Front Line Training Team

2012-01-24T19:29:00.000-08:00

Selling isn’t’ rocket science

Greet a customer on the lot today and you’re most likely toget a much more informed buyer than ever before. Some salespeople dread the intelligent buyerand in some cases avoid that buyer like the plague. The fear is that the knowledgeable buyer willoutwit and perhaps, even out-negotiate the average car salesperson.

Transparency is the new buzz word for the automotiveindustry. Websites driven around pricingtransparency are becoming the dominant discussion points for many industryexperts. These websites educate the consumer on everything from costsstructures to securing the loan. The ideais that “information” makes the vehicle purchase more palatable.

The shrewd buyer will generally know the product they’reinterested in before they step into the first dealership. These buyers are more likely influenced by;online reviews, third-party comparisons, word of mouth advertising and socialmedia than they are by a sales person. In most cases, the purpose of the visit is to have tangible contact withthe potential product.

This is generally where the expectations of the customer andthe processes of the sales person conflict. On one hand, we have an informed consumer who wants to skip the hype andbanter of salesmanship and on the other; we have a sales person who isinterested in making a commission. Thepolar opposites collide when the driving force is making money instead ofproviding solutions.

The research that customers do on a particular productserves to fill the void that a need has created. The salesperson has the responsibility ofdiscovering the need by performing a needs assessment. The conflict happens when either thesalesperson fails to properly perform a needs analysis and/or is uninformed onhow their product fills that void.

The process of determining the needs of a guest is in partsped up by the research performed on a particular product. Out of fear, the customer wants to reach thebottom line faster so that the discussion is based around dollars rather thanvalue. In the customers mind, the valueis a statistical analysis provided by the research performed. In reality, the value isn’t fully realizeduntil the pleasure of ownership outweighs the cost of purchasing.

Our job as professional sales people is to dissolve negativefeelings by creating value in our products and services. If you want to develop proper rapport withyour guest(s), it’s as easy as this; you must be able to establish arelationship. You must understand thecustomer from their perspective by enhancing the relationship. A salesperson must impart enough valuethrough the gathering of information.

The consultation stage is critical for uncovering the customer(s)wants, needs and desires. Theconsultation stage is where the salesperson aligns their products with thecustomer(s) demands. A good salespersonembraces the idea of the internet as a tool. The majority of consumers use the internet as a source for finding threeprimary pieces of information:

· Product information (comparisons and equipmentvalues)

· Vehicle availability

· Incentive information (special interest rates,rebates or leases)

Expense Control/Management (Part 2)

2012-01-07T11:11:00.000-08:00

Article number two will center on key areas for expense managementwithin the sales department. Salesdepartment expense management varies by dealership and ownership philosophy. Often,the responsibilities of expense management within the sales department fallentirely on the General Sales Manager and/or the General Manager. It certainly would benefit the salesmanager(s) to learn the more about the key expense control metrics.

There are four key performance indexes within the expense structureof the new and used car department. Theyare as follows (statement location varies by manufacturer); variable sellingexpenses, personnel expenses, semi-fixed expenses and fixed expenses. Thisarticle will center on four key expenses that will assist with variable expensemanagement.

Area number 1:Floorplan interest

Floorplan expense variables are; volume of vehicles on theflooring plan, turn rates, interest rates within the floorplan agreement, and anumber of other ancillary items. Floorplan interest can be managed by following a few simple guidelines.

1. Do not floor plan any used cars unlessabsolutely necessary.

2. Pay off cars timely, some dealerships use thebank holding their floorplan because they let you offset the contract to payofffloorplan.

3. Perform a monthly floorplan reconciliation tomake sure there aren’t any vehicles on the floorplan in error.

4. Make yourself aware of the floorplan incentivesfor turning inventory quickly. Mostoften, the dealership can reduce the cost of floorplan interest by turning theinventory prior to 60-days.

Area number 2:Contracts in Transit and Vehicle Receivables

1. Regular review of the schedules for allcontracts in transit and vehicle receivables.

o Contracts in transit exceeding 10 days(pay-plans for F&I managers should have a component that includes being fundedwithin the 10-day timeline).

o Vehicle receivables exceeding 30 days.

o Cause of credit balances.

2. Quarterly review of completed control auditrelated to deals, insuring compliance with company policies and procedures.

3. Insure compliance with 8300 filing requirements. Best practice: to have thebilling clerk perform an 8300 reviewon every deal and initial the jacket to indicate completion of the review.

4. General journal review.

Area number 3:Wholesale and Dealer Trade Receivables

1. Regular review of the schedules for all dealertrade and wholesale receivables.

a. Dealer trade balances exceeding 7 days.

b. Wholesale receivables with title in house.

c. Cause of credit balances.

2. Regular review of title pending report, both forsold and unsold units.

3. Review of monthly wholesale sale report showingwholesaler, gross and days in inventory for each wholesales vehicle.

4. General journal review.

Area number 4:Finance reserves

1. Review of the schedules for all financereserves.

a. Balances exceeding 60 days.

b. Credit balances. What is the cause?

c. Reconciliation and review of posted reservescompared to balance sheet.

2. Monthly review of all charge-backs andadjustments.

3. Review of detailed cause for any adjustmentexceeding a predetermined amount, i.e. $200.

4. General journal review.

Expense control within the new and used car department isthe responsibility of every manager. Each manager should make themselves familiar withthe detailed schedules, debits and credits of the expense side of thestatement. Expense management contributesto better ROI and more income for the department manager. The mostimportant step in expense control is awareness.

THE SEXY SIDE OF EXPENSE CONTROL: (PART 1)

2012-01-04T13:32:00.000-08:00

Expense management is not as sexy as closing a sale,providing a solution to an unsolvable problem or landing that big partsaccount. In fact, unless you are aGeneral Manager, Dealer or Partner you probably find the discussion of expensecontrol exhaustive and tedious. Thisarticle won’t change that perspective much however; we will attempt to reducethe arduous task of discussing expense control.

Expenses and expense control aren’t the most exhilarating topic’sto read or write about. The very topicof expense control is a critical component for sustaining profitability in a competitivemarket. Department managers understandthe importance of controlling expenses but most likely, it is not top ofmind.

· Expense Plan Tips:

o Every month the department managers work withthe General Manager and/or the Dealer Principle to review their expenses. On the 10^th of every month (on orbefore the date you perform your payable) all department managers meet with theGeneral Manager or Dealer. We refer to this as an “expense party”. The “expense party” is the opportunity foreveryone to review the accounts payable.

o Each department manager reviews his/herdepartment expense with the General Manager or Dealer Principle. The expense receivesa “value” placed on it. The value is based on a scale of 1-10.

1. If the expense scores a 3 or below the expenseis eliminated.

2. If the expense falls into the 4 to 7 range, wereview it to see how the expense can be decreased.

3. If theexpense is an 8 or above, we ask how to better manage it.

o Proper monthly review will help eliminateunnecessary expenses, reduce waste and control excess.

· An expense is simple to incur and difficult tomanage.

o Solution 1: At the end of each month, subsequent to the last day of the month-endand prior to statement finalization, have the controller, or other designatedemployee, prepare an expense detail, by vendor for each expense account andother income/deductions. This reportshould be rolled forward monthly for effective management evaluation of eachexpense account. These summaries shouldbe provided to each department manager prior to closing of the month-end. The month-end should be closed only when eachmanager has turned in his or her signed summary indicating that each expense,for which he or she is responsible, has been effectively reviewed and deemedcomplete and accurate.

o Solution 2: Run a trend analysis report should be and review it monthly. Any fluctuations versus prior month-to-dateshould be analyzed. The analysis reportshould compare each department’s expense with a standardized guide. Use of an expense composite trend report as compared to similar franchises of high performing dealers should be used. From these reports we can determine if the expense is in line or out of line.

· Dealerships spend thousands every month ongasoline but take little control on the expense that can be reconciled. Review of dollars will often highlight waste,theft and assist with control.

o Solution 1: Issue each driver (employee) a PINnumber. Every time that employee gets gas for any purpose, they must use theirPIN number. The use of PIN’s makeseveryone getting or receiving gas accountable.

o Solution 2: Accounts Payable must review andmatch the bill with the receipts and the PIN numbers used. Any vehicle receiving gas will be matched toa PIN number associated with the employee. Proper balance is essential and any discrepancies or missing receiptsneed to be addressed immediately with the department manager.

Engaging employees to accelerate the process of trimming expensesis essential. To truly control expensesone has to understand them. Carefulreview of departmental expenses will often shine a light on a processdeficiency. Dealers and their respectiveGeneral Managers must make expense control the responsibility of allemployees. Offer incentives or rewardsfor employees that help uncover waste and save the dealership money. Department managers must always pay attentionto the cost of sale accounts as well. Remember, controlling a dollar spent is more work than making that samedollar.

ROI for marketing

2011-12-09T09:42:00.001-08:00

Measure your marketing from inception to ROI
Check out our latest article in Auto Dealer Monthly.
Follow the link below. The article can be found on page 37.

http://autodealermonthly.epubxp.com/title/12049

Transparency...who is your dealer?

2011-12-09T09:11:00.001-08:00

Transparency is supposed to cure the excess profit that dealerships make on selling a “commodity”. We’rediscussing a platform that promises “upfront pricing” as the “new world order”but cautions “its arrival heralds a bona fide tipping point in automotiveretailing”. Transparency offers thecustomers an “upfront pricing” that is “non-negotiablein an environment defined by netmargin compression”

Some say, we don’t want transparency; suggesting instead thatwe prefer deceit and magic. Transparencyis apparently the answer to solve the age old question of how much profit istoo much profit? Having pricingposted below invoice online is supposed to ease our customer’s minds aboutpaying too much profit on a product.

Must we forget that dealers, managers and employees ofdealerships are major contributors to local economies? We are your relatives, neighbors andfriends. We are dads, moms, uncles,aunts, brothers and sisters that happen to work in the field selling aproduct. Most of us are veryphilanthropic offering our time, money and support to cure diseases, endpoverty, provide education against child abuse and cancer research. The money we make from selling a desired productis invested in houses that reside in your neighborhoods. We buy cars; send our children to church, payour taxes, support local schools and athletic programs. We advertise at the play, concert and sponsorevents when other local businesses refuse to add additional costs. Our business is the single largest contributorof local tax dollars generating millions in revenues for small towns and bigcities.

Dealers want the same things that our customers want. We want our customers to be happy, loyal andfair. We want our products to be sold ata fair profit margin that is dictated by supply and demand and not some vendorwith a separate agenda. We want to trainemployees to become successful business leaders and better people. If dealers refuse to stop the momentum ofpricing below costs online than perhaps we should consider one-price coststructures whereby margins are a function of supply and demand? Every dealer would then have to sell theirunique qualities instead of cannibalizing our profits. It’s a viable option that neutralizesthird-party predators and offers the transparency our guests require.

THE BE-BACK BUS AND THE ETHER

2011-11-10T14:57:00.001-08:00

So here you are, smiling from earto ear waiting for that special moment in your day when the be-back bus finally comes! The moment that inspires a salesperson as one of your prospects walksinto your showroom for another visit. It’sexciting isn’t it? You just can’t wait to greet them at the door, right?

We are grateful that the customerthought enough of the salesperson, the dealership and the product to come backto us. We’re certain that if the customeris back and most likely they’re here to do business with us. That’s all good news but be careful what youwish for.

What should we do when the be-back bus shows up?

Before we can get into adiscussion about what needs to be done we must understand where the customer’semotional state is right now.

Let’s discuss what transpired in the firstvisit:

In the previous visit, we built rapport.
Performed a need's analysis.
We demonstrated the benefits of our products.
Created value and at some point an emotionalconnection to our product was made.

All these steps created a demandfor the product you were selling. Theemotional desire to own your product was greater than the logical decision todebate costs. The close was ripe forthat first visit but…for some reason, the sale didn’t transpire.

Let’s discuss what transpired onthe be-back visit:

Someone deflated your customers’ emotionalballoon.
What was once a “necessity” is now another thingthat can go wrong?
What was once the value is now an added cost?
The desire to own a new car now became a burdenon the expense table.
The expert who presented the product is now anadversary who wants my money.

So what happened to all thatemotional energy? Where did the value disappear to? Here’s the answer! The ether wore off. The emotional decision that was created outof desire is now a logical decision based on economics.

“Logical decisions are slow and indecisive while emotional decisions arefast and final”

· Author unknown

So what’s a salespersonsupposed to do now? The answer is evensimpler than one might think. The salespersonmust start the process again! DO NOT under any circumstances goright into a write-up or negotiations. Remember, the logical state of mind ismost prevalent here and not our emotional state.

Begin by welcoming your guest(s) againand thanking them for returning to the dealership.
If you knew ahead of time (and youshould) that the guest(s) was coming back? You should have brought the vehicle they were interested into the frontof the showroom. Making sure it wasclean and in the best presentable condition.
Sit the customer down and review theirneeds analysis and what transpired during their last visit.
Present the vehicle again! Yep, you heardit right. Perform another presentation reiteratinghow your product meets their needs fulfillment.
Demonstrate the vehicle again! We need to create that emotional attachmentagain so by taking another drive you start to build value again. “Mr./Mrs. Jones I’ve taken the liberty topull your car up right here. That way wecan evaluate it again just to make sure it meets all of your concerns.”
Prior to the write-up take another tourof the dealership. Sell the guest(s) onwhy they would consider your dealership over any others they may haveconsidered prior to coming back.
Review your evidence manual. Show the customer why they made a wisedecision to do business with you.
Prepare the paperwork and assume thesale. Don’t offer to negotiate but simply state “Mr. /Mrs. Jones, will you be titlingyour new car in one name or both?” Let the negotiations take place at your guest(s)initiation.

Building value andcreating the emotional element is crucial when the be-back bus arrives. Much of the energy and excitement were lostovernight or prior to their last visit. Theguest(s) may have come back armed for a fight only to succumb to theprofessional atmosphere you create. Remember, the ether might have worn off but the perception of value is forever.

Welcome that be-back bus with preparation andprofessionalism.

Prospecting for profit

2011-11-09T19:15:00.000-08:00

Prospecting for Profit:

As aprofessional salesperson, the burden of creating revenue is yourresponsibility. Anytime you are notface-to-face with a prospective customer, you are temporarily unemployed. The dealership provided you with the toolsnecessary to become an entrepreneur. Thedealership provides the advertising, the product support and supply, thereputation, the telephones and communications tools to assist you withcommunicating with your potential clients.

Prospectingin the general sense of the word is defined as; searching for potentialcustomers who may want to purchase our products and services. These potential customers consist of (1)current owners of our product (2) orphaned owners (3) defected customers (4)customers not yet in the market. Thesalesperson objective is to have at minimum five belly-to-belly contacts forevery day worked. The contacts shouldgenerate at least one appointment each working day.

Thefollowing activities should be accomplished to maximize the one appointment perday goal:

· Work your CRM (customer relationsmanagement) tool on a regular basis. Careful to balance the tasks ofprospecting and following up on previous visits.

· Maintain a current owner follow upprogram that does at least three things

o Enhancesthe dealer/customer relationship

o Encouragesrepeat business

o Obtainsreferrals from friends, family and personal acquaintances.

