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NCM Institute

NCM® Institute Center for Automotive Retail Excellence Announces Winner of Lifetime of Virtual Training

8827_NADA_DailyAd27_9_8125x7_Jan27_2014_NCM_OnDemandThe anticipation is finally over! Tim Crabtree of Future Ford of Sacramento, won lifetime access to the NCM® OnDemand virtual training platform for his entire dealership from the NCM Institute, the leading provider in automotive management training.

The NCM Institute held this contest throughout January and February, and the rules were simple:  participant’s sign up for a complimentary 5-day test drive of OnDemand, and after taking the brief Orientation Module, were entered for a chance to win.

With over 70 hours of content and access to more than 30 trainers, NCM OnDemand offers a wide variety of courses for any dealership employee. OnDemand provides interactive, virtual training from the best instructors in the industry including the likes of Dave Anderson, Alan Ram, Jeff Cowan, and NCM Institute Instructors. The training provides engaging modules to increase profitability and team performance while addressing a dealership’s various pain points.

NCM is proud to offer Tim Crabtree a valuable tool that he can share with Future Ford of Sacramento. Tim has attended multiple NCM Institute classes and is excited to be a member of OnDemand. “I attended the Service Management Level I and the Service Management Level II classes this year at the NCM Institute in Kansas. Never attending a 20 Group class or discussion before, I did not know what to expect nor what was expected of me,” Tim said. “Steve Hall and Robin Cunningham do an excellent job with the learning format of the class and the overall instruction you receive. NCM definitely offers a wide range of classes that would benefit anyone that is up and coming in the business or the seasoned veteran that is becoming comfortable.”

With NCM OnDemand, you can receive great training without leaving your dealership.

If your dealership is among the many struggling to find the right training solution, try the free 5-day NCM OnDemand test drive. You’ve got nothing to lose, and a world of virtual training to gain. Visit ncmondemand.com today.

NCM would like to thank the participants who entered the contest and congratulate Tim Crabtree and Future Ford of Sacramento as winners of the lifetime access to NCM OnDemand.

 


Learn more about NCM OnDemand:

Permanent link to this article: http://blog.ncm20.com/2015/03/ncm-institute-center-for-automotive-retail-excellence-announces-winner-of-lifetime-of-virtual-training/

Steve Hall

Why Dealers Should Be In Express Service

Express Service

Dealers know you must provide fast, convenient, and competitively-priced service in order to retain your customer base.  They also know that oil changes and light maintenance are the most requested service items by customers.  Knowing this, why do dealers continually fight express service?

I’ve heard all the excuses: it hurts my hours per repair order; it hurts my gross profit percentage; it hurts my effective labor rate; I can’t make any money in express service; the list goes on and on.  Shouldn’t we think about it differently?

Isn’t it logical that if a customer comes to you for express services, you will have an advantage to getting the remainder of their maintenance and repair work?  Customers generally do business with people they trust.  If you start to grow that relationship from day one, when the only things that are needed are express-types of items, won’t you have the trust of the customer when the “real” repairs come into play?

We need to realize express service is the gateway to real profits, and if done properly you can make plenty of money along the way.   After all, how do you think all the mass merchandisers and independents stay in business?

Let’s look at it this way, have you ever taken a low profit (or no profit) deal on a new vehicle?  I’m sure that every dealer has, many times.  Why do you do this?  Often times it is because you are getting a trade-in you feel you can make money on.  Other times it is so you can move a unit off the lot to reduce your inventory costs, or maybe to help you reach unit bonus levels for factory incentive money.  Possibly, it was just so you would have an opportunity for the F&I department.  Whatever the reason you decided to take the short deal, you have a plan.  The loss of front-end gross on that unit gave you opportunities to make more money in the long run.  You had to make the deal to gain all of the other benefits.

Can you relate this thought process to express service?  We must retain the customer in order to get all of the long-term benefits.

But express service has an added benefit.

If properly structured, you will make money in express while retaining your customer.  That is a win-win, both short- and long-term!

