©2008 John Fuhrman
Auto Dealers and the web. Man what a mixture. On the light side it’s like oil and water. More often it’s like gasoline and a lit match. I look at what’s out there and think about how the buyers and sellers surfing the net are totally unimpressed by what’s out there. Don’t get me wrong, there are some really great sites out there and they are probably generating some great client contacts. But, I can say that based on my experience and eyewitness viewing, there are some myths that need to be dealt with.
Myth # 1 – YOU MUST HAVE A WEB SITE!
Look, it’s the Information Age, right? Shouldn’t every office have a web presence? Only if they first understand the expression, you can never make a second first impression. If 77% of today’s buyers are on the net before visiting a dealership, your web site is your first impression. If your site is under construction, don’t put it up. If it’s connected to some outside other .com company, don’t associate with it. If you don’t know if it’s even working or not, take it off the web.
If you’re thinking that this probably doesn’t apply to you, think again. Over two weeks, I did some on-the-job research. I found that the odds are very strong that your site, if it works, is in the minority. And the minority doesn’t do anything for you.
For some background, my company is on the web every day. We provide products and training to dealers in F&I, sales and service. Since we like to practice what we preach, nearly 90% of our marketing is done on line. Much of that is spend scanning Dealership web sites to find contact information for applicable products and services we offer. When the lack of quality web sites became apparent, I was asked to take a look. Being a small company, I decided to kill two birds with one stone and market to all the good sites I’d find. Boy was I surprised.
Myth #2 If You Can See It For Yourself, It Must Be Working
I visited over 1,000 Franchise and Independent Dealer Sites in all 50 states. Single point to multi-line groups, mega-dealers and Franchises. None were exempt from poor quality. Here is how it broke down.
1,000 visits or attempts to visit.
226 - were not working, under construction, linked to online poker, or other industry, or
even linked to other “Factory” sources.
332 – were cookie cutter (probably free or all done by the same person) sites that
provided no unique information. Only information about broad market topics.
These are online brochures, which are fine if that’s your intent.
442 - worked well enough to find individual contact information, sales people and
manager’s names. However, 77 of those emails were not activated for one reason or
another.
That means less than 40% of the sites currently on the web are working in a client friendly manner. How can you make your site stand out and work for you rather than just take up space somewhere on Google®?
Think like a sales manager. If you saw an agent greet a potential client outside the office, and before they even shook hands greeting a customer, handed them a credit app to be filled out before even saying hello, what would you do? Then, think how the client might feel when they look to email a salesperson for details or a question, and they have to fill out a complete questionnaire and still don’t know the salesperson’s name. Or worse, the email to the name they want to reach, doesn’t work.
Myth # 3 They’ll Know What You Meant
Finally, if your showroom or parking lot isn’t laid out like a maze with a cheese prize at the end, don’t make it an endurance contest to figure out how to use your site to find out the deals and inventory you have. (For a free list of 10 tips to better web presence, email me at jfuhrman@igotmycar.com and write “Web Presence” in the subject line)
If some of this sounds ridiculous, consider the odds. Over 61% of the sites on line fit into one or more of these observations. Your site should be a reflection of who you are as an office, or professional. Visitors should get a sense of what their experience would be visiting your place of business by how your site is designed. Do yourself a favor. Find a 15 year old and ask them to visit your web site and give you an honest answer. In fact, visit it with them and see for yourself.
John Fuhrman has been training and consulting dealers since 1992. He is now concentrating his efforts in North and South Carolina. His company, Carolina Automotive Resource Services is the exclusive agency for CMS “Employee Tool Pay” programs for technicians. His programs, F&I consulting, and products are increasing profits while reducing liability for many franchise and independent dealers. His company offers seminars and in store training and free evaluations. You can contact him at dealerprofitsnow@aol.com.
Saturday, December 13, 2008
Keeping Good Techs Is Great For Business
By John Fuhrman
Today having a nice looking car is not nearly enough to make for a profitable business. Customers expect the car to be in top shape and able to last at least for the term of the loan they have. All to often a car gets sold and fingers get crossed or we commit to “handle” problems as they arise.
Yet, a top-level service department can actually sell more cars at a much higher profit than any of today’s “Sales Systems.” In addition, quality cars are actually easier to sell extended service plans, which also can generate revenue while actually making customers happier. That’s because problems are handled at little or no cost to the customer and the service department earns a profit. That’s a real win-win.
