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Dustin Kerr

Oregon Senate Bill 276 – How Could This Affect Your BHPH Operation?

Government building blog 4.22

The Oregon Senate recently introduced a bill that has BHPH dealers in that state up in arms, and for good reason. The bill would drastically change the way some buy here pay here dealers do business. I am not going to try to debate the merits of this bill, or the lack there of. As BHPH dealers, we have all been discussing and fearing the changing landscape of compliance for many years.

The point of this article is to focus on a couple of the provisions in the bill and ask ourselves, “Doesn’t this just make good business sense?” Keep in mind the old saying “Pigs get fat; hogs get slaughtered” and ask yourself if you are running your dealership as a fat, happy pig or as a hog headed for slaughter.

Here’s a quick rundown of the highlights of the bill:

  • Obtain the same type of license from Oregon’s Department of Consumer and Business Services (DCBS) as payday or auto title lenders.
  • Reduce interest rates to account for the amount of the consumer’s down payment.
  • Stop accruing interest once a vehicle has been repossessed.
  • Cap repossession fees at 7.5 percent of the purchase price.
  • Stop using GPS or starter-interrupt devices.
  • Wait to repossess a vehicle until after 30 days from when nonpayment has occurred.
  • Cap interest rates at no more than 20 percent or the federal funds rate plus 17 percent, whichever is lower.
  • Form a good faith belief that the consumer has the ability to perform on the contract by using underwriting standards passed by DCBS.

I want to focus on the last two bullet points of this bill and ask you, as a dealer, to think about how you are handling these two issues in your state?

Cap interest rates at no more than 20 percent or the federal funds rate plus 17 percent, whichever is lower.

Full disclosure here, I used the state max of 21% for nearly every car deal I ever financed and would have probably charged more if the state would have allowed. My question to you though is this: is it good business to charge our customers more than 20% interest? Every 20 Group meeting I have ever been a part of has included conversation on how we reduce the term of our loans and retain our good customers.

Another big conversation is about the cars not lasting the term of the note. Are we sacrificing a few thousand dollars of gross for a few hundred dollars of interest? Interest income is a big part of this business and I have always been on the side of maximizing the interest dollars collected. Although, when do we hit a point of diminishing returns?

Form a good faith belief that the consumer has the ability to perform on the contract by using underwriting standards passed by DCBS.

Now I have no idea what the DCBS will set as underwriting standards should this bill pass, but let’s look closely at the rest of that statement and change it slightly.

What if the motto of our underwriting department was something similar to this? “Form a good faith belief that our customer has the ability to perform on the contract based on our underwriting and verification practices.” Nearly all BHPH dealers want to reduce charge-off losses and regulators on the state and federal level want to make sure you are not setting your customers up for failure. Having a written underwriting policy in place that is based on industry analytics and your own loss ratios will go a long way towards achieving those goals.

Don’t forget the verification part of the process. An application is only as good as the verification to support it. There is little doubt that there are serious changes on the horizon for the BHPH industry and some that may change the way we do business forever. However, some of these items just make good business sense. Is your business a “fat, happy pig” or a “hog headed for slaughter”?


Learn more by attending these upcoming courses:

 


Permanent link to this article: http://blog.ncm20.com/2015/04/oregon-senate-bill-276-how-could-this-affect-your-bhph-operation/

Rebecca Chernek

Integrating Desking and F&I to Boost Sales and Profits

keyboard

I developed my Desking and F&I Integration workshop to address the single biggest factor limiting sales and profits in dealerships today – the bottleneck that exists between the sales and F&I department. It’s caused by an entrenched “Us vs. Them” mentality that evolved during the F&I industry’s first quarter century. Because “it’s always been this way,” dealers accept it as the status quo.

The lack of integration between sales and F&I yields only negatives. It’s the reason customers like the True Car model. They’re tired of games. They want straight talk. They’re tired of being dragged through the mud. They’re tired of waiting for hours at the dealership, only to find they can’t get financed for the car they thought they’d be driving home that day.

Desking and F&I Integration takes a hard look at the problem, why it exists, and offers proven solutions. My workshop provides a system that delivers a seamless, transparent and resoundingly positive customer experience – while boosting sales and profit! Because it requires teamwork between sales management and F&I managers, I recommend that dealerships send a representative from each department to attend the workshop.

Before you can fix something, you have to recognize why it doesn’t work.