Take a few minutes and examine how much money is spent on a single vehicle over the lifetime of that vehicle.  Include average warranty work, recalls, oil changes, maintenance, tires, brakes, breakdowns and everything else that happens eventually to every vehicle.  Once you add all of these dollars together and look at the complete picture, you really see what the customer is worth over the lifetime of the vehicle.  Now you must develop your plan to make sure that customer never goes anywhere else, and express service has to be part of that plan.

Let’s look at express service for what it can and should be, a profit center with long-term financial benefits.  Remember, customer retention is a good thing.  Get fast, get efficient, get competitive and get profitable!


Increase performance while increasing profits with NCM OnDemand.

Click here to take a free test drive and see what NCM OnDemand has to offer.

Permanent link to this article: http://blog.ncm20.com/2015/02/why-dealers-should-be-in-express-service/

Garry House

The True Cost of DIY Training

Businesspeople in Meeting

I read a whitepaper recently by The Training Associates comparing the cost of staff trainers to contract trainers. Because in the NCM Institute Manager Training Survey several respondents cited their use of staff trainers as to why they do not use outside training providers, I was eager to read what the paper would reveal. If your dealership uses staff trainers, or you are thinking about bringing on staff trainers, read on for some interesting insights that may have you thinking twice.

First, the white paper, “Staff & Contract Instructors: Costs, Comparisons, and Considerations for Strategic Decision Making,” is updated frequently and used “by many organizations as a tool for assessing their instructor (aka trainer) acquisition strategy – with an eye toward reducing training-related costs and risk.”

Second, the paper reminds the reader that total staff instructor’s salary must include all forms of monetary compensation, including direct and indirect overhead costs and that, as a percent of salary, total overhead costs range from 40 to 150 percent. In their example, the total cost for a $70,000 staff trainer can range from $105,000 to $175,000.

Then there is the discussion of low staff trainer utilization rates, with realistic utilization of the trainer at about 60%, but while interesting, this is not the eye opener. No, what is most revealing is the side-by-side “Factors & Considerations” table that illustrates a near hands-down recommendation for contract instructors over staff instructors. In the few areas where staff instructors have the apparent advantage (no cancellation charges; immediate availability; total company control; loyalty and commitment to the company), the contract trainers trump the in-house trainers hands-down in cost and profitability, broad training expertise, and no employee liabilities and risks.

So the next time you think you could do your training better or cheaper yourself, think again. The NCM Institute is a proven training provider with hundreds of client testimonials to verify our credentials and an annual training subscription with an ROI that can’t be beat! Give us a call when you’re ready to talk about all your training needs…on-site, regional, online or at our training headquarters.

ondemand

Permanent link to this article: http://blog.ncm20.com/2014/04/the-true-cost-of-diy-training/

Bob Urichuck

Can Sales Management Increase Results?

Successful business man standing with his staff in

Organizations often promote the best salespeople into management whether they desire to be there or not — it is seen as a promotion or reward for the results they achieved. However, being a great salesperson does not make someone a great sales manager.

The toughest job of being a sales manager is demonstrating appropriate sales behavior — behavior you would like to see your sales team follow. Because you demonstrated successful behaviors with your buyers to get sales, does not mean the same behaviors will increase your sales team’s results.

So, what would be the appropriate sales discipline (behavior) for sales managers to demonstrate?

 Do you:

  • Always make yourself available to your team members or spend time with management?
  • Assign targets to each, or engage each to come up with their own target and draft sales plan?
  • Monitor their numbers or their behaviors?
  • Tell your salespeople what to do, or are you engaging them?
  • Lead salespeople or empower them to obtain commitment?
  • Demonstrate the behaviors you are training and coaching them on, or you are too busy kissing butt upwards to do that.

These are just a few questions you need to answer for yourself, and there are a lot more.

