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NCM Institute

#AskNCM: What is the Key to New Vehicle Success?

Used vehicle sales, service, and customer retention suffered in the wake of increased sales in the new vehicle department. As the economy ebbs and flows, we see the tides shifting; now the new vehicle department is beginning to suffer. How do we keep every part of the business profiting?

NCM Institute instructor Robin Cunningham gauges the situation and pinpoints what it’s going to take to keep your new vehicle department afloat in our ever-changing market.

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

Permanent link to this article: http://blog.ncm20.com/2017/08/askncm-what-is-the-key-to-new-vehicle-success/

Lycia Jedlicki

WHO Thinks We’re Overpriced?

Torso of a businessman standing with folded arms

I recently held a luxury brand parts and service manager 20 Group meeting, and one of the parts managers was proud of the fact that his counter gross retail percentage had increased by 3% that quarter. When the group asked how he achieved this, he told them something that stunned the room. He had reduced his pricing so his employees would stop discounting and overriding parts prices for their customers.

In the past, when his employees saw the cost of the part, for example, $1.25 for a fuse, they thought it was entirely inappropriate that the dealership marked it up and charged the customer $8.00. However, before you yell, “Fire that parts team,” realize that this is happening all over YOUR dealership and you may not even be aware. Many times, employees take it upon themselves to “right the wrongs” or “cheat” in business, so they can make the sale, reach the goal, gain the customer, or earn the SPIFF. Fostering an environment of open and honest communication, appropriate encouragement to meet goals, and a little room to make decisions to sink a sale can make all the difference.

The 20 Group proceeded to ask the parts manager if he thought the customer was going to leave their dealership without purchasing the fuse because it was $8.00. I’m willing to bet the answer is “No.” This scenario led me to remember an article I had just seen that says, “We are not going to be the least expensive, we are going to be the BEST and deliver the BEST experience possible.” Instead of the parts counter person discounting the part to $4.50, or another “acceptable” amount, he/she could say to the customer, “Let’s take this fuse out to your car and try it, just to make sure it works before you buy it.” I guarantee the customer would be pleasantly surprised and wouldn’t think twice about paying $8.00 for the fuse. Your employee ensured it worked correctly and solved their problem before they left our parking lot, so why would they question it? Taking the extra time to qualify the sale and genuinely help the customer has been linked to increased customer retention. As a consumer, don’t you enjoy shopping at and returning to businesses who care about you and your reasons for buying?

We also need to remind our employees how many complimentary things we do for our customers. Coffee and food in the waiting rooms, topping off vehicle fluids, safety inspections, car washes, battery checks, rental cars, shuttle services … the list is endless. Remind your employees of the value your dealership offers so they can project this value onto customers during the sales process. Instruct them to point out the complimentary amenities and casually offer them whenever possible. Emphasizing the value of a product or service, and the value your business brings, is another helpful retention strategy and continues to build the business/customer relationship.

Let me leave you with one last scenario: you hire a rookie salesperson and do a great job training him or her, and what do they do? They do exactly what you taught them to do. They sell the oldest vehicle for the most amount of money and retain a happy customer. 2017 is the year to train our employees to be the best, demand it even, to ensure both our businesses and team members thrive, and our customers leave happy and keep coming back. Which dealership do you want to be? The least expensive? Or the best?

Help your team become the best with training from the NCM Institute and membership in a manager 20 Group like Lycia’s.

Permanent link to this article: http://blog.ncm20.com/2017/08/who-thinks-were-overpriced/

Mark Shackelford

From the 20 Group: Scripts to Improve Service Advisor Sales

Cars in the automotive service

Service advisors see more customers in a week than many salespeople see in a month—without question, they are the public face of your dealership. And, when properly trained, your service advisors can bring in a steady stream of used vehicles to sell, customers to purchase units, and happy clients who frequent your service department.

These scripts and sales techniques, which I recommend to all my NCM 20 Group members, are a great start to transform you service advisors into sales professionals. Another way is to invest in training from the NCM Institute or arrange for an NCM consultant to present on-site training at your dealership.

1.   Friendly meet and greet script

“Welcome to ______ (dealership name).”

Offer the customer a hand shake, and then offer a business card.

