CALL US AT 1.866.756.2620
Steve Hall

Trying Something New?


Follow this Recipe for Better Results

Summer in Kansas City is the time to smoke, grill and barbecue. The other day I was putting together my special rib sauce and it occurred to me that cooking is a lot like managing. Cooking when you have a great recipe is a lot easier –­ and the results are consistently better ­if you’re following a plan and executing it flawlessly. My sauce recipe helps me stay focused and ensures a better outcome. Every time I think I can whip up my sauce without the recipe, I find myself leaving out an ingredient, not measuring properly or forgetting to watch it closely as it simmers.

Likewise, managing without a plan is hard. We operate in a people business and people can be messy. As a department Manager, you deal with varying personalities, mood swings and all of the other parts of a business that can be challenging, to say the least.

With this in mind, have you ever seen the manager that just seems to get results? No matter what they try, it just seems to work. Do they have a better plan or do they just do a better job with the plans they have? Granted, some plans or ideas are better than others, but even the best plans don’t stand a chance without proper communication and follow up. That’s the secret sauce – the key to their success.

At NCM Associates, we believe in Six Primary Elements of Effective Accountability Management. These elements are the foundation of solid business planning and will help you achieve any goal with greater ease. If you’re struggling to implement or execute your next plan, review these elements and become a better manager.

Plan your work and work your plan.

Do you have a plan for your department? Many managers come to work each day only to have the day rule them. I understand that circumstances come up and we must handle them, but do you take time to work “on” your business, not just “in” your business? A well-thought-out game plan is the first step. Decide what your goal is. Then you must plan the steps to get you there.

Is your plan written out? Well-written plans that are quantified will help keep you on track. This will serve as the roadmap towards your objectives. Quantification is used to put a dollar figure to your plan. This will justify why your efforts are worthwhile.

Clearly define and communicate your expectations.

Once you’ve thought through and written down your plan and are ready to take action to work the plan, the next step is to get everyone “on board” with the plan. We can’t be a one-person show. We must multiply our efforts through our staff. Oftentimes this is a point of failure. We think everyone understood what we said, but really, they didn’t. We may have spent a few days or even weeks thinking up and planning the new initiative and paying close attention to every detail. Then, when we go to launch it, we hold a “mandatory” meeting and in an hour expect everyone to be on board. Take time to do a better job getting their buy-in and then define their roles in very clear ways, with measureable expectations and deadlines.

Measure what you intend to manage.

What are the key components of the plan? How do you know if it’s working? The bottom line is that all plans must be measurable. Many times, good plans fade away, largely because people just can’t tell if they’re working. If you do a good job measuring results, now you will know if the plan is gaining traction and getting the results that you desire. As you see these results improving, it will help keep your attention and focus on the plan.

But how do you keep the team focused on the plan? Why not scoreboard it? In a common departmental area, away from customers, place a large whiteboard and start displaying the measureable results. Then every day, post the results. If the results aren’t what you desire, this will serve as a forum to bring the team into alignment with the needed actions to make the improvements. If the results are progressing as planned, use this as a celebration and encouragement tool. People love to see the score, to know if they are winning or not. Use their inner competitive desire to your advantage.

Inspect what you expect.

Now that you have a measurement tool in place, you need to inspect what you expect. Results will not just happen. If you’ve done a good job developing the plan, communicating the plan and deciding how you will measure the results, now you must inspect the activities that need to happen on a daily basis to end up with the desired results.

Do your associates know that you will be inspecting results and that you are committed to the plan? Or do they think it is just another whim that will quickly lose steam and fade away? For plans to work long-term, you must continually inspect what you expect.

Reward positive results and respond appropriately to negative results.

We believe that positive behavior that’s rewarded will be repeated and negative behavior that’s not effectively addressed will, likewise, be repeated.

Life is a balance; work should be a balance also. All too often we don’t hear anything about our performance or give feedback about our staff’s performance. Good or bad, it just seems to go unnoticed. That’s until someone does one too many bad things; then the hammer falls. We unload all of the built-up issues we haven’t addressed along the way. This outpouring of negative information hits them like a ton of bricks, whether it’s deserved or not.

Why do we do this? Doesn’t it make more sense to give consistent feedback for both positive and negative performance? If someone isn‘t following procedure, don’t we have the responsibility to let them know when it happens so that they can take corrective action? Just as important, when we find someone doing things right, isn’t that the best time to praise them? Employees feed off of this praise and usually try to do things right. Unfortunately, we all too often don’t communicate — and reinforce the behavior, whether right or wrong. Timely feedback will help keep your plan on track.

Develop and implement a systemic structure.

