I can't help but wonder if most dealers are going through the same "power" struggle between the office staff and the sales staff. In my sales career, having experience with more then one dealership, I have noticed the same struggle being played out, and I wonder if the dealer principals really notice. Let me give you "My Take" on how the sales staff sees the struggle between the office and sales department.
In the retail world, there are simply two types of employees. One who works face to face with customers and one who doesn't. With some of the office employees I've worked with, they are rightfully in their position because, quite frankly, they shouldn't talk to customers. They just don't have the right personality to talk to fellow "human beings" let alone customers. I'm not quite sure why they believe the sales staff is much more inferior then them. I have my theories and most of them play a small part, but I also believe that if my job was as repetitive as theirs day in and day out, there would be a lot of little things that would get on my nerves too.
One reason there are little things that, "send them over the wall" as I've been told, is the daily connection with the dealer principal or owner, who will turn to these individuals and constantly ask the "what, where, when, and why". In turn, these individuals will ask the sales staff the same questions and add "who and how". The sales staff will give their explanation or details on how something took place and then the connection is lost, the blame game starts. Instead of working together, and discussing the "what, where, when, and why" it becomes a battle.
The inability to communicate between the two types of employees is due largely because the office staff rarely has the satisfaction of overcoming objections, rejections, and obstacles that the sales staff deals with in nearly every interaction with customers. It makes the little things that are forgotten in a deal very trivial, and makes the person complaining about the little things missed, seem very unappreciative. "Things should have been done this way and they were not, or they should have been done that way and it was not" now you've added some anomaly to their black and white day and it causes pandemonium in there simple yet repetitive day. I've seen chaos caused because of simple things like a missing drivers license number in its appropriate box, or a phone number missing a digit on an application or worse yet a deal that had yesterdays date instead of today's.
To be fair, I know the jobs of the office staff is not simple. I know this because I don't want to do them. I know the importance of the office staff and I show appreciation through respect to those individuals. I appreciate the fact that the office staff will dot our "I's" and cross our "T's" when we forget to, and fill in the blanks and do all the other stuff they were hired to do. That in its self makes it that much easier for the sales department to do their job, which is SELL! Let's all remember that in your retail store, if you're not selling your not making a payroll, and a payroll includes everyone from the shop porter to the owner, which includes the office staff somewhere in the middle. To treat the front line workers as inferior and with a lack of respect only places more animosity towards the office staff.
This may not be true at your dealership, the person or people you have working the office has people skills, and you never have had any issues with them. If this is the case, be very thankful. Appreciation for each others roll in the dealership goes a long way. More often then not, issues will get resolved. Tensions will dissipate, and things will get back to normal. But time and time again someone will have a bad day, something will be missed, and someone will have to fix it. Working together in this economy is paramount, and that's what it's going to take to ensure that everyone gets paid on payday, and your dealership survives to see the next one.
I've said it before and I'll say it again. The most important roll in a dealership is the salesperson. Whether it's in the showroom, parts department, service department or accessories, they help in the customers decision to make a purchase that day and in the future. Without customers purchasing your goods or services in your "retail" store, there wouldn't be an office staff.
With that said, April 21st is "Administrative Professionals Day". Make sure you show your appreciation for all that they do and treat them to something nice.
That's "My Take"
Friday, March 26, 2010
Friday, March 5, 2010
What Makes A Good "Desk Manager"
Let me start by giving you my definition. The "Desk Manager" is a role we play as Sales Managers, or Dealer Principals. Whose objective is to maximize deal profitability and secure customer commitment. Now assuming every dealership uses this key role, let me give you "My Take" on what makes a good Desk Manager.
Back in the day the Desk Manager could live off a simple formula. In fact I still hear it used today. "Tight, Tight, Loose, Tight" meaning a salesman brings you an offer and your first two pencils are "Tight" if it gets to the third pencil it's "Loose" and your final pencil is "Tight" once again. Using this formula, to come to a deal, with the customer, usually results in higher profit potential and a customer satisfied with his/her negotiations in the end. While this formula can still produce the wanted results, today's customers are much more educated and the competition much more educating. More often then not, a customer already has the "out the door" price, from the weak dealership, in the nearby county or city who couldn't close a paper bag, let alone a deal. As well as the ever growing online shopper who may have an out the door price from some place he has no intention of buying from.
