I don’t believe I have posted this since my Dad (Thats his picture below) passed away on Memorial Day last May. I have shared the story with a lot of my friends but it never gets old. A friend of mine contacted me over the weekend as the History Channel was doing a show on the battle. This story was written by my Dad w…hile recouperating from injuries sustained druing the Battle of Leyte Gulf and the following 50 hours they spent in the water before being rescued. My Dad was the senior surviving officer and received the Navy Cross for his participation and Commander Evans was killed in action and was awarded the Congressional Medal of Honor for his bravery. I hope you enjoy.

http://ussjohnston-hoel.com/6217.html

Have you seen the commercials? Domino’s pizza is running a social media campaign saying they realize they’ve made a few mistakes in the past but are willing to listen to the public and take their constructive criticism. Then, they talk about how they made changes and then deliver the reinvented pizzas to the people who critiqued them. These people then give testimonials on how much better the pizzas are. Genius!

Social media is all about being visible in your market and no one expects a business to get it right one hundred percent of the time but your public wants to be heard. Allow them to voice their opinions and you reap the benefits!

How did the competition combat Domino’s efforts? Pizza Hut and Papa John’s are offering $10 pizzas. In other words, they are saying we realize our pizza still sucks but we want to buy your business. They don’t get social media. Domino’s hasn’t changed their prices, as a result they are holding gross.

So, what does this mean to car dealers? Dealer one that is active and visible in his market, and understands social media will be able to manage his reputation and attract sales and service customers. He will have people in his community recommending him as a place to do business and will be able to keep his prices right where they are.

Dealer two across the street, who doesn’t think social media will affect his business, will lose more and more of his customers to the dealership that the people in the community are recommending. His only selling point will be to offer huge discounts, cutting drastically into his profit margin.

Social media is more than having a FaceBook page and Twitter account. Social media is all about engaging your market. Social media is networking on steroids.

Social media isn’t about having a Facebook page or a Twitter account, it’s about building a community around your brand, and it’s about getting your market to engage. Social Media is networking on Steroids.

Any good social marketing strategy must be designed to earn the trust of your community before earning the right to pitching your product. Imagine this, you are at a party with a group of your friends and a salesman, who you have never met before, walks over and starts trying to sell you a car. How would you feel?

Twitter is great for finding people in your local market. You can do a search within 50 miles of your dealership for key phrases such as “car shopping” and even set those searches up on RSS feeds so you can get them in real time. Amazing! Now, you have a big group of people in your neighborhood wanting to buy a car, but how do you engage them without turning them off?

David Johnson developed the 20-20-60 rule of engagement. It’s a guide for engaging your community. This is the point where social media becomes an effective marketing medium.  It’s a combination of providing information that is important to the community and information about you.

A great example would be a Toyota dealer doing a video of a tech fixing the recall on the gas pedal of a Camry. Letting people know that you have plenty of parts in stock and they have top priority in your service department. Plus, your shuttle will take them to work and pick them up if need be. I know one dealer that did something similar and they are providing lunch each day for their service customers to say sorry for the inconvenience, probably Domino’s Pizza.

Social media is going to continue to grow in importance. You can either embrace it or give up your gross, it’s your decision.

Unless you or your customer is getting a refund, tax time isn’t the most joyous time of year. Except for those individuals who filed for bankruptcy and now have trustees holding their money to pay off debts, the vast majority of special-finance customers have historically received tax refunds. That’s why it’s critical you prepare now if you hope to cash in on what amounts to special finance’s version of Cash for Clunkers.

Considering the economic times we’ve experienced, the demographics of our customers will be a little different this year. “I think this tax season could be one of the most difficult and competitive years yet for subprime,” said Dustin Jones, finance director of Boch Honda in Boston. “Customer fear of being rejected for an auto loan is at an all-time high. Now, more than ever, families across America need their tax refund checks.”

