DealerSocket of San Clemente, California, won the Stevie Award for Management Team of the year in The 2009 American Business Awards, and Jonathan Ord, Dealersocket’s CEO and Co-founder, is on the Board of Judges for The 2009 International Business Awards.

While the plight of the American automotive industry has been making headlines around the world, auto-related businesses and auto dealerships have been particularly hard hit by the combination of low consumer confidence, a tough credit market, and the struggles of the Big Three Detroit automakers.

Despite this, one company serving the automotive industry is thriving. DealerSocket is an automotive customer relationship management solution provider that credits its success to the steady leadership, unwavering customer commitment, and innovative approach of its management: Jonathan Ord, Co-Founder and CEO, Brad Perry, Co-Founder and President, Cameron Darby, Chief Operating Officer, and Matt Redden, Vice President of Sales.

Building from the Ground Up
Before founding their company in 2001—with no outside investment—Ord and Perry spent a year working without pay in all departments of a dealership to gain a thorough understanding of dealers’ unique needs.  The management team continues to apply this principal of building from the ground up to every department of their organization, providing each employee the opportunity to do, contribute, lead, and solve problems.

The DealerSocket team’s mantra is: “Treat people ethically and fairly and give them room to grow,” a philosophy that positively affects both its employees and customers, as is evidenced by a low voluntary employee turnover of less than 2% and a customer retention rate of over 90%. 

Providing Effective Solutions
DealerSocket has responded to the challenges dealerships now face with several industry-first solutions enabling dealers to quickly and cost-effectively overcome each obstacle.  As turmoil in the industry has continued, DealerSocket signed an average of one new customer per day during 2008, increasing to 1.5 per day by March 2009.  Revenue growth in 2008 was 33% with record numbers of dealers leveraging the company’s comprehensive CRM solutions to recession-proof their businesses.

Outstanding Customer Support
At the core of DealerSocket’s unwavering customer commitment is the company’s Support Department. Solidly focused on the entire auto industry, the DealerSocket team serves as its customers’ eyes and ears, providing 24/7, year-round support not only for DealerSocket CRM, but for any issues their steadily increasing international client base requires.

In 2008, DealerSocket’s Support Department handled over 35,000 calls and more than 1,500 email inquiries.  Despite the increasing volume and urgency of each request, the department consistently maintained its superior industry standard with less than a 5% call abandonment rate and a hold time of less than two minutes.  And while the industry norm for closing a support ticket is approximately one week, DealerSocket’s Support Department closed all 2008 tickets in under one day at the first level and 3-5 days at the data and integration level.

As automakers stepped up incentives to assist struggling dealers, DealerSocket’s Support Department took on this role as well—identifying each new incentive and conducting team exercises to determine how dealers could best leverage them utilizing DealerSocket CRM. 

With each support request, representatives introduced all applicable incentives, as well as cost-saving DealerSocket offerings such as MoneyMaker, which helps dealers save money and increase revenues by mining their own data for leads.  In spite of an already heavy load, the team spent added time walking dealers through every step in the process of leveraging an incentive or implementing a new component of DealerSocket CRM. 

Succeeding Despite the Downturn
The phenomenal efforts by DealerSocket’s Support Department continue to enable customers to experience significant increases in both sales and service revenues during the worst downturn in automotive history. 

Recently surpassing 50,000 users at nearly 1,000 dealerships throughout the
U.S., Canada, Australia, and the U.K., DealerSocket continues to thrive despite
being at the very epicenter of the worst downturn in automotive history.  With
ongoing expansion, five-year revenue growth of 4,529%, six years of consecutive
profitable quarters, and countless awards under its belt, DealerSocket remains
an unstoppable powerhouse.

About Jonathan Ord
As CEO, DealerSocket co-founder Jonathan Ord sets vision and drives strategy for DealerSocket.  Over the past thirteen years, Jonathan has created and executed business process visions for more than 500 companies. 

About Brad Perry
As President of DealerSocket, co-founder Brad Perry focuses on transforming vision into reality, relying on his years of experience in the consulting and ASP software industry. 

Both men are graduates of Brigham Young University.  Jonathan earned a
Bachelor’s Degree in Accounting and Spanish, and a Master’s Degree in
Accounting and Information Systems. Brad earned a Master’s Degree in Accounting and Information Systems.

About Dealersocket
With the power to manage sales, service, CSI and marketing, DealerSocket’s Customer Relationship Management solution is one complete tool for all automotive dealership departments. DealerSocket provides the most comprehensive CRM solution available to the market today, allowing dealers to save time, save money, and improve sales staff effectiveness with one consolidated product. More than 50,000 users at over 900 auto dealerships throughout the U.S., Canada, U.K. and Australia now leverage DealerSocket’s CRM solution to optimize and manage marketing activities, sales processes, customer satisfaction and retention, and service department operations.  For more information visit: www.dealersocket.com.

by Tad Waddington, winner of the Stevie Award for Human Resources Executive of the Year in The 2008 International Business Awards. He is the author of Lasting Contribution: How to Think, Plan, and Act to Accomplish Meaningful Work.

