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Category Archive: Accountability Management

Robert Neuman

Are Your Employees Actually Working at Work?

Business people

Five or six times a week, your employees get up in the morning and say to themselves: “I have to go to work today.”  That’s good because you hired workers to produce—or assist in producing—gross in the first place.

Here is the big question, though: Do your work expectations match your employees’ work expectations? You likely want your employees to put in a full day of activity at work; you know, working while at work. On the other hand, your employees may believe that “as long as I am at work, I am working.” Notice the difference?

Gauge productivity

How do you know if you are getting the full work production out of your employees? Be observant.

Compare the numbers produced by your departments against industry production benchmarks: How are you doing? Is one department falling behind? Then, inspect all departments in the dealership, at all time slots, to see if or when there are pockets of idle time or non-productivity.

Create productive employees

If your departments are not producing as they should, it’s time to make sure your employees work at work! First, evaluate your employees. Here are some questions to consider:

  • Are your sales people producing the volume and gross as you would expect a professional sales person to achieve?
  • Is your used vehicle manager producing the inventory turn you need to achieve your return on investment?
  • Does your service department produce the simple key performance indicators, such as gross as a percentage of sales, increasing your effective labor rate and selling more hours per RO?

Once you’ve identified any problems, you need to develop a correction plan. One of the first things I recommend is educating your staff through the NCM Institute, especially if you haven’t yet invested in formal training for your team. If you’ve already taken the time to train your people, there may be some process issues happening—be sure to talk with your NCM 20 Group moderator and 20 Group members about opportunities for improvement. Another option is to meet with one of our consultants, who will review your operations and help draft an action plan.

Is downtime okay?

You may say, “It’s OK,” to have some employees have idle time, as long as they produce to a set production standard or expectation. I agree with that statement to a point. Just make sure that your employees are achieving—or exceeding—industry benchmarks. I recommend you keep an eye on it, though.

Accountability helps everyone

Obviously, everyone must work at what they were hired to do. Let’s make sure we are getting our fair share out of the employees we have hired. Share your expectations with them. Show them the industry benchmarks or standards, train them in the skills they need to achieve these standards and then hold them accountable. Times are getting leaner, and now is not the time to allow employees in your business to not work at work.

Learn more about Robert Neuman and how he and his NCM colleagues can help your dealership through 20 Groups and in-dealership consulting

Permanent link to this article: http://blog.ncm20.com/2017/01/are-your-employees-actually-working-at-work/

Dustin Kerr

Watch Out For Tax Season Temptations

Car taxes  design

It’s that time again. Right now, buy-here, pay-here dealers are in their busiest time of the year: tax season.

Although most dealers will tell you that tax season is not nearly as crazy as it used to be, there’s no denying that it’s still a major event in our business. BHPH dealers are likely to sell more cars—and collect more cash—in the next couple of months than any other month for the rest of the year.

Tax season means buyers, but what kind?

Sadly, it’s not all good news. It’s during tax season that we put our worst performing paper on the books. Flush with income tax returns, people walk into our dealerships with $1,000, $2,500, maybe even $4,000 or more down. And, just as giddy as our buyers, we completely forget about our underwriting guidelines and the fact that we are still going to have to collect on this account for the next two to three years.

Now, some dealers simply don’t care how well the paper performs. They feel that the cash down overshadows the risk of bad underwriting. And, many argue, they will just get the car back quickly if the customer defaults.

Now, I don’t entirely disagree with this philosophy. There is a certain point where the amount of cash down mitigates the risk involved. However, I always tell my consulting clients that there’s a way to do both—get the large cash down payments and properly underwrite each loan to ensure the highest probability of success.

And that approach, I think, is better.

 

Don’t lower your standards

The first thing we need to do? Slooowwww dooowwnnn! Hey, I get it. This time of year is very hectic, not only with sales but also with collections. It’s very likely we have more people in our lobby right now than any other time of the year.

When things start to get a little crazy, though, usually the first thing to suffer is attention to detail. Go back and look at the applications that were collected during tax season the last couple of years and compare them to applications collected during the rest of the year. If yours is like most dealerships, you’ll see a significant difference in the quality of information collected.

You need to discuss this situation with your staff ahead of time. Make it very clear that incomplete applications will not be accepted. (And, I mean be stern about it: It’s non-negotiable!)