“My name is ______, and you are …? (let them answer) Thank you for coming in today. Are you here for an appointment?”

Ideally, you should promptly greet the customer, but if you can’t, at least nonverbally or verbally acknowledge the customer. If the customer has an appointment with another advisor, then go get that advisor. If the advisor is not immediately available, start the write-up process with the customer. Do not leave the customer hanging unattended and unacknowledged.

Once the customer has been properly greeted, verify the following information—or gather it for the first time—and add it to his/her contact file in your system:

  1. Customer Name
  2. Customer Cell Phone Number
  3. E-Mail Address
  4. Vehicle Identification Number
  5. Preferred Method of Communication (Phone, Text, Email)

2.   Identify the customer’s primary needs

Next, a service advisor should determine the customer’s needs, using the LADDER technique:

L: Look at the person speaking to you

A: Ask questions

D: Don’t interrupt

D: Don’t change the subject

E: Empathize

R: Respond verbally and nonverbally

Keep the LADDER technique in mind while you use reporter-style questions to dig into the customer’s problem. Here are some sample questions using the “Six Ws”:

  1. What are the symptoms?
  2. Where do you notice the symptoms?
  3. When do you see the symptoms?
  4. How often do the symptoms occur?
  5. Who typically drives the vehicle?
  6. Why is the vehicle used? What for?

3.   Restate concerns

Be mindful of the customer’s comments and show that they can trust you by restating their concerns. Be sure to confirm your understanding of the concerns. Assure the customer that all their worries and concerns will be addressed.

4.   Perform a full circle vehicle walk-around

The walk-around does more than just identify problems; it helps build rapport and trust between the advisor and the customer. Here’s how to do a great walk-around:

  • Find common ground with your customer. Engage in conversation about their children, bumper stickers, aftermarket wheels, etc.
  • Discuss the condition of their vehicle.
  • Inspect the vehicle—tire tread depth, wipers, vehicle damage, windshield condition, etc.

5. Build value in your dealer recommended maintenance program

  • Get a maintenance guide into your customer’s hands.
  • Explain that your maintenance program is set up based on the driving conditions in your area.
  • Explain the benefits of your preferred customer maintenance guide.
  • Point out recommended maintenance items due at different mileage intervals.
  • Educate your customer about maintenance.

6.   Offer a courtesy multi-point inspection

Make sure that the customer knows that the multipoint inspection is free. Then, explain what happens during the inspection and why it’s important.

7.   Confirm final commitments

  • Explain to the customer what you will be doing to the vehicle.
  • Outline how much it is going to cost.
  • Determine if the customer plans to wait for the vehicle or if you need to arrange a shuttle ride or rental car for them.
  • Tell the customer when you plan to first contact them with an update. Verify their preferred contact method.
  • Have the customer sign the write-up sheet for an estimated dollar amount and any damage on the vehicle; note that any “diagnostic charges” will be applied to the bill.

8.   Follow up with the customer

  • Using the “10 AM / 2 PM / 4 PM” method, set up a deadline by which to contact the customer and give the customer a copy of the write-up sheet. Then, direct them to the lounge or rental office.
  • Present the multipoint inspection results.
  • Contact the customer two times per day with any updates: the first when the inspection is complete, the second when the job is done.
  • Set up a delivery appointment.
  • Instruct the customer to see you to review their paperwork.
  • Go over the repair order with the customer on the phone (tell them you would like to email them a copy).

9.   Customer active delivery

  • Review the customer’s completed paperwork including the multi-point inspection sheet.
  • Review the customer satisfaction survey process.

Script: “You may be receiving a survey from          (dealership name). It is my report card for how I did during your service visit today; it is vital to me. My goal is to provide all my customers with excellent service, so I would really appreciate it if you would take a few minutes and fill it out and send it in.”

  • Set future appointments in “lead results” (dates and times).
  • Next appointment card (offer the customer another business card with their next appointment noted on the back).
  • Escort or direct the customer to their vehicle.

10. 24/48 follow up with the inspection lead results

  • Inquire about the customer’s most recent service experience.
  • Ask how their vehicle is doing since service.
  • Thank them for doing business with you.
  • Remind them to send in the customer satisfaction survey.