I get workshop attendees thinking about how things work at their dealership – and how they should work. We’ll talk about how important it is to have a meeting of the minds between sales managers and F&I – and the customer.

We address issues that impact the overall customer experience, from how the sales department exchanges information about the sale, to finalizing the deal with the F&I manager. When is the best time to talk payments – before or after the customer goes into the F&I office? We talk about why not having a true meeting of the minds will undermine your menu every time – and reduce profits earned.

We talk about why establishing credit criteria earlier in the sale process helps to properly land the customer on a vehicle he can afford. And why structuring the unit earlier in the process allows for more units sold – while maximizing profits and limiting liability.

I share why it’s so important to conduct what I call “The Interview,” to qualify the customer and establish value points for later menu sales. The Interview occurs during the meet-and-greet and during the transaction review process, but it’s essential to expediting the sale and maximizing profits.

Besides contributing to the customer’s sense of a seamless process, having the F&I manager engage with the customer earlier in the buying process to learn the reason behind limited credit or slow pay history will pay off in several ways. Getting the story from the customer can result in stronger call-back decisions and fewer declined offerings. And the F&I manager can use information gathered during the meeting at the sales person’s desk to reduce customer resistance to products offered later during the menu presentation. Taking the time to meet with the customer briefly will cut delivery time in half.

How will the customer perceive the introduction to F&I? Will the customer see it as a one- or two-step process? Do old methodologies increase customer resistance? Has the sales department been concise with the buying numbers? Do we have a true meeting of the minds before the customer makes his way into the F&I office?

Why is that important? It’s all about the bottom line. With an F&I bottleneck, it takes too much time to deliver the car… is the paper work straight? Is the deal checklist complete and ready to go? What if the customer isn’t approved?

We’ll talk about why time is your worst enemy – deterring sales and reducing profits. If the dealer expects to use menu selling, how does that work if all the terms haven’t been confirmed with the customer prior to the menu presentation? Would it make sense to confirm the transaction prior to a menu presentation – and why is that so important?

The system I propose takes into account that every customer is different. I offer suggestions for managing subprime customers to enhance the customer’s experience and maximize dealer profit while limiting liability.

The workshop culminates in role-play sessions that allow attendees to practice what they’ve learned. It’s an excellent opportunity for sales managers and F&I people to work through new word tracks and hand-offs to another team member.

The “Us vs. Them” mentality is a dinosaur throwback that only drags the customer, sales manager, F&I manager, and dealership down. Customers and the marketplace have changed – it’s time to evolve and thrive in this new landscape.

Attendees will return to their dealerships ready to implement a system that will speed up delivery, putting wheels over curb in a fraction of the time compared to when your sales team and F&I staff were at loggerheads. Your F&I manager will have been able to present a menu to a trusting customer who appreciates the transparent process and the dealership team that understands his needs. Your satisfied customer will tell everyone he knows, and you’ll be delivering more units in one day than you ever thought possible.

UV Training

Permanent link to this article: http://blog.ncm20.com/2015/04/integrating-desking-and-fi-to-boost-sales-and-profits/

Robin Cunningham

There Is Good Failure and There Is Bad Failure

failure and success

I think we have all heard that we can’t even fail unless we try. In every class we conduct at the NCM Institute, we begin by focusing on accountability, management, and leadership. Right after that, we take a very deep dive into the students’ numbers, either departmentally or in the case of General Managers, the entire dealership’s profitability picture.

Some of them are year-over-year comparisons of new and used vehicle volume per vehicle retail gross profit and total departmental gross profit. We look at personnel productivity in those variable departments like unit sales and gross profit per sales person and unit sales and gross profit per manager. The discussion of F&I is huge because, in many dealerships, the F&I gross profit per vehicle retail is larger than the front-end gross profit per vehicle retail. Of course, we look at expenses in many ways like year-over-year comparisons in personnel expense, advertising expense, floor plan expense, and other selling expenses. We look at inventory aging, especially used vehicle inventory. We look at dollar and unit day’s supply and the all-important inventory turn rate. We begin to track the price-to-sale gap (difference between the advertised internet price and the actual selling price of each used vehicle).

In the Fixed Operations, we look at year-over-year comparisons in mechanical customer pay labor gross, mechanical customer labor gross as a percentage of sales, effective labor rate, the number of customer labor hours, the number of customer repair orders, hours per repair order, parts department gross, and parts gross profit as a percentage of sales. In the Fixed Operation Personnel Productivity, we look at the number of mechanical technicians, labor gross and hours per technician, the number of service advisors, how many technicians per advisor, how much labor gross per advisor, and how much parts gross profit is generated by each one.