Eliminating or reducing policy work can add thousands to any bottom line. Doing so requires that cars are as right as they can be before they are put out on the front line. It is also important that the staff believes in the service team at the dealership. Keeping top service talent is another of today’s great challenges. Yet, there is a little known benefit program available to any dealer who requires that technicians bring in their own tools.
This “tool pay” program basically places a value on the technician’s labor as well as on the value of that same technician’s tools. Just for using their own tools, there is a tax benefit that can increase their take home pay. In addition, the dealership increases their bottom line profit because the employment taxes are reduced or eliminated on the tool portion of the pay.
For example. Let’s say that you currently pay a dollar to your tech. That entire dollar is subject to applicable taxes. But suppose you said that $.65 was allocated to labor cost. That entire amount would be subject to tax. The remaining $.35 would be all or partially exempt from certain taxes. When you combine the two, the technician sees more take-home pay. But, the real benefit is the dealership is also saving the employment tax portion of the tool pay. That money goes straight to the bottom line profit of the dealership.
Imagine recruiting new techs or retaining top talent by allowing them to increase their take-home pay while at the same time, increase your bottom line profits. (For a list of things to look for in a top tool pay program, email me at jfuhrman@igotmycar.com and write “Tool Pay” on the subject line. Be sure to include the name of the dealership and your contact info.) The only requirement is that the technicians own and use their own tools on the job. It even works if they had previously depreciated all of their tools.
The dealer benefits from the ability to attract and retain top talent, but the real benefit is, the technicians are better able to continue to invest in the necessary tools to keep pace with what’s being sold today by continuing to invest in the needed tools. Ultimately, the customer and your average gross really benefit by reducing policy work and keeping customers happy.
John Fuhrman has been training and consulting dealers since 1992. He is now concentrating his efforts in North and South Carolina. His programs, F&I consulting, and products are increasing profits while reducing liability for many franchise and independent dealers. His company offers seminars and in store training and free evaluations. You can contact him at dealerprofitsnow@aol.com.
Today having a nice looking car is not nearly enough to make for a profitable business. Customers expect the car to be in top shape and able to last at least for the term of the loan they have. All to often a car gets sold and fingers get crossed or we commit to “handle” problems as they arise.
Yet, a top-level service department can actually sell more cars at a much higher profit than any of today’s “Sales Systems.” In addition, quality cars are actually easier to sell extended service plans, which also can generate revenue while actually making customers happier. That’s because problems are handled at little or no cost to the customer and the service department earns a profit. That’s a real win-win.
Eliminating or reducing policy work can add thousands to any bottom line. Doing so requires that cars are as right as they can be before they are put out on the front line. It is also important that the staff believes in the service team at the dealership. Keeping top service talent is another of today’s great challenges. Yet, there is a little known benefit program available to any dealer who requires that technicians bring in their own tools.
This “tool pay” program basically places a value on the technician’s labor as well as on the value of that same technician’s tools. Just for using their own tools, there is a tax benefit that can increase their take home pay. In addition, the dealership increases their bottom line profit because the employment taxes are reduced or eliminated on the tool portion of the pay.
For example. Let’s say that you currently pay a dollar to your tech. That entire dollar is subject to applicable taxes. But suppose you said that $.65 was allocated to labor cost. That entire amount would be subject to tax. The remaining $.35 would be all or partially exempt from certain taxes. When you combine the two, the technician sees more take-home pay. But, the real benefit is the dealership is also saving the employment tax portion of the tool pay. That money goes straight to the bottom line profit of the dealership.
Imagine recruiting new techs or retaining top talent by allowing them to increase their take-home pay while at the same time, increase your bottom line profits. (For a list of things to look for in a top tool pay program, email me at jfuhrman@igotmycar.com and write “Tool Pay” on the subject line. Be sure to include the name of the dealership and your contact info.) The only requirement is that the technicians own and use their own tools on the job. It even works if they had previously depreciated all of their tools.
The dealer benefits from the ability to attract and retain top talent, but the real benefit is, the technicians are better able to continue to invest in the necessary tools to keep pace with what’s being sold today by continuing to invest in the needed tools. Ultimately, the customer and your average gross really benefit by reducing policy work and keeping customers happy.
John Fuhrman has been training and consulting dealers since 1992. He is now concentrating his efforts in North and South Carolina. His programs, F&I consulting, and products are increasing profits while reducing liability for many franchise and independent dealers. His company offers seminars and in store training and free evaluations. You can contact him at dealerprofitsnow@aol.com.