Dissimilar people operating within the same systemic structure will produce similar results. Are you process-oriented? Everyone has their own viewpoints and biases. A systemic structure will help keep everyone on the right track – your track. Set up processes to help you reach your goal. Once your processes are in place, you will need to consistently train, monitor and enhance these processes. You have to remember that processes will not survive on their own. They just seem to disappear over time.

This is commonly known as process evaporation. We hear explanations like, “We used to do it that way, but now we don’t. There was no real reason for the change — it just happened.” The only way to combat this is to continuously work on the processes. The processes must become part of your culture!

The next time you’re getting ready to launch that new initiative, take a few minutes to review these six elements. Taking these into account early in the process will help you achieve every goal quicker, with more ease and better results. That sounds like a recipe for success for any manager.

This article was originally published in Fixed Ops Magazine.

Permanent link to this article:

Dave Anderson

Building a High Performance Culture (Part Nine)


This article is part of a multi-part series titled “Building a High Performance Culture” by Up To Speed Guest Expert, Dave Anderson, of LearnToLead®.

Words that Work: Tough-Minded

In this ninth post on building a high performance culture, I want to discuss a word that works: tough-minded. Consistently holding others accountable is impossible without tough-minded leaders, welcoming entitlement and mediocrity into your culture as a result.

For a quick review of this series, peruse the following words that work in a culture, and words that hurt a culture, from the past eight blog posts. This will help you grasp the concepts, values and mindsets necessary for great performance; and help you identify and weed out those that are harmful.

Words that work:

Earn: to acquire through merit.

Deserve: to be worthy of; to qualify for.

Consistent: constantly adhering to the same principles.

Hope: grounds for believing something in the future will happen.

Catalyst: a person or thing that makes something happen.

Responsible: to be the primary cause of something.

Words that hurt:

Fault: responsibility for failure.

To use in a sentence: It’s not my fault I had a bad month. In other words, I’m a victim.

Blame: to assign responsibility for failure.

Excuse: a plea offered to explain away a fault or failure.

Mediocre: average, ordinary, not outstanding.

Wish: to want something that cannot, or probably will not happen.

Entitle: a claim to something you feel you are owed.

The word tough-minded is defined as, “strong willed, vigorous, not easily swayed.” This definition embodies the makeup at the bedrock of high-accountability leaders. Notice that it doesn’t say anything about being rude, abusive, getting personal, being a bully, shouting or using profanity. No, you can be tough-minded in a calm, measured, respectful voice and get your point across far more effectively. In a sense, being tough-minded means you have decided to stand for something:

  • You hold everyone accountable for living the core values; even the high performer who is prone to be selfish or take shortcuts.
  • You apply consequences when necessary for missed performance objectives.
  • You hire slowly and strategically, even when you have pressing shortages. You don’t flinch, lower the bar, and bring someone on board that will inflict continual damage to the culture and team morale.
  • You terminate the non-performer, even when there’s no one readily available to replace him or her because you understand that it’s better to be strategically short-staffed than foolishly filled up.
  • You routinely make decisions that are right; not easy, cheap, popular or convenient.
  • You raise others to reach your expected performance bar; you don’t reduce the bar to accommodate someone else’s comfort zone.

Followers may not always like or appreciate a tough-minded leader, but they are certainly more apt to respect him or her. And in time, as the tough-minded leader positively impacts those on the team, like will evolve from respect.

Dave Anderson discusses leadership, training and NCM OnDemand:

To learn more about NCM OnDemand, click here or call 877.803.3627.

Permanent link to this article:

Steve Hall

Becoming the Best You Can Be

Optimistic businessman contemplating in office.

Is it a Knowing Issue or a Doing Issue that is holding you back?

Have you ever thought about what keeps you from becoming the best you can be? Hopefully, not only have you thought about this in the past, but you think about it on a regular basis. Though this thought process can apply to any employee, manager or owner, today I will focus on managers in the fixed operations departments.

Let’s consider the following situation for our example: The general manger meets with you to review your department’s past performance. During the meeting, the general manager states that she wants to have a minimum of a 50% increase in net profit in your department this year. How do you react?

When faced with a challenge, most people have one of three natural reactions. The first one is the simplest and goes something like this: You agree and believe that the requested 50% increase in net profit is obtainable, and you already have ideas on how to make it happen. You develop your plan, communicate your plan, and actually perform your plan. At this point the stars are aligned, life is good and you are on your way towards achieving the set goal.

The second and third types of reactions aren’t as simple as that. Unfortunately, they are more common than the first reaction.