And if you’ve been in the business for any length of time, you know that tax season always seems to come earlier with each passing year. A big driver of that is technology, which is why dealers like B.A. Nerison, owner of Wheel City Auto Sales in Sioux Falls, S.D., are getting an earlier start on tax season this time around.

“Be prepared, because it will come and go fast,” he said. “Customers are getting money sooner (via electronic filing). No longer can we count on two solid months of steady tax money.”

It’s also clear that dealers will have to compete for how that tax money is used. “Customers that are unemployed or have fallen behind on their bills will have their money spent before they even get it,” noted Nerison.

What that means is dealers will need to be a little smarter about their preparations than in past years. Consumers are struggling and dealers will have to compete with the perception that credit isn’t available.

“Preparations for this year’s tax season really started back at the end of September for us,” said Boch Honda’s Jones. “We really want to work on building the customer’s confidence and creating awareness that lending options are available. Our company is focused on meeting the customers’ needs.”

Marketing With a New Spin

Marketing is obviously an integral part of a successful tax season, as customers need to know that you are willing to work with them. However, Jones said dealers need to be cognizant of the stresses felt by consumers in this economic climate.

“Through our advertising, we want to portray that we are not looking to seize the customer’s refund check,” he said. “Instead, we want them to know that we can help them purchase a vehicle utilizing as little of the refund as possible. Taking more of a community service approach in aiding them in their purchase of a vehicle is our goal.”

It’s also important to have a firm understanding of a customer’s situation so you can properly communicate with him or her. Simply put, stress causes customers to lose sight of their goal, and in this scenario, their goal is to get a car. Dealerships like Lindsey Ford in the Washington, D.C., area, not only understand this reality, but they make sure their marketing plans reflect that awareness.

“We are taking a different approach in our advertising,” said Mark Law, finance director for the dealership. “For example, instead of doing a 20,000 piece mailer, we are mailing to 10,000 people twice to emphasize our message. Customers are embarrassed of their credit situation, especially people who have never had bad credit. You need to earn their trust first and we feel like that is best accomplished with a consistent message that we are here to help.”

Dealers also should consider other marketing strategies and mediums to relay their message, such as mining your customer database to create an e-mail campaign. Not only can you reach a large number of your customers, but you can do so rather inexpensively. Additionally, companies that offer these types of services will email your customers several times to ensure a good response, so take advantage of what’s available.

Going to the Source

Another good strategy is to locate every tax service company within proximity of your dealership. Just make sure to have your fliers or brochures available so they can distribute those to their customers. And if bird dogs are allowed in your state, make sure to offer something to these companies for referring customers to you. This is a strategy that Al Serra Chevrolet in Colorado Spring, Colo., has employed for years.

“We set up referral sources with the local Jackson Hewitt, Liberty

Tax Service, and H&R Block, as well as local independent tax preparation companies,” said A.J. Ager, the dealership’s finance director. “We pay their tax preparers commissions whenever they can get one of their customers to visit us.”

Another good marketing idea is to sign up with an online tax preparation company. They usually have marketing materials they can provide you, as they make their money off the refunds they prepare. That means the cost to the dealer is usually minimal.

“We are signing up for TaxMax so we can offer customers that walk in the door or are in our database a refund service,” said Ager. “Plus, they have a program that allows us to file a customer’s refund based on their last check stub of the year, and they have great marketing signs that we put up all over our lot.”

Cindy Christensen, general manager at Herbie’s Auto Sales in Greeley, Colo., said marketing to today’s troubled consumer may require a bigger commitment on the part of dealers. “We offer to match customers’ down payments up to $1,000,” she said. “We have a lot of repeat and referral business, and we make sure that our database of customers knows that we are willing to work with them. The cash incentive is our way of showing them our commitment to them.”

Playing the Inventory Game

Equally important to one’s marketing efforts is one’s strategy for attaining the proper inventory. This is an area that you need to start planning for before the first of the year. Auction prices drop every year during late November and December, but spike back up in January as dealers decrease their inventories for year-end. Smart special-finance dealers will capitalize on this so they can load up with inventory that they will own back of left book.