We remind our students that in 20 Group meetings, two of the most important metrics that the dealers look at are where the dealership and departments are in relationship to being at 30% net-to-gross and total dealership and departmental gross profit per employee.

What does this have to do with good failure and bad failure?

All we are doing in our deep dive of the numbers is identifying opportunity. And, we usually find a lot of upside opportunity in each dealership we work with. The bad failure I am referring to is not the missed opportunities that we uncover. Bad failure is not really doing anything substantive about it. Or, in many cases with our client-students, it is that they have never been taught or shown the best practice solution to turn the situation around. Bad failure would be learning the best practice way to do their job, and then not successfully holding themselves or their associates accountable to the new and better way of doing things.

For example, a General Manager, General Sales Manager, or Used Vehicle Manager comes to us and they are unprofitable in their used vehicle department, which invariably includes having a huge aging issue. We spend a lot of time examining the root causes of aging (price/valuation, reconditioning, planning). We go through the 30 Used Vehicle World Class Check List to determine a plan of action. The primary takeaway will be to begin conducting the Daily Trade Walk/Stock Walk Process. These help to ideally onboard each used vehicle into the system and manage the aging of each vehicle as it ages, not when it ages. Bad failure is coming back to the dealership and taking all this new information as a quaint suggestion and not doing it. Bad failure is synonymous with the definition of insanity (doing the same things over and over and expecting a better outcome). Good failure is gathering the buy-in necessary to get the team on board (this is not an easy undertaking) by explaining why we are going to do this, and what’s in it for everyone. Good failure is sticking through all the trial and error to ensure the eventual outcome. Good failure is celebrating the little wins along the way. Good failure is doing positive coaching when the slightest amount of process evaporation begins to creep in.

You get the point. Real, substantive change is hard! Good failure is creating the safe place where real change and growth can take place. Having a clearly defined and communicated daily routine where everyone understands the WHY is your starting point.

Good failing to you!

UV Training

 

Permanent link to this article: http://blog.ncm20.com/2015/04/there-is-good-failure-and-there-is-bad-failure/

Tom Hopkins

6 Steps to Getting Referrals

referrals

The easiest lead to close is a referred lead. Unfortunately, not many automotive salespeople have mastered the art form. I’ve developed a simple, six-step process for obtaining referrals that will give you so much more success in developing your referral business that you will make it an automatic part of every selling situation.

Start with a goal of just one referral every time, and work your way up to where you know the steps so well and they flow so naturally that you’ll get at least three referrals from every client. Then, memorize these six steps to getting referrals. The better you know them, the better you’ll mine the rich lode of referrals that’s just waiting for you in your current client base.

Let’s review the steps in detail so you’ll see how to work with each one most effectively.

Step #1: Help your clients think of specific people they know

When you ask for referrals, you have to give your client a group of faces to focus on. Never say, “Who else do you know that’s looking for a car?” Instead, help them focus on a particular group of people they know.

Salesperson: Bill and Jane, you’re excited with your new vehicle, aren’t you?

Client: Oh, it’s wonderful. We can’t wait to get on the road with it!

Salesperson: So tell me, who will be the first people you tell about your new car?

Client: Well, our relatives, of course. Then, our neighbors because they’ll see it in the driveway.

Salesperson: That’s great. Are there any of your relatives or friends who might also be in the market for a new car?

By mentioning family and friends, the client focuses in on those people he is closest to and with whom he’ll be in contact that very week while his excitement over his car is still fresh.

Step #2: Write the referrals’ names down

When your clients come up with a few people who might be in the market for a vehicle, take out a small notepad and write down the names of those referrals. (Be sure to ask how to spell the names.) Keep your notes out so you can jot down the information they give you. Plus, you’ll need those notes to qualify the referrals when you contact them.

Step #3: Ask qualifying questions

Here’s some information you may want to know when you contact the referrals:

  • Where do they live?
  • Would they be adding a vehicle to the family or replacing one?
  • What did they say when you told them you were looking for a new car?

When you get in touch with the referrals, you’ll be able to begin conversations with them based on Bill and Jane’s answers to your questions.

Step #4: Ask for contact information

Asking for the addresses and phone numbers of the referrals is more difficult because your client may not know this information offhand. But don’t let that deter you. You can’t just settle for the name, because there may be several people with the same name in the area. And knowing how to contact the referral is critical.