  • How can you expect results if you follow traditional sales management ways?
  • How do you think telling people what to do makes them feel?
  • Do you like to be told what to do by your boss?
  • How does it make you feel when you are told what to do?
  • How does it make buyers feel when your sales team demonstrates the same telling behavior?

Ownership generates commitment.

Most salespeople don’t like to be told what to do. Neither do customers. And yet that is usually what selling is all about—telling. When you are telling it indicates lack of engagement, trust and empowerment. Is that what you want?

It is no longer about you or top management — it is about the buyer. And the buyer in your case is your sales team. Do they buy into your sales management ways? If not, you will not lead results. If they do, the results will flow easily!

Who knows their market or territory best? Top management, you (the sales manager) or the sales rep?

What if you engaged the sales rep into setting the revenue target for their market or territory? Do you think it would be lower or higher?

The chances are that it will be higher, and in some cases lower. Either way you may have to do some negotiations up or down, but the point is, in the end, who owns the number? Top management, sales management or the sales rep?

When someone has ownership, there is commitment.

Commitment is what sales managers and salespeople have to obtain to lead results.

Next, what would happen if you got each member of your sales team to draft a sales plan and present it back to the team for feedback before finalizing? Once they finalize it and sign it off, who owns it?

Finally, as a sales manager should you manage the numbers or each salesperson’s behavior according to the sales plan? Is it not the behavior that people demonstrate that gets the numbers? Also, would it not be easier to manage their behaviors instead?

Sales professionals, buyers and probably you, too, like to be engaged. To be engaged means to be involved. Being involved is the second biggest motivating factor in the workplace. Everyone wants to contribute to the success of their organization. When you are involved, you feel empowered, trusted and become more motivated and committed because you own the idea.

Are you involving your salespeople, or are you telling them what to do? Are your salespeople asking questions of their buyers or are they telling them about their company and its products and services. The chances are they are doing exactly what you are doing— monkey see, monkey do.

Be aware. What monkey do you see, and what are you doing?


Bob Urichuck’s training (Velocity Selling) is available through NCM OnDemand. 

ondemand

Permanent link to this article: http://blog.ncm20.com/2014/03/can-sales-management-increase-results/

Tony Albertson

Better Processes Improve Technician Productivity and Gross Profits

Calculator red pencilDid you ever perform this calculation for your dealership Service Department? Whenever we do this exercise, either in the field with one of the NCM Retail Operations clients or in the NCM Institute classroom, the result always knocks the socks off the dealership management team. Click here to be immediately taken to an interactive Excel spreadsheet to perform this calculation for your dealership.

If your dealership’s technician productivity is below the Best Practice Guideline for your franchise, what do you need to do to increase technician flat rate hour production by one hour per technician per day? If you’re scratching your head, don’t feel like you’re alone! It’s a lot easier to identify the need for improvement than it is to determine WHAT you need to do and HOW you need to do it!

Effective processes drive productivity! In the Principles of Service Management classes conducted at the NCM Institute Center for Automotive Retail Excellence, attendees are taught how to develop, implement and flawlessly execute the following:

  • The interactive Walk-Around Process
  • The Menu Sales Process
  • The Additional Service Request (ASR) Process

How have you improved technician productivity in your store?  What are your greatest challenges to improvement?

Click here to learn about all our service management training options, including NCMi classroom, regional and on-site training opportunities.

service_roadshow

Permanent link to this article: http://blog.ncm20.com/2013/12/better-processes-improve-technician-productivity-and-gross-profits-2/

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/

Steve Hall

Does Your DMS Match Your Actual Parts Counts?

Fotolia_36189691_XSHave you ever had this happen?  … A service advisor contacts your parts department to see if you have a specific part in stock. You check the computer system and it shows that you have it. A price is given, “Yes, we have it in stock” is told to the advisor.

The advisor proceeds to sell the job to the customer; the information is relayed to the technician who then comes to the parts counter to get the part. Your counter person goes to pick the part from the shelf, only to find the spot on the shelf is empty!