“We start looking for tax season inventory in December when nobody else is looking for cars,” said Al Serra Chevrolet’s Ager. “This usually translates into us owning cars for a $1,000 or so less than if we wait until January.”

Understanding that money is made when vehicles are purchased, not sold, Al Serra Chevrolet scours Websites like Craigslist for people looking to sell their cars for “Christmas cash.” “This is especially helpful in stocking up our buy-here, pay-here inventory,” Ager said.

Eric Fishbein, special finance director for Conicelli Auto Group in Pennsylvania, agrees that inventory is a huge part of a dealer’s success during tax season. “It is important to stock a good selection of inexpensive vehicles for your tougher deals,” he said. “Don’t forget $3,000 down gives you 30 percent equity on a $10,000 car, but only 15 percent on a $20,000 car.”

Firm Up Lender Relations

The last critical ingredient to your tax season strategy is making sure your lender relationships are intact and healthy. The key is to have a proper lender spread, because it’s important to have different lenders that buy all tiers of credit (prime, near prime, subprime, equity and niches) so you can capitalize on every opportunity that walks through the doors.

Tax season is also a good time to evaluate your lenders and contact them to make sure your portfolios are performing well. In fact, calling your buyers to ask them about your portfolio delinquencies will go a long way in strengthening your relationship. And relationship is the word to remember, because you need your lender and they need you.

Especially with the limited capital in the current market, dealers who have strong portfolios will be the ones who get favors. That’s why it’s important that dealers also consider taking buyers out to lunch for a change. Remember, expense accounts for these bank reps have decreased considerably, so why not take them out for a bite to eat and solidify those relationships.

“Tax season is an important time of year to make sure your lender relationships are strong because you’ll be sending them an increase in business and you’ll be asking for a few more favors to get harder deals done,” noted Marc Danner, finance manager at the Rhode Island-based Tracy Chevrolet.

For those dealers in the dealer controlled finance business, it is especially crucial that one sticks to his or her underwriting fundamentals. “We will stretch on deals during tax time if the customer has a big down payment, but we try to minimize the exceptions,” said Wheel City’s Nerison. “In the past, these decisions have led to increased delinquencies. We manage these deals in collections with a shorter leash. If you do have to repo one, at least the bigger down payment decreases the loss we take.”

Tax season has always been a great time to be in the special finance business, especially if you don’t mind working long hours. It can be a big increase in business. And in this economy, we all need to take advantage of every opportunity that comes along.

Did You Know?

PREPARING FOR A SUCCESSFUL tax season is definitely important, but did you know there’s a federal incentive for your customer to buy now. Due to the American Recovery and Reinvestment Act of 2009, customers who purchased new vehicles may be entitled to a special tax deduction when they file their 2009 federal tax returns next year. Below are seven facts you need to share with your customer:

1. State and local sales taxes paid on up to $49,500 of the purchase price of qualifying vehicles are deductible.
2. Qualified motor vehicles generally include new (not used) cars, light trucks, motor homes and motorcycles.
3. Purchases must occur after Feb. 16, 2009 and before Jan. 1, 2010.
4. This deduction can be taken regardless of whether or not you itemize other deductions on your tax return.
5. Taxpayers will claim this deduction when fi ling their 2009 federal income tax return next year.
6. The amount of the deduction is phased out for taxpayers whose modifi ed adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.
7. The deduction may not be taken on 2008 tax returns.

HOUSTON — Dealer consulting services provider Next Generation Dealer Services (NGDS) has announced a series of training seminars to show dealers how to build business by utilizing social media.

The agenda for the seminars will include interactive presentations of how to properly use the most common social media marketing tools. The latest trends and technology will also be discussed, as well as social media etiquette, search engine marketing, popular Web design tools and the viral power of video.