Remember, you have to collect on this account for the next few years. A quality application is the first step to making sure you can do that.

The next thing I usually see that sets us up for failure is a complete disregard for payment to- income percentages. We all know by now, or should know by now, that accounts with payments greater than 25 percent of net income perform at a much worse rate than those with payments below 25 percent net income.

I’ve found that dealers and managers forget this rule when a large down payment is made. The attitude seems to be, “If they have skin in the game, they’ll make all the payments.”

Sad news, friends, but this just simply isn’t the case with most customers.

 

Don’t forget that tax money is free money

Here’s an important lesson I’ve learned after reviewing hundreds of thousands of loans over the years: The down payment amount has very little to do with how well a loan performs.

As far as our customers are concerned, that sizeable tax return is just free money. This sudden windfall isn’t a result of careful budgeting or pinching pennies for a down payment. No, it’s a bonus with very little emotional attachment.

Don’t compromise your payment to income standards just because the customer has a big down payment. Remember, all that tax money will be spent very soon, and they will only have their weekly paycheck available to make their car payment.

 

Don’t forget the delivery and closing process

Another area I see slip during tax season is the closing process. I consider the application and closing to be the most important aspect of the collections process. And, if you’ve ever read my articles, watched my BHPH Tip of Month video segments, or attended one of my training or consulting sessions through NCM, you know that I firmly believe that an improperly closed loan is a charge off waiting to happen!

In this busy time of year, it may seem like a simple solution to ask our commissioned sales team to close the loan instead of a manager or a collector. Sure, it might speed up the process, but the whole point of having a manager or collector close the loan is to double check and ensure that the salesperson hasn’t missed or skipped an item because they were afraid of losing a deal.

Don’t do be tempted to “streamline” the close; you’ll just pay for it later. Keep your processes intact, and have a dedicated person or team well-trained in the closing procedure review every application. And never let them veer off track just because you are busy.

 

Make the most out of tax season

I know how exciting this time of year is, but you can’t afford to be burned. Remember, these could be the worst-performing deals you make all year.

Make sure you have a great application process in place, follow your payment-to-income guidelines and don’t short-cut your closing procedures. If you do these three things, you can enjoy the cash windfall of February and March without the headaches that come in July and August.

Article originally published in the January/February 2016 issue of the BHPH Report. Be sure to check out the full issue!

 

Permanent link to this article: http://blog.ncm20.com/2016/04/bhph-tax-season-temptations/

Lindsey Quinn

Automotive pay plans that work: 4 elements for success

Bundle, Money Roll, Currency.

Developing an effective compensation strategy is an ongoing issue for most dealerships. You need a plan that drives solid performance from Sales. And you want to motivate employees … but you can’t afford to overspend for the market. So, what do you do?

NCM’s experts always advocate keeping pay plans simple and making sure that the criteria you select allow employees to track their earnings on a daily basis. Choose items that are under the direct control of the employee—after all, they can’t develop buy-in without feeling a sense of ownership!

Whenever possible, NCM believes you should limit automotive pay plans to four criteria. Here are some examples:

1. Volume

  • Unit deliveries for salesperson
  • Same‐store sales and/or market penetration for Department Manager
  • Hours sold for Service Advisor
  • Total hours produced by Service Department for Back Counter Parts Person

2. Margin

  • Income per delivery for F&I Producers
  • Effective labor rate for Service Advisors
  • Gross profit percentage for “Front” Counter Parts People
  • Controllable profit for Department Managers

3. Customer Satisfaction or Customer Retention

  • Regional or zone average at a minimum
  • Compensation rewards tied to “world class service”

4. Miscellaneous Incentives

  • Immediate department initiatives
  • Specific goals to drive short‐term performance

Sales compensation is a tricky subject for everyone in the automotive industry. Learn pay plan secrets of top performing dealerships in the NCM Institute class, Sales and Management Compensation. And discover how to hire motivated high-performing employees in the first with our class, Finding Top Talent.

Permanent link to this article: http://blog.ncm20.com/2015/12/automotive-pay-plans-that-work-4-elements-for-success/

Rick Wegley

Wagging the Dog: Don’t let a 5% problem ruin everything

Over the last several years, I’ve visited hundreds of dealerships. And, while performing operational assessments, I discovered that the majority of the headaches plaguing the culture and profitability of my clients were self-inflicted.