Step #5: Ask your customer to call the referral and set up the appointment

This step is where most novice salespeople balk. They won’t even try it. But those clients who will make the call will help you comply with the Do Not Call Registry. If the referral’s name is on that list, you can’t call them without their permission. Your existing client can, at the very least, get that permission for you.

Also, keep in mind that this question is simply setting the stage for the final step in the referral-getting process. Those clients who are uncomfortable calling for you will be so relieved that you offer them Step #6 that they’ll jump on it. If you had gone directly from Step #4 to Step #6, you may not have gotten the same response.

There is a method to my madness here. Here’s how it works.

Salesperson: Thanks so much for the referrals, Bill and Jane. You know, since I won’t get to see your excitement when you show off your new car, would you mind calling Don and Mary now and sharing your good news with them? Then I can work on arranging a time to talk with them.

If your clients are fine with that, then great! Start dialing. But if they hesitate and act uncomfortable, take the pressure off immediately by moving on to the next step.

Step #6: Ask to use the client’s name when you make contact with the referral

Your clients may not know the referral all that well, or they may feel uncomfortable making the call. If this is the case, let them know you understand their hesitation, but ask if you could bother them for one more favor. Ask for permission to use their names when you contact the people they referred you to. They’ll be so relieved to be let off the hot-seat, they’ll be more than happy to give you permission to use their names.

It may take you a few tries to get this pattern down to where it flows naturally. However, you’ll make it a natural part of every contact once you see the phenomenal results it generates. Many of my students have gone from getting one or two referrals to getting five referrals from every client. Don’t you think it’s worth a try?

gsmcourses-med_

Permanent link to this article: http://blog.ncm20.com/2015/04/6-steps-to-getting-referrals/

Dustin Kerr

Garage/Liability Insurance for the Buy Here Pay Here Dealer

For car guys and gals, insurance is a lot like compliance; we hate to deal with it, but we know we have to.

Those who have been operating for a number of years have a pretty good idea of what they need to look for in a garage policy and generally shop their coverage annually.

For those that are new to the business or haven’t dealt with the insurance side of things much before, this can be a very daunting task.

Every state and every dealer are going to have requirements specific to them based on state law and the dealer’s tolerance for risk.

This article is meant to give you a basic idea of what to look for in a policy.

  • Liability/Auto — This generally deals with test driving or when your covered employees are driving your vehicles. This covers medical bills and damage to someone else’s car or property if you, your customer, or your employees are involved in an accident that is their fault while driving one of your vehicles.
  • Other Liability — This would cover medical bills if someone fell or had an accident while they were on your lot. Think about someone slipping on an icy sidewalk or an oil slick.
  • Personal Injury Protection — This would pay medical expenses for you or occupants of your vehicles. This coverage is required in some states.
  • Inventory – (Your vehicles) can include comprehensive for things such as fire, hail, or vandalism as well as collision coverage, and might have a maximum value per vehicle. Some dealers who own their vehicles outright and have a very low ACV (actual cash value) do not carry this coverage at all.

There are other coverages you may consider. These are usually add-on benefits that require an increase in premium.

  • Truth in Lending — Covers mistakes made on contract or incorrect reporting of odometer.
  • Errors and Omissions – Have you ever made a mistake when perfecting a lien? That’s what this coverage is for.
  • False Pretense – Covers you from consumers who purchase using false information or bad checks.

This should give you a good starting point to understand what to look for in a garage/liability policy. Remember, no policy is right for every dealer or state, and rates may vary wildly for very similar coverage.

Also, be sure you know exactly what your policy says. Every provider is going to have different requirements for what they will cover. For example, they may not cover a wreck on a test drive if your salesperson is not in the vehicle. These are important items for you to know.

If you need any further help or guidance, please feel free to contact me at any time.

Cell 913-827-6677  |  dkerr@ncm20.com


NEW Buy Here Pay Here Courses from the NCM Institute:

Permanent link to this article: http://blog.ncm20.com/2015/04/garageliability-insurance-for-the-buy-here-pay-here-dealer/

Alan Ram

Training That Wasn’t

Call Center

Have you ever really trained your people? I don’t mean some of this stuff out on the market that is purported to be training; I mean really training.