“Social media is growing at a staggering pace,” said David Johnson, director of e-commerce at NGDS. “The underlying principles are similar to what car dealers have tried to do for years but on an exponential scale. Social media is all about making friends and building relationships. The dealership that embraces the use of social media and uses it correctly will take market share from their competitors at an unprecedented rate.”

As a bonus, dealers in attendance will receive a copy of Johnson’s book, Joining the Conversation: A Dealership’s Guide to Building Business Through Social Media.

“We are extremely excited about the program that David Johnson and his team have put together,” said NGDS CEO Rob Hagen. “David, like everyone we recruit to our company, has spent the majority of his career working inside a dealership. David has spent the past 10 years selling cars, running a BDC and Internet department plus consulting with other car dealers. He has catered his presentation around the specific needs of every profit source inside a dealership including finance departments and service departments.”

Johnson cautioned dealers not to jump into social media unprepared or risk souring customer relations. “The key is to build relationships first before you pitch your product,” he said. “People like to do business with people they know, like and trust. Once you have gained their trust, then you can offer your products. Otherwise, people will not be interested in what you have to say and label you as a spammer.”

NGDS has seminars planned for Houston, Los Angeles, Orlando (immediately prior to NADA 2010), Albuquerque, Atlanta, Memphis and Las Vegas. For more information, visit http://www.nextgendealer.com/index/seminar.

By Steve Finlay
WardsAuto.com, Dec 3

ORLANDO – Not yet out of the hospital, subprime auto financing at least has left the intensive-care unit.

The credit crunch that hit in 2008 hurt virtually all levels of financing. Subprime suffered the most, making it tough for people with low credit scores to get car loans.

But so-called special financing “is on the way back,” says dealership consultant Rob Hagen, CEO of SpecialFinanceCoach.com. “It’s a second coming.”

Showing faith but less zeal is Tim Zierden, a divisional general manager at DealerTrack Inc., provider of indirect-lending services to dealerships.

“Subprime has made a little bit of a comeback,” he says “The feedback is getting a little more positive.”

Signs of life: Some finance firms say they’ll consider car-loan applications from consumers with relatively low Fair Isaac Corp. credit scores of less than 500.

“I thought, ‘Wow, I haven’t heard that in a while,’” Hagen says at the F&I Management and Technology conference here. FICO scores range from 300 to 850.

If auto financing has changed, so has the profile of the subprime customer who in the past typically was someone with a checkered credit history or deadbeat tendencies.

But lately, many people with good credit ratings have seen their once-high credit scores fall because of unemployment, underemployment, upside-down mortgages, over use of credit cards and other recessionary ills.

“Many prime customers became casualties of the economy” dropping into near-prime and subprime categories, says Hagen, a 15-year dealership veteran before becoming a consultant.

“Dealers need to know how to handle those customers, how to deal with the transitional situation and explain why their interest rate is now 15% and no longer 5%,” he says.

Some consumers with respectable 780-750 scores a year ago saw their credit ratings “bruised” Zierden says.

Customers whose scores dropped 100 points from the mid-700s aren’t goners, he says. “It’s just a matter of finding the right car for them. They remain good customers.”

Read more at:

http://wardsdealer.com/latest/subprime_auto_lending_091203/

How do you market to clients with a big tax refund burning a hole in their pockets? How do you get to them before they mentally or physically spend the money?

Well, there are several approaches that work well. One is to get their attention during the filing process itself. This can be done several ways.

Signing up with a tax preparation service like TaxMax is a great way to have control of the funds. A.J. Ager, Finance Director from Al Serra Chevrolet in Colorado Springs, agrees. “We are signing up with TaxMax and have used them the last several years with a lot of success. We have control over the customer’s refund and that obviously means we have control over their purchase. All you do is enter the information into their system; they file the return and send the customer’s refund.”

One other great thing about TaxMax is they have a fourth quarter program that allows you to file a refund based off the customers last check stub. This will get the ball rolling faster for them to be able to get their money faster. TaxMax also has marketing materials that you can purchase and put on your lot letting customers know you can file their refunds and sell them a car all at the same location.