The problem with too much regulation

Intending to control unique and infrequent variables—and keep them from disrupting their daily routine—I found managers who kept adding steps and reducing employee empowerment. They chose this approach in lieu of defining the structure of the fundamental process, then documenting and training employees on it.

You can map out only so many scenarios. No matter what, unpredictable and uncontrollable variables will appear in nearly every customer service or sales environment.

Ultimately, managers created hurdles that made their jobs easier. But these limitations severely curtailed their employees’ ability to meet objectives and take care of customers. Most importantly, they completely changed their overall process in an attempt to manage the 5% of unique variables we call exceptions within their business model—and, in doing so, negatively impacted the 95% majority of the customers. Worse, they even created culture problems within the store!

Variables are unavoidable

So many processes changed. And, yet, these managers still were unable to avoid the unpredictable and uncontrollable variables that come with doing business.

By trying to control everything, most created new problems along the way. Now, they spend an inordinate amount of time and resources trying to manage a department with ineffective processes for handling the majority of their day to day operations.

Employee morale is low. Customer satisfaction suffers. And the department isn’t meeting its objectives. There’s pressure from above to “right the ship,” and these managers are unable to identify the root cause of a growing problem.

Manage by the RIGHT numbers

You should definitely manage by the numbers, but make sure you’re using the right ones.

Take a good look at your current structure and re-evaluate your current processes— simplify wherever possible. Involve your employees. And solicit feedback from both them and your customers on what is working well and what they feel needs improvement.

Once you have simplified and streamlined your processes, put them in writing. Hold meetings with all of your employees and make sure they all understand the revised processes. Provide the necessary training and resources for employee success. Definitely let them know what the empowerment guidelines are and the accountability aspect for each individual role. And clearly explain the minimum acceptable standards for performance.

Don’t forget the “why” part of this equation when discussing any changes with your employees. Discuss some contingency plans you have considered for the exceptions, and then review the empowerment tools that you have provided for them to use. Give examples of how and when they should be used.

The 5% goal

Manage 95% of your business by process, and then manage the 5% of exceptions. Once a clearly structured business model is in place, a manager should need no more than 5% of their time managing unpredictable and infrequent variables. This ideal state requires simple, defined processes (in writing) to manage the majority of predictable and measurable daily activities that contribute to profitability and customer satisfaction.

Is the tail wagging the dog at your store? If so, take a good look at your current structure and re-evaluate your processes. Chances are 95% of your problems are self-inflicted.

Tell us how you manage exceptions in your business? Is it a 95/5 mix or something different? Comment below with details. 

Permanent link to this article: http://blog.ncm20.com/2015/09/wagging-the-dog-dont-let-a-5-problem-ruin-everything/

Richard Head

Is Story Time Causing Your Dealership Turnover? FIRO and MBWA Can Stop It

open boo

One of the biggest expenses dealerships face each year is turnover. Not only does finding a new employee take a lot of time and money, but you then have to reinvest in proper training to get that new person up to speed.

I’ve found that dealerships – like many other complex work environments – are negatively impacted by assumptions, something I like to call “story time.” Before I go into the details of how story time ruins your employer-employee relationships and leads to turnover, let’s take a second to review what motivates people in the first place.

Motivation in action: FIRO

Developed by observing well-oiled, capable teams working in high-stress situations, the Fundamental Interpersonal Relationship Orientation (FIRO) approach boils people’s fundamental behavior down to three desires:

Inclusion.  Everyone expresses or wants contact with others—to be around others and work with others.

Control. Everyone expresses or wants influence over things and people.

Openness. Everyone expresses or wants to be known, seen, appreciated—a curiosity about others and a willingness to be seen ourselves.

This chart shows how each area relates to the others:

Blog graphic

For managers who typically can’t create a team from scratch based on compatibility, we have to focus on the thing we can change. Will Schutz – the psychologist who invented the FIRO method – says that creating an environment that encourages openness is the best method. And openness is what story time is all about.

It’s story time

First, let’s address openness. I’m not talking about some touchy-feely “new-age” thing. Instead, “openness” means a willingness to consider other interpretations of behavior.

