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Robin Cunningham

Good Failure and Bad Failure, Part II

failure and success

I recently wrote a blog for NCM, Up to Speed, titled: There is Good Failure and Bad Failure. That idea had been floating around in my mind for a while, and since I wrote that, I have noticed other articles in several other places essentially talking about the same concept.

I know from my many years in the retail side of the automobile business, that there is an unintentional focus of quantity of time spent at the dealership vs. quality of time spent. I say unintentional because no one would actually say, “I think we need to just be here for long hours and not worry about what we actually do while we are here!”

But since there is so little in writing in most dealership (organizational charts, written processes, written job descriptions and objectives), it is very difficult to hold people accountable if we have not clearly defined and communicated our expectations.

In Part I of this blog, I used scenarios of good and bad failure. In the bad failure scenario, most everyone in the variable operations was just coming back each day, picking up where they left off, and doing it all over again for ten or twelve hours. There was not a lot of incremental growth to show for it. In the good failure scenario, they were having very specific meetings, processes, and training each day. Everyone was gaining more momentum by becoming more knowledgeable and skilled at their various responsibilities.

In the Fixed Operations, an example of bad failure would be having too many customers coming in first thing in the morning because they were told that was the quickest way to get in and out on a timely basis; or having Service Advisors taking the inbound phone calls from customers who had questions about their car’s needs, which can lead to over or under-diagnosing. This can also lead to the Advisor making time commitments to the customer about shop capacity, and also making commitments about specific Technician availability. This can have a negative effect on gross profit margins if too high a skill level technician is assigned to work on lower skilled work.

Good failure can happen when we begin transforming the service drive and the customer experience by having a Service Appointment Coordinator or Service BDC taking all inbound service calls.  Finding out not just what the customer thinks is going on with their car, but also other things based on time, mileage, or history. This allows us to find out the ideal time for both the customer, and the shop to have the customer come in. This then can give the Advisor time to do a walk-around with the customer, which is critical to forming a long term, trusting relationship with the customer. As the vehicle ages, this relationship is necessary so that the customer will allow us to be the one doing all the routine and mechanical maintenance. At the end of each visit the customer’s next service appointment can be set based on time or mileage and entered into the CRM tool for proper follow up.

I say good failure, because it takes an all-out commitment from the Dealer, GM, Service Manager, Service Advisors, Technicians, Parts Department and the Support Staff. For those who have read and remember the book, “Who Moved My Cheese?”, there is going to be a lot of cheese moved, to successfully transform this critical department to be the dealership’s primary customer retention tool.

Good failure is the trial and error it takes when committing best practice processes into your dealership culture. Good failure is when all managers become committed to daily training and managing activities. Good failure is when you begin identifying your people’s true talents by continuing to increase their knowledge and skills.

I love it when Jared Hamilton says, “We need to be committed to daily training, on a weekly basis.” Meaning….ALL THE TIME!!!

 

Permanent link to this article: http://blog.ncm20.com/2015/05/good-failure-and-bad-failure-part-ii/

Jody DeVere

5 Tips On Communicating More Effectively With Women

In automobile center

It’s just a fact of life in the automotive world: listening is essential! One of the key things we stress when training our Certified Female Friendly clients is developing great communication skills. Too often, when a woman visits a car dealer, tire dealer, service center or other automotive retail location, she is interrupted, talked over, or simply not being heard. Well, I’m here to tell everyone in the auto world the same thing I tell every one of our Certified Female Friendly locations: women speak, learn to listen!

1. Verbal Skills

When it comes to speaking to your women customers, the three C’s are clear, concise, and correct. Don’t try to wow her with jargon, and don’t deny her an explanation because you don’t think she’ll understand. Women really appreciate it when you take the time to explain the whole process. Make sure your answers are correct, of course (we don’t want to be giving inaccurate explanations after all), and you want to explain yourself as clearly as possible while still remaining concise. If you can master the art of the three C’s, you’re well on your way to winning with women already.

