Turning Inventory Every Thirty Days

August 2006, Auto Dealer Today - WebXclusive

by Seth Ridgeway - Also by this author

I’m always on a quest to find dealerships to showcase in places that aren’t considered automotive hotbeds. I not only look for high sales and profits but the exceptional way they conduct their business and the people that make it all happen. I’ve found another gem; Champion Chevrolet located in Tallahassee, Fla.

Champion Chevrolet owner Larry Strom opened a new store dedicated to pre-owned vehicles and decided that he wanted the best person available to run it. The pursuit of this person took him down south to Melbourne, Fla. to recruit Steve Yawn to be the general manager. Strom liked what Yawn had to offer, and Yawn liked the new challenge. In turn, after Yawn took charge, he went out and brought in people that he knew could get the job done. Where did Yawn get his people? You guessed it, from other dealerships. He said that it’s not difficult to recruit and keep good people. All you have to do is pay them well and treat them right.

I’ve witnessed Yawn’s crew in action, and believe me they are very good. Over the last six months they’ve averaged 250 sales on a lot that carries 300 units, tops. Do the numbers; Champion Chevrolet is close to turning over their entire stock every month. Moving numbers like that keeps Purchasing Manager John Rader busy. He’s one of the reasons they move so many vehicles. He puts a product on site that they can move quickly with high gross. Why would you have anyone in that position that did differently? It’s the object of the exercise isn’t it? Buy low and sell high; that’s one of the first rules I learned and should be one that every dealer uses to maximize profit.

When I asked Yawn about the process that drives their success, he stated that simplicity and accountability were the keys. He went back to old school and started logging every deal that crosses his desk, and he still uses the paper log book method not a fancy CRM tool. He feels that gives him a more hands-on approach to dealing with customers and he wants his crew to use the same approach. Yawn has a great philosophy; “Do as I do; not just do as I say."

Yawn has diversified his advertising for the dealership. He co-ops television, print ad and radio with the new car centers in the group. He keeps his Internet Special Finance advertising to himself. He uses just one Internet lead source, Yawn said that they close 15 percent of their leads like clockwork every month. They have become part of our Internet and Special Finance business model that compliments walk-on and call-in opportunities. He said that once this marriage was completed, sales went from 190 to 250 units a month; 65 to 70 percent attributed to special finance customers.

The secret to their sales success is follow up. Yawn said you just can’t have too much of that. He thinks every customer lead is a potential sale and he treats it like a draft check that just requires the customer’s endorsement. All that’s required is to get the customer to the dealership before the competition does. He knows they’re going to buy from someone, so why shouldn’t it be Champion Chevrolet? Yawn has assembled a crew of 14 professional salespeople to make it all happen. He’s trained them well and knows they’ll follow set procedures. Yawn isn’t a control freak but does make sure that every Internet lead from starts with him and ends with him. He requires accountability from his people on every application received.

Yawn talks about profit on sales like a proud parent talks about their children. He said that they average between $2,500 and $3,000 a copy. His advertising cost per sale goal is 12 percent or less against the gross, and brings in the lowest cost per sale at four percent. Yawn said, “Just think about it, four percent of a $2,500 gross is just $105. By anybody’s standard, that’s a great bargain. With what’s being wasted today on advertising for this industry, that’s real close to nirvana."

One question that Yawn wouldn’t elaborate on when asked was which of his salespeople was the “Top Dog.” He thought for a few seconds and said they were “all exceptional” and wouldn’t single anyone out. I think that he also makes a great politician as well as a general manager. You never know; he could be governor someday. He already made the first step when he moved to Tallahassee.

Vol 2, Issue 6

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