Every third call to my office is a dealer calling and telling me “we’ve tried training our salespeople, but it didn’t stick”. Or, reporting that it is impossible to train salespeople. If you don’t think salespeople can be trained, you may as well extend that to all humans. When I ask these same dealers what they’ve done, many times they’ve simply sent some of their people to a seminar or workshop or something along those lines. Seminars and workshops definitely have a place and that place is normally education or creating momentum for a training initiative. For training to be effective, three elements need to be present; education, simulation and accountability. If you don’t have a strategy for accomplishing all three of those things, you don’t have training.

Let me give you some sports analogies that make this easier to understand. I can watch golf all day long on TV. I can understand what it looks like when somebody plays well. I understand golf; hence I’m educated in golf. That doesn’t make me a good golfer. If I want to become a good golfer, I have to hit bucket after bucket after bucket of balls for the rest of my life to get good and stay good. That’s simulation. Then I’m held accountable on a scorecard.

While baseball players need to be educated in baseball and know the rules, they also go to spring training every single year. In season, they take batting and fielding practice every day. And then, in how many statistical categories are they held accountable? All of them. Training salespeople requires the same strategy.

First, you have to educate.

With today’s technology, that can be accomplished online in 15 to 20 minutes per day without a manager having to take salespeople hostage in a conference room for hours on end, reciting what they think they heard someone say at the Marriott in 2004.

Then you have to simulate.

This can realistically be done in 5 to 7 minutes per day with a manager focusing on one or two areas during each session. For example, if you want to train your people on properly handling a preowned ad call on a specific vehicle, you as the manager will play the role of the customer. You would then start the call using a vehicle out of inventory. After making sure the salesperson knows how to properly answer the call, you might say something to the effect of “I’m on your website right now and you have a 2012 Honda Pilot advertised. It’s says to call for price”. You would then want the salesperson to respond exactly the way they had been taught. Maybe today we would just practice the beginning of the call a few times or until they got it right. Tomorrow you might go a little further, or focus on something else. That is simulation. It doesn’t take much to notice a big improvement. Momentum and excitement build as results are seen and cars are sold.

After that, we need to hold our staff accountable.

If we are specifically talking about how they handle the telephone for example, you need to be listening to call monitoring all day every day. That’s accountability. Think about it this way: if it wouldn’t work on a sports team, it won’t work on your sales team. Listening to someone talk for any period of time, calling that training and expecting a change in behavior would be the equivalent of popping in a workout DVD, plopping down on the couch and wondering why you’re not getting in shape. You absolutely can and need to train your people. There are sustainable solutions out there that can help you get it done effectively as well as cost-effectively. Just make sure that next time, what you’re buying is really training.


leadership

Permanent link to this article: http://blog.ncm20.com/2015/04/training-that-wasnt/

Dave Anderson

Building a High Performance Culture (Part 19)

This article is part of a multi-part series titled “Building a High Performance Culture” by Up To Speed Guest Expert, Dave Anderson, of LearnToLead®.

Chess

Words that Work: Wise

Words that Hurt: Foolish

In this post on building a high performance culture, I’m adding the word “wise” to the “words that work” column, and “foolish” to the list of cultural “words that hurt”.

I’ll expand on traits of both wise and foolish people, as well as strategies for dealing with both below. First, let’s do a quick review of the strong and weak cultural words so you can conceptualize the ideal culture to move towards, as well as what you must move away from culturally in order to maximize your organization’s potential.

Words that work and must be woven into culture:

Earn: to acquire through merit.

Deserve: to be worthy of; to qualify for.

Consistent: constantly adhering to the same principles.

Hope: grounds for believing something in the future will happen.

Catalyst: a person or thing that makes something happen.

Responsible: to be the primary cause of something.

Tough-minded: strong willed, vigorous, not easily swayed.

Loyal: faithfulness to one’s duties or obligations.

Passion: a strong feeling or enthusiasm about something, or about doing something.

Discipline: an activity, regimen, or exercise that develops or improves a habit or skill.

Commit: to pledge oneself to something.

Prune: to remove what is undesirable.

Words that hurt and must be weeded out of culture:

Fault: responsibility for failure.

Blame: to assign responsibility for failure.

Excuse: a plea offered to explain away a fault or failure.

Mediocre: average, ordinary, not outstanding.

Wish: to want something that cannot, or probably will not happen.

Entitle: a claim to something you feel you are owed.

Sloth: reluctance to work or exert effort; laziness.

Complacent: calmly content, smugly self-satisfied.