Learn more from Mark and the other NCM moderators by joining an NCM 20 Group. NCM also offers manager 20 Groups where your team can gather industry best practices from peers and have a forum to voice new ideas and implement strategies to better your business.

Permanent link to this article: http://blog.ncm20.com/2017/08/from-the-20-group-scripts-to-improve-service-advisor-sales/

NCM Institute

#AskNCM: How Long Should It Take to Recondition a Vehicle?

Reconditioning used vehicles is a major priority for any pre-owned dealer. If the car isn’t on the lot, it can’t be sold. Therefore, every minute the vehicle is in the shop is possible lost revenue.

Steve Hall, an instructor at the NCM Institute, shares his top tips for reconditioning vehicles faster and more efficiently. See what Steve’s years of industry experience can teach us on this segment of #AskNCM.

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

Permanent link to this article: http://blog.ncm20.com/2017/07/askncm-how-long-should-it-take-to-recondition-a-vehicle/

George Gowen

Give the Big Dogs a Run for Their Money

NCM-CD-708

Advance, NAPA, O’Reilly, Auto Zone, and Carquest all have something in common—they are in the parts business. More than that, though, they sell 100 times more parts and make 100 times more money than franchise car dealerships that sell parts. These parts businesses do not have OEM support. They do not have a service department at their store out of which they sell parts. And, they do not have a continuously growing customer base to prospect to. So how are they growing and building new stores across the country?

As car dealers, you support their businesses with millions of dollars of purchases. How many OEM parts did they buy from you? Are you content to let them be in the parts business without competition? What do they offer that you can’t? How many dealers have opened a stand-alone parts store? Take a moment to brainstorm what you can do to be competitive and, more importantly, make money …

Think of anything? Here are some ways to stay competitive with your existing parts department.

What’s your turn strategy?

At 20 Group meetings, the least interesting subject to dealers and general managers is always “the parts discussion.” Yet, it is the number one or two cash investment in any dealership (used vehicles may be an exception in certain cases). If we think of the parts department in terms of cash, we need to ask ourselves: Why don’t we focus on it more? I’m sure you have a turn policy on your used cars; do you know what your turn policy is for your parts inventory? Do you have a used car on your lot 9-12 months before you start to figure out an exit strategy? But that’s what we do with parts. Why?

Stock what you need, when you need it.

Having the part you need on the shelf when requested is more important than having the used car your customer firsts asks for. You can always switch the used car buyer to a different car, but not so with parts. If the part is not on the shelf when requested, it’s a lost sale. Most parts managers don’t count these as lost sales if they can get the needed part within 24 hours via a factory order or an outside purchase from a competitor. The fact is, having the part in stock when you need it will not only increase your margins but dramatically increase your service departments’ efficiency. What is the amount of monthly lost productivity in your shop because you don’t have the right parts on the shelf? If this metric was measured and multiplied by your labor rate, it would astound you.

The Math: $300,000 in outside parts purchases equals $300,000 in labor sales, divided by $100 per hour labor rate, comes to 3,000 labor hours. Assuming 1.5 hours per RO, we can say you had 2,000 ROs that had been delayed 30 minutes each waiting on parts. That comes to 1,000 hours of lost productivity, times your $100 per hour rate, equals $100,000!

Doesn’t it seem worthwhile to have the part on the shelf?

Training is a must.

How much training did your parts manager participate in last year, or ever? How can you get best practices in your parts department? TRAIN them. The NCM Institute offers outstanding parts manager training and NCM has two parts management 20 Groups whose numbers are constantly improving due to their openness to share ideas and best practices. Either or both will yield a huge ROI.

It’s time to get into the parts business and beat the competition.

Permanent link to this article: http://blog.ncm20.com/2017/07/give-the-big-dogs-a-run-for-their-money/

Alan Ram

The Importance of Call Monitoring

Smiling salesman having a phone call

Do your managers listen to every sales call on call monitoring? I speak at a lot of Dealer 20 Group meetings, and this is a question I consistently ask the dealers. The overwhelming majority of the time the answer I hear is a resounding, “No.” I have even had general managers tell me that they canceled their call monitoring because they couldn’t get their managers to listen to it. Are you kidding me?