What happens now? You either have to pick the part up from another dealership, possibly hold the vehicle over while the part is ordered, or have the customer return at a later date. None of which are good end-results.

What caused this to happen and what can be done about it? If you believe that you “can’t sell what you can’t find” then you need to have systems in place to make sure that you can “find it.” Let’s look at a few basic rules for a parts department:

  1. Every part must have a “home.” A bin location must be assigned to every part that you have in stock. Even if you are cramped for space, you must designate a space for every part in your system that has an on hand quantity. This includes special ordered parts.
  2. Each bin or location should have a designated number for identification. Does the numbering system make sense? Can a new counterperson or stocker locate the appropriate bin quickly and efficiently?
  3. Each bin should be arranged in alpha numeric order. Shelves should have parts tags for each part that is stocked in it. This makes for easier, faster and more accurate stock replenishment.
  4. If space allows, leave the top and bottom shelves empty. This will allow space for growth within specific bins. You will need this as you add additional part numbers into your stock.
  5. Perform I-bin counts. Individual bin or “I-bin” counts should be a daily discipline within your department.

Items one through four are pretty basic, but I would like to expand more on item five. Parts managers should be aware of this term, whether they apply it or not. General managers or owners may not have been exposed to it, so let me explain how and why to perform these counts.

I-bin counts are used to check the accuracy of your DMS parts system vs. the actual on-hand quantity.  Ideally, they should be set up the following way:

First, make a spreadsheet listing each of your parts bins number. Have additional columns for the date the bin was counted and a column for who counted it. You should have one more column noting that there were, or were not, discrepancies found and adjustments to on-hand quantities.

Each day, the parts manager should print off and have on hand quantity or inventory sheet for the bins that need to be counted. Ideally, you should count enough bins so that you “look” at your complete inventory every 30-45 days. In most parts departments, this only a few bins a day.

Once the sheets are printed, the count should happen quickly. The reason for this is, if any parts are pulled after the sheets are printed you will show a discrepancy and have to research it before any potential adjustments are made. Normally it only takes a few minutes to count a bin, with the obvious exclusions of high-density drawers. In those cases, you may want to count a couple of drawers a day to break it into bite-size chunks.

After the count is completed, if you find any discrepancies, research them appropriately and if the count truly is wrong, make the adjustment in your system. At times you will have positive adjustments as well as negative adjustments. After you are finished with the bin, including the necessary research and adjustments, you should retain the count sheets for future reference.

On a side note, it is a good idea to have different people do counts periodically. Though we don’t like to think that any theft would happen within our store, it can happen. Having a variety of people doing bin counts will make it harder to cover up. As a general manager, be willing to go back and perform some counts yourself; it can be an eye-opening experience.

By doing the perpetual count and check, you will get to see how accurate your DMS and actual on-hand inventory really are. You might just find that the “missing” part in our example above was just stocked in the wrong location!

If you are interested in continued training for your parts manager, be sure and check out the upcoming NCM Institute Principles of Parts Management I and II courses that are launching this fall.

Parts_Acc_Sept

Permanent link to this article: http://blog.ncm20.com/2013/06/does-your-dms-match-your-actual-parts-counts/

Thomas Bear

Used Vehicle Inventory – Checking on Your Investment

Used-Car-Investments_webIn a typical automotive dealership one of the biggest uses of working capital is the investment in used vehicle inventory.  Just like your personal investments in the stock market, you need to check on your investments in used vehicle inventory to see what is changing, where your stock is and whether you need to buy or sell.  A big percentage of you have adopted the Velocity concept, which is part of what we are talking about above.

If you would really like to know how the investment in your used vehicle department is performing, take some time bright and early one morning and do a physical used vehicle inventory.  All of you have done this at least one time in your life, but I bet for a lot of you, it has been a long time; you have probably delegated this process and are assuming everything you want to happen to your used vehicle investment is, in fact, happening.

Your Challenge:  Take the time to personally do a used vehicle inventory this month.