· Perform creative prospectingactivities such as:

o Utilizingemail blasts to creatively market to your customer base

o Usingpost cards with a quote of the month to keep your name in front of yourcustomer and the potential customers.

o Purchasingcreatively placed advertisements within the local shopper’s guides andbusinesses.

o Droppingbusiness cards and pens with the dealership name, website address and phone numberon them.

o Sponsorshipin local youth athletic programs with your name and email address.

· Handle incoming dealership phonecalls in a courteous and productive manner.

o Getthe prospective customers’ name and number and appointment date/time.

o Knowyour products and utilize word tracks to capture more appointments.

Prospecting implies digging for gold. The find the “gold” you must move a lot ofdirt in the process. The job is hardwork and is part of selling that most salespeople do not want to do. It is the process that involves the highestlevel of rejection and ultimately determines the path between ultimate successand complacent mediocre.

Metric VI- Service Metrics

2011-10-25T18:29:00.000-07:00

The Seven controllable accounts:

1. Expenses: Expenses by definition is; “a drain on resources” or cost. For every expense dollar saved, one dollargoes to the bottom line or net profit of the department.

Thereare two types of expenses:

I. Productiveexpense: That is an expense item thathas a designed purpose of producing sales or gross profit. If an item or performs increases productivityor makes the sale of a product and there is a definitive return on theexpenditure that can be tracked and quantified, it is productive.

II. Non-productiveexpense: An item of expenditure that is considered simply a cost of doingbusiness is considered non-productive. For example, a cleaning solution may have to be bought because of a needto perform the work. The purchase wasmade as a function of completing the task and in no way does it produce salesor income.

a. Personnel are the greatest consumer of cashand are always at the top of the list. The service department is a very peopleintensive business and there are several positions that if done away with willdeprive the dealership of its ability to perform its task in a customersensitive way.

b. Do we really need it? The first area we need to assess is “do wereally need it?” Review each addedexpense as if it were your own. Officesupplies and the like often add unnecessary expenses to the bottom line withoutadding profits.

2. Gross Profit: Gross profit is the difference between thesale amount and the direct cost-of-labor. The first controllable element of gross profit is the dollar value ofeach flat rate hour sold.

I. The effective labor sales rate is the averagepayment received for one flat rate hour sold. Customer pay labor is the area that has the greatest potential forimprovement. Warranty and internal laborare certainly contributors to the overall department’s effective rate but arenot subject to the variance encountered in the customer pay business.

II. Cost-of-labor is the pay given for producing aflat rate or billable hours. If a personproduces hours they are part of the cost-of-labor structure. The average cost of technician pay per flatrate hour is the “effective cost”.

3. Clock hours worked: The clock hours worked per day by eachtechnician should be controlled very closely. What may seem to be minor shortages on a daily basis can build up tomajor proportions when the year-end financial statement is compiled. Clock hours worked are influenced by anyactivity that keeps a technician from producing billable hours.

4. Percent of Productivity: The flat rate hours produced in a day dividedby the clock hours technicians actually worked that day determineproductivity. Productivity andefficiency are often confused. If atechnician does a four flat rate hour job in two hours he is 200%efficient. If that is all he produces ineight clock at work he is considered 50% productive. The outcome of low productivity is a loss forthe business and technician. On theother hand, if he produces ten flat rate hours in an eight-hour day, thetechnician is 125% productive.

5. Days worked in a month: The sum of days worked in a given month by aproductive employee is directly related to gross profit retention.

6. Effective Labor Sales Rate: The average dollar amount received for eachflat rate hour sold is the effective labor sales rate. The formula is total labor sales divided bytotal flat rate hours. Effective rate isone of the most important controllable.

7. Calendar utilization: The number of days worked per month versusthe days planned for work is calendar utilization. If a technician takes one day of unscheduledtime off every other week, it will dramatically affect the available days in amonth clock hours per week.

Metrics Part IV- Cash Managment

2011-10-17T15:01:00.000-07:00

It wouldimpractical for an article to attempt to cover every metric associated withcash, inventories and expenses. Instead,the article will serve as an introduction to the key metrics and how theyaffect dealership operations.

Metrics 1- Cash. Within the cash metrics there are several sub-categories, each withtheir own distinct metrics. The sub-categories are: contracts in transit,receivables’, cash efficiency, cash days supply, current ratio, debt to equity,frozen equity, inventory trust position, LIFO (last in first out), workingcapital requirements, net profit return on gross, net profit return on assetsand net worth.

This articlewill focus on three specific areas of the metrics of cash:

1. Cash

2. Cash management

3. Receivables.

Cash: Why: The dealership has the requiredcash to sustain dealership operations. What it means: dealership cashavailability must be equal to a minimum of one month’s average total dealershipexpenses plus technician payroll. How it’s used: to manage daily operations ofinventory and expenses.

Cash in bank:

1. Regular review of bank reconciliationsto determine the reasonableness of cause for any:

a. Reconciling item exceeding 15 days

b. Any check exceeding $10,000 andoutstanding for more than 30-days.

2. Insure that periodic cash internalcontrol evaluations are performed and documented

3. If available, scan through checkslooking for checks without appropriate signature requirements, checks toemployees or other unusual items.

4. General journal review

Contracts in Transit: Why: measuring the amount of days’from contract submission to funding. What it means: a measurement used todetermine how long it takes to convert a contract to a bank into dealershipcash. How it’s used: converts contracts to cash for operational functions. Theguide for measuring the contracts in transit is: averaged out to no more than 3days for conventional financing and 10 for special financing.

Cash Gap: Why: determine how long it takes tocollect dealership cash from the time the cash is spent to from the time of purchaseinventory until the time a sales is made. What it means: the goal is to be atguide of 30 days or less. If the numberof days is higher than guide, the results is frozen capital in addition to thecost of borrowed funds. How: manage thecash gap:

1. Reduce the time the inventory is on theshelf

2. Reduce the collection period of thereceivables

3. Inventory is good so long as it’s notold

4. Every week the General Manager shouldsit in with the warranty administrator, the controller and schedule accounts tomake sure the warranties are being submitted correctly. Any variance should be handled by thewarranty administrator and the controller notthe service manager.

Metrics 2 -Receivables’: The key to controlling cash flow andthe assets of the dealership is proper management of receivables. Regularreview of receivable accounts such as; parts and service receivables, warrantyreceivables, wholesale and dealer trades, finance receivables, factory holdbackand rebate (incentive) receivables, inventories and inventory, should be donedaily and weekly. Guides for managing receivables are provided by NADA as wellas the different manufacturers.

Inventories: There are four critical inventories to bemeasured daily, weekly and monthly. It does not matter how much inventory thedealership has in that line – the only thing that matters is how old it is.

1. New car inventory

a. days’ supply

b. contracts in transit days’ supply

2. Used car inventory

a. days’ supply

b. contracts in transit days’ supply

3. Parts inventory

a. days’ supply

4. Work in process (WIP)

a. number of hours WIP labor inventory pertechnician

Metrics 3- Expenses: Controlling expenses is an essentialmanagement function of dealership operations. Expense control is the contributing factor for retention of netprofit. Prior to closing out the month areview of expenses is needed along with supporting documentation for any variances.

· Expensedetails – A current months’ position compared to prior month and compositerequirements.

o Twoseparate lists comparing expenses

o Areasthat are of question should be highlighted and supporting documentation shouldbe presented reviewing the discrepancies.

o Reviewand input into a formulated Excel spreadsheet expense trend analysis.

o Preliminaryfinancial statement – compares current month’s expenses as a percentage ofgross profit versus the year-to-date expenses as a percentage of gross profit.

o Anexpense review meeting should happen with all department managers to discussthe expenses. A detailed action plan describing the processes needed to get theexpense inline should be presented by the affected department manager.

Next months’ article will focus on thekey metrics of the Service department. Themetrics for the service department are:

· WIP

· Service department proficiency

· Effective Labor Rate (ELR)

· Dollars per repair order

· Gross Retention

· Absorption

· Expensemanagement

Business Metrics: Segment III Dealership Operations

2011-10-07T12:53:00.000-07:00

Segment 1 – Dealership Operations.

This article isthe continuation of “The value of business metrics”. The primary discussion of the article is onthe general practice of dealership operations. The metrics for dealershipoperations is expansive but for simplicity this section will be on the threekey areas of concentration; cash, inventories and expenses.

Before progress can be made an assumption on theunderstanding of general accounting practices are necessary. For generalposting procedures, accounting methods refer to your franchise agreement asreporting does differ from manufacturer to manufacturer. The Management ofthese critical elements can be viewed as metrics on the balance sheet on pageone of the financial statements.

The balance sheet is separated between debits and credits.The components of debits are; assets cost of sales andexpenses. The components of creditsare; liabilities, owner’s equity, gross profit and sales. Assets, liabilitiesand owner’s equity are found on the balance sheets while cost of sales,expenses, gross profit and sales are found on the income statements.

Assets are listed on the Balance Sheet in order of liquidity:

· Total current assets – the goal is to move thevalues up the column

· Assets that will be converted into cash in ashort period of time usually within the next 12 months.

· Assets will always equal – liabilities, OwnersEquity / Net Worth

Liabilities arelisted on the Balance Sheet from most to least current

· Describes the Net Worth accounts.

Balance sheets present information on the results of theoperation of the dealership. Balance sheets show how the investment in thebusiness is presently distributed.

· Changes only when debits or credits affect them

· Not automatically zeroed out at the end of thefiscal year

· Nominal accounts referred to as IncomeStatements

Dealership Metrics: Segment II

2011-10-04T19:01:00.001-07:00

There is noright or wrong metrics for measuring the specific performance of eachdepartment. The guides are there toprovide a foundation of successful metrics that high performance dealers use.The most important aspect of the metrics is having a department manager thatunderstands how to use them. Understanding the metrics is only part of the discussion, the realcontent resides in knowing how to use the information.

To benchmark aspecific metric the dealership needs to have a forecast to measure itselfagainst. The typical debate is overwhether or not to forecast against prior year results, group average numbers orthe dealerships planning potential. Theforecast should be compiled and completed by each department manager andsubmitted for review to ensure it is consistent with the dealers’objectives. Once the forecast iscompiled and compared it should be formatted into a yearly business plan bydepartment. That business plan serves asa written goal for each department manager to manage by. The forecast can then be broken out intomanageable numbers for daily and weekly gross performance. Every day the manager should track his/herforecasts against daily productions. The daily tracks need to be turned intoeither the General Manager or the Dealer principle. The gross discrepancies should be monitoredclosely for accuracy and process improvement analyzing.

Day to dayoperations can distract department managers from reviewing their metricsregularly. Time should be allocatedspecifically to discuss the metrics of the departments’ operations. The metrics should commensurate with theoverall dealership goals. Weekly reviewsof tracking should be completed in a meeting with all department managers’. Thesereviews keep each manager on target for achieving their pre-planned forecastnumbers. Monthly reviews are often toolate for mid-month adjustments and process management. Occasionally, adjustments to forecasts areneeded so they are consistent with changing market conditions. Realigning goals is a necessary element thatrequires input and direction from both the team leader and senior management

Discussions bydepartment managers should be focused two specific areas; the people performingthe job and the processes involved in the job completion. Accountability for performance is always theresponsibility of the department manager. The manager must utilize the metrics tools to help uncover thedepartments’ weaknesses and strengths. From that discovery, the manager has to coach and counsel his/her staffin the processes needed to accomplish departmental goals.

The next seriesof articles will discuss the measurements for dealership operations. The metrics conversation for dealership operations will be specificto formulas, definitions and operatingguides. Unloading an abundance of information would be tedious andless informative. Instead, the focus will be to accentuate the three goals of;understanding why the measurement isthere, what the measurement means andhow the measurement is used.

Dealership Metrics: Measuring Performance

2011-10-04T18:59:00.000-07:00

Definition:Metrics isa set of measurements that quantify results. Performance metrics quantifies theunits' performance. Project metrics tells you whether the project is meetingits goals. Business metrics defines the business' progress in measurable terms.

A businessmetric is any type of measurement used to gauge a quantifiable component of acompany’s performance, such as return on investment (ROI), inventory turn rates, EBITDA(revenues, earnings before interest, taxes, depreciation, and amortization),and so on.

Metrics as itrelates to dealerships’ operations are essential for translating performanceinto profitability. There is a multitude of measurements for deciphering thenumbers for each department. Departmentalfunctions that can be measured upon can be improved. Uncovering the proper performance metricswill assist the department manager to improve productivity andperformance. The key is to understand why the measurement is there, what the measurement means and howthe measurement is used.

Everydepartment has a different metric for measuring performance standards. The debate can be made as to which metrics isbest to use when measuring departments’ performance. Dealership metrics is driven by a nationalaverage as measured by NADA; specific measurements by themanufacturer against a competing market segment, or by a 20-Group format measuringcomparisons to a peer group of cross-country segments.

Themeasurements will vary based on which guide is being used. There will be aseries of five articles centered on the metrics for each operation:

· Dealership operations

· Service department

· Parts department

· New car department

· Used car operation.

Up selling- Adding value to every Repair Order

2011-09-28T15:22:00.000-07:00

Up selling – adding value to every RO

As a trusted Service Advisor, you are the point of contactthat the guest has when he/she drops their vehicle off for repair. The concern of the guest is simple: Have yourepaired/completed the original concern that I visited for? Whether the visit is for a mechanical repairor a maintenance issue; the

Sell Don’t Tell:

Selling involves discovering the guest’s needs throughquestioning and educating them on the solution our dealership provides. Telling, on the other hand, is a lesseffective methodology of imparting all the things that you can provide withspeech. The later, although common inmany sales presentations, is far less effective.

If you are prone to telling, you will encounter resistancefrom your guest’s – especially the ones who scheduled in for a LOF or simplewarranty repair. Telling, or givingspeeches, is not interactive and thus often misses the mark when talking to aguest. Telling is not completecommunication – it’s a one-way.

Telling also has another very serious weakness. Telling requires the Advisor to guess whatthe guest wants. When you have amaintenance offering with dozens of potential benefits, how do you know whichones you should talk about? A benefitis an advantage of the service offering that the guest feels is important anduseful.

It is critical in selling that you spend as little time“telling” as possible. You are mosteffective in your selling when you’re talking about those things that are, inthe mind of a guest, most important. This means you need to ask the guest to tell you what is valuable ratherthan telling them.

Five steps to the sale. I think there are five keyelements that lead to a sale and a guest agreeing to your recommendations:

1. Our guests’s like and trust our dealership andthe factory brand.

2. They must like or trust the person at the desk –you – the trusted advisor

3. They need to see the benefit in the service orrepair being performed

4. They must feel that the price is fair andjustified.

5. They are compelled to make the decision to dothe service today.

To improve your sales process, you should focus on the fivekey elements in the sales process. As anadvisor, you need to know where you are missing the connection with yourguest.

Part III - Service Advisers Training

2011-09-28T15:06:00.000-07:00

Here’s the rule: No Guessing! Even if it seems too obvious to ask the question, even if it seems like you should really know the answer already, test out how the guest understands the concern before coming to a solution.

· Before we go any further, could you clarify the concern for me…?

· You know we’ve come across lots of ways to define that noise… We’ve seen it defined as _______in this situation and as ________in others. Just so we’re on the same page, how would you define the noise within the context of your concern.