- A good desk manager trains the salesperson with every deal brought to the desk. A salesperson works better when they have an understanding of what takes place when the deal is brought to the desk. There is no good replacement for hands on training.
- A good desk manager connects with the salesperson and has a mutual understanding on how the deal is presented to the desk and, in turn, presented back to the customer.
- A good desk manager requires all deals have the basics covered (complete write up, complete credit application, two forms of identification, etc.) from the sales person. No exceptions, No shortcuts.
- A good desk manager has the salesperson give a "temperature" check (ex..in a hurry, irritated, been shopping all day, un-enthused, enthusiastic..etc) on customers, to the desk manager.
- A good desk manager takes into consideration several factors, including inventory, customers ability to buy, financing options, customer expectations, customer commitment, and the SALESPERSON'S ability to make it happen. There is nothing worse then to cover all the basics, and "desk" a deal, only to have it all fall apart during the closing step.
- A good desk manager should be "Black and White"...meaning, the desked deal should be understood by the customer, the salesperson, and the finance person...as simple to understand as black and white.
- A good desk manager should know all finance and manufacture promotions.
The most important thing a good desk manager should know. What makes a "Good" desk manager, is having the "Best" salespeople.
This is why it is important to train the salesperson with every deal that comes into your desk. Discuss what went wrong and what went right. Have a solid "basic's" foundation, and don't deter from it. Have strong communication skills or understanding with your salesperson. Have faith in your salesperson's ability, and be good enough that your salespeople have faith in your ability to desk out a deal.
Now, this blog could have been titled "...Sales Manager" or "...Finance Manager" or "What makes a good Dealership" and the final answer would always be the same from me....SALESPEOPLE. But, I received an email from a follower that asked me what "My Take" is on desk managers, and I replied with "...read my next blog..." Bottom line is, the salesperson can make or break a customers decision to purchase from your dealership. Which in turn, affects your bottomline. So, no matter what role you take at your dealership, desk manager, sales manager, finance manager, owner or all the above, train your salespeople to be the best. If you have the best salespeople, that will make you good.
That's "My Take"
Back in the day the Desk Manager could live off a simple formula. In fact I still hear it used today. "Tight, Tight, Loose, Tight" meaning a salesman brings you an offer and your first two pencils are "Tight" if it gets to the third pencil it's "Loose" and your final pencil is "Tight" once again. Using this formula, to come to a deal, with the customer, usually results in higher profit potential and a customer satisfied with his/her negotiations in the end. While this formula can still produce the wanted results, today's customers are much more educated and the competition much more educating. More often then not, a customer already has the "out the door" price, from the weak dealership, in the nearby county or city who couldn't close a paper bag, let alone a deal. As well as the ever growing online shopper who may have an out the door price from some place he has no intention of buying from.
- A good desk manager trains the salesperson with every deal brought to the desk. A salesperson works better when they have an understanding of what takes place when the deal is brought to the desk. There is no good replacement for hands on training.
- A good desk manager connects with the salesperson and has a mutual understanding on how the deal is presented to the desk and, in turn, presented back to the customer.
- A good desk manager requires all deals have the basics covered (complete write up, complete credit application, two forms of identification, etc.) from the sales person. No exceptions, No shortcuts.
- A good desk manager has the salesperson give a "temperature" check (ex..in a hurry, irritated, been shopping all day, un-enthused, enthusiastic..etc) on customers, to the desk manager.
- A good desk manager takes into consideration several factors, including inventory, customers ability to buy, financing options, customer expectations, customer commitment, and the SALESPERSON'S ability to make it happen. There is nothing worse then to cover all the basics, and "desk" a deal, only to have it all fall apart during the closing step.
- A good desk manager should be "Black and White"...meaning, the desked deal should be understood by the customer, the salesperson, and the finance person...as simple to understand as black and white.
- A good desk manager should know all finance and manufacture promotions.
The most important thing a good desk manager should know. What makes a "Good" desk manager, is having the "Best" salespeople.