Whenever something happens to us, we almost always make up a story about it. Unfortunately, most of the time we don’t make the effort to check out our made-up story. We simply create this fantasy world about what’s going on. As time goes on, those stories get hairier and stranger.

Just think about the last time you were baffled by something your boss said. You probably found yourself thinking, “I bet they’re irritated with me,” or “They probably think that ….” In reality, you just don’t know what’s happening with your boss. But your brain doesn’t like uncertainty, so it’s compelled to make up a story that gives you some understanding. And our people do the same about us!

Story time has a huge impact on businesses. Dealerships (and all businesses) are composed of multiple, competing stories about what’s going on and why—stories that are rarely discussed openly and almost never examined in a way that could prove or disprove the stories. Left to run unchecked, story time can give your best performers misinformation, and lead them to walk out the door.

Putting story time to bed.

In work relationships, we have two choices:

  • Let people make up stories about what is going on with us
  • Tell people what’s actually going on, so that they stop making up their own stories

As a leader, you set the tone.

When you stay holed up in your office, I can guarantee that your staff is making up stories trying to understand your decisions.

“Management By Wandering Around” (MBWA) is a great way to stop story time in its tracks. And, what better way to interact with the dealership?!

When I get out into the departments, I share with my staff what’s going on in the department, what’s keeping me up at night … and, critically important, what my hopes and dreams are for the dealership and the department. As an added bonus, the employees relax a bit and tell me things they might not in more formal situations. Everybody wins! And everyone stops inventing stories.

Give it a try in your dealerships. Manage by “wandering around” and find out what’s really going on. Stop the stories and deal with facts! What do you have to lose?

Permanent link to this article: http://blog.ncm20.com/2015/08/is-story-time-causing-your-dealership-turnover-firo-and-mbwa-can-stop-it/

Dustin Kerr

Do You Have a Business… or Just a Job with More Risks?

dealership

When I was operating dealerships in Northeast Oklahoma, there was a little hamburger joint that had some of the best hamburgers and fried squash I had ever eaten. At the expense of my girlish figure, I would attempt to eat at this burger joint about once a week. The odd thing about that burger business is that some days it would just be closed for no apparent reason. Sometimes, it would stay closed for a week or two at a time before opening back up.

We had one of the employees as our customer, and one day, I asked her what the deal was with the restaurant being closed at such odd intervals. She informed me that the owner was elderly and when he was sick or had medical procedures that he would just shut the restaurant down because he had never taught anyone else how to run the day-to-day operations. It struck me that this gentleman appeared to have built a great business with a great product, but in reality, he didn’t have a business, he had a job with more headache and risks.

You may be asking yourself what this has to do with the car business.

Well, since you asked…I recently had the opportunity to attend the NIADA convention in Las Vegas and had the pleasure of meeting a lot of independent car dealers and talking with them about the 20 Group peer collaboration concept. Many of the dealers had no idea what a 20 Group was and were very excited to potentially join a group and learn from others going through the same challenges. Everything was great until I told them we meet three times a year for a day and a half. I heard the same objection over and over again and it went something like this: “It’s all I could do to get away to this conference. I’m scared to death about what’s going on while I’m gone. There’s no way I could commit to three days, three times a year to attend meetings away from my dealership.”

Albert Einstein once said, “The definition of insanity is doing the same thing over and over again, but expecting different results.” The question is: can your dealership afford to continue facing the same challenges without viable, proven solutions?

Just like the gentleman that owned the hamburger joint, these used car dealers did not have a real business, they had a job but with more risks and a lot more headaches. As business owners or upper management, you put in a lot of hours, have a lot of investment at risk, and must overcome never-ending challenges from customers, competition, and regulators. Some people think the best way to manage all those obstacles is to just do everything yourself. It’s not. In fact, trying to manage it all yourself is a recipe for disaster. It is critical to the success of your business and, more importantly, your health, to find or identify people in your organization that can help you run your business when you need to be away, whether that is for a 20 Group meeting, illness, or simply taking a vacation.

Remember, your primary job as a manager or leader is to train and manage activities. If you are scared of what might happen if you had to be away from your dealership for a few days, you might ask yourself “Do I have a business or just a job with more risk and more headaches?”


Learn more from Dustin Kerr:

bhphtraining

Permanent link to this article: http://blog.ncm20.com/2015/07/do-you-truly-treat-this-as-a-collections-business/

Robin Cunningham

Will You Take The Six-Month Challenge to Maximize Your Profits?

