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Tag Archive: NCM Associates

NCM Associates

#AskNCM: How can I get more out of my paint booth?

A student recently asked this question during our Collision Center Management class: How can I get more efficiency out of my paint booth?

Great question! Steve Hall explains, “You can never produce more vehicles out of a collision department than you can get through your paint booth system.” Steve explains his simple solution to increase paint booth cycle time and the number of vehicles you can get through collision in the video. The best part? No capital improvements needed!

Have another question for Steve or the other #AskNCM experts? Leave a comment below!

Permanent link to this article: http://blog.ncm20.com/2017/04/askncm-how-can-i-get-more-out-of-my-paint-booth/

NCM Associates

#AskNCM: Are all dealerships losing employees over working hours?

How many hours do your employees work on average? Is it too much? Too little? Are they even working while they’re at work? Expert Robin Cunningham shares his observations about the ways successful dealerships are scheduling their employees.

Have another question for Robin or the other #AskNCM experts? Leave it in a comment below!

Permanent link to this article: http://blog.ncm20.com/2017/03/askncm-are-all-dealerships-losing-employees-over-working-hours/

NCM Associates

#AskNCM: How often are NCM KPIs updated?

Ever wonder what goes into the critical NCM® metrics you use in your dealership? Expert Rick Wegley explains the differences between NCM Benchmark® data and best practice guides and tells you how we create them.

Learn how to leverage your NCM numbers.

Have another question for Rick or the other #AskNCM experts? Leave a comment below!

Permanent link to this article: http://blog.ncm20.com/2017/03/askncm-how-often-are-ncm-kpis-updated/

NCM Associates

#AskNCM: Why is New Vehicle F&I Such a Big Deal?

Why has new vehicle F&I become such a hot topic? “Fierce competition,” says NCM expert Robin Cunningham. As the market compresses, dealers cannot afford to miss the new car sale.

See how F&I impacts your dealership and discover how you can learn more about it.

Have another question for Robin or the other #AskNCM experts? Leave a comment below!

Permanent link to this article: http://blog.ncm20.com/2017/03/askncm-why-is-new-vehicle-fi-such-a-big-deal/

Robin Cunningham

Service BDC: Where are Your Customers, and When Are They Coming Back?

Call Center Operators Working In Office

I’m a big fan of service BDCs. In fact, during my retail days in the mid-Nineties, I was an early adopter of the concept. I had asked a consultant friend of mine, who help dealers set these up, to give me a hand at my store. We had staff who were either mishandling or not making inbound and outbound calls, so I remember being eager to see the results.

This topic must have been on my mind recently when I asked a class of NCMi students, “Where are your customers, and when are they coming back?”

Well, you would have thought I’d asked the question in a foreign language or something! There was absolute silence in the room. Some were looking at others to see if they had an answer. My take on the look on everyone’s faces was, “This is THE question, isn’t it?” No one ventured an answer.

The first service appointment is key

So, I then asked, “How many of your dealerships set the first service appointment on each new and used vehicle at the time of delivery, based on time or mileage?” Of the 25 or so people in the room, only two raised their hands affirming that this was, in fact, happening at their dealerships.

When we started our BDC, one of the processes we decided track was the first service appointment. We, for sure, were not setting these. I’d heard that getting a 65% return rate for the 1st Service Appointment was the Holy Grail but, we were told, only 14% of customers would come back on their own for non-warranty, maintenance, and repair work. You cannot build a business on 14%! So it became part of the sales and delivery process to have the BDC, based on time or mileage, to put the customer’s scheduled first service appointment into the system.

Consistent appointments make loyal customers

While we were very good in service in those days—especially in menu sales and work found on multi-point inspections, which we called the “perpetual service clinic”—I am sure we were not setting next service appointments, something I now know is a critical component to service profits.

With that in mind, I asked my students, “How many of you set the next service appointment with each customer during the active delivery with their Service Advisor?” The answer was zero.

It’s a given that the first service Appointment is a must to get the whole process started, but it’s setting the next service appointment that keeps it all together. I always think of this analogy: “How often would we get our teeth cleaned, if the dentist didn’t call to remind us?” The answers range from “not as often” to “never!” Service work on automobiles is no different; most people forget about it until the vehicle doesn’t run or they are reminded of needed work. It’s so obvious that it still amazes me that so few American dealerships take the initiative to set the appointment!

Challenge yourself to invite clients back

We all know that customer loyalty is on the wane. In response, most dealers have invested in CRM software to help us keep track of our clients. Yet, these tools are only as good as our processes. The sad truth is that many of my clients still are not setting first and next service appointments, even when they use these tools.