Here is a list of tips to move along in the write-up process:

1. Prioritize the list of concerns.

2. Ask for verification of the specific concern(s).

3. Provide the estimate.

4. Find out what they will do to decide before asking who will decide.

5. Get the how from who

a. What are some of the criteria will you be looking for to determine whether or not you had a solution that would work for you?

b. From your particular perspective, what are some of the key issues you’d like a solution to address?

6. Ask how and what rather than why.

7. Ensure you answer the guest’s specific concerns.

Becoming a trusted advisor:

What really makes for a successful advisor? The solution isn’t as simple as having the right prices, shop and technicians. Of course, all those tools help make for a more successful advisor. In today’s market, as in none before, it is crucial that we learn how to be customer focused while selling professionally. The dealership environment has changed radically in very distinct ways:

· Customers are better educated, more sophisticated, and much more value conscious.

o In simpler terms, they are harder to please; they want more for their money and are much more willing to give their business where it’s appreciated.

o Service advisors have to be more knowledgeable, must follow-up on their services and be extremely knowledgeable about the vehicles they are servicing.

o Service advisors have to be honest, and sincerely interested in helping their guest’s find value and derive satisfaction.

· Competition is stiffer:

o Customers have so many options to service their vehicles. They will choose those options unless you can offer a strong differential advantage.

o As the industry has become more competitive over the past decade, some products have become nothing more than a commodity.

o Items like, brakes, struts or batteries become loss leaders to drive traffic into your competitor’s stores. The offerings aren’t as good as your dealerships but they are a distraction to say the least.

o It’s not enough to be better – you must be superior. Your guest must acknowledge the superiority of your products, and the object of your presentation should be to lead them toward that recognition.

· Time has become a precious commodity – for advisors and their guests.

o No customer wants to have his/her time needlessly wasted in the service drive. With everyone so busy with so many demands, we have to value their time with solution based methods.

o The surest way to more loyal customers is to value their time. The Advisor must learn how to maximize the time by providing options to the guest. Can you provide instant status reports online or via text?

2011-09-23T12:47:00.000-07:00

Part II - Service Advisers Training.

In this post we will talk specifically about the communication requirements for a service advisor.

Avoid leading questions:

Leading questions can be manipulative, and frequently come over as sleazy. From the words our guest’s use to describe their desired success to the criteria they use to evaluate the proposed solution, we need to be very careful not to lead or assume the answer. Asking questions gives our guest’s a chance to explain themselves and think about what they’re trying to achieve, and in turn gives us the opportunity to learn more. Non-leading questions allow for open, mutual exploration.

Gain permission to ask questions:

Sometimes advisers feel they’re entitled to ask guest’s all sorts of questions. In fact, we need to earn the right to ask questions first.

· We agreed on some key concerns that we need to touch on. Just to make sure we fully understand your perspective, would it be okay to ask you a few key questions first?

So often we fall into the trap of asking multiple questions in one breath. The problem with asking more than one question at a time, is two-fold

· First, more than one question may confuse the guest about which question to answer, making it difficult for them to focus on the key issue.

· Second, the guest may skip potentially important questions as they attempt to answer either the question they remember or the easiest question, and they may not yield the most important information.

Effective questions are really those that offer a path towards additional insight, and help explore more opportunities. One of the most important times to slow down and ask questions is when you hear something that concerns you, or you see a reaction that spells potential trouble.

Move off the solution:

Have you noticed how many of us are hardwired into offering a solution to a guest before even understanding what the real needs might be? It seems like we have a knee-jerk reaction - the guest requests something and right away we’re offering our solution. We want to try and avoid the solution talk before we ascertain the real concern.

Once you have moved off the solution, you have to go somewhere. Proceed by building a conversation that will clarify the nature of the concern at hand.

Here’s how to structure a conversation:

1. Get a list of the concerns the guest has top of mind.

2. Make sure that list is complete.

3. Of the entire list, identify priority #1.

4. On that priority develop the cause for concern.

5. Summarize all along the way.

6. Take each issue in order of priority.

Clarify the underlying issues. Be sure that you and the guest are on the same page right from the get go – so don’t presume you’re defining an issue in a similar way. Ensure you’re not falling into the trap of confusing fluency with real comprehension.

Service Advisors Training- Part 1

2011-09-21T10:04:00.000-07:00

We've been asked by readers to post sales training information for the service advisors. We understand that little is offered in regards to sales training for service advisors. However, the initiative for seeking out training and taking advantage of sales training falls on the service advisors themselves. We are writing a 3-part series focused on selling in the service drive. In Part-1, we are going to focus on the "Intent".

Intent counts more than technique:

While you work on your questioning techniques, know that your intent is most important. Greeting your guest(s) with honesty, sincerity and empathy prompts your guests’ to share their concerns and fears. Consequently, your ability to find the right solution and their trust in adapting it, go up as well. Ironically, it is in our own most selfish interest to focus on the interest of our guest first.

Be a good listener:

When you ask a question, how well do you listen to the answer? Studies have shown that the best sales people listen 70% of the time and leave 30% of the time to talk. Service writing is largely a “receptive and observant mode” activity. Unfortunately, most of us do the opposite and spend 70% of the time advocating (pitching) and only 30% listening for understanding (inquiry).

Listening is a matter of choice and concentration. You must choose to listen actively and focus your complete attention on the other person. To become a better listener, do the following:

· Focus on the person’s answer – not on your next question

· Listen with your ears for auditory communication: watch with your eyes for visual communication.

· Sense with your intuition the real meaning of a guest’s concern. Can you see the difference between what someone says and what they mean?

· Expand the communication when appropriate. Don’t cut it short of understanding or prolong it past interest.

Our next sessions will cover:

Avoid leading questions:

Gain permission to ask questions:

Move off the solution:

Winning is a state of mind

2011-09-20T19:59:00.000-07:00

“Spread right, Trips Z-pass 90, X-36, 99 Max protections, Z-option…on two.”

Imagine the complexity of sitting in one of the huddles with of one of the top Quarterbacks in the country. Imagine trying to decipher the pass route, protection and coverage for an option route. Now, imagine doing all that without reading the playbook?

Sounds like a daunting task don’t it? What if the competition was better prepared? What if you were expected to win but lacked the preparation from the coaching staff, scouting team and trainers? The prospect of getting embarrassed or risking an injury should be enough cause for concern. What would happen if you ran the wrong route? Used the wrong coverage or missed an assignment? The outcome of your failed preparation could cause the team to lose.

Salespeople walk onto the blacktop field every day to play their biggest game. The opponents come prepared, and adjustments need to be made often as the game plan evolves. We are at a loss when the play doesn’t evolve as it was discussed. Instead of running an out, the coverage changes and the ball is thrown where only a defender can catch it.

If you can’t run, block, tackle and catch…you don’t play. Winning is a result when practice aligns with preparation. Players don’t get into the red zone without knowing how to make first downs. Coaches spend hours focusing their team on the fundamentals of the game. The fundamental skills are what separate the exceptional from the mediocre.

In sales much like in football, understanding the basic skills are essential for success. Practice, drilling and rehearsal of the specific skill sets are critical. The elite teams in any level of football are very efficient in every facet of the game. Those teams know what it takes to score a touchdown, kick the winning field goal or create a crucial turnover at the most opportune time. Winning is a state of mind...unfortunately so is losing!

2011-09-13T08:19:00.000-07:00

The 3 D’s to unlock your personal goals

Guidance comes to us in all forms of inspiring moments. We can be inspired by a loss that produces an epiphany and clarity. Sometimes that inspiration comes under the auspices of adversity. These select snippets in time are what define us as individuals and professionals.

Elite professionals have absolute certainty of their journey and the destination necessary to arrive. While we’re all capable of achieving massive success, there is a difference between those that want and those that do. We understand these behavioral indices to be simplified into three common denominators. They are as follows: Desire, Determination and Discipline.

Desire: True desire is a deep yearning to accomplish something that instills passion viscerally. Elite professionals are capable of visualizing the goal with absolute clarity with the result in mind. These professionals adhere to the belief that no matter what the obstacle or how many people pronounce doubt; the journey will be completed. All top athletes, coaches, business leaders and professional have desire that exceeds the level of their competition. There is a driving force that pushes high achievers to newer levels.

Determination: Desire alone isn’t enough to coerce a person to leave their comfort zone. To overcome even the most basic form of human need's; security, there must be a relentless pursuit of the dream with passion and conviction. No matter how big the obstacles may be. The focus on achievement is never derailed. Each failure is a lesson on the road to completion that is marred with complexity and uncertainty. Goal achievement requires determination and commitment with absolute resolve.

Discipline: There must be absolute discipline to do whatever is necessary during the course of travel to reach the pinnacle of your goal. Discipline requires that an individual do whatever is necessary on a consistent basis, day in and day out. Performing the tasks that others may see as mundane is a character that elite professionals embrace. Time is dedicated to improving a skill set, acquiring new skills and measuring existing performance. Elite professionals use metrics to provide a foundation for performance levels. They’re always measuring themselves against potential. The only prerequisite is in not being satisfied for anything other than accomplishing goals. Sacrifice becomes a necessary step towards achieving the result.

Do you possess the 3 D’s that unlock your true potential? Do you have clarity and purpose to accomplish our passion? Is there something that pushes you to wake up early in the morning and keep you up late into the night?

Fire them up...not fire them

2011-07-29T08:15:00.000-07:00

Each day salespeople come to work and they come with a purpose or an intention. This intention may not always be clear or aspiring, but they come to work, nonetheless. The situations that salespeople face are as unique as their actions and reactions to a situation. Even the role that money plays can bring down the most talented salesperson. Factors such as low grosses, bad CSI scores, confrontational customers and all too common defeatist managers can ultimately drive the overall effectiveness of your sales team. As a manager or company leader, how to determine the mindset of the sales team can be a challenge. Do you interrogate them as they arrive for work or just ignore them? If so, you might have a sales team that begin their day with a coffee clutch huddle so they can complain about the previous night's customer. There is, however, a more pro-active and productive approach to influence the intentions of your sales team.

To determine the purpose a salesperson has come equipped with, the respective manager(s) needs to gauge the sales environment. Life plays out in every showroom, every day and in every part of the country. As a result there are a massive amount of distractions that lead to a load of mood altering circumstances. As a manager, it becomes your task to understand the activities at play and find ways to re-focus negative energy into a mutually beneficial outcome. So, how does a manager take something as dynamic and complex as the showroom landscape and build a road map for success? Here are a few simple steps to serve as a tool to guide your sales people through their day:

Start by re-affirming simple goals.
Speak in a positive manner encouraging mind, body and spirit that any goal can be accomplished.
Simplify the goals so that they are realistic.
Set five achievable tasks that are easy to commit to and can be accomplished in a short period of time, like the end of the day.
Remember, the goal itself isn't as important as making sure the salesperson is on task so as to meet the deadline.
Sign-off on the goal prior to leaving. It’s important to make the salesperson responsible for his/her productivity. Having them sign off on their goal sheets makes them accountable for their respective level of success.

Team meetings are an effective tool for reinforcing goals. These meetings should be built on an encouraging and re-affirming foundation that supports positive thinking and action. The simple act of team meetings can alter a negative situation into positive progression. Sometimes all people need is a pat on the back, a little encouragement, group acknowledgment and positive energy. The sales manager(s) must command responsibility for the emotional energy of the staff. Success is a choice as is failure, so make sure your salespeople chose wisely by influencing the intention that your salespeople should come to work with. Make a conscious effort to improve the quality of life for those with whom you work with. Being an effective manager is to lead by example. Leaders should always bring their people into a battle prepared. Preparation is paramount to achievement. Leaders never require others to follow, but inspire the journey.

Provide individuals with a clear and concise road map to reduce uncertainty and instill accountability. Sales managers, service managers and parts managers are the key holders to greatness. The burden of dealing with a wide variety or personalities is a job requirement. All department managers must inspire the results they demand. Stay on the lookout for those who look for reasons to fail. Generally, the underachiever will try to find a reason to bring others down while finding fault in something or someone to excuse their mediocrity. Separate the confused from the disillusioned and teach focus and discipline. Regardless, there will still be those that refuse to see the light of opportunity. These select few individuals have a motivational meter that cannot be moved no matter the effort. If you find these individuals on your showroom floor, service drive or parts counter, waste no time. Call in the exterminator and eliminate the problem before it festers and grows. The response from employees who are working towards the common goals of the dealership will be positive, if they understand the negative forces will be removed from their work environment.

In the end, the responsibility of any manager is to inspire those that work with them. Our job is to fire them up…not fire them.

Gas or Brakes: The momentum of your team

2011-07-20T11:47:00.000-07:00

How do we get our people, the culture, aligned with the strategies so that everyone is committed to the strategy? How do we unleash the creativity, resourcefulness, talent, and energy of our team to come together?

Momentum can carry a team through the most challenging times. If the foundation is void of fundamental leadership skills, the team can decelerate quickly at the first sign of adversity. The variances in behaviors are dictated by the direction of its leaders. Unlocking the momentum of a team requires an understanding on how to nurture a winning attitude.

Five methods for accelerating the momentum of a winning team:

1. Empowerment at the management level. Building a team requires trust from both parties. When a team works with trust the staff understands what is needed and does their part to contribute. Empowered employees know what is expected, how to accomplish it and what the benefits are.

2.Supervision by motivation. Inspiration doesn't come from instilling fear. Managers that attempt to lead from a pedestal rather than commonality, create adversarial environments. Accelerating leadership requires inspiration through preparation.

3. Performance agreements. Setting an agreed upon performance standard that is reviewed regularly is essential. The employee should be a willing participant in the discussion of skill progression and goal achievement. The performance standards should overlap the dealership needs and the employees’ personal achievement goals. “Inspect what it is you expect”.

4. An environment devoid of negative energy. Nothing kills momentum more than a negative force. There is an amazing amount of energy that is sapped from a team when a negative force is allowed to disrupt the progression of goals. Disruptive individuals that affect the cohesiveness of a team need to be eliminated.

5. Recognition and reward for achievement. When employees are enriched they perform at higher levels. Recognition doesn’t always commensurate with an increase in pay rates. The simplest and most lasting reward is the acknowledgement for a job well done. Improvements are made when positive behavior is reaffirmed and reinforced.

For a team to continue the movement forward, someone has to have their foot on the acceleration. Alignment between structure and shared values, between visions and processes serve to reinforce the strategic paths of an organization.

No Shortcuts! (sorry)

2011-07-20T08:14:00.000-07:00

The secret paths on the journey to sales success do not exist. There are no hidden doorways that inherently lead to a pool of wealth. The trek requires tenacity, perseverance and commitment and is no place for the weak spirited. The route is littered with mediocre, unfulfilled promise and failure. This is especially true for the retail automobile salesperson.

Dealerships across the country are faced with finding motivated individuals to market, present and sell their products. Finding warm bodies to greet the customer doesn't present much of a challenge. There are certainly no shortages of untrained employees willing to peddle their wares for money. The promise of high commissions compared to the amount of work is appealing if not, alluring.

Sales professionalism requires skills practice and enhancement. Top sales associates rely on metrics to help them measure performance. Processes like prospecting, follow-up and establishing relationships are essential tools for building lasting sales success. Professional sales people rely on materials that support their mental and physical stimulation. Top sales people don’t allow the masses to dictate their monthly performance. True professionals rarely have peaks and valleys in their sales from month to month. In sales, the compensation will be commensurate with the effort of the individual.