Leadership Most Monday mornings I find myself standing in NCM Institute’s beautiful training facility welcoming a new class of retail automobile dealership managers who have come to Kansas City for formalized training specific to their job responsibilities. After introductions, I tell them something like: “We won’t be talking about what you think you have come here to learn until just before or after lunch.” I tell them we are going to be learning about Accountability Management and Leadership first. I tell them they likely have some pretty good plans and processes at the dealerships where they work, and if they had already mastered accountability management they would be even more successful than they are now.

And because they are going to be returning to their dealerships with lots of new knowledge, processes and metrics to be paying attention to, some of which will require some significant culture change to not only install but to instill, it will become imperative for them to begin mastering accountability management to fully realize the return on investment for all the time and effort they will be putting in over the course of the training.

Recently, we graduated our third General Management Executive Program (GMEP) class. This is the NCM Institute’s premier program for educating automotive dealership general managers. We were on the last day of the 11-month course, talking about what they had learned, what processes they had put into place, what successes they were having…and it became clear, as would be expected, there had been “process evaporation” in some areas. On the spot, I kind of made up the “Six-Month Challenge to Maximize Your Profits.”

I said to the class, “Reflect on where you are right now in all your departments in terms of sales, gross, expense, inventory aging, training and personnel productivity. Then when back at your dealerships, be sure to go over the 30 items on the Used Vehicle World Class Checklist with your used vehicle team and get buy-in to all the processes. Also, go over the 35 items on the Service Department World Class Checklist with your service team and get buy-in.”

“Now imagine it is six months in the future. You have put into action and are now seeing the results from the consistent application of the disciplines learned during your GMEP experience, including:

  • Daily Save-a-Deal and Make-a-Deal Meetings
  • Daily Trade Walk and Stock Walk
  • Daily salesperson one-on-ones
  • Weekly manager meetings to go over all the relevant forecasts, trends and metrics, discussing what has been working and what has not been working in each department and why
  • Measuring the price-to-sale gap on each used vehicle sold and also calculating the ROI  on each one
  • Coaching your service manager and helping transform your service department from a fix-it-and-smile operation to a selling operation
  • The ‘road to a sale’ is well entrenched on the service drive (yes, service drive!)
  • Your multi-point inspection process has generated increased amounts of additional service requests
  • Your percentage of competitive service work has increased AND your effective labor rate is increasing
  • Your customer retention efforts are really paying off”

OK…OK…I have to admit… I did not make the Challenge that long or comprehensive, although this just scratches the surface of what we covered over 11 months.

I could see in their eyes and by the nodding of their heads that I had made my point.  If one was to cover all those bases systematically, day in and day out, and if rarely did more than a 24-hour cycle go by where most processes were performed, monitored and enhanced, increased productivity and profitability are virtually guaranteed!  That is easier said than done for sure…and that is why we start and end each class with Accountability Management and Leadership.

We find for some managers the elements of the Six-Month Challenge are a timely reminder. We find for most, however, it is their first exposure to an approach that can truly help them become the effective leaders and managers they really want to be.

To learn more about the NCM Institute’s General Management Executive Program, click the link below or call 866.756.2620. Enrollment is currently underway for the next GMEP, with sessions starting August 5, 2013.

Permanent link to this article: http://blog.ncm20.com/2013/06/will-you-take-the-six-month-challenge-to-maximize-your-profits/

Garry House

The Difference Between ‘Good’ and ‘Great’ Auto Dealers

good_to_greatIn the first couple of paragraphs in his book, Good to Great, author Jim Collins makes several interesting statements:

Good is the enemy of great. And that is one of the key reasons why we have so little that becomes great. Few people attain great lives, in large part because it is just so easy to settle for a good life. The vast majority of companies never become great, precisely because the vast majority become quite good – and that is their main problem.

Although I’ve worked with a lot of “good” dealers during my professional career, I’ve never been privileged to work with a “great” dealer. That is not to say there aren’t great dealers; there are a number of great dealers, they’ve just not needed my help! Not surprisingly, all of the good dealers with whom I’ve been associated wanted to be better, but most never seriously aspired to greatness. In fact, one of my good client-dealers recently said, “Garry, you wouldn’t believe how difficult it is getting my team focused on performance improvement when we’re making a million dollars a month!”