So, here’s my challenge for you: Always be able to answer the question, “Where are your customers and when are they coming back?” Create a reliable system that gets your clients back to the dealership after their purchase and keeps them coming back.

NCM Expert Robin Cunningham is an instructor with our Institute and a frequent contributor to our blog and video series #AskNCM.

Permanent link to this article: http://blog.ncm20.com/2017/02/service-bdc-where-are-your-customers-and-when-are-they-coming-back/

Lee Michaelson

Retail Solutions: Hold Your Car Up to the Phone

Smiling salesman having a phone call

“Hold your car up to the phone, sir.” (hahaha!)

Remember when we made comments like this to customers who wanted phone appraisals? We were real witty back then when a customer wanted the old sight unseen trade appraisal!

Capture an interested customer

Well, today, we can do a phone appraisal, and it’s easy. As long as the buyer has a smartphone with a camera—and who doesn’t—you’re set!

You have a great chance to sell these customers because they have already narrowed their choices, and you have made it to the top of their shopping list. Make it easy, and you have an opportunity to sell a car.

Develop a process and set expectations

Customers are conditioned to the information you have provided about your car online: multiple pictures and possibly a video, equipment list, CarFax, and a compelling description for starters.

Let’s say the customer insists you provide an appraisal of their car before they come to the dealership. Do it in a professional manner. Tell them you have a process for this situation, and you need all of the following documentation just like they see online for the car they are interested in purchasing from you: six to eight pictures and a complete appraisal form. Explain that you will run a CARFAX or other similar vehicle history report on their vehicle.

My recommended Online Trade Appraisal Process

  • Make a PDF of your appraisal document and have it available for all appropriate team members to email to a customer. This is a great tool for qualifying the customer, and it gets the customer mentally involved in the appraisal. You also will start to build creditability in the evaluation, lower the client’s expectations of the trade price, and help build rapport between the salesperson and customer. You are now getting answers to many questions before the deal is started!
  • Have the customer complete the entire document, including disclosure about the odometer, accidents, body damage/work, and any mechanical deficiencies that require reconditioning. Make sure they sign it before they scan it (the camera app on their phone will work) and return it to you.
  • Detail the reconditioning and reconditioning cost on every appraisal to justify your appraisal. Use current market pricing evidence from the internet to validate your appraisal. Inform the customer that your appraisal is firm based on the appraisal document they submitted to you, subject to driving and inspecting the vehicle. This is a similar process they will likely want for the vehicle they plan to purchase from you.
  • Upon arrival at the dealership, every appraisal should get a trade walk around with the customer, 100% of the time. Profit can be improved if the evaluation of damage and missing parts is correct. Likewise, customer satisfaction can be improved as a result of clear communication and a transparent process.
  • Define follow-up responsibility in case of missing parts (needing a second key, for example). You can also reduce stock days by completing the vehicle trade-in process.

Most of our customers enjoy the easy satisfaction and quick turnaround of online shopping. Although there will always be a necessary in-person component to trade-in vehicles, by creating a simple phone appraisal process you can capitalize on their habits and gain new customers. And just think: how many more cars would you sell if you adopted this process?

Learn more about Lee Michaelson 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/2017/02/retail-solutions-hold-your-car-up-to-the-phone/

Terry Wichmann

From the 20 Group: How to Defend Your Used Vehicle Appraisal

NCM-CD-127

Editor’s Note: It’s clear that our readers found Terry’s last blog, My Favorite Wordtracks to Defend UV Gross Profit, an incredibly useful tool for their dealerships. We asked him what other defensive wordtracks he could share, and Terry came back with this excellent guide to making the most of your appraisal.

You, as the dealer principal or general manager, have two options when you feel that used vehicle gross profit per-vehicle-retail (PVR) is mediocre (or worse). You can yell at your sales managers to increase the gross profit PVR. Or you can determine if there is a Used Vehicle process which is “broken” or needs improvement. As yelling doesn’t accomplish much for long, I recommend that you consider your processes and fix them.

The four types of trade-ins

I have an NCM Retail Solutions client who likes to say that there are only four ways to take in a car: 1) steal the car; 2) take it in for the right money; 3) stretch to make a deal; or 4) bury yourselves in the trade-in.

During this conversation, let’s assume we are discussing trade-ins that we “took in for the right money” or “stretch a little bit to make a deal.”

Step One: Appraise the vehicle correctly

Many dealer principals or general managers believe that they make gross profit when buying the car. That is, the dealership makes its money when we trade for or purchase it, as opposed to when we retail it.  One of the factors in making gross profit when you ‘buy the car’ is determining if we appraise it correctly.

