October 2010, Auto Dealer Today - WebXclusive
In this competitive market, a used car manager’s job can be complicated. Today, like never before, it requires extensive knowledge of the market and technology. With that said, acquiring cars is only half of the task at hand. The rest of it is the ability to coordinate different departments to ensure profitability and efficiency in turning the inventory. Making it easy for everyone involved is what great managers do. There are no lone rangers in this industry; to achieve greater results you must establish precise processes within the four departments a used car manager relies on—service, Internet/phone sales, floor sales and F&I. The key areas of focus must be people, process and profitability.
Service – On many occasions used cars are placed on the back burner. This hurts service’s biggest internal customer—the used car department. Once vehicles are delivered to the store from the auction or fresh trades are dropped off on the back lot, it is critical to follow an established process to execute certification, reconditioning and/or safety inspections in a timely manner.
In addition to that, daily updates between the sales and service department are key to ensuring cars do not get lost in the shuffle. Updates should include car status, parts or warranty concerns, and instructions on repairs. The goal is to have a clear process from the point of arrival to the point of readiness for physical and digital displays. To ensure the process is being executed consistently, it is critical to hold scheduled weekly meetings to address concerns and measure the desired results. At any given time, your used car manager should know where his vehicles are in the reconditioning process.
Internet/Phone Sales – Your Internet team plays a critical role in the used vehicle sales process. The quality of your people (their skills and performance) will determine the growth of your sales. Experts agree that over 90 percent of your customers have researched online before they arrived at the store. If you are not treating the Internet department seriously, you’re missing out. To view your Internet team as an afterthought is a costly mistake.
Well-trained professionals are who you want on your team. That means they must be well-versed in phone skills and able to communicate efficiently through e-mail. The Internet makes information easily accessible. If you have been playing this game right, there is no doubt you have seen an increase in sales. To increase your digital market share, it is important to establish the process of verifying your digital inventory’s accuracy (i.e., spelling, vehicle info and pricing). Remember, in the digital world, your competition is only few clicks away. What impressions do your digital inventory and your Internet salespeople make on your Internet visitors?
Floor Sales – Used vehicle inventory knowledge is still one of the main skills that sales professionals rely on. Unfortunately, on many occasions salespeople follow the path of least resistance. In many dealerships, they rely too heavily on technology to gain their inventory knowledge. There is no better way to learn about a car than to actually walk around it and touch it. This is why a used car manager will need to take ownership of training his/her people. Daily communication about pricing or inventory changes is essential.
Training could include weekly lot walks with the entire team and periodic used car quizzes. Making it fun and memorable is what you are after. Your manager cannot treat these activities as a grind or afford to have a careless attitude about them. The moment your team feels that training is a form of punishment or not important, they will disengage and withdraw their interest, making it impossible to complete those tasks. How much time does your used car manager spend training the sales team?
F&I – Gone are the days of finance companies having no caps on loan advances. Even though the market shifted and finance companies are less stringent today than they were a year ago, things are not the way they were few years ago. You won’t see 150 percent LTV, for instance. Buying the right vehicle at the right price was always the name of the game, and now more than ever it is essential. Salespeople can sell your entire inventory, but if none of those cars are financeable, you are in trouble. Communication between the used car and finance departments about finance guidelines will assist used car managers in making the right decisions to reach greater profitability. Getting F&I involved in the sales process early could be another key to increasing profitability. What is your F&I T.O. process?
When everyone involved works together as one well-oiled machine (i.e., executing processes with precision, being held accountable and rewarded for their results), your profitability will take care of itself.
Vol. 7, Issue 8