What does “great” mean at the dealership level? In my personal opinion, as a dealership resources professional, a dealer can claim “great” or “world class” status when he/she achieves ALL of the following:

  1. 100%+ of assigned market share for each new vehicle franchise represented
  2. Retail Used to New Sales ratio of 1.00 to 1.00 or higher
  3. 80%+ share of calculated Service market potential
  4. Net-to-Gross (pure) of 30%+ and/or Net-to-Sales of 4.5%+
  5. Annualized ROI of 25%+ against true projected liquidation value
  6. Measurable best practices guidelines in each inventory and receivables category
  7. Measurable highest levels of employee engagement, satisfaction, productivity and retention
  8. Measurable highest levels of customer loyalty, retention and satisfaction
  9. Measurable highest levels of recognition for community service and for service to the retail automotive industry in general

By comparison, what does “good” mean to me when looking at the dealership level? This is tougher, and certainly more subjective, but here’s my take:

  1. 80% – 90% of assigned market share for each new vehicle franchise represented
  2. Retail Used to New Sales ratio of at least 0.75 to 1.00
  3. At least 60% Share of calculated Service market potential
  4. Net-to-Gross (pure) of 22.5%+ and/or Net-to-Sales of 3.5%+
  5. Annualized ROI of 15%+ against true projected liquidation value
  6. Measurable best practices guidelines in most inventory and receivables categories
  7. Measurable average levels of employee engagement, satisfaction, productivity and retention
  8. Measurable average levels of customer loyalty, retention, and satisfaction
  9. Measurable average levels of recognition for community service and for service to the retail automotive industry in general

As you’ve probably guessed, this article, unlike Jim Collins’ book, is not about how to transition from good to great, but rather it is concentrated on differentiating good from great. At the NCM Institute Center for Automotive Retail Excellence (NCMi), we don’t spend a lot of time focusing on becoming a “great” dealership; that is a challenge that would involve a long-term commitment and relationship between the NCMi faculty and a dealer’s entire employee body. NCMi does not have the resources to undertake that challenge, nor has it ever been our mission to do so. That is a challenge that is best undertaken by the NCM Retail Operations team.

The NCMi mission, and challenge, is to help transition the managers of a dealership, one or two at a time, from good to great. We do this by focusing on world-class (great) department processes…what they are, why they’re critical, how to implement them, and how to execute them. Part two of this article series will select one or more department processes, and I’ll show you the difference between good and great. Remember, great processes that become disciplined habits produce great and predictable results!

Permanent link to this article: http://blog.ncm20.com/2013/05/the-difference-between-good-and-great-auto-dealers/

David Kain

It’s Time for 3rd Party New Vehicle Lead Providers to be Transparent

fishbowlThe 3rd party new lead providers I know are operated by genuinely good people who want to provide a valuable service to the auto shoppers, dealers and manufacturers they serve. For more than 15 years in some cases, companies like Autobytel have worked diligently to bring car buyers and car dealers together using the magic of the Internet. Like Autobytel, AutoUSA and Dealix are also very well-intended companies that realize in order to grow their business they must also grow the businesses of the dealerships that write the checks for their leads. Beyond the well-known 3rd party new vehicle lead providers are other new vehicle lead providers that don’t have the marquee profile of these industry stalwarts, but send leads in the thousands each month to dealerships all over the country in the name of vehicle manufacturers. These companies are Shift Digital and Urban Science and their new vehicle leads show up in your CRM or lead management tool as Manufacturer 3rd Party Leads.  All are necessary and generally beneficial to the healthy growth of new vehicle sales across the country.

However…if they want to thrive in the future (not just survive), they need to be totally transparent with the originating source of the leads they sell to dealers. The business model used by most 3rd party new vehicle lead providers is that of a lead aggregator. They sell leads to dealers and manufacturers from their own sites (AutoByTel & AutoUSA) and sites they own (Dealix owns InvoiceDealers), as well as leads they buy and then “aggregate” to dealers from root lead sources.   There are literally hundreds of these root lead sources that are not well known to dealers, but you can easily find them if you search for your brands’ current make and models in your community.