Let me explain the second type of reaction that we can have when a target, goal or objective is presented. Again we will use the above example, where the boss has mandated a 50% increase in profitability. You may not have a plan to obtain the needed profit. You know that you work hard every day and you just can’t see where the increase is going to come from. You’re not sure whether you need additional sales, additional margins, good old-fashioned expense reduction, or a combination of all three. You want to perform to the requested level, but you just don’t have the answer to how to perform to that level. We consider this a “knowing issue.”

The best part about knowing issues is they are fixable. Our industry has many ways to tap into the knowledge base of highly successful people. Here are just a few ways to gain knowledge that would help you overcome a knowing issue to obtain the objective.

Automotive Training Companies

These companies can provide a wide range of solutions to overcome most any obstacle. You can attend two-, three- or five-day courses that will cover a variety of topics to overcome challenges faced by today’s managers. A side benefit of this type of classroom training is that in addition to the course curriculum, you get to engage other students and learn from their experiences. It also gives you time to get away and work on your business, rather than just in your business.

In-Dealership Consultants or Retail Operations Coaches

Consultants or business coaches are another effective way to get very specialized knowledge. These people will work hand-in-hand with you, on your turf, to come up with solutions that will meet your needs.

Webinars, On-Demand Video Training, and e-Learning Seminars

These on-demand and scheduled training segments are becoming an efficient way to learn new ideas or to help you understand the solutions that are available on a wide variety of topics.

Print and/or Digital Magazines and Blogs

These are easy to access and search. They are full of timely and useful information. Whether you’re looking for information on products or time-proven tactics to help you achieve your objective, much can be learned using this format.

Lastly, don’t forget other resources for information. They include digital automotive groups, discussion forums, professional networks, personal acquaintances, and the list goes on and on. In today’s world, we are never short on being able to find information and ideas.

Knowledge issues all come down to this:

If you really want to know how to accomplish something, with a little research or investment, you can find suggestions and best practice methods. Since we can see that information for solutions is readily available, this brings us to the third possible reaction. It may be the hardest to address. I call this one a “doing issue.” Continuing with our example above, you may understand your boss’s request and even have the knowledge or solutions to obtain the target, but are you willing to do what it takes to achieve it?

This reaction can get tricky, partly because many times managers disguise it as a knowing issue, when really it is more of a doing issue. They know ways to impact the desired result, but for whatever reason they decide not to take action and do it.

They may justify their decision with thoughts like, “The solution sounds like too much work,” or “If I do that, it might upset (you fill in the blank),” or “I’m happy enough with the way things are, so I’ll just wait this out and hopefully it will go away.” These particular types of responses can be devastating to a business, a department and even a career. Unfortunately, they happen way too often.

So how can you overcome this negative reaction? I am going to give you two solutions. The first one is to personally take control, or ownership, of this reaction. If you know that you are the stumbling block, then you can change and become the solution.

Be introspective and figure out why you refuse to “do what it takes.” Is it because the solution is illegal, immoral or unjust? If it is, then find a solution that doesn’t cross these non-negotiable boundaries. If it is just because it sounds like more work than you want to do, then find a way to make it manageable and make it happen, or find a suitable solution that requires less energy, investment or time. You must realize there are many ways to overcome every obstacle.

As an example, if you are having production capacity issues, don’t just convince yourself that you are maxed out and can’t grow. Maybe you have looked at installing a four-day, 10-hour work schedule to increase capacity, but for some reason, decided that was not a good fit. Now you have convinced yourself that there are no other options. Since you don’t want to do a 4-10 schedule, you just muddle along, not growing month after month, and just making excuses.

If you truly decided that the 4-10 option wasn’t the solution for you, does it stop there, or do you go back to the drawing board looking for other ways to improve capacity?

Again, it comes back to a “knowing” or a “doing” issue.

Did you consider the possibility of using a second or even a third shift, or possibly increasing your hours of operation or days of operation? Maybe a team system would help to gain stall density, or a three-day 13-hour shift program is another option. You could look at reduction of bays-to-technician ratio, or utilizing “community” bay programs. These are just samples of a variety of methods to increase your stall utilization and production capacity. There are many more potential solutions for the example, but you must research solutions, find the one that fits your situation the best, and then actually do it!


To help with doing issues, I like to use the Thomas Edison philosophy. When Edison was asked how he felt about failing so many times when trying to develop the incandescent light bulb, he said that he didn’t look at it as failure, but rather he had found 10,000 ways not to make a light bulb. But he added that he only had to find one way that it would work.

If we kept that same attitude, how great could we become? If you start evaluating every challenge as a either a knowing or doing issue, you will be better equipped to know what path you need to take to find that “one way” to make it work for you. That is a key to ultimate success for your dealership, department and career.