2. Non-Verbal skills improve Body Language

When talking to women customers, what you don’t say can be just as important as what you say. Women are storytellers. If you’re helping a woman customer, listen to her as she tells you what she needs. She’ll likely tell you about her entire car history, family, her kids, how many trips to school and tae-kwon-do and soccer practice she makes every week, how many snacks have spilled, and how many hours she spends in her car. These are important clues for you! This is a customer who cares about safety, reliability, and easy cleaning. While listening, signify your interest by nodding, smiling, and expressing (without speaking) that you’re following along. Repeat back the key points to her before you offer the solution she needs. This signals that you heard every word, and that goes a long way with women!

3. Marketing and Advertising that resonates with her

Just painting something pink doesn’t make it female friendly. Similarly, covering your marketing and advertising with flowers and hearts isn’t going to go very far either. Women don’t care about the colors you use in your advertising, they care about honesty and reliability. Use the same 3 C’s in your advertising that you use when speaking, and you’ll earn the trust of women – and men, too.

4. Look and feel of your store

When a woman customer arrives, curb appeal is important. Your location should look clean and professional from the outside, or she’ll be nervous about coming in. Similarly, make sure the inside is comfortable and clean, from the waiting areas to the restrooms. Giving her a nice place with a pleasant smell and casual atmosphere to sit and wait, with extras like complimentary coffee, wifi internet, and perhaps a safe play area for the kids will speak volumes about your commitment to women.

5. Dress for success with women…what you wear reflects who you are.

Finally, as long as you’re dressing your shop or dealership up, dress up your staff as well! You don’t have to wear uniforms (but if you do, that’s fine), but make sure all staff are well groomed and dressed well. All of these key points will paint a picture for your women customers that you’re a business who takes everyone seriously – and as long as you follow through and provide great work on top of all these excellent tips, you will earn her trust very quickly!

Permanent link to this article: http://blog.ncm20.com/2015/05/5-tips-on-communicating-more-effectively-with-women/

Steve Hall

Two Quick Tips for Service Managers

Auto Mechanic

It seems these days everyone is pressed for time and running a million different directions. Because of this, your team can feel disconnected and often times alone in their jobs. They don’t get quality time with their supervisor and never get to really hear what is going on in the department or business. They have questions like, “are we doing well or not,” and “am I doing my job to your satisfaction, “or ”am I about to be the next ex-employee?” Most of the time employees don’t actually ask these questions; instead the questions just keep floating around in their mind.

It’s a shame when valued employees feel this way. After all, it doesn’t take a lot of information or interaction to make these questions disappear. With this in mind, today I would like to give you two quick tips you can implement, with no added expense. These two items can possibly help your employees feel more informed and secure in their jobs.

The first tip is the monthly wrap-up and kick-off meeting. According to Marcus Buckingham and Curt Coffman in the book First Break All the Rules, one of the key components to employee retention is making the employee feel they are part of the information stream within the business. One way to help your team with this is to hold a monthly kick-off meeting.

On the first day of the month, bring your departmental team together for a quick three to five minute kick-off meeting. Think pre-game speech for the professional sports team. This meeting can be held right in the service department around the lifts and vehicles during normal business hours. Have the attendee’s stand, so the meeting stays short. For the wrap-up part of the meeting, let them know how the prior month finished up. Cover items like departmental gross profit, or shop hours versus objective, and be sure to cover CSI. Don’t forget to congratulate a few employees that had stellar performance

For the kick-off portion, set the goals for the month that is starting. Be sure to acknowledge upcoming employee anniversaries and milestones. Include anything that is upbeat and challenge the employees to reach the goals that are set.  Giving just a couple minutes of your time, combined with the key information that is shared, will make the whole team feel like an integral part of the organization. This meeting costs nothing, but has a lot of value. By doing this you can bring the team together, and win together.