The secret to successful sales is simple and can be summed into a few short rules. Success comes with having exceptional work ethics combined with immense enthusiasm. Results are consistent with preparation, practice and skills enhancement. Successful ingredients’ include; a great measure of honesty, a touch of humility and a balance of compassion. There is no shortcut's available for real sales excellence.

Sales Managers' strategies to sustained productivity

2011-07-18T09:28:00.000-07:00

Dealing with the today’s informed customers’ is as challenging as any time in history. Information is readily available as dealerships around the country lean on the internet to compete for market share.

Third-party websites’ acting as consumer advocates continue to compete for the attention of the web savvy customer. As information is passed through social media sites, chat rooms and emails it becomes distorted and confusing. Product comparisons and trim levels are easily obtained as a plethora of information is accumulated. Price obtainment is easier today than it was before and the shopper has more options than driving dealer to dealer.

The consumers’ destination is determined by several elements up to and including dealership customer service ratings and overall customer written reviews. Once the dealership becomes a destination place it’s truly up to the salesperson to cement the relationship. That dealership visit experience and not just price indicators are what’s going to make the sale.

Sales managers' have to educate, train and prepare their staff for handling today’s consumer or they will lose more than a sale. The loss won’t merely be existing business; it will lead to the loss of future business as well. The productiveness’ of the sales department and ultimately, the sales associates is in direct proportion to the direction of the sales managers. The old adage “inspect what it is that you expect” is essential in running an effective sales department.

There are several key areas’ that the sales manager(s) are responsible for that should be completed on a regular base. These eight elements serve as essential strategies to sustaining a productive sales department. These eight elements are; training, monitoring, measuring and performance standards, prospecting and follow up and inspiration.

Strategy 1 – Training: Every day the sales management team should be performing fifteen minutes of content related training. Training relates to “teaching a specific skill” or “enhancing a skill." Training is not gathering for a fifteen-minute rant on unrelated topics. Each meeting should consist of a single topic focused on improving or enhancing a specific sales process. The training should always end with a short test on the topics discussed. The point for testing is retention of the material. Rehearsal and practice of the learned skills should be routine.

Strategy 2- Monitoring: The sales manager(s) responsibility is centered on the production of his/her or her sales associates. Therefore; monitoring the activities of those associates is paramount. What are the sales associated doing when they come in for their shift? Providing the staff with action items throughout the day will keep the mind in motion.

Strategy 3 – Measuring and performance standards: Establishing minimum performance guidelines’ are essential for creating a win-win atmosphere. A detailed job description should highlight very specific requirements of the position. Here are a few of the standards that should be outlined:

· Gross revenue production

· Sales volume expectations – minimum of 12 units or store average over 90-days.

· Accurate customer information collection (i.e. email collection at 80%)

· Proper follow up guidelines.

· Product penetration expectations (new cars vs. used cars and aged inventory).

· What the specific measurement standards will be. How the standards will be utilized in the decision making process.

Strategy 4 – Prospecting and Follow up: Timely follow up done in an exact manner produces more effective return customers more frequently. Consistent follow up at regular intervals is the only activity that will ensure steady results leading to endurance and success.

An NADA questionnaire of consumers showed data that nearly 90% of those customers surveyed who didn’t buy on the spot said they were never contacted by the salesperson they talked to. The purchase was made somewhere, just not from the original sales associated.

Building a solid customer base is essential for creating longevity and success selling cars. Sales managers’ are responsible for teaching their sales associates to drive business to the dealership. Prospecting is a process that involves the highest level of commitment and determination. Prospecting is finding consumers to purchase our products and services by utilizing the available resources and identifying those potential buyers.

Strategy 5 – Inspiring: The most important ingredient in the sales process is motivating and inspiring the sales associates. Since the productivity is driven by how successful each sales associate is, it’s imperative that the team stays inspired. Sales manager(s) needs to inspire performance, production and motion. Positive employees are motivated by myriad successes throughout the day. The motivated associate should be regularly recognized, energized and reinforced. People who are the mercy of external forces to help spark enthusiasm are at other people’s mercy.

If momentum stops!

2011-06-15T18:51:00.000-07:00

Throughout the day think about how many times an outside influence has attempted to stop your momentum? One can’t even turn on the radio station without enabler’s who are intent on imposing their agenda; spew their negativity. Can’t even buy a box of Cap’n Crunch cereal without being harassed by impatient Iris complaining about the cost of her mocha late’ thing’a ma jig.

Then there are the newspapers’ printing stories about how bad the supplies of new cars are for dealerships. Experts galore appear out of nowhere to provide “advice” on how to beat the dealer at his/her own game. Open up a web browser at any time from any of the numerous portals and you’ll find articles on “What to do when you buy your next car”.

“I feel sorry for the person who can’t get genuinely excited about his work. Not only will he never be satisfied, but he will never achieve anything worthwhile”

- Walter Chrysler

What’s a person to do when confronted with all that outside manipulation? The answer is easier than it appears; it’s as simple as maintaining enthusiasm. There is no substitute for enthusiasm! When members of a team are enthusiastic, the whole team becomes highly energized. Energy produces power!

Momentum can only be halted when its driving force is allowed to be altered. Smile at impatient Iris, turn off that silly news station, and don’t read those negative articles.

I say booooo to those who don’t see the power of enthusiasm. I take responsibility for my own enthusiasm! Attitude is a choice – and that includes your enthusiasm. Believe in what you do and focusing in on those positive beliefs will help you act and speak positively about what you’re doing. Focus on the purpose and not the outcome!

Leadership: The DNA of Success

2011-06-14T19:41:00.000-07:00

While the experts pontificate on which direction the automobile business is headed, thousands of professionals go about their day totally unaware of the chatter. Intellectual enthusiasts debate the next greatest enhancement to the business as innovators sell their wares. Change, as a necessary evolution; it is as essential as the invention of the integrated circuit was to the computer industry.

Ideas abounded on the internet, can be perceived as complex and contradictive. Media’s experts debate the validity of social media; catchphrases such as search engine marketing, search engine optimization, Facebook and Twitter have replaced traditional dealership vernacular. Manufacturers have re-directed their marketing efforts to include online marketing campaigns in hopes of capturing product defectors. Dealers are in a constant struggle for market gains while controlling expenses that drain revenue. In search of the quick fix, cure all mentality; some dealers have chosen to modify their staff frequently in an effort to capture lost sales. Somewhere in this maze of dialect is a real resolution to the myriad of issues that plague our industry.

Creative, forward thinking professionals are the catalysts for change in our business. Innovators are creating new streams of revenue utilizing cutting edge forms of communication. The internet has forced dealership management to re-think the conventional pricing policies that have been dogged for years. Dealers’ and their management teams have had to alter their approach to owner retention while managing their online reputation. Successful dealerships are constantly reinventing themselves through the experimentation of ideas. Make no mistake about it; the entrepreneurial spirit lives on in the automotive world.

What qualities do leaders possess that enable them to make things happen?

1. They know what they want. Leaders instinctively know what they want and do what they need to do to accomplish that goal.

2. They push themselves to act on what they want. Results come because the leader takes action to accomplish their goals. Leaders do not allow distractions to dictate their actions.

3. They are willing to take more risks. Leaders are willing to put themselves out there with disregard for failure. Leaders will take chances that traditionally a follower will not.

4. They make more mistakes. Leaders are willing to put themselves into position to fail. Failure is often viewed as learned behavior.

5. They take responsibility for their failures and share their successes. Leaders take responsibility for the mistakes they make and never pass blame onto others when a failure occurs. On the contrary, leaders will always share the successes with willing participants.

Development of true leadership is a prerequisite to successful dealership operations. Dealers need to cultivate leadership qualities from a variety of personnel. Leaders embrace the honor of mentoring others and generally receive more in return than given. Profitable dealerships have sustainability because the focus is on building leaders within their organizations. Leadership is paramount for continued growth and prosperity. Within the genetic structure of successful dealership there must be a driven leader.

The WOW factor

2011-05-21T10:32:00.000-07:00

Take a stroll through any search engine for a new car and see what you find. There is an array of results varying from the pay per click to the simple organic search. The generic search would show vehicle postings, dealership reviews, website links and video links.

The average consumer is inundated with information pertaining to their search. Dealerships are plagued by a multitude of links that provide information unfortunately, not all the information is accurate. Nevertheless, the information is there for the decision maker. The customer will funnel down the review and decide which pieces are accurate.

Reviews can be written by a myriad of individuals from unsatisfied customers to a disgruntled ex-employee. The fairness of the revue is rarely taken into consideration in determining if the dealership is a place to visit or not. Dealerships that fail to manage their online personality are sure to collapse under the weight of negative reviews.

Relationship management is the buzz words of today’s dealership environment. The primary market area of the local dealer is no longer just in their backyard. Customers’ will come from miles away after reading multiple positive reviews. Consequently, customers’ will avoid your dealership for a negative review and no amount of “advertising” dollars will bring them in. The best management tool a dealership has is its voice of customer. Reviews intended as a voice for the customer to explain frustrations can be negative or positive depending upon the reaction. That is, if there is a reaction at all!

More times than not, the customers’ want to be understood and not just heard. The complaint can turn into a dispute as quickly as a match can spark a fire. At the same time, posting a concern can be the only way a customer feels their message get out. Read the review in full, for the complete explanation and withhold any judgments as to guilt or innocence. If necessary, walk away from the review prior to answering so the information is processed without bias. Answer the criticism and/or compliment with caution. Thank the customer for posting the comment and respond with compassion and/or gratitude for the post. Be brief but informative and acknowledge when there is a process failure. If there is a wrong offer to make it right. Do not offer anything free that might be viewed as a bribe to win over the customer. Remember, that everything that is posted online stays online for others to read.

Customer complaints used to be limited to the exposure they held. In other words, the complaint was confined to their small circle of influence. With the advent of social media that limited exposure is no longer accurate. Dissatisfaction with dealerships services or people can literally travel across the states within a few hours. The debate gets exasperated by others that are well outside the dealerships primary market area. Avoidance to negative posts will inflame additional posts within a blog or chat room. The damages can be irreversible but manageable. The goal is to negate any review that might reflect poorly on the dealership.

Due to the growth of social media dealerships have been hiring staff to assist with the management of their virtual reputation. Professionals, who understand the complexity and fluency of social media, are invaluable in today’s dealership environment. A typical brick and mortar dealership is easier to manage when the review is visible and tangible. The virtual review might be unnoticed and blossom under the guise of ignorance.

The typical customer who has a complaint about a process or service failure is concerned with the solution. A dealership is more likely to retain that unsatisfied customer when the complaint is addressed quickly and efficiently. Resolutions are often simple and cost little yet are long lasting and build loyalty. The WOW factor isn’t always giving money away but rather providing alternatives that solve the problem and provide the feeling that the dealership genuinely cares. When there is a failure, that failure can be traced back to either a people problem or a process problem. Most times, the complaint stems from an employee failing to follow an established process. Shortcuts generate inconsistencies, which lead to poor results.

If the dealership cannot WOW the customer than it better win them over. The cost of winning over a customer by taking responsibility for a failure will pay dividends through repeat business. Consequently, failure to acknowledge a complaint will reverse any momentum that is spent in advertising dollars.

Capture those lost sales in the service drive

2011-05-19T15:07:00.000-07:00

Generally, dealerships only measure the tangibles such as; hours per repair order, effective labor rates, sold hours and proficiency. Often, these indices tell a great deal about the performance of the department. One of the challenges of any dealership service facility is managing the opportunities.

Each metric is finely tuned to provide insight into the sales performance of the service department. It’s typical for a dealership to measure sales. However, the challenge is coming up with an accurate measurement tool for those unsold customers. Perhaps, the best thing to do is to ask better questions? What happens to those customers who do not purchase service items with you? Is there a measurement to determine the effectiveness of those lost sales?

Here is an outline for asking better questions:

• How many customers leave the service drive without buying the services offered? Dealerships keep very tight reigns on showroom floor traffic, but not their service drive traffic. What if the customer was leaving the dealership only to drive four miles down the road to a non-factory competitor? Who, by the way, is purchasing their parts from your dealership?!

• Do we know why the customer said “no”? Customers come into the dealership because they have a concern. Whether that concern is mechanically related or maintenance related. Investigating prices is the beginning stages of their process. Yes, price is an issue just as getting a “great deal” on a new or used car. The value is in selling the customer “why” they need to use genuine factory parts. If the cost alone were the issue, customers would never come into a dealership. The perception that dealership services cost more than the independent is alive and thriving. Service manager’s need to find out why the customer is saying “no” to their offerings.

• Do we have an effective method for tracking those lost sales? Tracking the lost sales is the key element needed for improving the results.

• Do we know how many dollars are leaving the dealership? To determine lost sales in the showroom, the dealership divides the number of sales lost by average sales gross profits. The service drive operation can do the same calculation. Determine the number of lost sales or the number of customers who said no to the service offering. Take the lost sales and divide them into the average sales per repair order. That number will be the total revenue lost per month.

• Is there a “closer” in the service drive? Would the customer leave the showroom floor without getting a visit from the “closer”? Chances are that the “closer” would either make the final effort to make the deal or at the very least make that follow up call. While it’s accurate to say that the service drive is a different sale, the goal remains the same. The closer in the service drive is either an assistant manager or the service manager. A subtle attempts to “close” the sale can and will add revenue every month.

The decision to fix or repair a car has taken a back seat to larger problems in this economy. Perception is that dealerships cost more money for repairs. If the customer can save a buck or two by using an aftermarket provider, they will say no to the dealer and bring it to the city garage. Competition for the customers’ attention has grown substantially over the past five years. Independent facilities have captured millions of dollars in revenues from the dealerships units in operations.

There are many different ways to address the issue of lost sales in the service. Here is just one solution to assist with implementing a process to measure and capture lost sales.

Step 1: Make an “op” code for the service advisor for all work offered but not purchased. One suggested “op” code is ASR (Additional Service Recommended). The service manager must drill into the service advisors head that logging the “op” code is not optional and will bring incremental business back to the team.

Step 2: Pull the “op” code report weekly to review the number of lost sales. All lost sale customers’ in that op code gets either (a) a phone call from your Service Manager (b) a follow up phone call from your BDC or appointment setter (c)an email from the dealership.

Step 3: Find out why the customer declined the work.

• Many customers have time issues and were planning on returning at a later date for the repairs. Extend a free rental to them if they come in sooner.

• Some will say the cost was too high right. Review the services offered and give them a good, better and best scenario. Sometimes the customer could get away with a small repair and perform the larger repair at a later date, when they have more money. The dealership may be able to capture that business.

• Offer the customer a discount to perform those services by the end of the month. A common discount amount is 15% but the value should be commensurate with the services declined. Bigger services that bring in time and money will warrant a larger discount.

Results:

The best case scenario is the customer’s coming back and the dealership is selling services. By monitoring and measuring lost sales in the service drive all sorts of data will present itself. Training solutions will come about from the lost opportunities. Advisors will learn from unsuccessful presentations and be more aware, of how they’re communicating the needs. If anything is accomplished then the dealership picks up incremental sales, advisors produce more hours, technicians get more work and the parts department sells more parts. Take the step today to start tracking your lost sales in the service drive.

Just do your job

2011-04-06T09:02:00.001-07:00

The day after the big game is when the analysis begins. In the car business, the “big game” is our weekends, right?