Here are some suggestions:

  1. Have your controller print out a used car aging report with the oldest car listed first.  You will want the year, make, model, serial number, mileage and a column to make notes on vehicles you have discovered items you want to have addressed after the physical inventory.
  2. Have your controller go with you to keep notes, keep you on track and so he/she can reconcile any differences at the end of the physical inventory.
  3. What are you looking for?
    1. Overall look of the lot – Do you have holes in the lot? Are they lined up straight? Does the lot look the way you want it to everyday?  You may think you look at the lot every day, but this morning you are looking at it like one of your 20 Group members is reviewing your used vehicle department.
    2. Location of the units – Are the oldest units located in the hot spot of your lot;  or, at least where a customer has to see the oldest unit in stock? You know you are going to find some of your oldest units on the back line.
    3. Damaged or missing equipment – You know you are going to find some – list them so you can review it with your management team.
    4. Reconditioning of vehicles – Look for vehicles with wax in the corners, tires that are not up to standard, door dings, etc.  You know you are going to find them, so note them.
    5. Missing and faded stickers – Stock stickers, Buyers Guides “As Is” (English and Spanish), window stickers (equipment, make, model, etc.) – you know the oldest units will have faded or missing stickers.
    6. Units not on the inventory listing – List them and find out if there is a deal working on the unit (and for how long), waiting for paperwork and finance approval, etc.  Did you just buy from a wholesaler or auction and the paperwork is in process?
    7. Units that are in the shop or waiting to get into the shop – Find out the date the paperwork cleared on this trade and really see how long it is taking to get vehicles through your shop.
    8. Units not personally inspected – You will have a list of vehicles that are not on the ground today.  Where are they:  Body Shop? Upholstery shop? Loaned to someone? Sold to a wholesaler and you are waiting to receive funds?  Remember to keep this listing and personally touch every vehicle in which you have your money invested.
    9. Titles – Have your controller verify you have titles for every used vehicle you have on your lot.  Most states require you to have the title in hand before you can sell the unit.

As the result of this inventory the following items need to be reviewed with my management team:

  1. ___________________________________________________________________
  2.  ___________________________________________________________________
  3.  ___________________________________________________________________
  4. ___________________________________________________________________
  5. ___________________________________________________________________
  6. ___________________________________________________________________
  7. ___________________________________________________________________
  8. ___________________________________________________________________
  9. ___________________________________________________________________
  10. ___________________________________________________________________

Make sure you pick a nice cool, sunny morning to do this physical inventory.  What did you find?  What processes have evaporated?

Remember, those are your dollars you have just inspected – are they up to your standards?  Now it is time to have a used vehicle meeting with your variable management team.  Good luck and good selling!

Used vehicle management best practices like this are taught in the NCM Institute’s Principles of Used Vehicle Management training programs, in our used vehicle management webinars, and in select regional training programs.  Find out more about our regional training program, “How to Make the Phone Ring and the Door Swing in YOUR Used Vehicle Department” by clicking on the link here or call 866.756.2620.

Permanent link to this article: http://blog.ncm20.com/2013/05/used-vehicle-inventory-checking-on-your-investment/

Jeremy Anwyl

Record Profitability Threatened by Shaky Fundamentals

record_profitabilityA quick look at the current state of auto retailing would suggest that things are good. Tough times (and a couple of notable bankruptcies) have thinned dealer ranks. Although pressures are mounting, the manufacturers are still demonstrating discipline around production volumes. Most importantly, customers are returning to showrooms.

Add all factors together and the result is that volumes and margins on both new and pre-owned vehicles are strong. So strong, in fact, that many dealers are experiencing record profitability.

Look more closely though and you will see a troubled landscape. Long hours and low compensation limit the appeal of vehicle sales as a career and conspire to keep employee turnover high. High turnover raises the costs of training and limits the potential for profitable referral and repeat business.

While margins today are healthy, the long-term trend is for margins to be squeezed. The squeeze comes first from manufacturers simply reducing the spread from MSRP to invoice, and second from market pressure driven by dealers who aggressively discount as a short term fix when sales are needed.