In 2002, the self-described social ecologist, management consultant, and author Peter F. Drucker argued that “developing talent is business’s most important task—the sine qua non of competition in a knowledge economy.” (Harvard Business Review, They’re Not Employees, They’re People.

In other words, “Knowledge-worker productivity requires that the knowledge worker is both seen and treated as an asset rather than a cost.” (Extract from Drucker’s Management Challenges for the 21st Century.)

And yet as soon as the economy goes down, so does training. This is weapons-grade shortsightedness, because training has benefits that can be direct, indirect, and very indirect not just for individuals, but also for their organizations and their countries.

Direct Benefits
Scientific Management, a theory developed by Frederick Winslow Taylor at the end of the nineteenth century, is a training technique that was used throughout the twentieth century that allowed American blue-collar workers to increase their productivity by a factor of 50. (See also The Principles of Scientific Management, first published in 1911.)

Indirect Benefits
Studies have shown that potential employees say they would rather work for a company with outstanding training than one with average training—even if it means a reduction in pay—and that most new hires said that training was the number one reason they joined the company that they did. (For more on this, see Return on Learning: Training for High Performance at Accenture.

Very Indirect Benefits
In the 1800s Japan and Sweden were poor countries with few natural resources, but they invested heavily in educating their people. A hundred and fifty years later they have enviable per-capita GDPs.

Increase Your ROI
The return on investment in training can be very high. In Return on Learning (see above), an analysis of 261,000 employee histories showed that for every dollar invested in training, a return on investment (ROI) of 353% was earned.

There are two reasons why ROI in training is so high. First, unlike other factors of production, investments in human capital do not have diminishing returns (see Gary S. Becker’s 1993 Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education [http://www.amazon.com/Human-Capital-Theoretical-Empirical-Reference/dp/0226041204]). If you keep adding people to a project they quickly begin to step on each other; each extra person adds less value. The more you know, however, the more you can know—and thousands of studies on learning curves have shown no end to how much improvement can be made to skills.

Second, the rate-limiting factor of any system is its least-productive element. A chain is only as strong as its weakest link, and—relative to other factors—companies usually underinvest in human capital (Nobel laureate Becker again), so investments in training yield the highest returns.

An example shows how this works: Imagine that you run a micro-business and that your business performance is a function of People, Process, and Technology. If you’ve invested $5 in Process and $5 in Technology but only $1 in People, then your total output ($5 x $5 x $1) comes to $25 units of production. If you increase your investment in People by just $1 more, then your output doubles ($5 x $5 x $2) to $50.

The formula for return on investment (ROI) is:
 
                        ROI = (Value – Cost) / Cost
 
In this example, the value added by the training was  $25 at a cost of $1.
 
ROI = ($25 - $1) / $1 = 2,400%.
 
The ROI in training is so high because training helps unlock value in the other factors of production. For example, suppose I am barely skilled at using some software. Upgrading me to the newest version or giving me a faster computer would not yield as much value as would increasing my skills with the software. Increasing my skills will allow me to draw more value out of both the software and the hardware.
 
Woulda Shoulda Coulda
I have seen hundreds of cases where a company had a mismatch of talent so they laid people off, paid severance, and then paid to recruit new people with the skills they needed. If they had just retrained their former workers, they would have saved money and created a more loyal workforce.

Yes, retraining can cost tens of thousands of dollars (and probably violates a guideline somewhere), but it saves money in the long run, not to mention avoiding the anguish of the laid-off employee and the bad press for your company.

Bottom line: Training creates lasting benefits for the individual, for the company, and for society.
 
About Tad Waddington:
According to Tad Waddington, he achieved literacy while getting his MA from the University of Chicago's Divinity School where he focused on the history of Chinese religions (Confucianism is strongly concerned with developing talent); he achieved numeracy while getting his PhD from the University of Chicago in Measurement, Evaluation and Statistical Analysis; and he achieved efficacy as Director of Performance Measurement in Accenture's Human Resources' organization Capability Development (any views expressed herein are solely those of the author, and may not in any way be attributed to the author's employer). As for achieving a legacy, well that remains to be seen.

In addition to winning a Stevie Award for best HR Executive in 2008, Waddington also received a 2009 World HRD Award for HR Leadership. He is a co-author of Return on Learning: Training for High Performance at Accenture and the author of Lasting Contribution: How to Think, Plan, and Act to Accomplish Meaningful Work, a book which has won the Eric Hoffer Award, a National Best Book Award, an Axiom Business Book Award, a Gold Independent Publishers Award, and a Pinnacle Achievement Award. For more information go to www.lastingcontribution.com.

Called the “apostle of appreciation,” by the Globe and Mail, Canada’s largest newspaper, Chester Elton is a Senior Vice President of the Carrots Culture division of the OC Tanner Company, a leader in corporate recognition programs. With his partner Adrian Gostick, he wrote The Carrot Principle which has recently climbed The New York Times and Wall Street Journal bestseller lists. He serves as a recognition consultant to Fortune 100 firms such as DHL, KPMG, Wal-Mart and Avis Budget Group.

Chester will speak at The American Business Awards in New York on June 22, and we recently spoke with him about how he got his start in business, what the OC Tanner Company does, and what advice he offers about how to institute a Carrot Culture in your workplace.

		Listen to the Podcast Interview...

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