Isn’t it true that the preparation leading up to the big game is where it’s won or lost? There’s practice, game-planning, video review and rehearsal runs. When it’s time for the game to start the players all know their roles and where they are supposed to be in order for the team to win. The last phase is the execution of the game-plan, right? I recall seeing a video somewhere of a great coach giving his pre-game speech. He told his players to “just do your job”. It sounds simple, yet that key phrase was the catalyst for their most important victory. Each employee (or teammate) was instructed to concentrate on doing their part of the game-plan.

The weekend sales results will be in direct correlation to the preparation leading up to it. Does the staff “do their job”? Are the sales people sharpening their skills through rehearsal (practice sessions) with management? Rehearsal runs are an important part of preparation. Knowing the word tracks, proper greetings and presentation skills are paramount. Are they preparing properly by following up existing customers and setting appointments for the upcoming weekend? Phone calls should go out two hours after the guest leaves the dealership without your product. Emails should provide reasons for enhancing your product and dealership. Text messages (if applicable) should be short and to the point. Invitations to return should be immediate. Are the sales managers performing menial tasks instead of working one on one with each salesperson? Sales managers should be working with sales people driving traffic, getting return traffic or planting the seeds for future traffic. Daily reviews of deals should be done with one goal in mind. How do we take a potential guest and turn them into a sold guest. Is the team working on what their roles will be in order to ensure a winning weekend?

While it’s simple to second guess mediocre weekend results, it’s much more important to analyze the innate details of why the weekend was or was not a success. I believe you have to ask better questions if you want to get better results. If a salesperson had a bad weekend you need to know why? Don't ask for a simplistic answer either. You need to look at the more complex answer. Did they prepare? Did they practice, drill and rehearse their role? Did that salesperson watch video? Not video of the customer, mind you. Did they watch a training video of the product they’re selling or one of thousands of free videos online from some of our industry’s best sales trainers? Alternatively, are they too busy worrying about what they might miss walking through the door?

The service drive offers extensive opportunities that rarely are utilized. Every day a customer drives into the service department with an older product that any dealership could use on their respective used car lot. The product improvements made on your brand from year to year could be substantial to the guest that’s driving a one to three year old car. Some guests don’t know that they could be driving a current year model with better features for about what they’re paying right now. It is the sales department’s role to inform the guest of those options. One to two salespeople should be scheduled to work the with the service advisors in the drive every day. The only goal should be to offer to show the product enhancements to those potential guests. Managers should demand that a select number of presentations happen every day. The practice presentations will reinforce the desired learned behavior. Trade evaluations and offers to purchase should be made to each customer.

“Just do your job” is a simple reminder of the brilliance of that coach. Everyone had an integral part of the teams overall success. We want to look at our coaches (sales managers) as well, to make sure they’re doing their part. Are they preparing everyone for a successful weekend? Is the sales manager(s) coaching for improvement? Are they demanding a certain level of performance from all their players?

I don’t think it would be fair to judge one weekend on its individual results – good or bad. Every team will experience a difficult loss. The difference, the best prepared teams will have fewer losses than those who don’t prepare at all. Next time you find yourself second guessing your weekend results ask better questions. Results are driven through consistency and expectations.

The most important ingredient

2011-03-23T11:47:00.000-07:00

Elements combined together are referred to as ingredients’. When these combinations of elements are blended they create a desirable product. We typically view ingredients as a mixture created to enhance a product. What if we were to analyze the ingredients needed to create the perfect salesperson?

We could go on forever in this article, outlining which ingredients are needed to create the perfect salesperson. In the interest of space and time, however; let’s call this a short summary rather than a complete list.

Enthusiasm: The perfect salesperson would have an abundance of enthusiasm for assisting customers. A no-fear, conquer all mentality.

Compassion: One doesn’t succeed by stepping over others. Compassion is having the desire to help customers who truly need professional advice and service.

Innate ability to listen: When a professional salesperson “listens” to his/her customer they truly hear what the concerns and needs are and don’t anticipate what they might be. Only then, do they take what has been learned from listening and propose a solution that meets or exceeds the needs of the customer.

Professionalism: Professional people “work” for a living. The true professionals come to work to work and not to socialize. Professionals practice their profession by continuing their education, improve their skills by attending seminars and are constantly searching for new ways to better their products and services.

Honesty/Trust worthy: While being honest appears to be a logical element of the perfect salesperson, it’s certainly not a given. Professionals don’t need to lie or miss-represent themselves to sell their products.

Good work ethics: The perfect salesperson has no need for down-time. They’re busy working on creating business for themselves for tomorrow and the day after. They’re generally cut from the first one in, last one out, mold.

Has ability to create value: Value as its perceived is different for every customer. The professional knows how present their product in a light that creates value for the customer. A simple listing of features is not enough and value is only created when it fills a need, value alone does not necessitate desire.

Is healthy emotionally, spiritually and physically: A physically healthy person exudes happiness and happiness creates calmness and confidence. Spirituality provides the balance in everyday life and gives humility in light of success. Emotional happiness is the business component necessary to go to work each day. If you hate coming to work it will appear evident, consequently if you love the challenge of work…it becomes something tangible.

Closer: The perfect salesperson knows how to ask for the sale but only after they have earned that right. Closing the sale can only happen if it is opened properly and the perfect salesperson knows how to open the sale. Persuasion allows a potential guest the permission to accept the proposal that solves a need.

Competitor: The perfect salesperson is a competitor who puts all his/her efforts into achieving the highest levels of personal and professional success. They are always competing with themselves and others for the prize of a sale. A competitor never relies on their successes to catapult them into their next success but rather they always look for ways to improve. A competitor hates to lose a sale, regardless of the circumstances. A lost sale proposes a weakness and that weakness is what drives the perfect salesperson towards achievement.

It is difficult to summarize the potential for greatness and wrap it up in a neat little package. Most of these attributes can be learned and duplicated. I recommend finding a mentor who is capable of showing you the path to getting the desired results. I used the term perfect salesperson as a metaphor to explain how greatness can be achieved. Nothing takes the place of good old fashion hard work ethics.

Active Delivery: Service to create loyalty not just satisfaction:

2011-03-19T09:12:00.000-07:00

As a trusted Service Advisor, you are the point of contact that the guest has when he/she drops their vehicle off for repair. The concern of the guest is simple: Have you repaired/completed the original issue that I visited for?

While every dealership has their own policies regarding active delivery; the one common thread is that it needs to be completed with detail and efficiency.

Here are some simple rules to help prepare for an active-service delivery:

Review the completed R.O. and make sure all the work has been performed as the customer requested.
Compare the individual charges for labor and parts to the work performed and compare the total charges to the estimate. Immediately investigate any discrepancies’.
Review the service technician’s explanations for the work performed. Make sure the explanation is clear, concise and compliant with Bureau of Automotive Repair guides.
Make sure that what you are communicating is clear so that the guest can reasonably understand the R.O.
Flag and close out the completed R.O. Enter labor information, technician comments and recommended additional repairs.
Make sure the parts department has posted the parts correctly on R.O.
Ensure that the vehicle has been quality-checked (QC) as needed, and place any old parts in the vehicle if the guest has requested them. Make sure those parts are contained in a plastic bag.
Make sure the vehicle is in the same condition it was in when the customer dropped it off.
Call the customer:

Review the completed R.O., and explain all work done to the vehicle including explanation of the total charges.
Advise the customer of parts that had to be special ordered (if applicable) and their arrival date.
Alert the customer to the next scheduled maintenance. Offer to make the appointment now for the next scheduled appointment.
Confirm the method of payment
Explain the active-delivery procedure.

10. Deliver the hard copy of the RO to the cashier to final posting. Update the cashier of anything related to the guest’s arrival such as; coupons,discounts or late/early pickup.

Active-service delivery:

Since you are the point of contact you should be the person to greet your guest(s) when they pick up their vehicle. The guest(s) should feel connected to the advisor and this hands-on approach is the process.

1. Greet the guest(s) with a warm and sincere welcome. Review the “three W’s”

What we did?
Why we did it?
When we would like to see you come back again?

2. If you have not already done so, review the invoice, replaced parts, charges, maintenance items, and additional work.
3. Make sure the guest(s) is completely satisfied with the service experience. Answer all questions. If there is a concern about the work that you cannot answer, arrange for them to speak directly with the technician.
4. Escort the guest(s) to the cashier and have the vehicle brought to the reception area.
5. Look the vehicle over again. Make sure all seat covers, and paper floor mats are removed. Remove the replaced parts if the guest does not wish to keep them. In the event that the guest wants to inspect warranty parts, be sure they are returned to the parts department.
6. Give the guest(s) your contact card and remember to “thank them”! Remind the guest(s) that the dealership will make a follow up call within a few days to be sure the guest(s) is completely satisfied. Ask for a preferred time if possible.

A seamless active delivery creates confidence in your ability to serve the guest(s). Since you are selling an intangible product, you must build value through detailed information. A good active delivery will reduce the amount of uncertainty a guest(s) may have while improving the perception of value. Generally, guest(s) who pick up their vehicle at the end of the day are rushed. They want to get in and get out and rarely have time to waste waiting for their vehicle. The guest(s) lasting impression is upon departure and rarely on the greeting.

You are what you surround yourself with

2011-03-16T08:41:00.000-07:00

Watch the morning coffee clutch gather for their morning ritual. Try to listen in to what the tone of the day is going to be. Are they focused in on trying to solve the world’s political problems? Maybe the tone will be centered on global warming, or the price of oil? There’s always that center-of-attention person trying to steer the conversation towards what’s not happening rather than what is happening.

If you were to observe the attention grabbing lieutenant you might be able to see the driving force behind his/her failures. Generally speaking, the disruption in the mental psyche of the staff stems from the provocation of this person. However, noticeably missing from this collective group of disenchanted mourners is the top producer. Coincidently, the top producer is “busy” working at his/her game-plan for the day. They’re following up on unsold customers, greeting existing customers in the service drive, mailing out thank you cards, sending e-mail blasts and prospecting for future business. Truth be told, they don’t have the time to sit around and talk about world issues.

The remainder of the staff which support the coffee clutch group generally make up the bottom third of sales for the dealership. Those underachievers wonder why top producers stay at the top and consistently make more money. Some are content watching sales being conducted around them while they ponder why no customers’ are walking through their front door. Often, the underachiever will look at the production of a top-tier producer and write off their success as luck. The common theme from the unproductive is that the top-tier sales producer gets “house” deals or seems to always be in the right place at the right time. It’s no wonder the elite is in the right place most of the time. They put themselves in the position to do just that. They’re not off smoking cigarettes, on a relentless coffee break, running errands or conveniently unavailable when a group of young buyers stroll on the lot.

It’s been said that cancer starts within a single cell. Those cells don’t always appear abnormal at first glance. The change is when the cell mutates and begins to grow beyond its normal capacity. Cancer cells show themselves in many different forms, everything from the seriously destructive to the non-lethal form. The treatment for cancer isn’t always the equal and varies based on the severity. The intellectual cancer who appears on your showroom needs to be managed much the same, as the severity of the destructive behavior dictates the treatment.

Surrounding your sales department with positive productive people is essential to a successful sales environment. In every dealership there are the “edgers”- that is the small group usually consisting of one to two people who are on the edge of greatness. The “edger’s” want to be great, they think there is a possibility of greatness but just cannot see the light yet. The “edger’s” haven’t been poisoned yet but rather misdirected by the masses to mediocre. These are the people we need to direct and save from the mundane.

Monitoring the coffee clutch group will allow you to take the pulse of your sales department. Clearly, the productive staff will manage their own motivation. However; the motivation of those peering upwards will need to be adjusted. The focus of the department manager is to help stagnate the negative behavior. Finding the motivation for every employee of the sales department can become trying. Heck, sometimes finding the motivation for ourselves can be a test. Not all employees need to be rewarded financially to realize their motivational potential. Just having a manager from any department recognizing an employee for even the smallest of successes is a motivator.

In the end, it’s the mood of the coffee clutch that tells you what’s happening in and around a dealership. If the tension in the showroom is transparent to management, then one can only imagine what the customer is likely to feel and see. Don’t allow the undercurrent of the coffee clutch to affect the dealership performance. Work to disrupt the course of their unplanned meeting by offering constructive solutions to their downtime. Disrupt the mental conditioning the unproductive are creating by giving the group a list of tasks to promote intellectual stimulation.

A lot of great leaders have said that enthusiasm was the single most important ingredient to their achievement in success. Certainly, enthusiasm is at the very center of selling success. However; persistence, ability, effort and other attributes contribute to the overall success of a professional. Without enthusiasm even the greatest of intentions get shot down before they are ever presented.

Lost Sales

2011-03-16T08:26:00.000-07:00

Lost sales are an everyday occurrence in our business. A dropped phone call, misplaced pressure by a salesperson or a simple failure to communicate, all creates lost sales. Tracking is only one component of a lost sale; the most critical ingredient is in the process of following up. Does a dealership have specific, measurable methods to determine what that lost sale equates to in "lost revenue" and more importantly, how that "lost revenue" affects the employee? Here are just a couple of tracking methods for lost sales and the process of follow up:

1. Track all inbound sales calls and who took the call. Find out what the outcome was and listen to the call to use as an opportunity to train.
2. Track all declined work through an "op" code in service. Make the advisors post that lost sale and what was declined. Follow up that op code utilizing phone calls and e-blasts.
3. Track the lost sales in parts daily. Post all true lost sales in your DMS so that you can see the sales request for that part. It will allow you to determine if your depth or breadth should be greater.
4. Track daily and weekly your inbound internet requests and what the response rate is.
5. Track and measure your SEO/SEM by reviewing your SRP vs. VDP. If you’re consistently fewer than 3% return you may have a placement issue.

Lastly, I believe it’s important to review the value of a lost sale. We often talk about being “fired” by a non-returning guest. Once that customer fires you – no amount of money will buy them back. Why spend advertising dollars trying to capture new sales when you could just as easily spend that money on keeping the ones you have?

True Professionals

2010-12-01T19:29:00.000-08:00

The struggle for a competitive edge requires skill enhancement. The techniques of yesterday are no longer acceptable tools. Knowledge of products, technology and problem solving all take on new meaning while working with today’s customer.

Customers no longer accept mediocre presentations, canned closing questions and product demonstrations that lack comprehensive knowledge. The customer is and will continue to be, more prepared for the buying process. They will ask questions that an untrained salesperson will not be able to answer. Customers will come prepared with product comparison data, pricing parameters and have a solid understanding of the value of their trade-in.

Salespeople will need to be more prepared than ever to compete for a customer’s business. Customers aren't necessarily interested price comparisons so much as they are assessing the salespersons' knowledge. The preparation of the salesperson will ultimately determine whether or not a vehicle is sold. Average is no longer acceptable to the buying public.

Allowing staff to go about today as they did yesterday will ensure regression. A salesperson attempting to sell automobiles while failing to improve his/her skills will most certainly be unproductive. Technicians must constantly be tested and retrained on their skill set. Their training consists of updated modules, technical service bulletins, and renewals of certifications. Doctors, attorneys’, CPA’s and other professionals are continuously being trained on the latest technology. Athletes’ and coaches are constantly reinventing themselves and their playbooks to become more competitive in their environment. All of these people share one common thread; they are professionals.

