget about physical security. Simple acts like keeping doors locked and not leaving mobile devices unattended in a vehicle are non-technical ways to improve security.

Gregory Arroyo is the former editor of “F&I and Showroom” and “Auto Dealer Today” magazines. He now serves as senior manager of strategic content for DealerSocket. Email him at [email protected].

In uncharted waters, the Indiana dealership is leaning heavily on its virtual presence to navigate it through the COVID-19 pandemic.

By Gregory Arroyo

Emily Spellman serves as director of digital marketing for Circle Buick GMC and has been a driving force in the dealership’s digital push.

This March marked Emily Spellman’s first year as director of digital marketing for Highland, Ind.-based Circle Buick GMC. She’s been a driving force in the 39-year-old dealership’s digital push, but she admits that nothing in her more than 10 years as a marketing professional prepared her for COVID-19.

“We’re all learning as we go,” she says. “The biggest thing I’ve learned is to focus on what I can control and zeroing in on what really matters, which is taking care of the community and our employees and translating that in our messaging in a way that connects with people.”

Deemed an essential business, Circle Buick GMC’s showroom and service department remain open.

Circle Buick GMC’s showroom and service department remain open despite Gov. Eric Holcomb’s March 23 executive order directing all Hoosiers to stay home. Thanks to local officials, who personally requested that Circle remain open, dealerships operating in its Lake County market were deemed essential. Spellman’s challenge is to strike the right balance when it comes to the dealership’s messaging.

“You don’t want to encourage people to leave their home, but, at the same time, you need to show you’re available to people who need us,” she says. “People are still buying and servicing their cars.”

Digital Readiness

Spellman feels fortunate to work for a dealership that has taken several forward-thinking steps that are helping during this uncertain time, such as adopting DealerSocket’s full platform of solutions. They include the software provider’s CRM, RevenueRadar data-mining tool, and the company’s DealerFire website and PrecisePrice digital retail platforms.

For the three months ending on Jan. 16, RevenueRadar generated 33 store visits, 23 open appointments, and 21 sold units, while PrecisePrice created 40 new leads, 33 store visits, and 16 sold vehicles. Total gross on PrecisePrice deals was $684 higher than units sold via internet leads.

Emily Spellman says DealerSocket’s PrecisePrice digital retail tool is generating a lot of engagement. She notes the dealership is currently working on new F&I product descriptions, videos, and infographics for the tool’s F&I presentation page, as well as F&I-related SEO content for the website.

Spellman calls that snapshot conservative in terms of PrecisePrice’s true impact, noting a definite uptick in customer interactions with the tool. “People are sending us that info, which comes to the CRM. And we’re pretty proactive about setting those appointments,” she says.

“But really, it’s been a mixed bag in terms of the traffic we’re getting,” she adds. “I was looking over some of the data today, and we’re getting walk-ins, return customers … So, digital retailing is one piece of it. The big difference I’ve noticed is between our current DealerFire website and our previous site. We’re getting more leads overall.”

Stay the Course

Sales for the 130-unit-a-month dealership remained on pace with last year through the first two days of April, but Spellman predicts a slowdown for the month. For now, General Motors’ interest-free financing for 84 months with deferred payments for up to 120 days is what’s influencing buyers, who she believes are taking advantage in case their job situation changes.

Circle Buick GMC is using its Facebook page to collect supplies and donations in support of first responders and the local St. Jude House.

“It’s definitely influencing people,” she says.

It’s why the dealership has adjusted a couple of in-house sales procedures to keep customers and employees safe and to abide by the state’s social distancing mandates. The dealership is also using the moment to collect supplies for first responders and the local St. Jude House domestic violence shelter.

“We’re trying to take advantage of the captive audience we have by sending a positive community message,” Spellman says. “People always remember the businesses that stood up to help, were positive and didn’t feed into the crisis mentality.”

As for the road ahead, Spellman’s advice is don’t panic. “Don’t sacrifice the permanent on the altar of the immediate,” she says. “The dealerships that will survive are the ones that have a cool head and a long-term strategy.”

The Kansas City dealer group is hoping the digital steps it’s taken through the years will sustain demand through the COVID-19 pandemic.

By Gregory Arroyo

Pictured is the showroom of Soave Automotive Group’s Mercedes-Benz of Kansas City, Mo.

Soave Automotive Group, a multi-rooftop operation serving the greater Kansas City area, was off to a solid year, with sales and service profitability outpacing 2019 through February and no sign of that momentum wavering. That was before local health officials delivered two COVID-19-related orders within a period of six days.

The first, which ordered the closure of all social venues like bars and restaurants on March 17, left Kristopher Nielsen unfazed. As Soave’s eCommerce and customer experience manager, he was on the line that day with DealerFire’s design team to get the group’s response to the Coronavirus pandemic online and out to its markets.

“We have no plans to scale back our ad budget,” Nielsen said. “We’re not going to have a knee-jerk reaction. I think there are real opportunities to gain market share in this difficult situation.”

Ready for Anything

The forward-thinking steps the group has taken over the years to button up its operations and virtual presence was the reason for Nielsen’s optimism. He felt especially positive about the integration between the group’s DealerFire websites and DealerSocket’s CRM.

The connection allows him to see how many website visitors a campaign generates, which vehicles they look at, time on site, and then alerts his teams when those customers return — critical capabilities in the weeks ahead.

Nielsen also feels good about the group’s online service scheduling and fully online purchase process, which had generated robust engagement in the 90 days prior to his call with DealerFire. The newest addition to Soave’s websites is DealerFire’s test-drive delivery scheduler, which Nielsen added as part of the provider’s 100-day free use offer.

All three shopper experiences would get calls to action on the landing pages he wanted DealerFire to build to house the group’s COVID-19 response. The main message was that Soave Automotive’s dealerships were open and ready to help.

Promoting those landing pages would be an email campaign, press release, announcement bars on the group’s homepages, and the same SEO content strategy Soave had perfected since partnering with DealerFire in 2010. “The biggest thing for us is checking in on customers and orders coming in,” Nielsen said. “We’re contacting customers reaching the end of their leases. They’re going to need a car regardless of what’s going on in the world.”

Stay the Course

Soave was closing out a lighter than usual but still productive weekend when the second health order was issued. This time, all non-essential businesses were ordered to close on March 24 to stem the spread of the virus, which has infected more than 700 people in the Kansas City area. Dealership service departments could remain open, but sales were limited to appointment-only.

Nielsen said the shoppers who visited his group’s showroom that weekend were especially motivated to buy. Online traffic remained relatively stable, but lead and contact volume declined. Service capacity also declined, as customers opted against non-critical repairs.

Pictured is one of the COVID-19 landing pages DealerFire created for Soave Automotive.

“We’re actually still on track with last year, but January and February were very strong,” Nielsen said. “We’re now going to give back some of those gains.”

As for inventory, Nielsen said the group is keeping in touch with manufacturers as production shuts down. The group wasn’t concerned about being oversupplied, Nielsen noting that Soave has enough vehicles on the ground to get through April.

“A rising tide lifts all boats. Only when the tide goes out do you discover who’s been swimming naked,” Nielsen said. “We recognize that all we can control is how we react. So we’re trying to stay positive and plan as best as we can for where things may go.”