The second tip I would like to share today is coaching from the sidelines, not the locker room. I think that is worth restating. Do you coach from the sidelines or the locker room? Let me explain what I mean. You would never see a NFL coach hanging out in the locker room while the game is being played. They are found watching the action as it happens and coaching everyone on the team to perform better.

Now, put this into your everyday work life in the service department. Game time for the service department is every morning from about 7:30 to about 9:00. Where are you during this time? Are you hanging out in your office running reports, answering e-mails and reviewing numbers? That would be considered “in the locker room”. Should you be on the “sideline” watching the game and coaching the team while the action is happening? Yes.

Is there really anything more important to a leader than helping their team perform better?  Wouldn’t this also help the employees better understand how they are performing in their jobs? Keep this in mind each and every morning and spend the time directing the team, when the game is actually happening, then perform the behind the scenes work during the non-peak times of the day.

Remember that your team moves at the speed in which you lead them, and to lead you must be in front of them. Don’t focus on the wrong items. Put your efforts into your people and unleash the power of the team.

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Permanent link to this article: http://blog.ncm20.com/2015/05/two-quick-tips-for-service-managers/

Tom Hopkins

Dedicate Yourself to Educate Yourself

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One of the most important lessons I’ve learned in life is that no one else is going to look out for you as well as you will look out for yourself. To become and remain a professional in the automotive industry, you must recognize that you are in charge of your own education and act on that fact. Build on your strengths and correct your weaknesses. If you aren’t sure of what to work on first, there is certainly someone in your life who will gladly assist you like your manager, your loved ones, or a trusted friend.

There are some common, basic skills that apply to the business world. They all impact how well we relate to the needs of others to feel important when they’re around us; to accept the education we provide about our vehicles and the industry; and to help them own a vehicle that’s truly a good choice for them.

Here are five skill areas that I strongly recommend you consider developing or strengthening as they have made all the difference for many of my students:

Memory

Having a good memory is critical to anyone, but especially to those of us who meet many new people every week. I have learned to make a game of it in my career. I challenge myself to remember as many people and their stories as I can. There are some great courses and books written on this subject. Even if you learn and use only one small strategy, I guarantee you’ll see the benefit of having done so. One little strategy that I learned and have used for years is to repeat each person’s name to myself four times when I first hear it. Then, to use their names (as they give them) as soon as possible in conversation.

A Second Language

Consider the part of the country in which you live and those people you do business with. As our country continually redefines itself by its people, be aware of the advantages of being able to communicate with others in their native tongues. Today’s projections show that both Hispanic and Asian portions of the population are on the increase. To be able to work with more people, you must learn more about them, their languages, and their cultures.

Voice

Since your clients choose to get involved with you based on what you say, doesn’t it make sense that you train your voice to give the highest level of professional presentation? If you’ve never considered voice training before, record yourself giving a portion of your presentation, then listen to it. Most of us hate the sound of our own voices. Just imagine how our clients feel when listening to us. Your goal is to project your message with clarity and power.

Math

Don’t cringe on me here. I know many people hate math. However, in business, you need to know some basic math skills really well. Invariably, you’ll have potential clients who will have champagne tastes and beer budgets. Understand what they can truly afford before trying to find them the car of their dreams.

Know the current interest rates on vehicles and play with the math on a range of vehicle investments. Learn how to quickly determine what a monthly investment might be on a vehicle prior to persuading the client that it’s right for them.

I know the favorite computation of every salesperson who works on a fee basis is to determine their percentage of every sale. Don’t stop there. Play the numbers game often and you’ll get better at winning.

Negotiation

Do you consider yourself a trained negotiator? Trained negotiators can quickly and effectively analyze the details of situations and determine the best route to resolution. If that brief description doesn’t fit you, make an effort to find a book, audio, or seminar on the subject. Then, schedule the time to learn from it.