These root lead sources typically show up on the side bar with the other pay per click advertisements just to the right of the organic search.  A recent search I conducted on Google using the terms “2013 Ford Fusion Lexington KY” returned several pay per click options, including one that said Ford Fusion with a sub-message that promoted “Don’t Pay $21,700 for a Ford Fusion – Submit Form for a Free Quote!”…A click on the link took us to a site where the headline reads, “Did You Know Every New Ford Fusion Has a Secret Price?” Once I filled out the form to obtain my Secret Price and hit submit, I was then provided the option to get additional pricing on a Mazda, Honda and Chevrolet.  Wow, four quotes for the effort of filling out the form just one time! Sadly, four dealerships will now receive this 3rd party new vehicle lead from a presumed buyer interested in their brand, but the salesperson will likely not know the original root source because it will be masked as a well-known source; in my opinion, too often as a manufacturer 3rd party lead.  Oh…these four dealers that received my test lead…they will each pay for the lead even though none of them will know whether their brand was the primary selection of the auto shopper.

Here’s where we come in. We teach dealers each day how to effectively respond to their leads and how to motivate car buyers to come in to their dealerships. One technique is to read the lead and identify the source.  When the source is identified as a Manufacturer Partner Lead or a Manufacturer 3rd Party Lead or even one of the Big 3 lead providers (Autobytel, AutoUSA and Dealix) the salesperson or Business Development Center agent can’t be sure of the original source and therefore, they will not know what the customer experienced during the lead submission process.

We encourage dealers to take electronic field trips online with their Internet sales team to click where the customer clicks so they can have a clear understanding of their experience before they hit submit. When a dealer knows what the customer experienced, the dealer can respond in kind knowing what the customer was told during the shopping process. This helps buyer and seller appreciate one another more, especially when a salesperson or agent states during the call or email that they are the preferred dealership representing the root lead source. This works great when the sources are clear-cut such as Kelley Blue Book or Edmunds.com, but they are confusing when the source is called Manufacturer Partner or 3rd Party leads.

There is no good reason why this root lead source isn’t clearly identified to the dealership that buys the leads. The reasons for not providing the names of these obscure sources are likely to keep the dealers from being concerned with the quality of individual sources, but that’s not fair to the ones who are writing the checks. All dealers appreciate that leads are scrubbed for working phone numbers and email addresses before they are sent to them. The leads I am concerned about are the leads that get through the filters without telling the dealerships they are likely the 3rd brand choice, or that a price has already been provided below invoice. This would be great for the salesperson or agent responding to know so they can provide a more valuable reply to the auto shopper.

If Trilogy SmartLeads and TrueCar can provide the sources of their leads, so can all the 3rd party new vehicle lead providers. It’s time to help car buyers and selling dealers by reducing unnecessary tension.  Let the buyers know that a dealer will likely be calling them to provide a price, and tell selling dealers that a buyer has selected their vehicle, it was their second or 3rd choice, and they already know the invoice and were told they should pay less. It’s only fair and it’s also the best way for your business and you’re paying dealers to thrive. Just my two cents.

This article was reprinted with permission from KainAutomotive.com. David Kain is a well-known speaker and trainer on Internet sales and management best practices for automotive dealers and he also moderates NCM’s Internet 20 Groups. To find out more about NCM 20 Groups for Internet Directors and Managers, call 877.803.3627

 

Permanent link to this article: http://blog.ncm20.com/2013/05/its-time-for-3rd-party-new-vehicle-lead-providers-to-be-transparent/

NCM Associates

The Perfect Day For A Dealer/General Manager

african salesman standing at car dealership

Realizing the dealer/general manager’s day is full of interruptions, if you could wave a magic wand and create the perfect day, what would you do during this day?

Which activities do you wish you did every day? Which activities are the top ten for you to do every day? Here’s an exercise we use in our 20 Group meetings from time to time that might be helpful for you to realign your daily priorities. The following list is meant to be a thought-starter, to establish what should be priority items a general manager does in a typical day. This is not an all-inclusive list and you are encouraged to add to it.

Highlight the number of the process if you are actively doing it on a daily basis. Highlight the entire process, if it is a process you used to do and need to reactivate (process evaporation).