Another great tip that I have done is forming relationships with local tax preparation companies and setup referral programs. I would create brochures every year and pass them out to tax preparation companies close to the dealership so they could give them to potential customers. Then, we would spiff them when customers showed up at our store.

A.J. again agreed. I am pretty sure he got this from me at a Twenty Group several years back but he won’t admit it. “We set up referral programs with all the Jackson Hewitt, Liberty Tax Services, and HR Block locations within about 15 miles of the dealership. We pay their preparers every time a customer shows at our store regardless if they buy. If we can’t sell them, that is not their fault and we want them to keep sending us customers!”

Cindy Christensen, General Manager of Herbie’s Auto Sales in Greeley Colorado, has a marketing tip that works well for them. Herbie’s does a great job of taking care of their customer base and the majority of their sales each month come from referrals or repeat customers. “During tax season, we send emails to our database of customers letting them know we will match their down payments up to $1000,” says Cindy. “Plus, we also have flyers all over our showroom and in our service departments about this incentive so even if a customer isn’t in the market now; they can refer a friend or family member to take advantage of our Herbie’s Family Rewards program. Lastly, we make sure our BDC contacts all of our buy here pay here customers with low balances (under $2000) to invite them to take advantage of this opportunity to get a new vehicle.”

Lindsey Ford of Wheaton in the D.C. metro area has another approach to getting customer in their dealership that has been influenced by the current economic times. “We are focusing on marketing to less people but marketing to the multiple times”, says Mark Law, Finance Director. “There is a lot of mistrust with customers these days on if they can get approved so we try to reassure them by marketing to them with the same message just a couple different ways and through a couple of different mediums.”

Mr. Law continued, “We did a mail piece from our customer database and then did an email blast with the same message to the same customers. Also, we purchased an email list of customers in close proximity to our dealership and sent them four separate emails. We anticipate the multiple contacts will strengthen customers trust in us and make them are more likely to visit our dealership.”

These are all some great ideas but let me mention, marketing to your existing database should not just happen this time of year. Your database is your most precious sales asset and it should be treated that way. I truly believe a new position will be created soon in dealerships as Database managers.

Next week, we will dive into some things that you can do to make sure your inventory is ready for the tax rush. Until then, I wish you and your families a Happy Thanksgiving!!!

Used car departments have always been the key to any dealership reaching its maximum profitability. In these current economic times with inventory cost up and grosses down, you need to very smart about your inventory practices.

When was the last time you looked at what is selling for you on your used car lot? I don’t mean what sold last week, what used cars have sold for you over the last year or two. A report to show you this is available in any DMS. Pull that report and compare it to your current inventory. You may be a little scared!

With turnover the way it is in our industry, every used car manager is going to have his “favorites” that he believes sells better than others. It is true having several program Camry’s at a Toyota store works well but loading up a Ford lot with them is not a smart proposition.

Pull this report and look for trends. Look what the public comes to your lot to buy.  Rule out the one or two sales of a given model. When times are good, you can take a chance a “cream puff’ that gets traded in.

Look for models that you have consistently sold month over month. This is what you want to have on your lot. Used car prices are fluctuating so fast these days, make sure to have vehicles that will turn and earn!

Also, look at how long it took these models to sell on average. Try to stock inventory that has a fast turn over.

Look at average miles and ACV of what has sold for you. This will all give you valuable information on what your inventory should look like.

When you are done analyzing this information, you should be able to put together a virtual inventory that works best for your store. Go compare that to your current inventory and see how many units you have that do not fit into your ideal inventory model.

Soon, new car supply will catch up with demand and then demand for used cars will decrease causing values to decrease. Don’t be kept with a lot full of water!

Think efficiency and play to the majority in this economy to maximize your profits. When things get better in the economy, then you can take a chance on that used Porsche on your Ford lot because you think it will increase your drive by traffic.