True professionals invest in themselves, reinvent their approach and work on improvement of their skills. The book store has a multitude of books on the newest sales advances from outside our industry. A small investment in a seminar from one of the many outstanding innovators in our business could and often do, lead to skills' enhancement.

There are a lot of rumblings around our industry that the Internet will be the only avenue to purchase a car in the next few years. The perception...the “salesperson” is no longer needed. The assumption is that the buying process will be completed online without having to visit a dealership. If you believe that, get out of the business now. Do not look back, move on and enjoy being a greeter at one of those big box stores!

Professional people embrace technology and the advancement of processes. Long gone are the days of unmotivated and unprofessional salespeople. Customers demand more from their car buying experience. If you don’t give them the experience they deserve, no price will be low enough to keep them. In general, most showroom floors have lacked the work ethics needed to progress. The demand on the business has been strenuous as the market drifted from a seller’s market to a buyer’s market. Dealerships of all sizes needed to adjust their budgets to fewer cars at smaller profit margins. Discretional expenses such as training have been either eliminated altogether or depleted to cover only the essential. During that time, the internet has grown exponentially. Social networking has given consumers more power than ever and that will only continue to grow. Chat rooms, buying clubs, online reviews and other social media provide an endless stream of information. Buying decisions are made every day based on information provided on the web. Whether or not the information is accurate or not is, not relevant.

The sales process has evolved, this much is true. The evolution is knowledge and not the deletion of professional salespeople. What customers want, is to have honest answers to tough questions, unbiased responses to product comparisons and a non-confrontational buying process. Sound familiar? It should because it hasn’t changed in years. Ultimately, customers will decide who gets to stay in business and who doesn’t.

Got Attitude?

2010-07-14T12:27:00.000-07:00

Momentum is a funny thing. There are so many negative influences on momentum. Often, the lack of momentum itself is a negative influence. We have grand plans and ideas of what should be, could be or would be, if only…

We can find all sorts of reasons not to get started can’t we? The news has a great influence on how consumers react to the market. Friends, family and co-workers have influence over your reaction to the environment around you. Sometimes those influences can be positive and reaffirming and other times, they can be detrimental. The recent downturn in the automobile industry is a perfect example of how negative news can affect an entire organization.

So, I started wondering. If there were no momentum and people around you were a constant reminder of how bad things were, how would you react? Would you agree with the naysayers? Would you lend support to their argument on how bad things are? Would you stop looking for opportunities and start seeing all the hints that are apparent if you had your antennae on?

I had a very good friend who became a casualty of the downsizing of a rather large corporation. He had ever reason to be depressed, upset and marginalized. He had plenty of support to feel that way as well. He actually responded to the “supporters” that this was the break he needed! He was excited about the unlimited opportunities that his situation provided. He enrolled back in school with the concept of reinvigorating himself again. He had already had his Masters’ degree. Still, he wanted more. Why?

He sent out numerous resumes, went on plenty of interviews and competed with hundreds for a single job. Although the outlook was not good, he kept a positive attitude. After being unsuccessful in finding a job, he had what he considered “mini success”. Those mini successes taught him how to go after what he had wanted to do his whole life, to be a teacher. He didn’t become a school teacher in the true sense of the word, instead he became a consultant. His passion was showing others how to get the most out of their business by performing more efficiently. Now, he’s considered a “go-to” guy in his field and is looked on as a guru of sorts. Imagine that! He had every reason to quit, to give in and to allow the “supporters” convince him that it wasn’t good news to lose his job. He refused to believe that and instead let it be his “blessing”. In the end – as he puts it, “losing his job brought him to realize his passion”.

The momentum for my friend was losing his job. He took the apparent negative momentum and turned it into positive momentum. Why can’t you do the same thing? Every manufacture is offering ridiculous incentives to promote their brands. The down economy is the best time to take advantage of these crazy offers. Why don’t you create momentum by offering those deals to your existing customers? You won’t have to go far! Those guests’s are arriving every day in your service and parts departments. Look outside your four windows and see what is beyond the showroom. There is plenty of guest’s waiting for you to let them know what is possible. Go find them!
You can be a victim, or you can take advantage.

The real question is whether or not you got attitude?

Don't let opportunities pass you by

2010-06-23T09:02:00.000-07:00

Just the other day, I witnessed a salesperson sitting at a desk reading the newspaper. I watched at a distance while at least five guests came walking out through the service waiting area into the showroom. Not one of those guests was greeted with a warm and sincere smile, nor were they offered any information on current incentive programs.

I suppose that the salesperson assumed since the guests’ were in service, there was no apparent reason to show any excitement? I watched the salesperson sip coffee while guest’s walked over to the brochure counter and perused through the material. I watched as a husband and wife who had just dropped off their late model car for service, walked the new car lot. I wondered to myself, what could be so captivating that it could keep that salesperson from greeting a guest?

The service drive started to back up as a variety of years and models rode in through the drive. Not once did this salesperson even glance up from this captivating article. It was obvious the salesperson was so immersed in the article that he hadn’t heard me approach from the side. I peered over his shoulder to see what the article was written about, and I was taken back. The article, was something like (and I’m paraphrasing here), How the economy has affected the automobile business.

I must have startled him with my outraged because he turned to look at me like he had seen a ghost. I simply said “isn’t it ironic”? He responds by saying “what do you mean?” With my index finger about to punch a hole in the desk, I pointed at the article. I could tell there was no indication the salesperson knew what I was talking about by the blank puzzled stare.

I said, “You’re reading an article that talks about how things are slow, and I’ll bet you are in agreement with the article, am I right?” With an air of confidence the reply was “yea, the article hit it on the head no one is buying anything now”. “You’re correct!” I said and paused for an agreement. Just as if I had given permission, the salesperson added “people are scared of the economy these days”.

I had to explain the irony in the situation since this salesperson hadn’t begun to realize the opportunities. Guest’s coming and going every minute of the day with at least the idea of being sold on the dealership! All that salesperson would have to do is show the value and relate how the new product could benefit the guest. Chances are at the very least, that would provide multiple opportunities to practice a quality presentation. If the product was good enough to present and demonstrate the value, there might be a chance to offer the guest an upgrade. In fact, with the factory incentives it’s quite likely that the guest might be able to upgrade their car for less money! That would be a benefit would it not?

Look, the truth is that there are plenty of guests out there who would like to know what the value of their vehicle is. That value might help determine if it were possible to upgrade to a new product with little or no money down. Instead of waiting for something to happen, next time go out and make it happen.

You might have to show your product multiple times in order to get the chance to offer an upgrade. It has been said “it’s better to be proactive than not active at all”. I'm not sure who said that, but I'm sure they understood the power of motion. Moving forward towards an objective is often more efficient than waiting for the objective to come to you. Do not allow yourself to sit idle while opportunities continue to present themselves. You have to be willing to see the opportunity in order to take advantage of it.

Managing Special Order Parts Process

2010-06-12T09:03:00.000-07:00

Controlling a dealerships cash flow is an important aspect for the Parts Department. One of the easiest components to manage is Special Order Parts (SOP). If you are like most parts managers the area of handling SOP is a difficult one at best. At times I am sure you are the only one who appears to be concerned about it in your dealership. There’s almost a free for all with ordering SOP and little is done in the way of processes to control it.

Most processes fail because there is disconnect in understanding the processes involved. What is perceived as a process for the parts personnel is considered a burden by the service advisors. Service Advisors don’t take the time to understand why the process is in place because it doesn’t directly affect them. Probably, the most difficult of tasks is to get all affected parties in agreement as to how SOP’s should be handled. In the end, it is the Parts Managers job to control and manage his/her SOP.

If the Special Order Parts process is not controlled adequately, there will be an abundance of obsolescence. The cash flow sitting in unwanted and/or unused SOP’s can be insurmountable for a Parts Manager. Although the return process varies from factory to factory, its generally true that the obsolete SOP’s are non-returnable. This costly failure in process management is the reason most parts managers lose their job.

Below is a simple outline of a procedure to help manage and control the SOP process. Now remember, this is an “outline” and the needs of each dealership will control the variations of this simple control method.

1. Develop a bin system by week. Have a separate bin or location for each week of the month. There will need to be four separate bins for each week. Label them accordingly.

2. There should be a separate bin for each service advisor employed. Label each bin separately according to the service advisor.

a. For example; Service advisor John has bin 1 which would stretch across each week. Service advisor Jenna will have bin 2 for each week of the month and so on.

3. When a SOP order is placed – you put that order into the appropriate week and service advisor bin.

4. As the weeks progress you will now have multiple orders by service advisor and by the week in which it had been originally ordered.

5. At a glance anyone can see who ordered the SOP and in what week they were ordered. Then as the weeks progress the parts department can tell the advisor that there is an SOP in week 1 that has not come by to pick up their parts.

Here is a diagram for what we mean:

Week 1 Week 2 Week 3 Week 4

John

Jen

Mark

Tom

The control and utilization of the bin process lays entirely with the Parts Manager. The Parts manager will need close communication with the appointment setter, the service advisors and most importantly, the Service manager. Each service advisor is responsible for their individual SOP and the scheduling of the appropriate replacement/repair of the SOP. The parts manager will monitor by the week any SOP orders and the scheduling process. If the SOP is not repaired/replaced within an 18-20 day time period- the SOP is returned to the factory. There should be a hard-line date placed by the parts manager for returning unused SOP’s. The flexibility should be at the discretion of the parts manager and not the service manager. Service managers will always err on the side of the advisor and want to hold out as long as possible. The burden of aged parts and SOP’s lies with the parts manager and therefore the decisions of returns should always be within the parts department.

In the weekly or bi-weekly management meeting report the parts manager should have to report on the status of all SOP’s. The report should include aging for both warranty and non-warranty related SOP’s, the status of the SOP appointments and the return process.

This is a simple process which allows the dealership to monitor service advisors and the SOP orders. It does not become a cure all and like any process requires diligence and communication. The most important tool to help control and manage the SOP’s is to have a process. A process that is fixed and monitored daily, weekly and monthly. Good luck with your Special Order Parts and remember to review it often so that it doesn’t become too big to manage.

Got Attitude?

2010-05-29T09:50:00.000-07:00

Momentum is a funny thing. There are so many negative influences on momentum. Often, the lack of momentum itself is a negative influence. We have grand plans and ideas of what should be, could be or would be, if only…

We can find all sorts of reasons not to get started can’t we? The news has a great influence on how consumers react to the market. Friends, family and co-workers have influence over your reaction to the environment around you.

Sometimes those influences can be positive and reaffirming and other times, they can be detrimental. The recent downturn in the automobile industry is a perfect example of how negative news can affect an entire organization.

So, I started wondering. If there were no momentum and people around you were a constant reminder of how bad things were, how would you react? Would you agree with the naysayers? Would you lend support to their argument on how bad things are? Would you stop looking for the opportunities and all the hints that are apparent if you had your antennae on?

I had a very good friend who became a casualty of the downsizing of a rather large corporation. He had every reason to be depressed, upset and marginalized. He had plenty of support to feel that way as well. He actually responded to the “supporters” that this was the break he needed! He was excited about the unlimited opportunities that his situation provided. He enrolled back in school with the concept of reinvigorating himself again. He had already had his Masters’ degree. Still, he wanted more. Why?

He sent out numerous resumes, went on plenty of interviews and competed with hundreds for a single job. Although the outlook was not good, he kept a positive attitude. After being unsuccessful in finding a job, he had what he considered “mini success”. Those mini successes taught him how to go after what he had wanted to do his whole life, to be a teacher. He didn’t become a school teacher in the true sense of the word, instead he became a consultant. His passion was showing others how to get the most out of their business by performing more efficiently. Now, he’s considered a “go-to” guy in his field and is looked on as a guru of sorts. Imagine that! He had every reason to quit, to give in and to allow the “supporters” convince him that it wasn’t good news to lose his job. He refused to believe that and instead let it be his “blessing”. In the end – as he puts it, “losing his job brought him to realize his passion”.

The momentum for my friend was losing his job. He took the apparent negative momentum and turned it into positive momentum. Why can’t you do the same thing? Every manufacture is offering ridiculous incentives to promote their brands. The down economy is the best time to take advantage of these crazy offers. Why don’t you create momentum by offering those deals to your existing customers? You won’t have to go far! Those guests’s are arriving every day in your service and parts departments. Look outside your four windows and see what is beyond the showroom. There is plenty of guest’s waiting for you to let them know what is possible. Go find them!

You can be a victim, or you can take advantage. The real question is whether or not you got attitude?

If you believe...it will happen

2010-05-05T10:34:00.000-07:00

As salespeople we are always trying to change our behavior to achieve a desired outcome. All sorts of influences, occurrences and issues control our mindset. We can be excited about a new product or, deterred by an aging product. We can be unmoved by consumer interest level of a brand or a model segment.

Ultimately, our motivating factors are what determine our general success or failure for a given month. If you believe that sales is “90% motivation and 10% perspiration” than you know how important the power of belief is. One cannot deny the outside environment can have a cause and effect on business. The economy is an example of how the outside environment can dictate the pace of business. Growth still happens regardless of outside influences as many success stories dot the automotive landscape.

Salespeople can be inundated with material that suggests ways to improve skills, manage time, and learn how to prospect and how to stay motivated. The material is plentiful if the salesperson is willing to invest. With the advent of the internet, the tools have become more readily available and simpler to use. With such widespread availability it’s difficult to believe that an average salesperson in the automobile business exists. Yet, on an everyday scale the typical dealership showroom employee exists on a meager level. Why is that?

There is a great deal of “experts” within our field. They have excellent tools, ideas and action plans to help the average showroom employee become a salesperson. So with all these “experts” available, why are there so many averages or better said, below average, showroom employees? In my humble opinion the reason is simple…they do not believe. I realize that’s a rather simplistic way of associating an education with mediocre but it is accurate. Showroom employees get caught up in the way it was or the way it used to be that they become blind by association.

Motivation when combined with motion produces results that are unseen until the individual succumbs to the belief. In order to experience any level of real success you have to project yourself to the desired end result. In simpler terms my friend, you have to believe. Ultimately you have a "horse in this race", so in order to win you have to train. You will have to invest your time, energy and emotion to truly experience the result.

Is having the belief alone enough to succeed? No, not entirely however; the best place to start is by building a level of mental commitment to achievement. You can learn to accomplish the results you currently only “hope” to achieve. Start by changing your belief pattern and focus on the value of skill building.

A customer service test. Would you pass?

2010-04-03T13:32:00.000-07:00

During a recent dealer visit I was asked to evaluate their service drive for “poor customer service”. I questioned the dealer as to what specifically he meant by “poor customer service”? The dealer stated that specifically their survey scores as related to the district and zone were poor at best. He wanted to know the reasons why.

So I set out to investigate the reasons for the poor ratings. I started with the pure numbers of the service operation. We looked at the volume of repair orders, the individual volume of repair orders, hours per repair order, the effective labor rates and the technicians’ proficiency numbers. Problem number one came when the service manager had “no idea” of the proficiency of any individual technician. The service managers’ perspective was that he “didn’t want to make it a competition between his techs”. I didn’t quite understand the logic behind this and asked why he felt it would breed competition instead of being (a) a tool to measure how well the dealership used the techs time, (b) how well the tech utilized his own time and (c) how well the tech performed when assigned a specific job?