Choose just one of these five areas and dedicate yourself to improving in it this month. Then, next month, choose another. Once you get started on this journey of self-education, you’ll be amazed at what you learn and how simple things can have a powerful impact on your overall success in life.

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Permanent link to this article: http://blog.ncm20.com/2015/05/dedicate-yourself-to-educate-yourself/

Robin Cunningham

Are Better Than Banker’s Hours Possible in the Car Business?

Man business modern in wristwatch

Is that a crazy title to a blog article, or what? Recently, I had the opportunity to accompany one of our 20 Group Moderators to one of his meetings. The plan was for the groups to each bring one of their Variable Managers to the meeting, and I would work with them separately from the dealer meeting. Then, I would report back to the dealers the next morning on how our breakout meeting went.

Before any of that started, the group met at one of the member’s dealership on Sunday evening, shortly after the dealership had closed. Many of the staff members were there to interact with us, show us around to the various departments, and answer any questions we might have about their operation. It really was a great experience. We knew this was a large, successful, and very profitable dealership. It is a rare opportunity to visit a dealership after hours and see it from that perspective. All the dealership staff seemed relaxed and yet confident about themselves and their respective positions in the dealership. We had a wonderful meal catered on a portion of the showroom floor. Incidentally, there were no cars on the showroom floor. Instead, on the floor there were only couches, chairs, tables and plants. It was more like a nice hotel lobby.

The next evening at dinner, I happened to be sitting next to the dealer whose store we had visited the previous evening. By now, I was very familiar with their financial data to match the more personal experience with him and his staff the night before. I must have said something about what an ongoing challenge it must be to keep that level of culture and profitability maintained month after month, year after year. He agreed it was and then said that he only worked from 10:00AM to 3:00PM each day. As you might imagine, I was a bit stunned by that comment. Then, I half-kiddingly said, “And you probably go out to lunch as well right?” He looked at me and said that he certainly did go out to lunch each day with one of his staff members.

What I haven’t said yet, is this person is the Managing Partner in the store from a large dealership group. So technically, he is the General Manager; and the night before, I found out there really isn’t a General Sales Manager either. So we are not talking about a place that has all those roles covered by other people with those bigger titles.

My head was kind of spinning with how this was possible. He looked over at me and said, “Robin, the reason this is now possible is that I spent years and years and years training all my people on exactly what they needed to be doing and why.”

As some of you know, I am a full-time instructor at the NCM Institute so training and coaching is what I do. To actually hear someone talk about his years and years of training his people, and to have actually been in that store and met his people, is essentially unheard of. By the way, I have never met a more humble, low-key person in his position.

The next morning, when I was debriefing the dealers about the time I spent with their Variable Managers, I could not restrain myself from retelling this story to this person’s fellow Members. Maybe they already knew this. They certainly knew how profitable the store was.

So going back to the audacious title of this blog about whether “better than banker’s hours” are possible in the retail automobile industry, I can now tell you the answer is yes. It just takes years and years of training your people to know exactly what they need to be doing and why.

Accountability management is essential. At the NCM Institute, we work with the six primary elements of effective accountably management as our starting point for everything.

There is so much more upside opportunity available to us in the retail automobile business than we likely believe is possible. Consistent, long-term training for all of our people is apparently the key.

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Permanent link to this article: http://blog.ncm20.com/2015/05/are-better-than-bankers-hours-possible-in-the-car-business/

Eric Schmitz

Lowering Workers’ Compensation – How to use Safety and Compliance Software to Protect Your Dealership and Employees while Decreasing Insurance Rates

Insurance on Pocket Watch Face.Workers’ Compensation insurance was designed to ensure adequate employee reimbursement from an on-the-job injury, as well as minimize lawsuits between employers and employees in the workplace. Beneficial to both employers and employees, but paid for by employers, Workers’ Compensation can be costly; research shows that over the past ten years Workers’ Compensation rates in 26 states have risen 3% per year. Continued increases are expected over the next several years. However, dealers don’t have to give in to this increase; despite the rise in costs, dealers can impact their premiums. How? By reducing their Experience Modifier (Ex-Mod).