This article was originally published in the July/August 2014 issue of Fixed Ops Magazine.


Permanent link to this article:

Tom Hopkins

Questions Are The Answer


When you work with a new car prospect, don’t you agree that you should try for several minor yeses before you go for the “big yes” buying decision? It makes sense, doesn’t it? It would be helpful to learn a specific technique that would begin a string of “yes” answers, wouldn’t it? You’re probably getting tired of all these questions, aren’t you?

If you answered “yes” to these four questions, you’ve just proven the effectiveness of the “Tie-Down” questioning technique. Let me begin by defining the term “tie-down.” A tie-down is a question at the end of a sentence that calls for a positive response.

Here are some examples:

  • “A reputation for excellent service after the sale is important in making this decision, isn’t it?
  • “I can tell you are happy to hear that we have a wide range of financing options, aren’t you?
  • “You can see how our evening service hours would make your life easier, can’t you?

This technique works most effectively when you tie-down a positive statement about the benefits of your services that you know your prospect needs. The key is not to over-use them so your prospect won’t suspect you’re using a technique.

Here are 18 standard tie-downs that you’ll find useful.

Aren’t they? Don’t we? Isn’t it?
Aren’t you? Shouldn’t it? Isn’t that right?
Can’t you? Wouldn’t you? Didn’t it?
Couldn’t it? Haven’t they? Wasn’t it?
Doesn’t it? Hasn’t he? Won’t they?
Hasn’t she? Won’t you?? Don’t you agree?

You don’t want to use too many of them with any one client, just enough to get the yeses flowing. Experiment with your existing presentation until you find a comfortable number of tie-downs to use without sounding repetitive.

Another way to keep these tie-downs from sounding overused is to use them in other forms: “Inverted,” and “Internal.” I’ll use the same example as above to demonstrate them.


A reputation for excellent service after the sale is important in making this decision, isn’t it?


Isn’t a reputation for service after the sale important in making this decision?


A reputation for excellent service after the sale is important, isn’t it, in making this decision?

The inverted and internal tie-downs allow you to hide the fact that you’re using a technique while adding warmth to your statements. By utilizing all three types, you’ll have a good mixture of them to build into your presentation. Once you’ve learned them and worked with them, use of the tie-down will become a speech habit that will improve your business and your earnings.

Another form of the tie-down you might consider using is the “Tag-On Tie-Down.” It can be used in a variety of ways. The simplest is to tie-down a positive statement your prospect has just made. For example, if they say, “Having a good extended warranty is important.” You would say, “Isn’t it?” They make a positive statement and you agreed, but asked for another positive statement. The statement being the word, “yes.”

Another useful questioning technique is the “Alternate of Choice” technique.

An alternate of choice question is one that suggests two answers, either one will confirm that your prospect is going ahead. The easiest example of this is getting an appointment. The average salesperson will say to their prospect, “When can we get together?” This allows the prospect to say, “Never” or, “I’m too busy just now, I’ll call you later.” Now, that won’t get you an appointment today, will it?

In using the alternate of choice question you would say, “I have an appointment opening this afternoon at 3:00, or would 4:30 be more convenient for you?” You’ve given your prospect two choices, one of which they will most likely agree to. If they cannot make either appointment, they’ll tell you and you can counter with another alternate.

This is also a good technique to use when you try to get a delivery date from your prospect once they show signs of going ahead. “You mentioned needing to remove some things from your garage in order to park your new vehicle in there. How soon would you want to take delivery of your new truck? Now? Or, would later this afternoon be better?” Just remember to use it whenever you have two alternatives you can give to your prospect, and either one means the sale is proceeding forward.

These two simple questioning techniques are the first steps to turning your existing presentations into positive momentum builders. Please remember, a quick reading of these techniques will not do. You need to read them, study them, learn them, and practice them until they become a natural part of your speech. If you have to stop and think before using these techniques, your prospect will suspect you are using a sales technique and will try to fight you. Once they’ve become a natural part of your speech, they will flow smoothly and add warmth to your presentation. All it takes is one “yes” to turn a prospect into a satisfied client.


Permanent link to this article:

Alan Ram

Persistence Wears Down Resistance

call center

I’ve said this before and I’ll say it again, I have learned so much about selling by being a customer. Here’s a saying that we take for granted, that you’ve heard a million times: “Persistence wears down resistance;” as a matter fact, I invented it. That’s not really true, but it’s a great saying that you need to apply to your mindset daily when you sell cars.

Let me tell you what happened last night. I got a call from a Wells Fargo mortgage broker, Greg, who is following up with me from back in my San Diego days; in fact, he’s been following up with me for about five years. He called me about refinancing my house as well as a couple of rental properties I own. So, I asked him to put together a proposal for me because I recently had been thinking that I should refinance at a lower rate. Now is the time, and Greg’s going to get the deal!