After much debate and discussion regarding the time it would take that manager to track a “meaningless number”, I decided to approach obstacle number two. The effective labor rate was at best ten dollars below their door rate and at worst fifteen dollars below the posted door rate. We started looking at how they were selling jobs in the drive. Were the advisors utilizing a menu program? Was the pricing consistent and competitive within the dealerships own market? Were the jobs being dispatched appropriately? As you might have guessed, we struck out on all of these areas as well. No pricing consistency, no measurement and no dispatch policy. I was starting to get a clearer picture of where some of the issues might be.

Problem number three, work distribution and flow. Out of the four advisors who shared equal hours and shifts, one was standing out as the superstar. His customer pay hours per repair order leveled around the 2.7 area. Sounds great right? Well perhaps it isn’t so great? After further investigation and analysis we determined this specific advisor was writing almost one-third the repair orders as the other advisors. He had very little, if any at all one-line repair orders. After digging a little deeper we found that the advisors pay was tied around an hour’s per repair order bonus of 2.5 per repair order. It seemed our advisor was walking around the smaller repair orders and cherry picking the larger repair work repair orders. The worst part of all this was that according to the staff “it was common knowledge” that this specific advisor was working the system.

I was debating how to present the opportunities to the dealer however; before I could present them I needed to see the service drive in operation. I set out to see how the drive operated during the rush hours in the morning and the peak hours in the evening. I watched the write-up process carefully and listened to the presentations for potential up-sell items. I made notes on areas that could be easily corrected by designing a write-up process.

I became concerned for the dealer during the up-sell calls. Now mind you I only had a small window into the process and I could have easily just been witness to the most difficult customers at the worst time of the week. Or, I could have witnessed the normal working operations from a completely different perspective. Here is what I found – pretty consistently

1.When calling back the customer with an up-sell opportunity, never once did the advisor acknowledge that the guest’s initial concern was addressed.
2.When the guest was reached they always got the bad news first. “Mr. Customer, we found that you need new brakes and rotors…”
3.When the problem was presented it was presented without benefits. “Mr. Customer, my technician says you need to replace… and it costs $$$”.” In most instances, the customer declined the work. In some cases when the additional work was approved and completed, the customer came in “visually disappointed” in the process. The survey scores showed that as well.
4.No active delivery was completed upon delivery to the customer. Not once did the advisor review the three C’s. Cause, concern and correction. The advisors never went over the “W’s” either. What we did. Why we did it. When we wanted to see you again.
5.Lastly, there was no follow up done by the advisor. When asked, they felt it “wasn’t their job to follow up after the car was picked up”.

So, I have to ask you a rhetorical question. Is the poor survey scoring a people problem or a process problem? Perhaps it’s neither a process problem nor a people problem but rather a lack of having the right training and tools? My summation to the dealer is not why I wrote this article. I wanted to give you a different perspective the issues this dealer is facing.

Customers will tell you when, how and why you are failing them. The responses should you listen will come in all sorts of ways. Listen to the comments made to the cashier at the end of the day. Listen, to the shuttle driver’s comments, the porter who is leaving the lasting impression with the customer. Look at the survey scores with an eye for improvement rather than an eye of suspect. The customer will tell you what they want and how they want it. Just listen. If you do not listen, they will fire you. The problem with being fired is that you never get another chance.

Review your process at your dealership. Does it flow for the customer? Listen to the advisors sell jobs in the booths. Is it consistent with your goals? Get your front line people trained accordingly. Invest in them because they are the front line and face of your organization. Are they an accurate representation of you? In closing, I have to ask the question. In this customer service test, would you have passed?

©2010 F.L.T.T.

The Evidence Manual

2010-03-13T17:52:00.000-08:00

The Evidence manual
What is the single piece of evidence that you can present to your customers that will truly separate you from the competition? Before you answer that question I want you to think about the “purpose and not the result”.

The manufacture has a multitude of marketing materials to support their statements of strength. The purpose is to provide enlightenment for the customer. The manufacturers need to present their product in ways that will stimulate a buyer to take action. That material gives credence to the product that bolsters the image to the customer. What the manufacturers’ are attempting to do is have a third party sway the decision in their direction. Ultimately, the marketing material is that third party opinion that supports their claims.

So why don’t you have that same marketing material? The marketing material I’m suggesting is something that has been around the automobile business for thirty years. It still has relevancy in today’s market place, particularly given the impact of the Internet. This marketing material is called the “evidence manual”. What exactly is“evidence manual”? Well, the “evidence manual” is a binder that you put together that bolsters you as the product.

If you recall from previous articles we have spoken about the product, person, place and price of the negotiation stage. The “evidence manual” falls in the person stage of selling the car. Your selling you as well as the product.

Here is what the “evidence manual” might consist of:
• Letters of recommendation from your existing customers.
• It should have pictures of you and your family. Or, if you don’t have a family, it will have pictures of you doing the things you like.
• Anything that will highlight your experience, your interests, hobbies and your awards.
• Any training seminar that you have attended that has automotive relevance can also go into the book.
• Any CSI scores that have shown customer excellence should also go into the “evidence manual”
• Anything that honestly boasts you as a professional.
• Any picture or statement that shows that you are a professional who cares about what they do for a living.

Once you have taken the time to develop an “evidence manual” you need to know how and when to use it.
• You should have it by your desk so that it is easily accessible to any perspective guest. If the “evidence manual” is close by; your guest will want to know what it is and usually ask to see it. That simple step takes the pressure off of the buying process. If a guest can see that someone else had enough confidence to purchase from you and actually enjoy that process than they might be able to as well.
• If the “evidence manual” is not close by you should bring it out prior to the negotiation or write-up stage. It is the perfect tool to help validate what you are offering. Remember, a guest has many choices so you need to make sure you validate their choice.

The “evidence manual” is a simple tool that when used right can truly make the difference in a car purchase. If you do it right it can also act as a motivator when times are difficult. You can look back at all the positive feedback and reiterate to yourself that you are good at what you do.

If you have worked hard enough and have earned a “President’s Award”, a “Master Sales Award” or a “Gold’, “Silver” or “Bronze” level award (whatever your manufacturer recognizes achievement for) use that to your benefit. Explain that not only is the guest getting an exceptional value with your product, but they are getting an award winning salesperson as well. That is a very powerful message to the customer!
In the end, you know that it’s a matter of using the tool. I have said in the past that it’s like having a drawer full of tools that become valuable when you need them. Or, they become worthless if you never open the drawer. Go out and buy that binder today and get creative with it. Make yourself stand out from the run of the mill car salesperson. The reality is – just by reading this article you have already began to stand out from the rest of your peers. Good selling and continued success.

Do you value your job?

2010-01-09T10:50:00.000-08:00

Think about all the restaurants that have closed over the past year and the dealerships that have closed over the past year. I believe there is a correlation between the two. At the core of the comparison is the employee's that are in this case, no longer working for these failed businesses.

I found myself looking at the names of the places that closed and started thinking about experiences I had at these locations as well as other retail businesses.

I thought about the rude hostess, waiter or manager that never said hello when I entered and never said thank you with sincerity. I thought about the quality of food that was never that good even though the person cooking called themselves a chef. The place may even have been dirty or appear disheveled. I noticed employees just walking over a napkin or fork on the floor. Those same employees that thought it was more important to smoke while they weren't busy, instead of helping the rest of the team provide wow service to the people spending money right then. Instead of focusing on “I am not making money right now” they should have been worried more about the customer’s experience. The employee’s that did not even understand that for my $20 I wanted to be "wowed" and made to feel important.

Now these restaurants are dead and buried. The tax loss will have a huge affect on their city and county. Employees have to start all over again because the glue is in the locks. Let us not forget about the owner or investor who put their life savings into the dream. What made these places go bad? Lack of accountability? Lack of career minded employees? People thinking if this job does not work out I can go to another restaurant? Another Bar? Owner too caught up in living the dream? Sponges on the payroll who were bossing people around instead of trying to help?

Maybe that restaurant didn't open for the customer? Small businesses go through this every year. Do you ever stop and ask why and how it could have been prevented?

Again this is an article to share with someone in a retail automobile business. Employee's can make a tremendous difference to a business. Effort or the lack of effort and execution of a process can affect the life of a business each and every time. Share your thoughts with your co workers next week if you are thinking like me. Don’t hold in your thoughts! The thoughts and ideas of employee's can make the difference. This is not only about the restaurant business but rather any business out there.

You have a choice to make 2010 the best ever. You have a choice as an employee of a dealership, restaurant or any other retail outlet. You can choose to learn from your failures and grow with your successes. You can choose to follow the processes designed to promote success or buck the system and do what you want. Ultimately, the choice is yours. So as a participating employee you can also call out those who aren't doing their part. If you see a slacker, nay-Sayer or negative person; don't just sit there! Do something. After all, they are a direct reflection of you.

Restaurants need location, service, clean facility and good food and they will stay profitable. Dealerships need location, service, clean facilities and good products and they will stay profitable. Now do you see and correlation?

Consistency breeds continuity. Dreams sell. Passion helps it become reality.

2009-10-24T08:29:00.000-07:00

There’s obviously an incredible amount of discussion going on over GM and Chrysler and their restructuring phases. Although the opinions vary to the degree of the individual’s perception, the one common denominator is product. The automobile business is seeing the drastic re-sizing and structure changes that many industries experienced in tough economic times of the past. The “old school” mentality of “tough it out, we did…” isn’t working. There are some life-long dealerships closing due to market shrinkage and lack of funding. As we all know, having the cash for inventories, payroll and other related business activities is essential. Many dealers had the rug pulled out from underneath without warning. Floor-plans were stripped and financing became non-existent. Some of those dealers were forced into closure due to no fault of their own.

Now natural attrition is a necessary evil. However, terminating dealers who have been productive, profitable community businesses is in a word; insane! Has the industry started to become a virtual reality?

The automobile industry has been paying the same way since 1970's. Managers get a portion of gross or net, salespeople are still getting “minis” or 25% of gross. I’m curious. If we changed our pay-plans to match our needs for “quality” people, would it change our industry? What if we changed the way we “negotiated” a car deal? Would the process that we use currently to negotiate a car deal drastically change the consumer’s perspective?

There are surveys that suggest that overall satisfaction with the buying experience ranked around 98%. I haven’t been able to find where the survey listed “how” the customer’s bought their cars. Here’s what I mean. If a customer purchases a car on-line at say a few hundred dollars under invoice…and drives away “satisfied with their experience”. What happens when that same customer comes back into the market five years from now? What if the market is changed and the value of that specific car has increased? What’s the “experience” now for that same customer? Is he/she going to be willing to pay say, retail for that same car? Will that customer than purchase another brand? Would they not purchase at all? No one really knows.

The automobile industry is facing an unprecedented set of circumstances up to and including the cause and affect of the Internet pricing wars. What’s interesting to me is that no one appears to be looking forward as to the changes that are needed now. I was reading an article in Wards that referenced old ideas resurfacing again as new ideas. Experts touting new creative ideas on how to change the market place that were in fact old ideas rehashed. So again I question, who is looking forward?

Anyone involved in negotiating a car deal knows that a customer, who gets every dollar out of the dealership, still feels they left money on the table. Even an educated buyer, who’s well-versed on the cost structure of a particular car, wants to get every dollar associated with that product. Whether it’s an issue of “winning” the price war, bragging rights or the fear of being taken advantage of, in any of these situations it’s usually a frustrating process. Don’t bore me with the details of utilizing the correct selling procedures that’s another issue for another article.

Why do you think more and more customers are reverting to the on-line negotiation technique? They want you to bid for their business without having to cross the threshold of your dealership. Information is a powerful tool that has put the power of cross referencing products within the reach of your customer. On-line applications allow the customer to do their own product evaluations without having a biased opinion of a salesperson thrown upon them. The problem comes in when the customer is using data that supports a lower price on a product that has considerably more value than is presented. It becomes a negotiation over price and not value. I’ve seen customers walk away from an incredible deal just as a matter of principle. They’ll go to the low priced dealer only to pay more in other fees unknowingly.

I’ll suggest that if as an industry, we were forward looking – we would be addressing the negotiation process. We are setting the stage of future buyers that will make decisions on price alone. Even the manufacturers are getting in on the on-line negotiation wars. GM is trying out EBay pricing on their products! Say what? What customer in his/her right mind would “bid” on a product at cost? They’ll bid considerably below and wait for a seller to agree. Oh, the seller will agree because they have aged inventory or some kind of stair step program to hit. Then what happens? Hasn’t the value of that GM product been set? Isn’t the correct value considerably lower than MSRP because a precedent has been set? The Internet world has wings far and wide and you can bet that if one buyer achieves a ridiculous price on a product, than thousands will find out in chat rooms and in social networking sites. In my humble opinion the writing is on the wall. The only tangible thing left that will define and separate dealerships is the quality of service it will render.

Service Drive - where the road meets the rubber?

2009-04-01T19:32:00.000-07:00

There have been many requests for an article for service personnel. There are a lot of experts in the field of service writing and of course, service drive management. Perhaps underlying issues are better left to the individual dealer.

There have been countless articles written and documented about the volume of customer’s the service advisor will see in a given day versus a sales person. There are gross contribution comparisons and even customer retention comparisons. Most “experts” believe that the value of a professional service advisor is greater than a sales person. That might be the case depending on which side of the argument you are on.

Service advisors are sales people in different shirts. Good advisors are often selling work, suggesting future work and explaining repairs and in effect, they are negotiating. The products they’re negotiating are slightly different in costs but they are negotiating. Service advisors can actually take a section out of the sales training guide and use it to the benefit of the customer. They can learn proper word tracks and how to use sales techniques to overcome objections.

Let’s discuss the service drive for a minute. Do your service advisors go out to the drive to meet and greet the customer? Or, does your customer have to come in to meet the advisor at his/her desk? Is your advisor busy writing the repair order instead of getting to know why the customer is really at your dealership? Are hoods popped open, fluids checked, tire measurements taken and the battery tested right there in the service drive? Does your service advisor walk the vehicle with the customer to note condition? Maybe this is the best time to evaluate the needs of the customer?

When your advisor is seeing the customer for a repeat visit, are they asking what the customer liked about their prior visit? This would be a good time to review prior CSI returns for positive and negative results so you know how to proceed.
When the repair order is completed and the expectations are set for completion, does your advisor “thank” the customer for using your dealership? The advisor should be clear about their expectations and the completion of those expectations. Good communication up-front, clear and concise cause and affect notes will help the advisor avoid problems upon completion.

The continued relationship with a dealer is in direct proportion to the customers experience with the service advisor. If the relationship is built correctly in the service drive you are likely to retain that customer. The service drive is really where the road – for the customer, meets the rubber.

Train your advisors in communication, organization and follow up. The investment made early on will be brought back to the dealership on every visit.

Shortcuts cost money

2009-04-01T18:57:00.000-07:00

Who coined the phrase? The phrase is cemented into the minds of those long-ago sales people who were trained to follow the golden steps. You know the one's I’m referring to, the “golden steps” process that eventually leads to the sale. You remember that process don’t you?

Volume levels for all dealerships are shrinking and with it the market has claimed many. Dealership closings dot the landscape that now is our business. Well intended and talented people are out of jobs right now. New car pricing wars are continuing to erode profits and commissions in every market, in every city and across all brands. The internet for its intended value; is now a profit hungry leach hanging around the new car showroom.