Call Monitoring Is Not Optional

When it comes to selling cars today, there is no activity for your managers to be engaged in that is more productive, or more relevant, than listening to sales calls and quickly resolving missed opportunities to do business. It’s as easy as your managers having call monitoring open on their desk throughout the day, and listening only to sales calls.

I often hear the excuse that managers just don’t have the time to listen to every sales call. Let’s face it, how many sales calls do you honestly get each day? You probably get 10, 20, or maybe even 30 sales calls throughout the day. Compare that number to how many managers you have on staff throughout the day. Don’t tell me your managers don’t have time to listen to sales calls. As long as your phone numbers are tied to the right departments, it’s not a problem.

A “Save The Deal” Tool

Why is it important for managers to listen to each sales call throughout the day? Because call monitoring is more than just a tool used to judge how well your salespeople are handling inbound calls. Call monitoring should not be thought of primarily as an accountability tool. More than anything, it should be thought of as a “save the deal” tool. If something goes wrong on a sales call, your managers should be able to immediately intervene and resolve the issue. However, this cannot happen if your managers aren’t listening to the sales calls. If the customer calls your dealership at 10 a.m., that means they will be out buying a car at 4 p.m. If your managers are waiting until 8 o’clock at night to listen to that call, it’s too late, and the opportunity is gone.

Another benefit to listening to your sales calls on call monitoring is the accountability factor. In other words, when salespeople know that you are listening and that they are being held accountable for their performance, their effort level naturally rises. It goes hand in hand with training. If you hold your people accountable without training them, all you’re going to hear is weak salespeople and missed opportunities. It’s simple. Train your people and then hold your sales staff and managers accountable.

Call monitoring gives you the opportunity to save deals and make sure that each opportunity is maximized, as well as provides you with a tool to hold your salespeople accountable and find areas for improvement. It is an invaluable tool and it is critical that managers use it every single day.

What About Outsourcing?

In today’s automotive industry, outsourcing call monitoring has, unfortunately, become an option for dealerships. Outsourcing your dealership’s call monitoring is a bad idea. Someone who is monitoring your calls three time zones away and working out of a basement is not nearly as qualified as your managers to make a determination on when a call was maximized versus when it wasn’t. Your managers can tell whether or not a woman who just made an appointment on the phone is really coming in, or whether she simply set an appointment so that she could end the call quicker. They can gauge whether the appointment is real or whether it is smoke, and can make the determination on whether they need to call the customer back and tighten things up.

Don’t waste the opportunities that call into your dealership every single day. Call monitoring needs to be a priority at your dealership. You need to make sure that your managers are listening to your sales calls every day and throughout the day. If you want to see your dealership succeed, this is not optional.

Check out in-person training options through NCM Associates, and discover our online platform, NCM OnDemandAlan Ram’s Management by Fire course offers additional tools for your dealership training needs.

Permanent link to this article: http://blog.ncm20.com/2017/07/the-importance-of-call-monitoring/

Jerry Powers

Old School, Meet the New Buyer

Young couple buys a car

How do you get your salespeople to spend quality time with your customers? Customers are flocking to your dealership because they’ve found the exact vehicle they want, at a price they can afford, and to close the deal, the only thing your salespeople need to do is not mess it up.

These customers are usually in a hurry, and many are put off by the “usual sales process.” How do we spend enough time to keep them interested, but still avoid wasting their time? How do we move the salesperson from answering questions to actually asking them? How do we increase the level of comfort between our staff and our clients? Discover what some of our dealers are doing to slow the customer down, increase the customer’s confidence, and dramatically increase sales and dealership profit. It’s an old-school idea with a modern twist.

Early on in your sales process, after the “Meet and Greet,” ask your salespeople to say “Mr. or Ms. Smith, here at XYZ Motors, we have found a way to save our customers precious time during their purchase process. By looking at your vehicle now, my appraiser can perform the valuation while you and I are checking out the vehicles you are interested in. This can save you up to an hour of your valuable time. Where did you park?” “Perfect, show me your car.” The benefits to the customer? They see us saving them time, the most valuable of all resources. And, it allows the salesperson time with the customer to get to know them.