To understand how to reduce an Ex-Mod, it is important to first understand how Workers’ Compensation is determined. Workers’ Compensation is comprised of two parts:

  1. The size of the dealership’s payroll and the employee job classifications. (Dealers cannot reduce this portion of Workers’ Compensation.)
  2. The dealership’s Experience Modifier (Ex-Mod). Dealers can impact and change the cost of their Workers’ Compensation insurance by reducing their Ex-Mod.

Premiums for Workers’ Compensation insurance are calculated using the following formula:

Payroll  X  Classification Rate  X  Ex-Mod = The Dealership Workers’ Compensation premium.

Every dealership has an Ex-Mod; it is based on the losses the facility has had over the past three years. The modifier factors both severity and frequency of losses and is set in the industry so that the average business has an Ex-Mod of 1.0. To learn more about how an Ex-Mod is calculated, click here.

One way dealers can reduce their Ex-Mod is by implementing a positive safety culture. Research shows that dealers that have frequent safety committee meetings, conduct regular trainings, and increase employee communications have a correlating lower Ex-Mod score. There are a variety of methods that you can use to implement a positive safety culture. Many dealers have found success through the use of a compliance and safety software.

While every software is different, the best safety and compliance software has the following features in common:

Safety Data Sheets specific to your facility’s chemical inventory. Employees must have access to chemical Safety Data Sheets (SDS), which will allow them to safely handle the chemicals used in their daily work, as well as have an informational resource in the event of an emergency. The best software will have a wide-variety of SDS available and will also allow management to upload additional sheets.

On-demand Environmental & Safety training. Employees must be able to train upon hiring, and should also have the functionality to review and retrain annually. Good software includes a multitude of trainings, such as Personal Protective Equipment (PPE), Accident Investigation, Emergency Response, and more.

Accident tracking and management. Managers require a consistent way to investigate issues, investigate them, identify their root causes, and track their resolutions. A good safety and compliance software will allow for tracking so that underlying issues are resolved.

Multi-faceted compliance management. Compliance is an every evolving entity that dealers are required to stay on top of. A good software stays up-to-date with changing regulations, prompting users when changes are made.

Self-inspection tools. Running a dealership is a complicated process; things often slip under the rug, losing importance until an inspector arrives. The best safety and compliance software allows users to continually see where they are excelling and where work needs to be done.

Safety and compliance software helps implement a positive safety culture, and therefore lower Workers’ Compensation rates by creating a culture through systematic safety program management. Improved visibility created by utilizing safety software increases employee awareness and overall safer employee actions through the creation of a consistent line of training and communication dealership-wide. In essence, employees who can take part in safety and are able to see management taking a part in safety are more likely to participate themselves, improve loss control, and lower Workers’ Compensation premiums.

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Permanent link to this article: http://blog.ncm20.com/2015/05/lowering-workers-compensation-how-to-use-safety-and-compliance-software-to-protect-your-dealership-and-employees-while-decreasing-insurance-rates/

Lycia Jedlicki

What has a Better Return on Your Investment: Training or Advertising?

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If you ask a dealer how much their monthly advertising budget is, they usually can tell you that number right off the top of their head, along with approximately how much they spend with each vendor.  However, when asked how much they spend on training each month, you will probably get an “I don’t know” or “not enough” answer.

Truthfully, most dealers do not have a monthly training budget. Dealers for the most part don’t like training; they just expect their people to know what they are supposed to do and to know what it expected. Training just isn’t as exciting as advertising. But let me ask a question: If your advertising brings in a lot of show floor traffic and vehicles through the service department, and your people just do a “so-so” job with them, is it a good investment? Wouldn’t we be better off transferring some of our advertising budget to training? After all, don’t we want to make sure all of our customers get treated properly?