Without his extensive use of Social Media Barack Obama would not be the president of the United States Today. From a relatively unknown senator to his meteoric rise to the presidency of the United States, Barack Obama was able to harness the powerful new medium of Social Media to propel himself into one of the most powerful positions in the world.

The numbers are staggering, at the time of his election Barack Obama had over 3.1 million fans on his Facebook page, John McCain just 614,000. But he didn’t stop there, his YouTube channel had over 20 million views and just over 825,000 friends on Myspace.

Check out the rest at:

Persuasive Concepts

It’s almost that time of year and no I don’t mean Christmas. I mean the time of year that helps car people all across America pay off those credit card bills they accumulate during Christmas. Tax season is upon us and it is greatly needed after the tough financial year that has been 2009.

I have had the pleasure of interviewing several well run special finance operations and will share tips from them in the coming weeks. Plus, I will be sharing tips from my over 17 years of special finance experience. This will be broken down into a six part series that talk about pertinent subjects like marketing, inventory, and sales processes.

In general, tax season seems to start earlier and earlier every year. People file for refund loans based off their last check stub and this has caused dealers to start their preparation earlier.

Recently, I spoke with B.A. Nerison, owner of Wheel City Auto Sales in Sioux Falls South Dakota. Mr. Nerison had this to say about the upcoming tax season. “Be prepared because it will come and go fast! Customers are getting their money sooner (via electronic filing) and the tax window is short, unlike a few years ago. No more can we count on two solid months of tax money. It’s turned into a month long event at best.”

With economic times the way they are, there are sure to be other challenges that are unique this year as opposed to past years. “Customers that are unemployed or have fallen behind on bills will have their money spent before they get it,” said Nerison.

One person who echoed that sentiment is Dustin Jones, Finance Director for Boch Honda outside Boston. “Now, more than ever, families across America need their tax refund checks,” said Mr. Jones. “Our company is focused on meeting customers’ needs and through our advertising, we have portrayed that we are not looking to seize the customers tax refund but help them purchase a vehicle utilizing as little of their refund as possible.

“We know that a lot of people are struggling this year and taking more of a community service approach in aiding them,” continued Jones.

When I asked Mr. Jones when they started preparing for tax season, he responded “At the end of September”.

As an indication of how early tax season is starting these days, TaxMax offers a program called their “Fourth Quarter Program”. It is a program that estimates what a customer will get back on their tax return, look for reasons that would prevent them from getting a return, and offers loans based off their tax refund amount.

Al Serra Chevrolet has used Taxmax for years with great success. A.J. Ager, Finance Director in Colorado Springs, loves the program. “ We signed up for TaxMax again this year. It is a great way to control your customer’s refund.”

It is easy to see how powerful it could be if you control the customers refund. You know how much they are getting and the money comes to you first!

“You enter the information into their system”, continued Mr. Ager. “They file the return and send you the customers refund.”

This is great for customers that walk into your showroom but is it also good to go find your local tax preparers as well as local H.R. Block, Jackson Hewitt, and Liberty Tax Services offices. Make sure they know you are a dealer that helps credit challenged customers and give them a bird dog on customers they send to you.

I will share some great marketing tips to get a bunch of customers from these local tax preparation companies in my next edition of the tax season checklist. Until then, take a look at your operation and see if you are ready for tax season. Tax season is the equivalent to cash for Clunkers for a special finance department!

Repossessing a vehicle is never a good thing, but technology has certainly come a long way in helping dealers do just that. The Special Finance Coach discusses how to keep customers on time with their payments, as well as how social networking sites like Facebook can help when they’re not.

Contrary to popular belief, repossessing a customer’s vehicle should be the last resort when it comes to the buy-here, pay-here (BHPH) business. It’s bad for business and it’s an outdated philosophy.

Unfortunately, some dealers are ready to “hook” a customer’s vehicle if they are one day late on a payment. What a dealer needs to remember is these customers have a history of not paying on time. That means they need to be trained on how to stay current on their payments, which is what payment assurance devices are designed to do.