The salesperson, with the customer in tow, does a silent walk around appraisal, (form or smartphone in hand), making sure to ask about parking stickers, sports equipment, soccer balls, racks, etc., that are on or in the vehicle, to gain a level of comfort and find similar interests with the client. The salesperson touches any imperfections without a word and asks what the customer likes about this vehicle and what they are hoping to change with their new vehicle (What’s their pain point?), and then asks for the keys to take to management for the appraisal. After this, your normal sales process can proceed.

This is a great ice breaker and allows your newer sales staff more time to get comfortable with the customer and vice versa. However, the biggest and best advantage is that the desk now controls the keys and the process. They know who has a customer and that the salesperson must come back to the desk to get the keys before the customer leaves. This ensures a 100% trade orders of all customers with trade-ins. This has helped many of our clients’ dealerships dramatically increase used vehicle sales by acquiring more trades. Is there anything more important than the acquisition of quality trade-in vehicles in your store? I didn’t think so. This will not only improve your look-to-book percentage, but also your used vehicle, fixed operations, and overall dealership profitability. Good luck and good selling.

If there is anything NCM Associates can do to help you and your business, just give us a call at 800-756-2620 or email info@ncmassociates.com.

Permanent link to this article: http://blog.ncm20.com/2017/07/old-school-meet-the-new-buyer/

Kendall Rawls

Think Like an Owner

Car salesman

Ownership, as defined by Merriam-Webster, is the state, relation, or fact of being an owner. Often, those who feel ownership of something take special care and feel great responsibility for it. If we dissect the definition of ownership a little more, it does not necessarily mean that one must “own,” but rather, there is a mindset of being or acting like an owner.

This “ownership attitude,” or lack thereof, can be seen in many dealerships. Some leaders may not own stock in the dealership but have ownership in areas of strategic initiatives, team motivation and collaboration, and show emotional investment in the achievement of the dealership’s mission. On the other hand, some leaders show up, fulfill their responsibilities, and get the job done. However, if a better gig presents itself across the street, they don’t hesitate to take the opportunity.

An ownership mentality, whether the actual owner or leader, is a great attitude. It is the state of mind or the accountability we put on ourselves to put care and action into what we own.

Imagine if all key managers and influencers in the dealership had a dealer-minded attitude and made decisions that were always for the betterment of the whole and not just the individual? Take a moment and analyze each leadership role in the organization and identify their level of engagement. Does it appear they lead from a place of “ownership”—meaning, in a way that promotes the organization’s mission, vision, and core values, and nurtures team synergy? Or, are they just performing the duties of the role? Also, it is essential to determine if the key managers think and act as if they have an ownership stake in the dealership. Have they bought into the dealership’s mission, strategic vision, and view the business as their own? When management leads from a place of ownership, the attitude becomes contagious throughout the organization and profitability, performance, growth, and fulfilling long-term strategic plans can become a reality.

So then, how do dealer principals/owners create an owner-centric mindset in those that are not actual owners? Here are a few areas that, if executed with intention, can be game changers:

People Development

Offer learning and training to your people. Providing access to operational training is one area to ensure your people are equipped to succeed. Also, a new and growing area is in the development of soft skills that are focused on self-awareness. Providing access to training cultivates a feeling of loyalty amongst your people. Investing in their success motivates people to want to invest in the dealership’s success.

Leadership Development

Rather than a culture where managers lead from positional power—“I’m your boss, so do what I say”—invest in leadership development to create an accountability culture based on coaching. Leadership influences others’ choices, priorities, and behavior. Power and position may create compliance in your organization, but it will also create challenges in nurturing a sense of buy-in to your organization’s mission and vision, thus ultimately demotivating employee loyalty and their drive to go above and beyond the call of duty. As our industry evolves due to technological advancements, changing consumer behavior and demographic shifts, position, and power fall short of inspiring people. There are too many competitors recruiting for good talent which is making it harder to retain the movers and shakers in the organization. As such, it’s imperative to foster an environment where people are inspired, respected, and empowered which helps them want to stick around.

Self-Awareness

Understanding one’s own personality/management style and how it interacts with others is one of the biggest leadership game changers out there. Be willing to do a self-assessment and provide the same assessment to your key leaders and teams to create an understanding of natural leadership and communication qualities and traits. Go a step further and provide coaching to key leaders and rising stars to develop flexibility in how to work with a diverse team.

