March 2010, Auto Dealer Today - WebXclusive
You know the sales rep who says, "When I’m a manager, I will never be like this jerk I work for." Although, the minute they get promoted, they become the same jerk. Why does this happen? The simple answer is: It's all they know!
I had the chance to speak with many dealers at the NADA convention in Orlando, Fla., and it was very interesting to see that some dealers are actually making the excuses for their special finance teams these days! It was amazing to me that for every eight or nine dealers who are either still making money with special finance or trying to get into the special finance game, there was one dealer who said, "Special finance is dead! We used to be a big special finance dealer, but now we can't get inventory and the banks just aren’t buying anything." Guess what, Mr. Dealer? You just got sold! Drive Financial, AmeriCredit and AFS Financial (Autobank) are just a few of the many finance companies that are still buying strong, and just because your used car buyer who deals only with his "wholesale buddies" and/or goes to the exact same auction(s) week after week says he can't find cars doesn't mean there aren't good buys out there.
Can't get deals bought? Can't get inventory? Believe it or not, those are signs of personnel issues! If your buyer can't find cars, he's not looking hard enough, and if your special finance team can't get deals bought, they never knew how to in the first place!
Profound knowledge tells us, what we know in advance, we prepare for in advance! Here's some special finance manager profound knowledge. We know in advance what we are going to hear from our sales teams: the leads suck, the mailers aren't working anymore, customers don't show up for appointments, customers have no cash, customer credit has gotten worse, we don't have the right inventory, we don't have the right finance companies, etc. So, we need to prepare for these excuses in advance. Better yet, we need to prepare our teams to stop making these excuses and start doing the right things to make more special finance deals.
I have run special finance teams of up to 60 employees, and believe me when I tell you I've heard every excuse in the book about why someone isn't selling cars, getting deals bought or funding deals. And they are just that—excuses!
Here are some simple things that we did on our team daily to avoid the excuses and become successful:
1. SF Managers/Salespeople: The leads don't suck! It's never, ever the leads. It's always people and process, nothing more and nothing less. So, know your process and make it your responsibility to follow it consistently and get better every day. You will drive more traffic and sell more cars. Train and develop!
2. SF Directors/Sales Managers: Control what you can control! Stay focused on the daily activity within your department. Coach your team every day to ensure each member is staying on task. Inspect what you expect!
3. SF Directors/Sales Managers/Finance Managers: Banks and finance companies are buying! Find out which ones are buying and how and what each buys. Know their programs and guidelines better than their buyers, and you will get more deals done. Study and grow!
4. Finance Managers: Have your paperwork correct and in order. Then go over the deal with the sales manager who rolled it and get the whole story before speaking with a buyer or funder. Communication is a key component to getting your money. Sharpen your saw!
5. Used Car Buyers: There are some great buys out there! Stay in constant communication with your special finance director, sales managers and finance managers to find out what customers and finance companies are currently buying, and buy those vehicles. What worked yesterday isn’t always going to work today. On that note, constantly seek new sources of inventory rather than only buying in your comfort zone. Stay up to date!
In most cases, if a special finance manager, sales manager or finance manager learned how to do special finance within the last five to six years, they probably aren't very good at working deals today.
Here's why: Before technology streamlined the buying process, you had to put your deal together and either take it to the bank yourself or fax a finance company the customer application, deal structure, book sheet and, in some cases, a credit report. Then, you had to actually talk face-to-face or get on the phone with the buyer and have an intelligent conversation about why you think it's a deal and how you think it should be structured. This process takes skill, preparation and a lot of time. It's not an easy task to structure a deal and fax all of that paperwork to a variety of finance companies that all have different buying guidelines and preferences.
Once DealerTrack and RouteOne came into the picture and the "payment call" came into play, the true art of putting together special finance deals became obsolete. It made a bunch of so-so finance and sales managers instant geniuses because they could shotgun an application to multiple finance companies hoping to see at least one approval, which they saw most of the time. The finance companies even told them how to structure the deal so it would pass through the system. Then, the manager would go beat their chest and tell everyone within earshot (including their dealer/GM/GSM) how great they are at getting deals done.
Now, these same so-so finance and sales managers can't get customers in the door, can't get deals bought and can't get deals funded because they have no clue how to do it! Why don't they? Again, the answer is: It's all they know!
When the dealer principal or owner asks them why they aren't driving traffic and making special finance deals anymore, what do you expect them to say? Do you expect them to reply with the truth? "Well, boss, I never really knew what I was doing in the first place, and since you and the other managers never learned how special finance works, I'm just going to tell you the leads suck, the finance companies aren't buying and we can't buy the right inventory.” More times than not, they will respond with some variation of the last part of that response, at the very least, and the boss is going to buy it because it's all he knows!
Wouldn't your dealership be in better shape if your entire sales team worked a proven process to handle these highly profitable customers who are growing in number every day? And, more importantly, wouldn’t you be in better shape if you and your entire sales team completely understood and communicated your game plan daily?
Stop listening to all the excuses, get off the sidelines and get back into the special finance game!