This story probably doesn’t sound unusual to you until I tell you about our previous conversation (or lack thereof) when Greg called me, probably about three months prior, and I was sick, grumpy, and I blew him off. I probably shouldn’t even have been answering the phone that day, but he had been calling me for years now and leaving messages most of the time. But today, he happened to follow up with me at a perfect time when I was ready to do something.

That’s what you get when you’re persistent!

For so many salespeople, follow-up is a one-and-done proposition. You follow up with a customer, you don’t get the answers you’re looking for – and you’re done with them. Well, that’s a huge mistake!

Everybody is going to be buying a car eventually, so sometimes you just have to be willing to follow up long-term. What I didn’t realize over the years of Greg following up with me, was that Greg was, in fact, secretly building up a little bit of rapport with me.

Every time you follow up with a customer, whether they come down and buy or not, you should be building up a little bit of rapport with them so that they feel like they owe you as soon as the time is right.

You can’t take things too personally when you sell cars.

You don’t know what’s going on in this person’s life when you’re following up with them. I’ve been blown off hard by customers before and many times, I suspect it’s just because they’re in a bad mood about something that has nothing to do with me; they’re in a fight with their spouse, their boss has been yelling at them, or they are hungry and cranky. Who knows, but the next time I call them, they are usually a completely different person and I get the result that I am looking for!

The bottom line is this, I don’t think that 90% of car salespeople would’ve been as persistent as Greg.

After the call he had made to me three months prior, and my angry response, most salespeople would’ve deleted me from their CRM. His persistence wore down my resistance, and I suspect my commission will be making his house payment for the next few months.


Permanent link to this article:

Bob Sloan

The Importance of Increasing Car Count


Car count is one of the primary metrics for measuring growth in the service department. An increase usually leads to additional shop hours produced and gross profit. A decrease is a call to action to determine the cause(s) as well as develop a plan to reverse this trend.

Determining car count today can be complicated due to the following:

  • Financial statement
  • Prepaid maintenance
  • Express or quick service

Financial Statement

Some statements provide separate accounts for prepaid maintenance and express or quick service.  The factory accounting manual outlines how to handle these labor operations as well as traditional customer pay work

Recommended Action: Review factory guidelines to ensure proper accounting regardless of financial statement.  You cannot make valid comparisons unless the data is accurate. If not properly accounted for, DMS systems can double count repair orders feeding into your financial statement.  Therefore it may appear that your car count is increasing when actually it may not be.

Prepaid Maintenance

Several manufacturers provide no-cost prepaid maintenance in addition to offering factory backed prepaid maintenance contracts. Coverage varies from comprehensive plans like BMW to limited plans that provide basic oil and filter changes. These plans are designed to improve customer retention during the initial ownership period. Consistent follow up is key to ensuring vehicle owners remain “active,” especially after the prepaid maintenance period.

Recommended Action: Measure service retention by VIN and follow up with owners after the prepaid maintenance period to ensure they remain your customer.

Express or Quick Service

Most manufacturers are either encouraging or mandating that dealers offer customers some form of express or quick service.  This could be a structured program like Quick Lane (Ford) or simply a recommendation to set aside one or two bays for this work.  The primary goal is to be convenient while offering competitive prices.

Recommended Action: Do your homework and research the need and potential for express service in your market.


Car count is not the same as measuring the number of customer pay, prepaid maintenance or express repair orders. Car count represents the number of visits per vehicle (VIN) during a specific time period. It is a more accurate measure of service retention and owner loyalty.

Recommended Action: Begin today to track car count and develop a plan to improve or maintain your service retention using this metric rather than the number of repair orders.

To make this easier, many manufacturers’ web portals allow tracking by VIN’s serviced at your dealership. If you are unsure of how to get this information, ask your dealer representative for assistance. Remember they all start as your customers, what you do after that point makes the difference.


Permanent link to this article:

Rebecca Chernek

F&I for Gen Y: Their Way or the Highway


These days, slicing and dicing away at the amount of time it takes for a customer to buy a car is the name of the game in the auto industry. It makes perfect sense. You can’t fault consumers for not wanting to spend hours trapped inside a dealership. Especially the Gen Y crowd, that ever-growing consumer base whose attention spans are seldom wider than their feet.

In truth, there’s not a dealer in the world that wants to deal with impatient buyers. But guess what? You’d better get over it. At 80 million strong, Gen Y consumers make up approximately 26 percent of today’s auto buying crowd. And you had better believe that figure is going to grow as Baby Boomers (who remain today’s largest auto buying base) sail into their sunset years, followed rapidly in suit by Generation X.