Another common misconception is that all devices are created equally. There are two basic types of devices: GPS devices and payment reminder devices. Both tout shut-off features, but they vary greatly in how they’re used.

Payment-reminder devices are for dealers who want to collect their money. They are also proactive tools that help dealers nurse customers along during rough times. GPS devices are for dealers who want to collect their collateral. They are reactive tools that allow dealers to quickly make repossession decisions.

Both products serve a fantastic purpose and can be great assets to any BHPH dealer. Deciding on which works best depends on that dealer’s business plan. “Dealers have different ways of managing their portfolios and we have products to assist them with any business model,” said Jake Frank, co-founder of PassTimeUSA. “In fact, our Elite product is unique to the industry in that it combines both the GPS and payment reminder technology.”

Payment assurance devices go a long way in eliminating “skip hazards,” but skips are going to be something every BHPH dealer has to deal with. Repos will happen to any portfolio, but at least you have your collateral to remarket or sell off at the auction to minimize your loss.

On a skip, you will have to write off the entire amount of the outstanding contract. If you are new to BHPH, one of your fundamental underwriting guidelines must be to eliminate possible skips. That means you need to be wary of customers with credit bureaus that list addresses from several different states.

One precautionary measure I always recommend to my dealers is to Map- Quest the customer’s address. If it’s an invalid address, this is the easiest way to catch it. That’s not to say I haven’t been fooled before, but most of those instances occurred before technology was available.

Cybertracking Revolutionizes Collections

I once had a customer’s phone bill with his address on it, which I thought was golden. I went to his house to collect payment on a bounced down-payment check, but the address did not exist.What a horrible experience that was. Turns out the customer went around writing hot checks after opening anaccount with $50.

Regardless of how diligent you are, this situation will still happen every once in awhile. Some customers will just try to get one over on the system whenever possible. I refer to these people as “credit criminals.” They will clean up their credit reports and lie right to your face just to be able to get into a car.

One time, I had a customer run on me when I was heading up a BHPH department in Louisiana about 15 years ago. It took a couple of months, but we finally tracked down the customer and repossessed the car in Trout Run, Penn.

Professional recovery companies specialize in “hunting” down your runaway customers, and the most common practice being used today by recovery companies is a process referred to as cybertracking. Cybertracking does not replace fundamental collections practices, such as calling references, but it is a powerful tool for when a credit criminal tries to run.

Ron Brown, president of Confidential Security Investigations (CSI Group), is a self proclaimed hunter. His company has been a leader in cybertracking. “In all the years that I have been in this business, one thing has held true throughout: Man’s ability to skip trace has always paralleled their ability to communicate,” he said. “Early on, hunters would track people on foot. Then, as years went on, they started to track people by the paper trails they left behind. Now, we follow their electronic trails.”

Collectors Employ Social-Networking Sites

There are several companies out there that are in the business of gathering data. Much of their efforts are fueled by their ability to track an individual’s interactions and conversations online. Some of these sources are pay-as-you-go sites that provide access to public records, such as MasterFiles.com. There are also sites that allow free access, such as brbpub.com or Black- BookOnline.info.

“The key is being able to decipher the data,” said Brown. “Some data can be very misleading. Have you ever pulled your credit bureau and saw a job you never worked at or a residence you never lived in? We are trained to see the difference between the real and fictional data.”

Social-networking Websites are also great tracking tools, said Brown. “People update their Twitter, Facebook, and MySpace accounts several times per day, allowing anyone following their actions the ability to know just where they are and what they are doing,” he noted.

Imagine a skip feeling like he or she got away with the car without paying for it, and then heads out to lunch one day and Tweets: “Off to lunch at my favorite Italian restaurant, Tony’s.” And just as soon as he hits send, the CSI Group intercepts the updated message and sends a local field agent to Tony’s restaurant to look for their collateral.

Technology is assisting many BHPH dealers across the country to increase their profitability and minimize their losses. These products require a small upfront investment for a huge long term profit.