Further threatening profits are demands from the manufacturers. Often these involve expensive facility relocation or upgrades. Even more common are requirements to chase outmoded ideas of customer satisfaction, as defined by largely irrelevant (to the consumer) satisfaction surveys.

For many dealers, marketing costs continue to creep up. New business acquisition is a good example. Few dealers have done the math, but for most, finding new customers is a loss leader. Profits come from repeat business and referrals. This has been true for decades, but for most dealers, both repeat and referral business remain at low levels.

In the minds of consumers, dealerships — with a few notable exceptions — are viewed as pretty much the same. This helps explain why customers tend to do business very locally. Customers focus on the default differentiator — geographic convenience — when nothing else is offered.

Finally, as I noted in my last post, consumers still dislike broad swaths of the purchase process. It takes too long and getting to net pricing is too difficult. This is a growing problem as consumer expectations are being shaped by other shopping experiences and, by comparison, auto retailing continues to fall short.

Any business with healthy profits but troubled fundamentals is an alluring target for outsiders seeking opportunity. But history has shown that retailing is something of a spider web, ensnaring the overconfident.

This is partially attributable to a web of state laws and manufacturer agreements. Both conspire to make it unlikely that change will come from outside our industry. But change can easily come from within. It is dealers who will transform auto retailing.

It fact, it is already happening. If you visit enough dealers, you will run across a very few who are dramatically different. The obvious difference is that they are much, much larger than their competition. But looking more closely, things get really interesting.

For one, you would expect their average vehicle gross profit to be lower than average, but it is actually higher. Secondly, stores like this rarely, if ever, use price leaders. They may have good-sized marketing budgets, but because it is spread across a large volume of sales, their per-unit costs are low. They draw from large geographical areas. And perhaps most importantly, they have very high rates of repeat and referral business.

How high? Try over 80%.

One more thing: they have been at it for a long time — sometimes decades. Their business processes are well honed. Management has been in place for years.

As you might expect, these stores make a lot of money. So much so, the wonder is why other stores don’t try to emulate their success.

There are some good reasons. To understand these, let’s step back a bit and consider the way our industry has evolved.

Remember what it used to be like to be a dealer? It wasn’t that long ago when being a dealer meant you had a single franchise; a business in which your entire net worth was committed. The manufacturers liked this arrangement as it meant that dealers tended to be highly motivated. A dealer was very focused on doing what it took to maximize profitability, making decisions that optimized business results moment by moment. This is a very efficient way to conduct business, but I have to note — from a consumer’s perspective — it is not very consistent.

Today, auto retailing has changed in many ways, but the “cultural overhang” of entrepreneurial optimization still exists. We have seen the growth of megadealers and corporate chains, but even in these cases the tendency is to defer decisions to the management “on the ground.”

Here’s the conundrum:

A store that is run by a highly-motivated owner or GM, where decisions are based on maximizing moment-by-moment opportunities, will financially outperform a dealership where the business is built around consistent processes. Outperform, that is, in the short term.

Therein lies the rub. The stores I mentioned above — those that are models of future dealerships – achieved their dramatic levels of success by being willing to stick to a way of doing business even though it meant they left money on the table in the short term. This is obviously not easy to do.

But it was their commitment, perhaps even their stubbornness, which over time meant these few dealerships began to see better results than their competitors. Given a long enough time frame, the results became dramatically better.

Commitment is one thing, but what exactly were these dealers committed to? And more importantly for dealers today, can the “cycle time to success” be shortened?

I will answer both questions in my next post.

Jeremy Anwyl is vice chairman of Edmunds.com and a guest contributor to the Up To Speed blog. To reach Jeremy, tweet @JeremyAnwyl, call 310.309.6393 or email janwyl@edmunds.com.