We as dealers spend thousands of dollars monthly to bring people into our show rooms and service departments, yet when we mystery shop ourselves, most of us cringe at the results. So again, I ask you this question:

Are your people properly trained, and if not, why not?

I have two dealers in different 20 Groups that  took money out of their advertising budget and moved it to training. What were the results? A Volkswagen dealer from Chicago, Illinois is going to have his best net profit year, while Volkswagen is having a very tough year. A BMW dealer from Florida also invested some of his advertising budget in training and his net profit is up 51%.

These dealers did not just invest in automotive training. They did leadership seminars through local colleges and the BMW dealer brought Toast Master’s into their dealership so he could make sure his people knew how to communicate with their customers.  These dealers decided to invest in their people, and it has paid off handsomely.  As the Breakers Resort in Palm Beach, Florida says, “Happy employees make happy customers.”

Challenge yourself with this question when doing your advertising budget this year, “Are my employees going to handle my customers the way I would like them to all of the time?” If not, maybe it’s time to rethink how you are spending your money so you can get the best return or your investment.

UV Training

Permanent link to this article: http://blog.ncm20.com/2015/04/what-has-a-better-return-on-your-investment-training-or-advertising/

Tom Hopkins

Success Begins in Your Mind

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Most people who fail in business fail because they don’t know how to keep their attitudes positive on a daily basis. They start their careers learning and practicing the basics, applying those ideas and end up making some money. Then, they go into a slump. They will stay in their slump until they go back to the fundamentals. Until then, they return to doing what they get paid for and accept failure and rejection without letting it stop them.

The key to success is in how you handle failure. Handling failure does not come naturally to most people. It is an acquired skill.

Some of your emotions tell you to sulk and avoid any situations in the future that are likely to put you in line to feel the pain of rejection again. Other emotions tell you to get more out of life for yourself and your loved ones. Concentrate on what you have to gain, and learn how to change your attitude toward rejection.

I am going to present five sayings that have helped me move forward in all areas of my life. Memorize them and recall them when you’re rejected or have failed to achieve what you wanted.

I never see failure as failure, but only as a learning experience.

Every sale that doesn’t go through is a learning experience; every challenge you have is a learning experience. Learn from your failures. Thomas Edison, who conducted more than ten thousand experiments on filaments before he produced a practical light bulb, was once asked, “How did you keep going after you failed more than ten thousand times?” Edison replied, “I did not fail ten thousand times; I learned ten thousand ways that didn’t work.” Like Edison, try to look at failure and rejection in a different light as a learning experience.

I never see failure as failure, but only as the negative feedback I need to change course in my direction.

Outside a restaurant with a lively bar, I once saw a gentleman who had too much to drink to try to unlock his car with the wrong key. No matter how many times he tried, the wrong key still didn’t work. After I’d talked to him into taking a taxi home, it occurred to me that sometimes we all keep using techniques that don’t work in our selling endeavors. We keep applying the wrong solution to the problem long after we’ve tried it and failed.

I never see failure as failure, but only as the opportunity to develop my sense of humor.

Have you ever had a traumatic experience involving a sales presentation? Three weeks later, you finally tell someone about it and suddenly that same event is hilarious. The longer you wait to laugh, the more that failure will hold you back. Make a determined effort to laugh sooner, and learn the trick of telling a good story on yourself.

I never see failure as failure, but only as an opportunity to practice my techniques and perfect my performance.

Every time you present your service to others and they don’t buy, at least they gave you a chance to practice. Many people don’t realize the importance of this. Learn to appreciate the opportunity to improve.

I never see failure as failure, but only as the game I must play to win.

Selling is a game. Life is a game. Both have their rules. Over the years, I’ve discovered that a single rule dominates every situation: Those who risk failure by working with more people earn more money. Those who risk less failure earn less. If you risk failure, sometimes you will fail. But every time you fail, you’re that much closer to success. Success demands its percentage of failure.