It Shouldn’t Cost To Be Compliant
It Shouldn’t Cost To Be Compliant
Without spending too much time stuck on memory lane, I look back on some of the first cars I sold when I started in the business. There was a bill-of-sale, odometer statement for the trade-in, maybe a bank contract, and a buyers order. That was the entire paper process. You finished the deal by putting a stock tag on the trade (No FTC labels back then).
Within the year, there were added papers to verify that neither party tampered with the narrow gas tank hole that was now standard equipment on many cars sold due to the conversion to unleaded gas. Then it seems there was an additional piece of paper added each year until today when it’s like closing on a house.
As technology advanced, we now video tape parts of the sales transaction, compel the staff to err on the side of caution, and as a result, profits have steadily diminished, turnover has increased, and finding and keeping talent is today’s ultimate challenge. But what does sales transparency have to do with any of that? Why does compliance and full disclosure have to cost profits?
The answer is – it shouldn’t. In fact, done properly in dealerships I’ve trained, profits have increased by as much as 30%. But like any other methodology for success, it won’t happen by accident. The dealer, manager, and everyone involved must commit to making the right changes rather than change just for the sake of change.
Since leaving the cold weather of New England and settling in the Carolinas, I’ve been working with a lot of independent dealers of all sizes and volumes. One of the first questions I ask them is, “How much profit are you making on parts?” As many of you know, a good deal of independent dealers don’t have a parts department. So, the answer is often that little or no money is made with parts.
That makes sense. If you don’t have a department, why should you expect profits? That should apply to F&I as well. If you feel you can’t dedicate someone to be your F&I expert, you shouldn’t expect to make much of a profit in that area. And, if the profits weren’t there, why on earth would you take on the liability? Regardless of how much money you do or don’t make financing a vehicle, you have certain responsibilities to the customer – and the liabilities that go with it.
Many of my New England clients have become “Cash and Carry” stores. They have made a decision to simply sell the cars. The customer is responsible for arranging all financing themselves. They have made the decision to risk losing a deal here and there rather than risk non-compliance violations. While that is a legitimate business decision, it may not be the best for your future.
Look, you’ve chosen the types of vehicles you sell based on how much profit you feel they can return. Why not do the same with F&I? (For a free list of the top 10 things a successful F&I department needs, email me at jfuhrman@igotmycar.com with your dealership name and number and we’ll send it immediately.) When doing a dealer evaluation, I always include F&I potential so the dealer can make an educated decision. And, there is not much extra work involved in developing a profitable department. In fact, you can actually increase profits, product sales, and customer satisfaction by doing the extra work.
First, make a final decision. If you want none of the liability, get out of the finance business. Like I said earlier; there is nothing wrong with this decision, but it must be final. You can’t be in one week and out the next. If you are committed to F&I, get the right person to handle it – exclusively.
Once you have the right person, get the “store” in order. That means get the products you’ll offer finalized. These products must be offered to every customer, every time. No exceptions. Products are plural but only one of each.
I can’t tell you how many times I go into dealerships and find almost as many Service Contract companies as cars on the lot. The more of each product you have to sell, the less likely you are to sell any. Go back to the first rule and make a decision. The customers aren’t shopping for the best price on “GAP,” chemicals, VSC’s, etc. They are looking for a good deal on a car.
Second, set and demand specific expectations. The first rule in F&I is that, “PVR is blind to volume.” That means excuses about profitability based on slow traffic will not be acceptable. Unless your volume dropped from 50 units to 3, volume should have nothing to do with the performance of your F&I department with each customer.
Finally, train your team. Training the sales staff is at least as important as making sure your F&I person is trained. If you or your team don’t know how to transition a customer from the close to F&I, you not only lose money, you can put yourself at risk. The best part about training is, it’s available everywhere. Vendors offer it, AFIP certification can be done online, and there are several private training companies that are local, regional or national.
While this may sound like a lot, consider this. For years, many of the franchise dealers have stated that F&I is what is keeping the doors of the showroom open. With the current economy, some of you may be looking for every opportunity to maximize income with every customer. Now, that opportunity may be just a decision away.
John Fuhrman has been training and consulting dealers since 1992. He is now concentrating his efforts in North and South Carolina. His programs, F&I consulting, and products are increasing profits while reducing liability for many franchise and independent dealers. His company offers seminars and in store training and free evaluations. You can contact him at dealerprofitsnow@aol.com.