Maintain: to cause (something) to exist or continue without changing.

Apathy: a lack of enthusiasm, interest or concern.

Interest: to be curious about (as opposed to being committed).

Wise is defined as: having or showing good judgment.

Foolish is defined as: lacking good sense of judgment.

Keep in mind that wise doesn’t necessarily mean book-smart, and a fool isn’t necessarily an untalented dullard. In fact, sometimes the “fool” is the brightest person in the room. And while most people show signs of both wise and foolish behavior from time to time, the trait that dominates should best foretell their future with your organization.

What can accurately help you determine how to categorize one as wise or foolish is in how they respond to the feedback you give them on their behaviors. Author Dr. Henry Cloud specifically mentions the following differences. Pay close attention, because in order to build or sustain a strong culture it’s essential you have wise people throughout; those who respond as follows when receiving feedback on their behaviors and performance:

  • They thank you for it.
  • They own it; take responsibility for it.
  • They show remorse for unhealthy behaviors when you bring it to their attention.
  • Your relationship with them strengthens as a result of the feedback.
  • They change their behavior as a result of getting feedback.

You can take wise people far in an organization. Your investments in time, dollars, training, coaching and mentoring return to you exponentially over time as they grow and increase their capacity to contribute to the organization.

Unlike a wise person, the fool does the following when you give him feedback:

  • Externalizes it: He will blame others, conditions, and even you for their behavior or results: “You do the same thing!” etc.
  • Minimizes it: He will try to convince you his behavior or result isn’t that big of a deal: “I was only ten minutes late. What’s the big deal?”
  • Rationalize it: He will excuse it; say he had no choice based on the situation he was in, the options available: “Given the hand I was dealt, I didn’t have a choice,” etc.
  • The relationship weakens as a result of your giving feedback; the person withdraws, pouts, resents and tells others how unfair you are.

Your future with foolish people within your organization should be brief, at best. They demonstrate character flaws you cannot fix or change. They can fix or change them, but don’t seem to see the need for it.

 


toptalent

Permanent link to this article: http://blog.ncm20.com/2015/04/building-a-high-performance-culture-part-19/

Steven Banks

Get Your Arms Around The Data In Your Dealership

Get Your Arms Around Your Data

Lately it seems I am unable to hide from the term, Big Data. I’m exposed to it in headlines, newspapers (a bit old school, but I still read them), magazines and yes, even blogs. But what does “big data” truly mean and why are we being doused with it? The term is so new I couldn’t locate it in the Merriam-Webster® dictionary, so I took the obvious next course of action and looked up the definition in the infamous Wikipedia. This is what I found:

“Big data is a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications.”

To dealerships, big data, or more importantly the management of big data, can mean the difference between increasing profitability and stagnation. Let’s take the aforementioned definition in a bit more industry-specific direction. To ensure we are maximizing day-to-day operations efficiently we use traditional DMS systems, inventory management systems, RO analysis software, manually-generated spreadsheets, etc. All of this is great and even necessary, but it seems as other technology is advancing and there is more information readily floating around in the cloud, our in-house systems should be able to progress at the same accelerated level.

So what does this mean for us?

In order for us to know what actions we should take, we first need to know what questions to ask ourselves.

What data should we pay attention to?

Any data that can impact our dealership should be monitored. Ignore the data that is fascinating but irrelevant. Perhaps instead of looking at the national averages, comparing our dealership numbers at a regional or state-specific level is the best course of action.

Who should we rely on to receive this information and is the source of this data really credible?

I often find myself five minutes into reading an article or looking at a visually stimulating pie chart that shares impressive data when I realize I’ve never heard of the company publishing it and don’t recognize the columnist.  Does that mean you need to recognize every author’s name?  Absolutely not (as you might not recognize mine), but take what you find with a bit of caution if the author or company is unfamiliar. These days, it’s pretty easy to find out if an “expert” is speaking with authority, so do some research to find out more before acting on the information.

There is so much noise out there; what should I be looking for to help me manage my data?

There are some amazing new solutions available to help dealerships with data management.  Some data management vendors will unleash a plethora of raw data to their customers, but it is hard to make sense of it.  Avoid any vendor that says they have it all, as they will tend to over-promise and under-deliver.  Look for a platform that works in conjunction with your DMS, fixed, variable and accounting systems.  After all, this is the approach that we took when developing NCM axcessa, our web-based software that aggregates your dealership’s big data in real-time and eliminates the need to manually generate reports.  Why?  Because our clients demanded it be that way; otherwise, it’s just another piece of software rather than the actionable intelligence tool they desired.