Work with these five attitudes toward rejection. What counts isn’t how many transactions fall out, how many doors slam, how many things don’t work out, how many people go back on their word. What counts is how many times you pick yourself up, shrug off failure, and keep on trying to make things come together.

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Permanent link to this article: http://blog.ncm20.com/2015/04/success-begins-in-your-mind/

Dustin Kerr

Oregon Senate Bill 276 – How Could This Affect Your BHPH Operation?

Government building blog 4.22

The Oregon Senate recently introduced a bill that has BHPH dealers in that state up in arms, and for good reason. The bill would drastically change the way some buy here pay here dealers do business. I am not going to try to debate the merits of this bill, or the lack there of. As BHPH dealers, we have all been discussing and fearing the changing landscape of compliance for many years.

The point of this article is to focus on a couple of the provisions in the bill and ask ourselves, “Doesn’t this just make good business sense?” Keep in mind the old saying “Pigs get fat; hogs get slaughtered” and ask yourself if you are running your dealership as a fat, happy pig or as a hog headed for slaughter.

Here’s a quick rundown of the highlights of the bill:

  • Obtain the same type of license from Oregon’s Department of Consumer and Business Services (DCBS) as payday or auto title lenders.
  • Reduce interest rates to account for the amount of the consumer’s down payment.
  • Stop accruing interest once a vehicle has been repossessed.
  • Cap repossession fees at 7.5 percent of the purchase price.
  • Stop using GPS or starter-interrupt devices.
  • Wait to repossess a vehicle until after 30 days from when nonpayment has occurred.
  • Cap interest rates at no more than 20 percent or the federal funds rate plus 17 percent, whichever is lower.
  • Form a good faith belief that the consumer has the ability to perform on the contract by using underwriting standards passed by DCBS.

I want to focus on the last two bullet points of this bill and ask you, as a dealer, to think about how you are handling these two issues in your state?

Cap interest rates at no more than 20 percent or the federal funds rate plus 17 percent, whichever is lower.

Full disclosure here, I used the state max of 21% for nearly every car deal I ever financed and would have probably charged more if the state would have allowed. My question to you though is this: is it good business to charge our customers more than 20% interest? Every 20 Group meeting I have ever been a part of has included conversation on how we reduce the term of our loans and retain our good customers.

Another big conversation is about the cars not lasting the term of the note. Are we sacrificing a few thousand dollars of gross for a few hundred dollars of interest? Interest income is a big part of this business and I have always been on the side of maximizing the interest dollars collected. Although, when do we hit a point of diminishing returns?

Form a good faith belief that the consumer has the ability to perform on the contract by using underwriting standards passed by DCBS.

Now I have no idea what the DCBS will set as underwriting standards should this bill pass, but let’s look closely at the rest of that statement and change it slightly.

What if the motto of our underwriting department was something similar to this? “Form a good faith belief that our customer has the ability to perform on the contract based on our underwriting and verification practices.” Nearly all BHPH dealers want to reduce charge-off losses and regulators on the state and federal level want to make sure you are not setting your customers up for failure. Having a written underwriting policy in place that is based on industry analytics and your own loss ratios will go a long way towards achieving those goals.

Don’t forget the verification part of the process. An application is only as good as the verification to support it. There is little doubt that there are serious changes on the horizon for the BHPH industry and some that may change the way we do business forever. However, some of these items just make good business sense. Is your business a “fat, happy pig” or a “hog headed for slaughter”?


Learn more by attending these upcoming courses:

 


Permanent link to this article: http://blog.ncm20.com/2015/04/oregon-senate-bill-276-how-could-this-affect-your-bhph-operation/

Rebecca Chernek

Integrating Desking and F&I to Boost Sales and Profits

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I developed my Desking and F&I Integration workshop to address the single biggest factor limiting sales and profits in dealerships today – the bottleneck that exists between the sales and F&I department. It’s caused by an entrenched “Us vs. Them” mentality that evolved during the F&I industry’s first quarter century. Because “it’s always been this way,” dealers accept it as the status quo.

