Article

Chewing Gum And The Special Finance Department

August 2006, Auto Dealer Today - WebXclusive

by Greg Goebel - Also by this author

O.K., I will grant that it is possible that I may be a bit subjective on the subject of training, as one of my roles is that of a Special Finance trainer, but bear with me on this for a few minutes – for in all the years I spent as a dealer, I truly practiced what I preach.

Wrigleys – you know the company – they own a bunch of things. Newspapers, a baseball team, and among other things, a company that manufactures and sells chewing gum. Now you may wonder how this fits in with the retail automobile business, but it really does.

Many of our sons and daughters are probably in their senior year of college. They will soon begin (if they haven’t already started) interviewing for that first position out of college … one often termed “entry level.” Who knows, perhaps one of our readers will even have their son or daughter wind up taking a position with the Wrigley companies … maybe even with the chewing gum division.

You see, if they do, they will spend a minimum of three weeks in training learning how to sell … a pack of chewing gum. Yes, you know that simple little product that sits by the checkout counters all over the country. The product that a two or three year old child more than likely can figure out how to open and chew on their own. Three weeks of training to sell chewing gum.

Now, let’s do some math in our heads. Let’s add up what it costs Wrigleys to fly their new hires to their corporate offices, put them up in hotel accommodations, and feed them for three weeks? Then let’s add in the people they have on staff that they have to pay to perform the actual training. Don’t forget the training rooms, the audio visual and other technological equipment, and on and on. Have you added it all up, all costs, just to sell a package of chewing gum?

Now, let’s do some comparisons. First, let’s compare that pack of chewing gum to, say, an automobile. It is pretty obvious which product should require more training to properly understand and explain to a buyer. Why is it that very, very few dealerships offer 120 hours of sales training in the course of an entire year to their staff that sells that automobile? That is just selling an automobile. Add in the more complex issues brought by the Special Finance customer. You have to be able to identify the individuals, qualify them properly, be able to identify all stipulations, and of course stay in compliance with Truth in Lending guidelines and privacy issues.

If Wrigleys trains their entry level position sales representatives for three weeks just to sell a pack of gum, can you imagine the time and money spent training and shaping their management team? Honestly, that gets to be a number that I can’t even get my arms around.

Now think of the dealership’s management team, the Special Finance Manager, the General Manager, the Sales Managers, and Finance and Insurance Manager. How are they trained to recognize and understand the lenders and their programs; to read credit and make good decisions; to sell a deal to a lender; to fund deals quickly and, oh yes, keep the department in compliance with all federal, state and local laws? How are they kept current? Not much of a comparison, I would imagine. As an industry, retail automobile dealers are woefully negligent at training.

O.K., I have now stated the obvious.

Furthermore, dealers in general will claim it is difficult to find quality people to staff their dealerships. (Bringing to mind the analogy I often use – “You don’t ever see a high-dive by the “gene pool” in the car business.”) Gee, I wonder why. We try to recruit people to achieve our lofty goals, while not teaching them how to conduct business. Oh yeah, we then offer to pay them on performance based compensation plans.

As you read this article, we are closing in on the end of yet another year. It is a time when prudent dealers begin to forecast, to budget and to plan for the upcoming year. Most dealers, general managers and Special Finance managers have somehow risen to the top in spite of the lack of training regimens. They have sought out learning experiences, and educated themselves on the intricacies of operating a multi-faceted business. And somehow, they can never find time to provide the ongoing training that was generally never provided to them. They rationalize that either the chance of missing that next deal is more important than teaching their employees how to conduct business, or it costs too much.

As a partner in Leedom and Associates, and moderator of 20 groups, I have a number of highly successful dealer clients. They all have a very common denominator. They train, train and retrain. Every day. Every week. Every month. And they manage to attract people – the “good ones” – that other dealers don’t believe exist in the retail industry.

Nearly every dealer that has risen to that position has ambition for growth and increased profitability. I was in that position for 18 years. During that time, I continually sought out more knowledge, for my team and myself. Now, as a moderator, consultant and trainer, I continue to learn from the very dealers that I am also training.

Yes, there were times when I swallowed hard when I wrote the checks. It seemed expensive. There also is always the chance that you are paying to train someone that may leave you and go somewhere else to compete with you. Then again, which is worse? To pay to train someone and have them leave, or to not train someone and have them stay?

As we look to the coming year and we consider ad budgets, operating expenses and bottom lines, I urge you to consider how much more profitably dealerships can operate if they have good people that are trained to do their jobs … and plan for it. Okay, I will get off my soapbox now.

Vol 1, Issue 5

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