So what’s the trick to attracting the latest generation of car buyers and getting them into your dealership?

Simply put: doing things their way. Gen Y buyers aren’t just heavy on impatience, but they’ve also got a low tolerance for high-pressure sales tactics – not to mention extra time spent inside the F&I office. The fact is, by the time a Gen Y buyer has approached you, they’ve likely already done extensive online research for the best deals possible. In other words, they know what they want. And they expect you to give it to them.

Big league players like Penske and Morrie’s Automotive Group are wise to this, and they’re implementing changes that are turning the auto sales industry on its ear. These players believe it’s entirely reasonable to time an entire sales transaction within 60 minutes, thus playing straight to the deepest wishes and desires of a new generation of car buyers.

Naturally, this is something that can’t happen overnight. In order to pull this off, a dealer would have to transform into something of a “one-price store” with no handoff to the F&I department. A seamless process would have to be developed and put into place – but it can be done. Throughout my own career, I have worked with a handful of dealers who embraced this all-in-one culture. Interestingly enough, those dealers saw consistently increased sales and profits in both the front and back end.

Before anyone should accuse me of advocating for the abolition of the F&I role, let me make one thing clear: this is not what I’m saying. Yet it stands to reason that total delivery time must become a serious consideration – and that deliveries in F&I any longer than 30 minutes max can and should no longer be tolerated.

In order to accomplish this not-inconsiderable task, you first have to understand why deliveries take so much longer than they should. Often, I conduct on-site dealership analyses to try to determine why customers spend so much time in the F&I office. What I frequently find is both illuminating and a bit frustrating:

  • Messy deals being handed off from the sales department
  • Zero consistency on the sales floor, with deals infrequently closed on payment or price
  • Incomplete checklists that aren’t signed off by the sales manager
  • Missing buyer agreements in deal jackets. This represents no meeting of the minds between the customer and the dealership, and relies too much on guesswork. The salesperson has skipped critical steps in the process – in some instances not even offering the customer the opportunity to take a test drive.
  • Little to no sales floor training on how to properly fill out documentation
  • Inaccurate payoff and trade information
  • Incomplete rebate forms
  • Unverified insurance information
  • A lack of menu usage or any other sort of selling strategy

There are great benefits to the F&I interview process. But unless management actually gets behind the practice with its full support, things rarely go the way they should. A point of fact is that the F&I interview works to reduce – and in some cases, eliminate – the anxiety that a customer feels when talking finances. It builds a common bond, reduces errors, and dramatically speeds up delivery. Not to mention, it also increases dealership profits.

On the other hand, passing a customer off to F&I without first performing the necessary due diligence results in a doubling of the time necessary to close the deal. This puts the dealership at jeopardy of loss of buyer faith and, ultimately, loss of sales.

Lack of menu usage is yet another common issue driving increased time frames. When done right, and when limited to no more than six products, menu presentations are short and concise and take a maximum of five minutes.

Less is always more, even in the car selling business.

The all-too-common practice of spending “as much time as it takes” to go over all products is a foolish endeavor. Time is of the essence. And time spent ironing out details and running information checks that should have been taken care of on the sales floor is a fool’s gamble.

Auto dealers these days cannot afford to fly by the seat of their pants and simply hope for a reduction of delivery time. That’s simply not feasible. Creating an atmosphere where all players are on the same page and where a consistent process is enforced is the only answer. Ultimately, this means having a zero-tolerance rule for “Lone Ranger” tactics which frequently – if not always – undermine results.

This is the bottom line:

If you want to cut delivery time in half and appease the hurried attitudes of today’s younger buyers, you’re going to have to make big changes. Those changes start with ensuring salespeople dot their i’s and cross their t’s before so much as thinking about forwarding a customer to F&I. And every manager must pitch in – it’s a team effort. Sure, this is easier said than done. But it’s far more preferable to losing that rapidly growing segment of potential buyers – or losing out on maximizing your F&I potential.

As Michael Jordan once said, “Talent wins games, but teamwork and intelligence wins championships.” Taking your dealership to championship level means employing a heavily-focused, well-managed process that puts everyone – from the boss up top to the lot attendant – on the same page. It’s only when everyone moves in unison that you can really make big strides forward.


Permanent link to this article:

Joe Basil

What Mode is Your Dealership Operating In?


As the great recession started to unfold in 2008 and 2009, gasoline prices rose above four dollars a gallon, the banking and housing industry began to collapse, unemployment rose and auto sales fell off the charts. Those dealerships that came out on the other end in strong financial shape recognized and acknowledged this change. They adapted to the changing economic environment by recognizing what mode they were in and shifting their business operating mode as needed.