I imagine your sales managers mostly value trade-ins of your franchise accurately. You need to evaluate their performance on other franchises, too, to protect the appraisal. Here are some sample questions to get you started:

    • Do you think they correctly appraise trade-ins of other franchises accurately?
    • When it is necessary to replace the windshield on a luxury car, do you think they know which luxury car has the $300 windshield or the $3000 windshield (which includes cameras and sensors)?

Step Two: Understand the costs of misappraisal

If we appraise a trade-in or lease-return incorrectly, say by $500, we will probably make $500 (or so) less gross profit than if we caught it, assuming we took in the trade for the right money in the first place. So, it’s critical that you get the appraisal right.

Another of my NCM dealer-clients likes to include the line item “$300 hidden reconditioning” on the used vehicle appraisal form. This reminder helps his sales managers consider hidden problems that are often missed during an appraisal, such as the water pump, rear main seal, and other items we may not see or hear during the evaluation process.

Step Three: Replace negotiation with documentation

To solve the misappraisal problem, I recommend to my NCM clients that their fixed ops managers provide pricing to their sales managers for the forty or so most common maintenance items on their most frequently accepted models, based on the CP labor rate and 40% gross-%-sales for parts, which is cost plus 67%.

Once this menu is available, your salespeople—or, preferably, sales managers—can defend the appraisal to prospects by showing them the costs to repair these common maintenance items. It’s hard to argue against the costs in black and white. This approach of replacing negotiation with documentation was one of Dale Pollak’s philosophies when he defined used vehicle “velocity” by designing vAuto.

There’s so little room for negotiations nowadays, so you need to prepare to counter any objections while accurately appraising trade-ins and lease returns as a means to increase your dealership’s used vehicle gross profit PVR. With the right process in hand, you’ll see better results than yelling at your staff.

How does your dealership defend the appraisal? Tell us below. Have more dealership concerns? Meet with Terry or another NCM Consultant to identify opportunities for improvement in your store.

Permanent link to this article: http://blog.ncm20.com/2017/01/from-the-20-group-how-to-defend-your-used-vehicle-appraisal/

Brian Faulkenberry

From the 20 Group: Checklist to Stop Process Evaporation

Close up of working process at business meeting in office

During my more than twenty years moderating NCM 20 Group meetings for various industries, the phenomenon called “process evaporation” has frequently been interjected into Super Idea sessions and composite reviews.

A good process gone missing

I am not sure who coined the phrase, but I suspect it was a frustrated owner who thought he or she had a best practice in place only to find out the procedure had “evaporated.”  What I’ve heard numerous times from members is some iteration of the comment: We used to do that; I guess it worked so well that we stopped doing it!

Although said tongue-in-cheek, disappearing best practices are probably a reality at most dealerships, including yours.  In my experience, putting processes in place is the easy part; the difficulty lies in making sure employees consistently adhere to them. Some of the reasons dealerships may experience “process evaporation” include management or personnel turnover, too many procedures, a lack of consistent follow-up, and dealer complacency.

Stop losing your processes

If you want to keep best practices in your business, now’s a good time for a department-by-department review to see if any “process evaporation” has crept into your operation.  I’m starting with the administrative department, but I will touch on other units in future blogs.

Administrative Checklist

Use this list to identify a few administrative procedures that you should check. How many are still in place at your dealership?

  • Walk dealership; do you see any privacy compliance issues?
  • Do you have weekly manager receivables meetings?
  • Do you have weekly manager review of rebate receivable?
  • Are all vendors on the approved list at agreed pricing?
  • Do you have zero employee receivables?
  • Have all employees signed their reviews and documented issues?
  • Have you outlined an employee purchase policy for new, pre-owned, and parts & service?
  • Are month-end financial statements completed by the fifth working day?
  • Are all NCM reports submitted promptly and accurately?
  • Does your staff open and review all mail daily?
  • Are manager reviewing all schedules by 10th of each month?

While this list will get you started, there may be other best practices at your business that you’ve started but have slipped away. Be sure to track what’s happening in your dealership and, if something’s working well, don’t let it evaporate!

Learn more about Brian Faulkenberry 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/from-the-20-group-checklist-to-stop-process-evaporation/

Kevin Cunningham

From the 20G: Members’ Advice for Getting the Most from Your Meeting

kevin

As a moderator, I’ve had the fortunate pleasure to work with wonderful NCM 20 Group members. I’m always impressed by the great pains they take to prepare for our discussions, and it’s clear to me that their work is the key to getting the best possible outcomes.  So I asked some of the most successful dealers I know to tell me exactly how they get the most from their meeting, and they agreed to let me share their insights in a blog. Please know much of the following article comes directly from their quotes.