People development, self-awareness, and development of leadership soft-skills are game changers for current and future leaders. Enabling and empowering managers to build a foundation for future growth, sustainability, and a culture of ownership throughout the organization. To do this, managers and the dealer principal/owner need to learn how to think differently in this changing industry.

Learn more about the NCM-Rawls Dealer Executive Program and how it can prepare you and your successors to lead your dealership into the future.

Permanent link to this article: http://blog.ncm20.com/2017/06/think-like-an-owner/

Adam Robinson

Are Your People Driving Profit? Understanding Critical HR Benchmarks

two businessmen having discussion in office

While turnover rates continue to be higher than average in the auto industry, a dealership’s ability to understand the components of its hiring process will unlock critical insights that help to increase profit and identify roadblocks that deter quality hires.

For example, the longer an open position goes unfulfilled, particularly in a sales role, the more productivity is disrupted. The average dealership takes seven days to review a new job application. By the time a dealership gets around to contacting a potential candidate, they are usually already in talks with another employer. Our research has shown that the fastest company response tends to win the candidate—70 percent of new hire applications were reviewed in the first 12 hours after submission, and 82 percent of all hires were considered within 24 hours. If the average dealership is waiting a week to review candidates, how many of them are still quality leads?

Not only does an efficient hiring process help fill vacant roles by 37 percent (or 16 days) faster than the national average, it can also help a dealership secure top talent in the industry before its competition.

As you analyze your dealership’s current approach, consider the following components of an efficient and effective process:

Define the role

Rather than remain focused on what your dealership needs, find out where ideal candidates are already working and the work culture and environment to which they are accustomed. For example, are there opportunities to grow and learn in your open role, or do you need someone seasoned who requires less training? Once you determine the position, you can better identify if your opportunity is robust enough to attract the right fit.

Source candidates

A dedicated company career site (or landing page on your dealership website) is the best way to attract candidates by providing them with enticing, relevant information on your business, available positions, and what makes your organization a great place to work. These goals are best accomplished by applying the same mentality of consumer advertising to your employment advertising. What’s more, dealerships only review about 72 percent of total applicants, but all applications should be examined, prioritized, and responded to.

Select a quality applicant

While this is often the piece of the process that tends to break down the most in the auto industry, it is important to carefully select the right candidate. Be sure to give multiple people in your company an opportunity to weigh in on the decision, which also provides the candidate with multiple perspectives of what the job will entail. A candidate’s competencies should be identified, and the team should determine which ones can be transferred over, and what will require additional training.

Verify backgrounds

While typically an overlooked step in the process, verification helps mitigate your risk. Be sure to confirm a candidate can do what they say they are capable of, and whether or not they have done so previously, by speaking with references. Background checks should also be performed to see if the candidate makes good choices and is a good member of society. As the person who will be interacting with your customers, be sure their values align with yours.

Onboard efficiently

Typically, the first day of a new job is filled with paperwork and logistics. Utilize technology to take care of as much paperwork as possible ahead of time, showing your new employee you have already made an investment in them. This approach will, in turn, raise their enthusiasm and investment in your dealership and their new position.

Applications should be reviewed immediately, candidates should be contacted in a timely fashion, and the overall hiring time should remain relatively short.

Once your process has been developed, it is important to measure its success against industry benchmarks to ensure your team and hiring managers see it through. An efficient process in a vacuum doesn’t do your dealership any good, so keeping your team accountable is crucial.

If a hiring manager is taking too long to reach out to candidates to facilitate the recruitment process, that delay has the potential to impact not only a candidate’s interest in the position but their opinion of the company overall. This delay can also result in a loss of potential business from the candidates as customers down the road, or loss of new consumer leads when they share their experience with their family and friends.

Your managers should include the hiring process in their regular discussions on how to improve sales and strategies, keeping their finger on the pulse of who may be at risk for leaving, how to best prepare for those situations, and how to continue actually shaping the team.

A successful hiring process will not only benefit your company but also your customer. While dealerships have little control over the make and models of the cars they sell, and many dealerships are offering the same products, the customer experience is one of the few factors you CAN influence, making the hiring process just as critical to the success of your company as the client experience. Maintaining an efficient recruitment process will ensure your employees continue driving your profit.