Now that we have had four years of continued retail auto sales growth, those same dealers that successfully maneuvered their way through the recession are again studying the changing market conditions and adapting accordingly. They will continue to be successful because they consistently evaluate and assess the changing marketplace environment and reconcile that against the operating mode of their dealership.

So, one might ask what am I referring to by asking what “mode” a dealership may be in? Generally speaking, any business at any one point in time could be categorized in any of the four following modes: crisis, growth, profitability or maintenance.

Crisis mode would be a dealership or department that:

  • Has weak leadership throughout
  • Is consistently reactive versus proactive to market changes
  • Undercapitalized and short of cash
  • Has no strategy or direction
  • Has low or no hiring standards
  • Has over-aged inventory issues
  • Is liquidating its net worth on a daily basis

Growth mode would be a dealership or department that:

  • Has clear aggressive leadership
  • Is making long-term strategic decisions
  • Is properly capitalized
  • Is focused on growing their customer base, market share, and in turn, their enterprise value
  • Typically has very high standards that are consistently implemented through strong management teams
  • Is willing and able to make short-term sacrifices for long-term growth

Profitability mode would be a dealership or department that:

  • Has a time proven business model supported by a solid balance sheet
  • Is focused on and run by return on investment criteria, as opposed to sales volume or market share
  • Identifies opportunities for profit improvement at each and every transaction level within the dealership business process
  • Focuses on and invests in recruiting and developing top-performing employees

Maintenance mode would be a dealership or department that:

  • Might typically, but not necessarily have a strong balance sheet with excessive or lazy working capital
  • Does not focus on its market share position
  • Does not make decisions based on return on investment criteria
  • Consistently fails to recognize changes in the market and adapt accordingly
  • Makes little or no investment in training and developing the management team and employees
  • Complacently relies on an existing customer base
  • Carries excess over-aged and obsolete inventory

So based on these categories, which one might your dealership fall into? How did it get there? What will make it possible to maintain or change your position? It might be an interesting exercise to have your management team review these categories and determine which one they think their department falls into, compared to your assessment. A step further would be to have employees in each department determine what category they feel they are in, in comparison to their manager’s opinion.


Permanent link to this article:

Tom Hopkins

The Greatest Destroyer of Business: Fear


Fear is the greatest enemy you’ll ever encounter as an automotive professional. Fears appear on both sides of most sales situations so you really need to understand them and master how to overcome them.

Hopefully, you’ll learn to recognize and conquer your own inner fears. Those common fears most salespeople have of not getting enough business, making mistakes, or losing face will be conquered with knowledge and experience. Being educated and well-prepared to perform in this industry brings about self-confidence.

Fear is also what builds that wall of resistance you so often run into. The toughest job you’ll encounter in sales is when you have to help others admit to and overcome their fears so you can earn the right to serve their needs.

There are skills you must master in order to climb over or break through that wall. But, first, you must understand what the fears are.

What are the most common fears you’ll have to overcome with buyers?

Your prospective client is initially afraid of you. You are a salesperson. I think you’ll agree with me that salespeople are not generally accepted with open arms—even by other salespeople. Even if you are going to help someone you already know — a friend or acquaintance or even a relative — when you enter their lives in the role of a sales person, certain fears will arise. It’s bound to happen in 99 percent of your presentations. (I’ll give you a one percent non-fear situation with your parents or grandparents, simply because in most cases they’ll believe in you and trust you no matter what role you play with them.)

What you need to do to conquer the “salesperson fear” is to master the skill of putting people at ease. Learn to use a relaxed manner and tone of voice. Use rapport-setting comments and questions that show them you are interested in them, not just in the transaction. You need to come across as warm, friendly, and inviting. If you truly believe in your products and the quality of service you and your dealership can deliver, it should show.

Smile. Give the client a sincere compliment. Thank them for the opportunity to serve their needs. In other words, treat them as you would a guest you are honored to have in your home.

The next fear you’ll encounter is their fear of making a mistake. Hey, we all have that one, don’t we? We’ve all made decisions we’ve later regretted. Since you’re working with one of the larger investments average people ever make, you must take the time to talk them through every aspect of the transaction very carefully.

You are the expert. You know this business. You may have knowledge about aspects of it that they hadn’t thought of, and if they had, their decision may have been different.

You must go into every demonstration with a very curious interest in the who, what, when, where, and why of the transaction. When you’ve satisfied yourself that it is in their best interest to proceed, then it’s your obligation as an expert to convince them that this decision is truly good for them.