Without spending too much time stuck on memory lane, I look back on some of the first cars I sold when I started in the business. There was a bill-of-sale, odometer statement for the trade-in, maybe a bank contract, and a buyers order. That was the entire paper process. You finished the deal by putting a stock tag on the trade (No FTC labels back then).
Within the year, there were added papers to verify that neither party tampered with the narrow gas tank hole that was now standard equipment on many cars sold due to the conversion to unleaded gas. Then it seems there was an additional piece of paper added each year until today when it’s like closing on a house.
As technology advanced, we now video tape parts of the sales transaction, compel the staff to err on the side of caution, and as a result, profits have steadily diminished, turnover has increased, and finding and keeping talent is today’s ultimate challenge. But what does sales transparency have to do with any of that? Why does compliance and full disclosure have to cost profits?
The answer is – it shouldn’t. In fact, done properly in dealerships I’ve trained, profits have increased by as much as 30%. But like any other methodology for success, it won’t happen by accident. The dealer, manager, and everyone involved must commit to making the right changes rather than change just for the sake of change.
Since leaving the cold weather of New England and settling in the Carolinas, I’ve been working with a lot of independent dealers of all sizes and volumes. One of the first questions I ask them is, “How much profit are you making on parts?” As many of you know, a good deal of independent dealers don’t have a parts department. So, the answer is often that little or no money is made with parts.
That makes sense. If you don’t have a department, why should you expect profits? That should apply to F&I as well. If you feel you can’t dedicate someone to be your F&I expert, you shouldn’t expect to make much of a profit in that area. And, if the profits weren’t there, why on earth would you take on the liability? Regardless of how much money you do or don’t make financing a vehicle, you have certain responsibilities to the customer – and the liabilities that go with it.
Many of my New England clients have become “Cash and Carry” stores. They have made a decision to simply sell the cars. The customer is responsible for arranging all financing themselves. They have made the decision to risk losing a deal here and there rather than risk non-compliance violations. While that is a legitimate business decision, it may not be the best for your future.
Look, you’ve chosen the types of vehicles you sell based on how much profit you feel they can return. Why not do the same with F&I? (For a free list of the top 10 things a successful F&I department needs, email me at jfuhrman@igotmycar.com with your dealership name and number and we’ll send it immediately.) When doing a dealer evaluation, I always include F&I potential so the dealer can make an educated decision. And, there is not much extra work involved in developing a profitable department. In fact, you can actually increase profits, product sales, and customer satisfaction by doing the extra work.
First, make a final decision. If you want none of the liability, get out of the finance business. Like I said earlier; there is nothing wrong with this decision, but it must be final. You can’t be in one week and out the next. If you are committed to F&I, get the right person to handle it – exclusively.
Once you have the right person, get the “store” in order. That means get the products you’ll offer finalized. These products must be offered to every customer, every time. No exceptions. Products are plural but only one of each.
I can’t tell you how many times I go into dealerships and find almost as many Service Contract companies as cars on the lot. The more of each product you have to sell, the less likely you are to sell any. Go back to the first rule and make a decision. The customers aren’t shopping for the best price on “GAP,” chemicals, VSC’s, etc. They are looking for a good deal on a car.
Second, set and demand specific expectations. The first rule in F&I is that, “PVR is blind to volume.” That means excuses about profitability based on slow traffic will not be acceptable. Unless your volume dropped from 50 units to 3, volume should have nothing to do with the performance of your F&I department with each customer.
Finally, train your team. Training the sales staff is at least as important as making sure your F&I person is trained. If you or your team don’t know how to transition a customer from the close to F&I, you not only lose money, you can put yourself at risk. The best part about training is, it’s available everywhere. Vendors offer it, AFIP certification can be done online, and there are several private training companies that are local, regional or national.
While this may sound like a lot, consider this. For years, many of the franchise dealers have stated that F&I is what is keeping the doors of the showroom open. With the current economy, some of you may be looking for every opportunity to maximize income with every customer. Now, that opportunity may be just a decision away.
John Fuhrman has been training and consulting dealers since 1992. He is now concentrating his efforts in North and South Carolina. His programs, F&I consulting, and products are increasing profits while reducing liability for many franchise and independent dealers. His company offers seminars and in store training and free evaluations. You can contact him at dealerprofitsnow@aol.com.
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