Big Data has arrived at the party and the reality is it’s here to stay.

So let’s not only get used to it, let’s embrace its power to help us accelerate our dealerships in an economy and marketplace where the complacent mindset is depleting and the progressive mindset is excelling.

 


Permanent link to this article: http://blog.ncm20.com/2015/03/get-your-arms-around-the-data-in-your-dealership/

Dustin Kerr

Hiring Buy Here Pay Here Salespeople That Produce – The Newspaper Ad

I’ll be blunt; hiring candidates from a newspaper ad is not the most effective way of finding the type of talent that can be molded into a productive salesperson. However, there is a time and place for the newspaper or Craigslist ad, and in this article, we are going to discuss how to make your ad as effective as possible.

Watch the video – Click here!

First, we should set the correct expectations. It’s highly unlikely you are going to find a seasoned, successful salesperson through these types of ads. Salespeople that are already trained and productive are likely making a significantly better income than what the average BHPH dealer is going to be willing to pay them.

So, we are really looking for people that have the right temperament, work ethic, and confidence to be receptive to our training program (because we are going to train them correctly) and to fit in well with the culture we are trying to promote.

Before we go any further, I want to give you two sources that I have used in the past that provide great information on hiring salespeople. The first is a book by Chet Holmes titled “The Ultimate Sales Machine,” and the second is “The Anderson Hiring System” by Dave Anderson, a virtual training program available in NCM OnDemand.

The ad I use and will describe below is a combination of what I have learned from those two gentleman mixed in with my own experiences. Be warned: this ad will eliminate most of the applicants you would get through the typical newspaper or Craigslist ad, and that’s what we’re going for. We don’t want to have to wade through all the applicants who are just looking for another paycheck.

The headline of the ad should get their attention and should show the upward end of what they could expect to make. For example: Now Hiring Sales – No Experience Necessary – Extensive Training Program – $40,000-$60,000.

The body of the ad should then eliminate as many of the undesired applicants as possible and we will do that by using very blunt, straight-forward language.

We are looking for individuals that have the desire to be great. Please do not apply if you only have an average desire or work ethic. Our training program is very extensive and includes a great deal of role playing and practice. We are a rapidly growing company that is a leader in our industry and we are only interested in those that want to be the best.

Too many times we get caught up with trying to sell the reader on why they should apply with our company, generally because we are in crisis mode and desperate for a warm body. This ad will eliminate a great deal of the warm bodies as they will be turned off by the strong, in-your-face language. Those that do apply will typically be very confident in their abilities and open to the idea of training.

Now, this MUST be followed up with a thorough interview process that goes well beyond the applicant’s previous job history and resume. Conducting a proper interview is beyond the scope of this article, but is something we will cover in great detail in future articles.

In the meantime, get these ads running continuously on Craigslist, and if you have any questions regarding improving your hiring process or how being a member of a 20 Group can help your profitability and cash flow, please email me at dkerr@ncm20.com, or call me at 913-827-6677.

ondemand

Permanent link to this article: http://blog.ncm20.com/2015/03/hiring-buy-here-pay-here-salespeople-that-produce-the-newspaper-ad/

Jeff Cowan

The Myths of Writing Service Part 2

Writing Service Part 2As you remember from my article last month, myths can be very dangerous things. They can and will impede your ability to grow, expand, and succeed. I discussed some of the biggest myths surrounding the writing of service and will list a few more here today that have come up and continue to come up in the many meetings I am asked to speak at throughout the year.

Myth: Service writers do not need the same amount of training as the car sales staff.

Fact: A Service Advisor who works with just fifteen customers a day will generate more gross profit for a dealership in a month than a sales person does who delivers thirty vehicles in that same month. In addition, due to the volume of customers they will talk to in a month, they will have more impact on your survey scores and customer retention than any other employee in the dealership, including the dealer. So why would they not need the same amount of training or more?

Myth: Women service writers who are mothers are risky due to parental responsibilities.