This is why it is important to train the salesperson with every deal that comes into your desk. Discuss what went wrong and what went right. Have a solid "basic's" foundation, and don't deter from it. Have strong communication skills or understanding with your salesperson. Have faith in your salesperson's ability, and be good enough that your salespeople have faith in your ability to desk out a deal.
Now, this blog could have been titled "...Sales Manager" or "...Finance Manager" or "What makes a good Dealership" and the final answer would always be the same from me....SALESPEOPLE. But, I received an email from a follower that asked me what "My Take" is on desk managers, and I replied with "...read my next blog..." Bottom line is, the salesperson can make or break a customers decision to purchase from your dealership. Which in turn, affects your bottomline. So, no matter what role you take at your dealership, desk manager, sales manager, finance manager, owner or all the above, train your salespeople to be the best. If you have the best salespeople, that will make you good.
That's "My Take"
Monday, March 1, 2010
Menu Selling (K.I.S.S.)
It has been at least 10 years since I sat behind a finance desk and called myself a finance manager. Through out those 10 years I've held monthly meetings with my finance staff on what was expected, and what was new. I remember on several occasions discussing the use of a "Menu Selling System", only to be told at the next meeting the several reasons of why it doesn't work. I recall discussions on finding a way to get the 300% rule in place, whether it was using the menu or not, we needed to find a way to get 100% of the product, in front of 100% of the customers, 100% of the time. I sat through several online meetings with a couple of different menu selling companies, trying to derive at a system that works with the Power Sports business.
The Menu Selling companies, chose the dealership I was working at, at the time, because we were a high volume dealership. Not your typical 200 unit a month "high volume" dealer, but at our best, we did over 200 units in one day. Our best month was over 1400 units sold. For a few years we had an 800 unit per month average. There was no one more qualified to try a menu selling program for the Power Sports business then this dealership. However, the biggest reason (excuse) the menu selling did not work was because we were high volume and there was not enough time to double input customers information and figure out different formulas for the customer to choose. That was still no excuse for not getting 100% of the back end products available, in front of the customer. There was a great deal of back end profits lost by not having a system in place.
In my defense, my compensation had no bearing on how successful or unsuccessful back end products were sold. Which was partially my fault for not negotiating and the dealer principals fault for not recognizing the potential. Nonetheless, the finance department was the responsibility of the Sales Managers and the success or failure of the department, rest with us.
Now fast forward a couple years, in a new dealership, instead of managing the F&I department, I am the F&I department and, in getting hired on, I stated I would find a way to make the menu system work. Find a way to get 100% of the products available, to 100% of the customer, 100% of the time. Here's some of the reasons I heard, in previous meetings, on why it wouldn't work:
Customers have exhausted their time and efforts in negotiating the (front end) deal and don't want to hear what is available to them (back end).
Customers are always in a hurry. It doesn't matter if they have no place better to be, once confined into an office to sign paperwork or just the thought that they have to get into an office to sign, puts the customer in "hurry up" mode. They stop listening before you even start.
Customers are far more educated these days, with the Internet, on the spot news articles, word of mouth, and the experience of previous purchases. Customers know what they want and don't want.
So, being faced with customers who had no money, or time, and over (or under) educated about back end products, I needed to come up with a way to get the products in front of the customer regardless. One of my favorite reminders to salesmen who made things too hard on themselves and the dealership, was K.I.S.S. or Keep It Simple Stupid. So I came up with my own "menu" and instead of emphasizing the price or the payment, I put everything available on the menu. I used key words and phrasing and no more then four bullets to emphasize the features. (ex. Warranty = Mechanical Breakdown Coverage...Gap = Total Loss Protection, and bullets like Nationwide Coverage, Unlimited Mileage...Pays Deductible, Pays Deficiency..etc) and I represent this "Menu" as an "Accountability Sheet" which makes me accountable to you, the customer, and my boss (the dealership) that all available protection is being offered at the time of the sale.
So far, I have had a number of customers, who not only listen intently, but open up to the idea that maybe there is more to these back end products then just a "way for dealerships to make more money." There is much more to my "Accountability Sheet" and a simple, yet effective approach to presentation, and I get 100% of products, to 100% of the customers, 100% of the time. That's Keeping It Simple Stupid.