Learn the retail management principles and processes that successful dealers and general managers use to maximize efficiencies, drive sales and improve profitability. Early registration is open now for the General Management Executive Program. Discounts expire on May 31st, so click the banner below to get the details!

Permanent link to this article: http://blog.ncm20.com/2013/05/record-profitability-threatened-by-shaky-fundamentals/

Rebecca Chernek

To Women With a Passion for F&I

woman_FandIEMBRACE CHANGE

The glass ceiling for women’s acceptance in the finance industry was shattered over a decade ago.

According to the 2012 Catalyst Census of Women Executive Officers and Top Earners, which counts the number of women in upper management in Fortune 500 companies, women comprise over 18% of all executive officers in the finance industry, and 19% of board directors in the finance and insurance industries in Fortune 500 companies.

BUT . . . that glass ceiling is only slightly cracked for F&I women in the automotive industry.

Why is this true? It’s no secret that the auto industry worldwide has been male-dominated since the birth of the four-wheeled, horseless carriage. Ownership of auto makers is passed down to the sons and to their sons in Japan, Germany, France, Sweden and in Canada; this practice has been followed for generations even in the United States.

Some 95% of the country’s 20,000 auto dealers who belong to the National Automobile Dealers Association are male.

While a very small percentage of women have the financial means to become the owner of a GM, Ford, Chrysler, Saab or Toyota franchise, an increasing number are rising in the ranks to positions of valued leadership and respect in these manufacturers’ offices.

This includes the position of F&I manager at a local franchise dealership.

Why should this perk up your interest?

Because if you have the inborn drive to set goals, to meet and beat challenges along the way, and to be a leader as well as a team player, you can be one of the women to shatter the glass ceiling in what still remains a prominently male domain.

Challenges will be part of your F&I experience in a car dealership, but the field is wide open and you could become a role model for many more women in finance to follow in your footsteps.

It is part of car “culture”—still in practice, spread like dandelions in your front yard, and written about by every journalist on the subject—to repetitively say that many women start out in car sales and with their awesome success are asked by the dealer to step into the position of finance manager, but few stay.

The reasons given are always the same: no training for the position; no ongoing training; little cooperation from the predominantly male sales personnel; long inflexible hours; continued disrespect and a lack of dealer willingness to change the culture to be more inclusive of women outside office workers, or to change former methods to reach out to women buyers in the community. When lumped together, they discouraged open dialogue and widened the unspoken impression that female finance officers are inadequate.

Here’s some advice given by two widely-dissimilar women. Former First Lady Eleanor Roosevelt, who is still famous for her role as women’s advocate, said, “No one can make you feel inferior without your consent.” Dolly Parton, who is one of the most successful female recording artists of all time and an astute businesswoman, said, “If you want the rainbow, you’ve got to put up with the rain.”

In other words, take a position as F&I manager at a car dealership with your eyes wide open and fixed on your ultimate goal: to not only meet the culture challenges, but rise above them so fast and with such dignity that you become an influential member of the dealer’s inner circle. One that has numbers to prove your value and leadership skills that have every member of the sales team eager to become your best friend.

Study; ask for training; provide it for all the sales staff and have weekly meetings with them to share successes and failures; learn not only the names of the office staff, but exactly what they do and how and why. That’s what leadership in the finance office requires. More than words. More than overblown reactions to a culture that is waiting for you to show them how to embrace change. It requires a concerted plan and actions that drive your ultimate success. Oh, and see that the dealership’s bottom line soars and those males in sales see their paychecks grow like a snowball rolling downhill.

Then the statistics will change and the article topics will reflect it.

THINK BIG. Start small.

Rebecca Chernek is the principal of Chernek Consulting, an F&I training and consulting agency in Atlanta. Her ”Closing Tools Mastering Menu Sales Workshop” will be offered in Chattanooga,Tennessee July 15-17, 2013 at Woople Headquarters. Contact Becky Chernek for details at 404-276-4026.

Permanent link to this article: http://blog.ncm20.com/2013/05/to-women-with-a-passion-for-fi/

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