The lack of integration between sales and F&I yields only negatives. It’s the reason customers like the True Car model. They’re tired of games. They want straight talk. They’re tired of being dragged through the mud. They’re tired of waiting for hours at the dealership, only to find they can’t get financed for the car they thought they’d be driving home that day.

Desking and F&I Integration takes a hard look at the problem, why it exists, and offers proven solutions. My workshop provides a system that delivers a seamless, transparent and resoundingly positive customer experience – while boosting sales and profit! Because it requires teamwork between sales management and F&I managers, I recommend that dealerships send a representative from each department to attend the workshop.

Before you can fix something, you have to recognize why it doesn’t work.

I get workshop attendees thinking about how things work at their dealership – and how they should work. We’ll talk about how important it is to have a meeting of the minds between sales managers and F&I – and the customer.

We address issues that impact the overall customer experience, from how the sales department exchanges information about the sale, to finalizing the deal with the F&I manager. When is the best time to talk payments – before or after the customer goes into the F&I office? We talk about why not having a true meeting of the minds will undermine your menu every time – and reduce profits earned.

We talk about why establishing credit criteria earlier in the sale process helps to properly land the customer on a vehicle he can afford. And why structuring the unit earlier in the process allows for more units sold – while maximizing profits and limiting liability.

I share why it’s so important to conduct what I call “The Interview,” to qualify the customer and establish value points for later menu sales. The Interview occurs during the meet-and-greet and during the transaction review process, but it’s essential to expediting the sale and maximizing profits.

Besides contributing to the customer’s sense of a seamless process, having the F&I manager engage with the customer earlier in the buying process to learn the reason behind limited credit or slow pay history will pay off in several ways. Getting the story from the customer can result in stronger call-back decisions and fewer declined offerings. And the F&I manager can use information gathered during the meeting at the sales person’s desk to reduce customer resistance to products offered later during the menu presentation. Taking the time to meet with the customer briefly will cut delivery time in half.

How will the customer perceive the introduction to F&I? Will the customer see it as a one- or two-step process? Do old methodologies increase customer resistance? Has the sales department been concise with the buying numbers? Do we have a true meeting of the minds before the customer makes his way into the F&I office?

Why is that important? It’s all about the bottom line. With an F&I bottleneck, it takes too much time to deliver the car… is the paper work straight? Is the deal checklist complete and ready to go? What if the customer isn’t approved?

We’ll talk about why time is your worst enemy – deterring sales and reducing profits. If the dealer expects to use menu selling, how does that work if all the terms haven’t been confirmed with the customer prior to the menu presentation? Would it make sense to confirm the transaction prior to a menu presentation – and why is that so important?

The system I propose takes into account that every customer is different. I offer suggestions for managing subprime customers to enhance the customer’s experience and maximize dealer profit while limiting liability.

The workshop culminates in role-play sessions that allow attendees to practice what they’ve learned. It’s an excellent opportunity for sales managers and F&I people to work through new word tracks and hand-offs to another team member.

The “Us vs. Them” mentality is a dinosaur throwback that only drags the customer, sales manager, F&I manager, and dealership down. Customers and the marketplace have changed – it’s time to evolve and thrive in this new landscape.

Attendees will return to their dealerships ready to implement a system that will speed up delivery, putting wheels over curb in a fraction of the time compared to when your sales team and F&I staff were at loggerheads. Your F&I manager will have been able to present a menu to a trusting customer who appreciates the transparent process and the dealership team that understands his needs. Your satisfied customer will tell everyone he knows, and you’ll be delivering more units in one day than you ever thought possible.

desking

Permanent link to this article: http://blog.ncm20.com/2015/04/integrating-desking-and-fi-to-boost-sales-and-profits/

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