I'm still finding ways to perfect my presentation, and I learn something new with every customer. I would be very interested to hear from other Power Sports dealers on their approach to the "Menu System" do they have one? Does it work? Are the Customers Responsive (Positive)? Are you interested in my "Accountability Sheet"?
SIDE NOTE: This past weekend was the busiest we've had this year. All day, deals were stacked one after the other, using various finance companies, mixed with "in a hurry" cash customers. This sheet was presented with 100% of the deals and the outcome was a 70% close ratio with, not just warranties, but insurance, gap, and Lo Jack as well.
I've worked with, heard of, and experienced my share of "F&I Managers", and most can be categorized in either a "Hard Sale", or a "Soft Sale" approach to back end sales. I would generally categorize my self as a "Soft Sale". This sheet helps step up the soft sale and ensuring that the products are being introduced. From my experience the hard sale approach leads to unhappy customers, more cancellations, less repeat business.
That's "My Take", what's yours?
The Menu Selling companies, chose the dealership I was working at, at the time, because we were a high volume dealership. Not your typical 200 unit a month "high volume" dealer, but at our best, we did over 200 units in one day. Our best month was over 1400 units sold. For a few years we had an 800 unit per month average. There was no one more qualified to try a menu selling program for the Power Sports business then this dealership. However, the biggest reason (excuse) the menu selling did not work was because we were high volume and there was not enough time to double input customers information and figure out different formulas for the customer to choose. That was still no excuse for not getting 100% of the back end products available, in front of the customer. There was a great deal of back end profits lost by not having a system in place.
In my defense, my compensation had no bearing on how successful or unsuccessful back end products were sold. Which was partially my fault for not negotiating and the dealer principals fault for not recognizing the potential. Nonetheless, the finance department was the responsibility of the Sales Managers and the success or failure of the department, rest with us.
Now fast forward a couple years, in a new dealership, instead of managing the F&I department, I am the F&I department and, in getting hired on, I stated I would find a way to make the menu system work. Find a way to get 100% of the products available, to 100% of the customer, 100% of the time. Here's some of the reasons I heard, in previous meetings, on why it wouldn't work:
Customers have exhausted their time and efforts in negotiating the (front end) deal and don't want to hear what is available to them (back end).
Customers are always in a hurry. It doesn't matter if they have no place better to be, once confined into an office to sign paperwork or just the thought that they have to get into an office to sign, puts the customer in "hurry up" mode. They stop listening before you even start.
Customers are far more educated these days, with the Internet, on the spot news articles, word of mouth, and the experience of previous purchases. Customers know what they want and don't want.
So, being faced with customers who had no money, or time, and over (or under) educated about back end products, I needed to come up with a way to get the products in front of the customer regardless. One of my favorite reminders to salesmen who made things too hard on themselves and the dealership, was K.I.S.S. or Keep It Simple Stupid. So I came up with my own "menu" and instead of emphasizing the price or the payment, I put everything available on the menu. I used key words and phrasing and no more then four bullets to emphasize the features. (ex. Warranty = Mechanical Breakdown Coverage...Gap = Total Loss Protection, and bullets like Nationwide Coverage, Unlimited Mileage...Pays Deductible, Pays Deficiency..etc) and I represent this "Menu" as an "Accountability Sheet" which makes me accountable to you, the customer, and my boss (the dealership) that all available protection is being offered at the time of the sale.
So far, I have had a number of customers, who not only listen intently, but open up to the idea that maybe there is more to these back end products then just a "way for dealerships to make more money." There is much more to my "Accountability Sheet" and a simple, yet effective approach to presentation, and I get 100% of products, to 100% of the customers, 100% of the time. That's Keeping It Simple Stupid.
I'm still finding ways to perfect my presentation, and I learn something new with every customer. I would be very interested to hear from other Power Sports dealers on their approach to the "Menu System" do they have one? Does it work? Are the Customers Responsive (Positive)? Are you interested in my "Accountability Sheet"?