Chat rooms boast of how consumers can “buy below costs” on virtually any new vehicle sold. There is bragging rights as to whose purchase for the exact car was the lowest. Dealers’ don’t have a lot of options in this challenging market. So what’s a dealer to do?

I was listening to Glenn Beck just the other morning and he was referencing a website that the government designed to help Americans “cope” with this challenging market. Glenn went on to describe the site and half joking he said – and I’m paraphrasing here – “what would our grandparents say”?

Suppose we asked ourselves that same question? Suppose we asked those who suffered through 18%+ interest rates, and gas lines two miles long. Suppose we ask those dealers who suffered through draughts with little or no product available? What would they say? You want the answer?

Simple enough: “shortcuts cost money”. True sales professionals don’t listen to excuses, rhetoric or negative influences. They keep on going – following the process and selling cars. Sure, their volume has also declined a little but the truly professional people haven’t seen a complete collapse. Truly professional sales people don’t shortcut, they don’t make excuses and they never let the sale or the loss of a sale for that matter; be dictated by shortcuts.

Here’s a challenge for you to take regardless of your position within the sales department. Ask yourself and/or your team how many shortcuts they/you took on the last opportunity? Did you/they take all the necessary steps to complete a sale? Did you tour the dealership? Did you introduce the potential customer to your service personnel? How about a “best buy” walk? Most importantly, did you actually present and demonstrate the specific vehicle the customer wanted to buy? If not, why? If so, how smooth was the transaction process?

Shortcuts cost money it is that plain and simple. Every customer deserves and wants 100% of you regardless of what happened on your prior opportunity. Process design is to provide you with a clear road map of how to correctly create and complete a sale.

Why selling ins't selling...

2009-03-25T18:55:00.000-07:00

I once looked up selling in Webster’s dictionary to see what selling by definition was. Here’s the definition of selling according to the dictionary; “1. To transfer (property) esp. for money. 2. Deal in as a business. 3. Be sold.”
Sound simple?

It doesn’t say be cheated, cheat or take advantage of. The ancient Roman word for salesman however, meant cheater. Plato referred to the early salesperson as someone who, in a well-run community was fit for little else.

Selling as a process is pretty simple to comprehend. It is the mutual agreement between a sales representative and a client to do business together. I believe the transfer of property to mean “a customer who has a need for your product and upon mutual agreement that product ownership is transferred from the seller to the purchaser”.

I’m going to outline why I think that selling doesn’t mean selling in the true definition of the word. I will refer to selling as “value offering”. I know…you’re thinking “isn’t that just a politically correct way of saying selling?” Well perhaps it is, but I hope to discuss a better way to offer your product without the need to “sell” the customer something.

In my estimation value offering is the salesperson understanding and assessing the needs of a customer and effectively communicating what you have learned. You are going to have to work at assessing the customer’s needs to be able to effectively communicate how your product serves their needs. The production of automobiles has truly become a Global market. We’re seeing products cross brands, and market conditions demanding new segments. We’re seeing manufactures’ creating similar products across a broad section of brands. We’re seeing product evolution create an equal footing for all manufactures. We’re seeing the industry being forced to meet the ever increasing demands of customers in forms of product development and product content. In fact, with the advent of Navigation systems, blue tooth wire technology, MP3 capabilities, and IPod connections we’re seeing technology drive future products. We haven’t even discussed the future of Hybrids, Natural Gas, Diesel technology and Fuel Cell vehicles.

The internet provides customers with numerous outlets for product comparisons while third-party sites offer “best deal ´searches. When you think about it the information that is available is overwhelming when it comes to the purchase of an automobile.

There is a difference maker in this equation. There is one piece of the puzzle that can separate your product offering from another manufactures. There is one divider between the norm and the exception to the norm. The one factor that separates you from your competition is you.

Dealing with Adversity

2009-03-25T18:49:00.000-07:00

Dealing with adversity:
We’re salespeople so face it. We’re probably going to hear "no" more than anyone selling anything. The key is to be a bit of an optimist. Every opportunity that presents a no will ultimately present the same opportunity for a yes.
• Prepare your mind to limit the impact of unsuccessful opportunities.
• Always come to work with a purpose.
• “Focus on the purpose…not the outcome”
• Look to people who are supportive but not to those who will lend a shoulder to cry on.
• Stay away from the “coffee clutch” group. They want to solve world problems and not sell cars.
• There are three types of salespeople: Be a number 1
1. Those who are at the top
2. Those fighting to get to the top
3. Those who feel the top is uncomfortable and wish you to come down to their level where life is easier.

The Dealership Tour

2009-03-04T19:42:00.000-08:00

The dealership tour is the third step in building value for your guest. The dealership tour is providing the customer with a compelling reason to buy from your dealership. Hopefully based on prior steps, we have built enough value in ourselves and our product.

The service, parts, customer lounge, body-shop, Wi-Fi, shuttle services and any other offerings should be a part of your final tour. This tour plays a critical role in holding profits, and establishing a life-long relationship with your guest. Most average sales people will never do this step. They are so anxious to get to a write-up sheet that they forget to sell the value of the dealership. The dealership tour builds a mental ownership for the customer. They can see themselves driving into the express department or up to service or even visiting your parts departments. The guest knows they will need shuttle services or early-bird drop off services, they just don’t know how to use them.

The dealership outline:
Why?
• Most salespeople will not do a full dealership tour.
• It will increase your customers’ awareness to your full dealership offerings.
• It adds to the value of the vehicle.

When?
• After you have done a professional trade evaluation
• Before you attempt an offer sheet.

Where?
• Show them the advancements in technology since their last purchase.
• Show them the early-bird drop off services. The shuttle services and the Express services.
• Show them where your parts boutique is.

How?
• Give an exceptional tour. Show your enthusiasm for your dealership.
• Always start at the service facilities.
• Introduce them to key personnel when appropriate or whenever possible. If no one is available, provide your guest with a business card as an introduction.
• Explain your shuttle service availabilities.
• Explain your rental/loaner car program if appropriate.
• Ask a pre-planned question – “As you can see Mr. Guest, it is important to have a well-run service, parts and body-shop isn’t it? That’s only part of the total value you’ll receive from our dealership”.

Appearance

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Appearance:
Clothing should be neat, clean and businesslike.
•All salespeople should wear dealership authorized attire. All clothing should be clean, ironed and unsoiled.
•The rule of thumb is conservative and businesslike.
•Gum chewing, smoking, wearing sunglasses and eating on the showroom is old school and unacceptable.
•Avoid looking flashy. Never wear excessive jewelry or gold.
•All salespeople should visit the restroom several times per day to freshen up. Your goal is to always look professional and presentable. The elements of being on the lot all day can sometimes exaggerate your appearance.
•Hair should be cut or styled on a regular basis and combed away from hiding your face.
•Fingernails should be clean and free of debris.
•Good dental hygiene is an important aspect of meeting customers face-to-face.
•Strive to maintain good physical fitness. Feeling good about yourself is as important as keeping a positive mental attitude.

Selling Requirements

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1.Be involved in seeing that every guest is waited on promptly.

2.Be able to successfully follow these basic steps:

Greet all customers professionally and promptly.
Build a relationship based on mutual trust and respect.
Use effective questioning and listening techniques to determine the needs of the customer.
Do a manager’s introduction.
Select the right car based on the information provided by the customer.
Present the vehicle using the right buying motives of the customer.
Prepare to test drive every customer.
Tour the dealership.
Prepare a silent trade evaluation.
Present an offer sheet providing the customer with the needed information to make an intelligent, informed decision.
Negotiate the purchase of the proper vehicle using the assigned word tracks.
Prepare the legal documentation, set the time-line and prepare the vehicle for delivery.
Follow up with the customer within 24hrs to thank them for their business and answer any outstanding questions.

Planning Requirements

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Determine your desired income goals at the start of each day, week, month and year. Define those goals and write them out.
1.Determine your monthly average sales to achieve your income goals.
a.Calculate an average commission per vehicle sold.
b.Divide your monthly income goal by the average commission to obtain average monthly sales needed to meet your income goals.
c.Take holidays, seasonal events and vacations into consideration.

2.Make sure your objectives are “SMART” goals (Specific – Motivating – Attainable – Relevant – Track able and time-bound).

3. Set up your daily activity list:
a.How many belly-to-belly contacts are you going to have today?
b.How many follow up calls are you going to make?
c.How many emails, snail mails and phone calls are you going to use to contact your previous customer base?
d.What product are you going to master today?
e.Discuss with your manager(s) the specific areas of improvement that you can focus on.
f.Cross check your activity list at the close of business every day.

4.Plan each day in writing. Prioritize your activities by making an appointment schedule.

Appearance

2009-02-13T08:38:00.000-08:00

Clothing should be neat, clean and businesslike.
•All salespeople should wear dealership authorized attire. All clothing should be clean, ironed and unsoiled.
•The rule of thumb is conservative and businesslike.
•Gum chewing, smoking, wearing sunglasses and eating on the showroom is old school and unacceptable.
•Avoid looking flashy. Never wear excessive jewelry or gold.
•All salespeople should visit the restroom several times per day to freshen up. Your goal is to always look professional and presentable. The elements of being on the lot all day can sometimes exaggerate your appearance.
•Hair should be cut or styled on a regular basis and combed away from hiding your face.
•Fingernails should be clean and free of debris.
•Good dental hygiene is an important aspect of meeting customers face-to-face.
•Strive to maintain good physical fitness. Feeling good about yourself is as important as keeping a positive mental attitude.

Job Requirements – Come prepared or don’t come at all

2009-02-13T08:24:00.000-08:00

Do you want to know your part of this plan? First, I believe this is the most important part of the job requirement – you have to be absolutely committed to being a professional sales person. To me that means you are going to decide to choose this profession as yours. Most are thrown into the sales position as a pass-through job. Some are given the opportunity by association and not true desire. Others see it as a way to get a pay-check without having to work hard.

I once read that the word decision comes from the Latin word to cut off. So in other words, making a decision is to cut off from any other option.

Here are the job requirements in no specific order:
•Come to work on time every day.
•Greet all customers with a professional and courteous greeting.
•Sell a minimum of the dealership average for a minimum of 90-days.
•Have a thorough understanding of the products and services you sell.
•Complete all paperwork and customer documentation in a legal, compliant manner.
•Utilizing a customer management tool; contact, update and follow up on a daily basis.
•Set a minimum of 10 (ten) specific items you wish to accomplish at days’ end.
•Complete a sale by following the established sales map paying special attention to completion of each individual step.
•Practice, drill and rehearse all of your learned behaviors.
•Be professional at all times. Be sure to never use foul language while on the showroom floor.
•Never handle a customer dispute on the showroom floor. Follow our established customer handling skills.
•If you suspect the situation is getting outside of your control, call time-out and get out.
•Be honest in every transaction.
•When a customer requests another salesperson, department or to use the facilities, escort them to the location and always introduce that person as a guest.
•Wear dealership authorized attire every day at work. Look like you are a sales person and not a customer.
•Never smoke in or around the showroom.
•Communicate clearly with the sales manager(s) about every customer (before they leave) so the sales manager(s) can direct you accordingly.
•Market your lot correctly. The merchandise is yours to show so take pride in the appearance of the lot.
•Forecast and track your daily, weekly and monthly goals. Review those goals with your manager(s) to keep you on track.
•Walk your inventory every day that you are on shift. Ask about new arrivals and prior sold units.

What’s it take to slow these people down?

2009-02-11T17:57:00.000-08:00

Are you always struggling with the customer who’s a bit different from the mold? Do you often find yourself saying, “My customer’s different”? Are you dealing with the customer who’s always “in a hurry” or, “only want to drive”? It’s an interesting issue that pops up in showrooms across the nation. So the question is; what’s it take to slow these people down?

The answer is as simple as the question. Before I answer the question we should talk about the reason(s) your customer is in such a rush:
The customer already has numbers from another dealership on the Internet and just want to “make sure” of their choice.
The customer is scared they might actually “buy” something once they get into the showroom.
The customer does not trust the sales person they are dealing with.
The sales person they are with is not knowledgeable enough about the customer’s true wants, needs and desires.
Somewhere along the way the customer was given the advice on what to say to get out of the dealership once they have driven the car.

Alright smart-guy so what do I do, you ask? Well, you have to slow the customer down. I know, I know...I did not actually answer the question. Or did I? You see most sales people go from “Hi, how are you?” to “Give me a copy of your driver’s license”, to “Let’s drive” and onto the “If I could, would you?” There in lies the problem.

In order to build trust, rapport and confidence you have to earn it. Notice I didn’t say you ask for it. To do that you have to stop the partial sales cycle you’re repeating. Here are some simple steps you can utilize to take back the process of selling a vehicle.

Greet the customer with a greeting fit for a king. Let them know you are happy they’re at your dealership and not somewhere else!

Thank them for coming in. Make your customer feel welcome and not intimidated. Offer your first name and ask for their names (all parties present).
Offer them the opportunity to come in from out of the cold, heat, rain or snow.

Don’t just go on a drive with them because they picked out a car to test drive. Yes, it’s important to drive the car but not yet.

Offer a reason for coming inside. “Mr. and Mrs. Customer allow me to share with you how I like to assist my guests. First, I like to find out your vehicle of interest and how you came about that vehicle. Second, I like to make sure I have all the necessary information to provide you with the best experience you have ever had. Will you allow me to do that?”

Once you are inside (this takes practice, patience and persistence) take out a legal pad or writing pad. Then, ask questions (you know the ones you were taught to ask about their needs) and write down the answers. Explain to your guest that you treat all your customers with respect and act much like an Attorney, Doctor or Consultant. You listen first, and respond with solutions to fit their needs.

When you have asked a few questions, built a little rapport and trust then it’s time to go to work. By working, I mean you select the product that fits what the customers needs are and bring the car to the customer. Notice I said, “bring the car to the customer” and not… bring your customer to the car!

Warm the car up or cool it down as needed. If possible put on their favorite radio station. If you don’t know, don’t experiment.

Walk inside and say: “Mr. and Mrs. Customer, based on what we’ve discussed earlier I’ve taken the liberty to choose this vehicle. Let me share a few reasons why.” - Now you can discuss the benefits as it relates to your individual customer. You can point out safety to a customer that’s interested in safety or performance to a customer who’s interested in performance etc. Remember, to get the customer physically and visually involved in the presentation. The more involved they are the more value they will see in your product.

Once you have performed (it is a performance) a “customer involved” presentation you can set the stage for a demonstration drive.

OK. So the answer is simple but not always possible. So, what do I do then? I say focus on the 90/10 rule. That rule is simple; 90% of the time it will go your way and 10% of the time it won’t. Don’t focus on 10% of your customers and not practice for the 90%. I’m not saying avoid the 10% group, all I’m saying is don’t practice for them. Ten percent of the time you’ll have to call time out and get out. That could mean getting a manager involved or another experienced salesperson.

In the age of information you have to be at the top of your game if you are going to succeed. You have to know your product, your competitor’s products and the potential benefits to your knowledgeable customers. The customer will test you and if you fail, the customer will find an “excuse” to get out of your dealership…quickly.

Master this process and it will result in more sales, more profits and more repeat and referral customers. Despite what most of you believe, your customer will pay more for a good sales representative. Try and succeed.

Joseph Clementi
“Focus on the purpose and not the outcome”