The next fear is a fear of owing money. People may make irrational statements or ask questions that seem out of place. They may even mistrust what you have to say. They may want to negotiate.

Please realize that it’s simply a symptom of the fear they are feeling about the transaction. When you notice something along these lines, pause in your presentation. You might want to do a brief summary of what’s been discussed thus far to be certain they understand everything you’ve covered.

This challenge may appear in many variations, depending upon the negotiating skills of your clients.

They may stall making any decision to go ahead and you’ll have to draw them out.

They may be point blank about it and you’ll have to sell them on the value of the vehicle and the service your dealership provides.

A good way to handle most fears is to confront them head on, but gently. You might simply say, “John and Mary, I feel you have some hesitation about going ahead with this purchase. Would you mind sharing with me what it is?” Then, be quiet and wait for their reply. It could be that they’ve had a bad past experience and are sitting there fearful of having another. They’re waiting and watching you for signs that you’re not like that other salesperson.

Get them talking about their fears so you can determine something concrete to work with. Help them to see how different you and your dealership are. People won’t do business with you if they don’t like you, trust you and want to listen to you. Learn how to get fear out of the way.


Permanent link to this article:

Robin Cunningham

How Profitable is Incremental Growth?

Composite Review

I think it is safe to say that every business operator is planning, forecasting, or at least hoping to increase their sales and profits in whatever business he or she is involved in.

In the retail automobile business, that growth can come in many forms, such as:

  • Selling more new or used vehicles
  • Increasing the gross profits of the vehicles you already sell
  • Increasing finance & insurance income per vehicle retail
  • Reducing the aging of your used vehicle inventory
  • Reducing your reconditioning cycle time in order to get the vehicle front-line ready sooner
  • Increasing the repair order count in the service department
  • Increasing the gross profit margin in the service department
  • Increasing the number of parts on the shelf that the service department needs each day

There are many more forms growth can take, of course, but these are pretty representative of the opportunities available to most dealerships we work with.

The reason I say that incremental growth, resulting from actions like those mentioned above are far more profitable than one might think, is because, for the most part, the personnel, semi-fixed, and fixed expenses are going to be nearly the same in our operating departments, whether or not we drive increased sales and gross.

If we can keep the selling expenses in the range of 30-35% of total all-in gross, when we incrementally add more gross, we can retain 65-70% of that increased income as net profit on the bottom line. If a dealership is doing really well, its total expenses will typically run 70% of gross profit, leaving a net profit metric of 30% net-to-gross. So growing our business, while being able to maintain our expenses at best practice levels, can drive more than double the incremental net-to-gross metric than would typically be the case.

There are several places we see this demonstrated during our NCM Institute classes. Our students are encouraged to develop and document at least two Guarantee of Action Plans (GOAs) each evening after class and then present them to the class the following morning. These GOAs describe and quantify their ideas. The GOA could be something like selling 10 more used vehicles per month by pricing them more competitively to the market. The quantification might look like this: 10 incremental used vehicles at $2,976 all-in gross, which would be $29,760 additional gross per month, or $357,120 annually.

The primary selling expenses (commissions to salespeople, F&I producers, and sales managers, advertising, floor plan interest, policy and delivery expense) will be maintained at no more than 35%, and assuming that no additional incremental expense is required, the department would retain 65% of the $357,120 or $232,128 in additional net profit. The equation I used looks like this: (10 x $2,976 x 12 x 65%)  If these 10 extra vehicles were not sold, the same 65% in expenses would still be incurred; but not any extra gross profit nor subsequent net profit.

When working with variable department managers, another action we suggest our students begin focusing on every day is to reduce the price-to-sale gap. That is the difference between the advertised Internet price of a specific vehicle and the actual retail transaction price at the time of sale. In the beginning, this can be a huge number, so we suggest starting at a target reduction of $200 per car.  As an example, for a dealership retailing 80 used cars per month, reducing its average price-to-sale gap by $200 per vehicle, and keeping its variable selling expenses at no more than 35%, would increase its net profit by $124,800. The equation I used looks like this:  (80 x $200 x 12 x 65%).

By the way, we work with a lot of variable managers, and, before we begin teaching them this best practice, they tell us that they believe their true average price-sale-gap is currently at least $700 per vehicle retailed… off Internet pricing! (Don’t get me started!) So the $200 per vehicle target reduction that we’re suggesting is extremely conservative.

As I said at the beginning, there are numerous opportunities for increasing sales, gross and reducing expenses in our dealerships these days. I hope my brief message validates for you the powerful effect that incremental growth, combined with a controlled expense structure, will have on your bottom line!


Permanent link to this article:

Older posts «