SIDE NOTE: This past weekend was the busiest we've had this year. All day, deals were stacked one after the other, using various finance companies, mixed with "in a hurry" cash customers. This sheet was presented with 100% of the deals and the outcome was a 70% close ratio with, not just warranties, but insurance, gap, and Lo Jack as well.
I've worked with, heard of, and experienced my share of "F&I Managers", and most can be categorized in either a "Hard Sale", or a "Soft Sale" approach to back end sales. I would generally categorize my self as a "Soft Sale". This sheet helps step up the soft sale and ensuring that the products are being introduced. From my experience the hard sale approach leads to unhappy customers, more cancellations, less repeat business.
That's "My Take", what's yours?
Monday, February 22, 2010
Monday Morning Turndowns
OK, it's Monday Morning. I have no less then 12 applications in front of me that need to be, either, reworked or submitted to a high risk lender. All 12 applications are "buyers" that, "if qualify", will buy. One applicant wants to buy two units and keep his payments under $200 a month. The others, well, want to buy, has down payments to make it happen and are eager and ready to pick up their units as soon as they are approved. So after a dismal weekend, I have 13 total units ready to roll. Sounds like a great Monday Morning.
Here we are 2 1/2 hours into the morning and I have just received my final turn down. 13 units, down to 0. Not completely unusual, we've all seen it before, and with today's credit history, it won't be the last time we'll see Monday's like this. Last blog I discussed the need to get back on a personal level with our lenders, work on getting customers to come up with a down payment, and re-educating our customers. Going into the week after that blog, I did just that. I approached every customer with the understanding that there is a want to buy, but the hesitation may be an unwillingness to discuss their bad credit. After following all the steps of the sale I overcame the hesitation and the result was 12 applications of bad credit.
Now, whats my point. As I wrote the first two paragrahs of this blog I stopped and and asked my self the same thing. "What is my Point". After reading it over I realized that I was venting my frustrations, and it worked, I'm no longer frustrated. The point here is not that my efforts were stopped short of a sale, because I couldn't get any approvals, but the fact that there are customers walking through the door, eager and ready to buy, and with the comprehension that the days of $39 a month payments, 0 money out of pocket, are a thing of the past. Re-educating customers is going to be a long process it's definetly not going to happen overnight. It will probably take as long as it takes for the customers to start rebuilding their credit well enough to start buying again. It's something we shouldn't lose focus on. Re-educating the lenders probably won't take as long, but without applicants like these they won't know there are buyers out there, and dealers working hard to try and make it happen.
Here we are 2 1/2 hours into the morning and I have just received my final turn down. 13 units, down to 0. Not completely unusual, we've all seen it before, and with today's credit history, it won't be the last time we'll see Monday's like this. Last blog I discussed the need to get back on a personal level with our lenders, work on getting customers to come up with a down payment, and re-educating our customers. Going into the week after that blog, I did just that. I approached every customer with the understanding that there is a want to buy, but the hesitation may be an unwillingness to discuss their bad credit. After following all the steps of the sale I overcame the hesitation and the result was 12 applications of bad credit.
Now, whats my point. As I wrote the first two paragrahs of this blog I stopped and and asked my self the same thing. "What is my Point". After reading it over I realized that I was venting my frustrations, and it worked, I'm no longer frustrated. The point here is not that my efforts were stopped short of a sale, because I couldn't get any approvals, but the fact that there are customers walking through the door, eager and ready to buy, and with the comprehension that the days of $39 a month payments, 0 money out of pocket, are a thing of the past. Re-educating customers is going to be a long process it's definetly not going to happen overnight. It will probably take as long as it takes for the customers to start rebuilding their credit well enough to start buying again. It's something we shouldn't lose focus on. Re-educating the lenders probably won't take as long, but without applicants like these they won't know there are buyers out there, and dealers working hard to try and make it happen.
Saturday, February 13, 2010
Powersports Financing
I've heard it all from owners, salesmen, consumers, and consumer wannabes on "if the lender would just buy more we would sell (buy) more". While this statement is true, it usually insinuates that the finance company has turn down someone who should have been approved.