Thanks to NCM Associates’ partner, Hireology, for sharing their guidance on attracting and managing millennial employees. Learn more about Hireology and join NCM’s experts for more actionable advice on hiring the best people for your team in our Hiring Top Talent and Success-Driven Pay Plans classes.

Permanent link to this article: http://blog.ncm20.com/2017/06/are-your-people-driving-profit-understanding-critical-hr-benchmarks/

Joe Basil

NCM Case Study: Five Successful Dealerships Regain Lost Net Profit

Portrait of call center worker accompanied by her team. Smiling customer support operator at work.

I’m going to make it crystal clear. Your net profit is sitting right in front of you, and it walks right past you (and out the door) every day! Let’s get it back.

During my years in business, I’ve observed that 80% of the dynamics that impact a business or industry originate outside its four walls; however, 80% of the forces that impact the dealership’s profitability originate inside them. It’s my opinion that your increased profitability walks in and out of your dealership every day and right in front of your eyes.

Five case studies: regain lost profits with simple changes

Your opportunities for increased net profit are in every step of your customer transaction management process. The gap or disconnect is that some dealers and managers can’t see it, even though it’s right in front of them. Here are some specific examples from some of my NCM 20 Group and consulting clients who have discovered big profits from small changes.

1. The BDC conversation turnaround

A used vehicle manager observed his business development center (BDC) customer-contact phone calls. The business development representatives (BDRs) were making their 100 calls per day; however, the tone of the calls was flat and lacked sincerity. The calls could have been made by a computer; they were so impersonal.

Once he brought it to the attention of the business development manager (BDM) and they did some training, his appointment show ratio began to climb. Just imagine how many deals the dealership had already lost before this simple change!

2. Lead with the winner

During a pre-owned digital merchandising review, our NCM 20 Group noticed a photo of a clean 2013 Silverado crew cab pickup truck with 9,000 miles on it. It was a great vehicle, but at over $36,000, it was priced exceptionally high for the market.

Three or four photos later—buried in the vehicle description—the dealership showed that the Silverado was a handicap/wheelchair accessible vehicle! Not only that, but a little research revealed to us that a new one would cost between $67,000 – $69,000. The vehicle was priced under market for an accessible truck, but it couldn’t find buyers because of the poor photo choices and lack of relevant keywords in its description.

Take a look at your digital merchandising. How many of your vehicles are overlooked because of simple mistakes?

3. Walk around for more profits

During a training session with service managers, I asked how many of them do walkarounds on customer vehicles in the service lane? All nine raised their hands. Then, I asked how many do walkarounds on 100% of customer cars, 100% of the time? Only three out of nine said yes!

Insist that each and every vehicle get a walk-around. Every time your team skips one, you’ve missed flat rate hours and parts sales that are just waiting for you in the service lane.

4. The difficult customer hand-off

In a general sales manager meeting, we were discussing the customer handling process in the BDC and the sales desk’s involvement. One sales manager discovered that when the BDR got stuck with a customer, they just chalked it up as a difficult customer and moved on to the next one, missing out on opportunities to set the appointment.

The sales manager changed the system straightaway. Now, when a BDR gets a difficult customer, he or she turns them over to a sales manager. Their show rate and close rate increased immediately.

Think about your BDC and sales deck system: How many deals have you lost over the last six months because your BDC and sales desk weren’t well connected?

5. The sales hot spot

A used car manager began paying close attention to his vehicle details page (VDP) activity and the sale of the related cars. Every day, he shared the top five VDP activity vehicles with his salesforce, requiring each salesperson to select one of the top performing VDP vehicles. They were required to make sure it was clean, ready to demo, and parked in a “hot spot” on the used car lot.

The UV team quickly upped their closing ratio on these cars by 25%. It makes me wonder just how many used vehicle customers we “unsold” because we didn’t have the car ready for the customer to demo.

Awareness improves profits

I think these five mini case studies demonstrate how small changes in your dealership can quickly result in improved profits. Take a good long look at your customer transaction management process and discover your own plentiful opportunities to make the most of the customer traffic flow you already have!

Discover how Joe Basil and his NCM colleagues can help your dealership through 20 Groups and in-dealership consulting.

Permanent link to this article: http://blog.ncm20.com/2017/06/ncm-case-study-five-successful-dealerships-regain-lost-net-profit/

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