Dealer One – Get your management team involved

I typically get my agenda and meeting materials 4-5 weeks prior to the actual meeting, so I have no excuses for not being prepared. To determine what my best opportunities are, I actively review my group composite, circling, highlighting, and making notes. This really keeps me focused throughout the meetings.

After I get my juices going, we get our management team together to review the agenda allowing me to delegate topics for their research and follow up. I like to do this for many reasons; however, most importantly, this lets me and my team know where our opportunities are. Also, when I read the responses from my team, I now am aware of their best thinking. This can—and has— create opportunities to develop people’s talents.

Note from Kevin: On a side note, while talking with our team at the NCM Institute, l learned that is a significantly high percentage of our class attendees don’t even know what their actual responsibilities are! There’s a real chance here for you to validate what you expect from your team and to communicate it in writing, then get them the training they need to meet your goals.

Dealer Two – Create a to-do List

After our follow-up management team meeting, I create my list of what I want to take away from the meeting. I ask myself of this trip’s purpose: “to make another dollar or to save another dollar?”

Dealer Three – Embrace the social aspects

Getting away from the store is vital to my own personal growth, as attending a meeting truly allows me to work “ON” my business instead of just working “IN” my business. During the meeting, I very specifically and clearly articulate what issue I want to get addressed.

Please know that I can and do get as much important feedback from the social events as I do in the meeting rooms. With so many individual agendas—some strategic, some operational—I try to pick out members who are already succeeding in the area I want to improve upon and make sure I get time with them regardless if it is in the meeting room or a group activity.

One more tip:  As so much of our sales are initiated though e-commerce channels, I work to review the websites of my fellow members and local competitors. This gives me an opportunity to compliment members and offer constructive criticism.

Dealer Four – Don’t scare your employees

Note from Kevin: A common thread I have witnessed over my decades with clients is the pages of notes and exuberant enthusiasm members go back to their stores with. So not to scare your team, the following notes from a member are ones I would recommend:

  1. On your first day back from a hectic travel event, try to sit down and get your notes and action plans organized.
  2. It is very important NOT to overwhelm your team with a “Meeting Mania” list of things, ideas, and processes you want implemented a week ago. So pick out the TOP THREE things you learned. Set up a meeting later in the week to discuss these ideas; get your team involved in the implementation or the construction of a new or modified process.
  3. Share all of the Best Ideas presented and collected while attending the meeting. After discussing them, distribute the ideas to your department heads where they best apply.
  4. Review the composite with your team when you get back. Also review it monthly and be as transparent as possible, so your staff knows the metrics you expect them to meet.

My dealers have given you a lot to think about, I realize, so let’s prioritize here. I think the key takeaways here are to know what you want to get from each meeting and make sure you put yourself in the position to get it. Stay focused and open to new ideas while attending your NCM 20 Group meeting. Bring back your ideas and, after a few days, share them with your team and discuss ideas for positive change.

As I am not in your shoes, I realize much of this is easy to say. As such, this is why I contacted your peer dealers to get the truth from those in your shoes. Here’s to great selling!

Learn more about Kevin Cunningham 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/from-the-20g-members-advice-for-getting-the-most-from-your-meeting/

NCM Associates

New Ideas for New Orleans

Going to New Orleans? With just a week to go, we can’t wait to join you in the Big Easy and to share our exciting new options for your dealership.

Announcing the NCM-Rawls Dealer Executive Program

We’re debuting our newest education option, the NCM-Rawls Dealer Executive Program, at the convention. A joint-venture with The Rawls Group, this 10-month training course is specifically designed for dealers and their successors who want to create and maintain a family legacy. Visit the Rawls Group booth #3937 to talk with Kendall Rawls or the NCM Associates booth #4931 to speak with Brandiss Drummer to learn more. On the operations and expenses front, our Software Solutions team will be on-site to demo LiveAudit®, HealthCheck™, and axcessa®. If you haven’t yet seen these products in action, be sure to book a time to see how these cash flow, expenses, and operations tools can make managing your dealership easier and more efficient.

We’ve also brought back last year’s crowd-pleaser, the Ultimaker 3D printer! When you sign up for a demo or consultation—or stop by the booth—you can pick from our selection of three gifts. The video above shows a time-lapse of their production.

Are you coming to New Orleans? Visit our team at Booth #4931!

Permanent link to this article: http://blog.ncm20.com/2017/01/new-ideas-for-new-orleans/

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