It's my experience, as of late, that these finance companies want to lend to consumers and allow dealers to "sell more" but they don't want (or can't) fall into the same mistakes made in years past. For example, in years past we would have an 18 year old kid come in with 2 pieces of credit with a $1000 high line and less then 1 year on the bureau but a score over 700. Well certain lending companies, in less then 2 mins, would approve this kid with a $15K credit line and we could send him on his way with a new machine or 2 in less then an hour.
In the beginning, we would joke on how ridiculously lucky we just got and that we need take advantage of this approval, give him what he wants and tell him how ridiculously lucky he just got and make sure you make your payments on time and don't mess this up etc, etc. Then it became such commonplace in this business that every one with a heartbeat and a score over 580 was going to get approved for something. We stopped telling people that we just got a gift of an approval and we stopped telling them to make sure you make your payments etc, etc.
If you are one of the unlucky people who just got in this powersports business in the last 5 years, you're one who believed that customers were never ending and approvals are second nature. If you've been in this business longer then that, like me, you got so use to stuffing your wallet with money and lost sight of the gifts of approvals we were getting. We even led consumers to believe that approvals were no problem, just fill out this application and we'll have you in the office signing paperwork in just a few minutes.
I don't know, entirely, how the inner workings of a finance company operates, but I do know some decision making people made some wrong decisions by allowing these types of gifts to continue. Now, in order to survive today and in the future, these finance companies have to make right decisions, and that includes turning down someone who should be turned down. Looking harder at applications that score alone can't define.
Now this doesn't mean, giving in to the finance company and allow there decision to be final. Let's get back to the basics, understand the credit bureau of our customers. Find if we must a middle ground with the lender, and start working the consumer more for down payments, proof of income etc, etc. Use what we know to be true and start building that relationship up with lenders again like we did in the past. Lenders want to lend, they want to lend to consumers who can prove they can pay, they want to lend to dealers who are looking out for the best interest of the consumer, dealer, and lender.
That's My Take!
Lenders used (AHFC, HSBC, GE (Funancing), Sheffield, MB, BMW, YDS, and countless others that either don't finance powersports any longer or have gone by the way side)
It's my experience, as of late, that these finance companies want to lend to consumers and allow dealers to "sell more" but they don't want (or can't) fall into the same mistakes made in years past. For example, in years past we would have an 18 year old kid come in with 2 pieces of credit with a $1000 high line and less then 1 year on the bureau but a score over 700. Well certain lending companies, in less then 2 mins, would approve this kid with a $15K credit line and we could send him on his way with a new machine or 2 in less then an hour.
In the beginning, we would joke on how ridiculously lucky we just got and that we need take advantage of this approval, give him what he wants and tell him how ridiculously lucky he just got and make sure you make your payments on time and don't mess this up etc, etc. Then it became such commonplace in this business that every one with a heartbeat and a score over 580 was going to get approved for something. We stopped telling people that we just got a gift of an approval and we stopped telling them to make sure you make your payments etc, etc.
If you are one of the unlucky people who just got in this powersports business in the last 5 years, you're one who believed that customers were never ending and approvals are second nature. If you've been in this business longer then that, like me, you got so use to stuffing your wallet with money and lost sight of the gifts of approvals we were getting. We even led consumers to believe that approvals were no problem, just fill out this application and we'll have you in the office signing paperwork in just a few minutes.
I don't know, entirely, how the inner workings of a finance company operates, but I do know some decision making people made some wrong decisions by allowing these types of gifts to continue. Now, in order to survive today and in the future, these finance companies have to make right decisions, and that includes turning down someone who should be turned down. Looking harder at applications that score alone can't define.
Now this doesn't mean, giving in to the finance company and allow there decision to be final. Let's get back to the basics, understand the credit bureau of our customers. Find if we must a middle ground with the lender, and start working the consumer more for down payments, proof of income etc, etc. Use what we know to be true and start building that relationship up with lenders again like we did in the past. Lenders want to lend, they want to lend to consumers who can prove they can pay, they want to lend to dealers who are looking out for the best interest of the consumer, dealer, and lender.
That's My Take!
Lenders used (AHFC, HSBC, GE (Funancing), Sheffield, MB, BMW, YDS, and countless others that either don't finance powersports any longer or have gone by the way side)
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