  1. Arrive at the dealership early, walk through the shop before the technicians arrive, and check the appointments for the day.
  2. Watch the shop “wake up” as the parts personnel, technicians, service advisors, and service directors arrive.
  3. Take time to talk to everyone in fixed operations. What is the pulse of the store today?
  4. Watch the service drive process. Are the recommended processes being followed? Is the service manager on the drive in the morning?
  5. Visit office personnel. Pick up daily DOC and see if deals from previous day are in the office to be processed. How is the paper flow and what are the challenges in the office?
  6. Stop by the customer lounge. Is it clean? Are amenities available? What are customers discussing? Are customers receiving the proper communication while they wait?
  7. Walk through the showroom and check for privacy issues, clean desks, and open computers. Watch the sales department “wake up” for today’s business.
  8. Attend sales meeting and sales training sessions to see if scheduled training is being reviewed. Is the sales board up to date? How are unit sales tracking this month?
  9. Hold a five-minute stand up meeting with all key managers. Review DOC and discuss any inter-departmental challenges for the day. How is the dealership tracking for the month, by department? Discuss any customer concerns.
  10. Reserve time after the manager meeting to discuss departmental challenges and customer concerns with the managers involved.
  11. Attend make-a-deal and save-a-deal meetings with managers on duty. Are these processes being done and are they productive and profitable?
  12. Walk the lot with your new vehicle managers. Is inventory clean, properly displayed, oldest units in front in hot spots of the lot? Are all required stickers, addendums, etc. on vehicles and fresh looking?
  13. Visit the sales office when deals are being worked to verify the approved sales process is being followed for starting price, cash down, payments, leases, trade evaluation process, etc.
  14. Visit the used vehicle department. Are there any privacy issues? Walk the lot with the used vehicle manager. Are oldest vehicles in the hot spots? Is inventory properly reconditioned? Drive the oldest vehicle on the lot with the used vehicle manager. How many vehicles have been in inventory over three (3) days, but are not front line ready?
  15. Personally open all the mail for the day and distribute to applicable associates.
  16. On payroll day, personally distribute payroll checks to associates.
  17. Review daily reports:
    1. Contracts in transit
    2. Previous day’s receipts/deposits
    3. Accounts receivable
    4. New vehicle inventory
    5. Used vehicle inventory
    6. Wholesale units sold for the month
    7. Parts inventory
    8. Employee parts purchases for the month
    9. Employee vehicle purchases for the month
  18. Review repair orders from the previous day.
  19. Review deals from the previous day.
  20. Mystery shop sales, service, and parts by phone and internet.
  21. Visit with F&I personnel. How are you tracking? What is your product penetration? Unfunded contracts? Deals working, etc.?
  22. Take an employee to lunch.
  23. Attend the technician/service advisor meeting.
  24. When factory reps, finance reps, fire marshal, EPA, and other outside vendors are in the store, make sure you spend a couple of minutes with them before they leave.
  25. Sign all checks, review documentation, and purchase orders.
  26. Visit the parts department and do random bin checks.
  27. Walk the entire lot for damage, abandoned vehicles, things that need to be repaired, replaced, or cleaned up.
  28. Review status of staffing requirements. Are additional people needed? What is the status of recruiting?
  29. Go online and review the dealership’s website. Are all specials current? Are vehicles priced per dealership’s policy? Are pictures of vehicles current, clean, and are the approved number of photos shown?
  30. Review internet lead source data. Number of leads, closing, number of hits, length of time on site, etc.
  31. Select a major process and see if the process is being followed as established (again, process evaporation).
  32. Visit the cashier area during a peak time to confirm an active delivery is being completed for all service customers.
  33. Arrive at the dealership at closing time to see how customers are being handled at the end of the day.

Clearly you cannot do all of the listed items in one day, but what should the priority items be in your operation? What other items are on your list? Should you have a daily, weekly, and monthly checklist of things you must do to effectively keep on top of your stores? What reports should you be reviewing daily?

Please share with the Up To Speed Blog readers the activities and must-review reports you do on a daily basis in the comments section below, or tell us what reports you wish you had that could make your life easier!

Most of the best practices and management processes that these thought-starters refer to are taught in our on-site consulting engagements and through the NCM Institute’s training programs for dealers and general managers, like the General Management Executive Program.

Permanent link to this article: http://blog.ncm20.com/2013/04/the-perfect-day-for-a-dealergeneral-manager/

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