Fact: Tell that to Abigail Adams, wife to President John Adams. While John was overseas for many years, she stayed behind and ran the farm, ran John’s businesses, and raised 6 kids, one of which grew up to be our nation’s sixth president. One of my daughters is at the child bearing age. She and ten of her close friends have all had children in the past twenty-four months. While one of them quit her career and became a stay/work at home mom, the other nine not only continued their careers, but eight of them actually increased their hours or took on more responsibility. Why? Because they quickly realized that if their kids were to have a life equal to or greater than their own, they had to work harder and smarter. If all things are equal and I have the opportunity to hire a male service writer versus a female service writer with kids, especially young ones, I will take the female with kids every time. Think grizzly bear with cubs.

Myth: Service writers who work in economically challenged areas cannot sell as much as service writers who work in affluent areas.

Fact: Many times, they can sell more for one simple reason; the more financially challenged a person is, the more important their vehicle becomes to them. Financially challenged customers know that if their vehicle does not run and they cannot get to work, then their financial situation will only get worse. I have worked in countless service drives with countless service advisors where their customers were financially challenged and the sales made were either equal to or greater than those in service departments where the reverse was true. The difference is that the financially challenged customer requires a service advisor who has a slightly different skill set and outstanding follow-up and over the telephone selling skills.

Myth: Women service writers have a tougher time in service because men prefer to talk with men.

Fact: This is not a gender specific problem. A service advisor who is strong at taking control of the customer and exudes confidence, can and will be able to handle your customers. While this myth used to have some validity twenty years ago, it has none today. If I were to list the top ten service advisors that I have worked with over the past twenty-nine years, seven of the top ten would be women.

Myth: It does not take as much skill to be a quick service writer as it does to be a full shop service writer.

Fact: Arguably, it takes more. Think about it. A quick service writer is many times the first person a new customer will work with in service after purchasing a new vehicle. Their ability to handle your customer and convince them that your shop is the only place to go for service, has to be near perfect, if not perfect, to get the job done. Although the path to full shop writer begins many times in express, the express writer should be trained to expertly handle any scenario that a full shop writer would. Again, they are likely to be the first point of face to face contact in the dealership after purchasing a new vehicle. Express should be trained to impress every time on every level.

Myth: It is impossible to train veteran service writers to adapt to changes in their customers’ demands and in new technology.

Fact: Not if you have established a culture of constant change in your department. The service writer or employee who cannot adapt to change and evolution in retail sales will become a dinosaur within five years. When you consider how rapidly your customers and their buying habits have changed in just the past few years, and how rapidly technology changes, any employee who can not keep up is costing you money. In the future there will be two types of sales people; those who sell technology and those who use it. The rest will become obsolete.

Myth: Service writers can handle setting their own check-in times, checking in your customers’ vehicles, following up on those customers throughout the day, closing those customers over the telephone, closing out their own repair orders, contact customers who have been waiting for parts, cashier their own customers, actively deliver vehicles back to each customer as the vehicle repairs are completed, send a thank you note to each customer, contact customers who missed their check in times, contact customers who previously declined repairs, contact customers they have not seen in over six months, while at the same time getting and maintaining high survey scores and customer retention.

Fact: Only if they write ten to fifteen repair orders a day. Just like on the vehicle sales side, you want to free your service writers (sales people) up as much as you can, to talk to your customers.  Sales people make you money when they are talking to your customers.  The more time they have to talk to your customers, the more money they will make you. From the beginning of car sells through the early 1960’s, vehicle sales people answered the dealership’s incoming sales calls, did their own financing and helped people when they came in for service. When dealers realized that those activities kept their sales staff in the building and not out on the lot where the buyers where, it ushered in the era of the telephone receptionist, the F & I department and service staff, and significantly more vehicles were sold. The more you can do to support your advisors by freeing them up to talk to your customers, the higher your retention, survey scores and sales will be.

Myth: Service writers will not sell or are not good at selling additional products like special wheels, extended warranties, details, etc.

Fact: Not true. To sell anything on a service drive requires three things; a great product, great training in how to present and sell it, and a great pay plan.

If you are consistently not hitting your sales, retention and survey goals, it is a sign of great weakness not to try something new. Trying something new can be as simple as taking a look at what you or your staff say can’t be done, and testing to see if the reason is based on fact or myth.

You should make this a common practice and part of your monthly routine to dispel myths that may exist in your work place. I get blamed from time to time for being too willing to test and eliminate these myths and reasons that hold my business back. I am told I need more patience. The fact is, I do have patience for the time it sometimes takes for myths to be tested.  What I do not have patience for is the lost customers and revenues that myths produce.

Permanent link to this article: http://blog.ncm20.com/2015/03/the-myths-of-writing-service-part-2/

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