I consider our accessories department a necessary evil at our dealership because I know we can’t do without it and I know we can’t get rid of it due to the fact they generate extra profit for the dealership.  With all that said, I would still love to get rid of it!         As a sales manager, I get paid on the front and back end profit of each deal. I don’t get paid a dime on what the accessories department does. My main complaint is our accessories manager gets a chance to sell his crap before the customer gets into the finance office and sometimes the accessories that are included into the financing make it to where our finance managers can’t be as profitable as we need them to be. I find that I am purposely sabotaging the accessories manager’s opportunity to sell product by lying to him and telling him the deal is maxed out. I do that so our finance department has more than enough room to...

     We just recently increased our spend with Cars.com and Autotrader.com for both our new and used inventory. The increase gave us several features including chat leads. Both reps are pushing to get me to get set up for chat so we can get our sales guys working on it. I see the value in having my guys available for chat at all times but I have some reservations.   Here's my 2 issues:   1- My sales guys struggle with manning the phone desk at all times during the day. I worry it would be a constant battle to make sure someone is available at all times to respond to the chat leads. I push them hard enough to follow other processes so I worry they wouldn't be that committed to responding to the leads in a timely manner (which I'm sure would just piss off the customer and they would shop elsewhere).   2- We currently get chat leads and have a 3rd party company handle the leads and set up appointments. Even with a dedicated comp...

We have started doing key replacement on our new and used cars. We pre-load the product and give it away for free for 1 year. We decided to introduce key replacement and test it out for a little bit to see if it could be a viable replacement to the Etch product that we currently have.   It's gone pretty good so far and our finance department has done a good job with the product. They have the option to upgrade the customer to a 3 year or 5 year program. There is pretty good gross in both plans. Obviously the higher they can penetrate,  the more profit we can make on the back end of the deal.   They have been at about 55% for an upgrade. Our understanding is that some dealers are penetrating at 80% when they offer the key replacement as a giveaway. I think our finance guys are pretty good, so I'm starting to think that the 80% mark is unattainable. Is there anyone out there that is aware of a store doing 80% on key replacement? I would love to know if th...

Like everyone knows, the finance department is arguably the most important department of the dealership. Dealerships are relying more and more for strong #'s from their finance department in order to be successful. With that said, the GM has asked me to spend time with our 2 finance managers and evaluate the entire department. I am going to review their #'s over the last 12 months and find areas where we can improve the department both in overall gross and product penetration. I'm happy to spend as much time as is needed with them due to the fact that I get paid on the overall gross generated from the sales department. If they do better, I do better.        Here's what we expect out of them: Warranty penetration: 55% with $1000 in markup Gap penetration: 30% with $400 in markup Credit life penetration: 12% with approx $150 in markup Chemical penetration: 25% with $200 in markup Etch penetration: 85% with $261 in markup...

     I'm wondering what is the best way to implement a BDC schedule. We are re-committing to the BDC and making it mandatory that every sales consultant attends every day.        We have 2 teams at our store and we set up the schedule to where each team is up there for an hour. Example: Team A is in the BDC from 2-3 and team B covers the floor. Then the teams alternate from 3-4 in the afternoon. We have had a 50% show rate at best during the first few weeks. I make it mandatory that each guy goes up during his scheduled shift and the only exception is if they are in front of a live customer. I find that most of the time the guys can't come up for one reason or another. Our guys understand the importance of the BDC and acutally want to come up for the most part. They just can't come up because most of the time they are legitimately busy and don't have enough time.         I'...

     I was recently in a training and one of the topics discussed was closing out the month in 3 days. Our store normally takes 10 days or so to close out the month, so we are quite a ways away from the goal. The reason it takes us so long to close out the month is that it takes F & I until about the 5th of the month to finish up all deals. It then takes the accounting office a few days to post & cap all the deals. Finally, it takes our controller and GM about 2 days to do the statement. It is usually the 10th-13th of the following month until we see the statement from the previous month.        I feel like we take too long to close out the previous month and this training was a pretty big eye opener. They discussed ways to expedite everything so you could close the month by the 3d of the following month. I know we have room for improvement but I feel like 3 days is pretty unrealistic. What is your guys' thoughts? Do your s...

    Our current turn policy for our used car department is a 90 day turn. We stick to our guns the majority of the time and make sure that we get off of the car in 90 days. However, sometimes we will make exceptions and let a car age past 90 days if auction values or going up on the same car and it would be difficult to go replace the same car for approximately the same money. In our opinion, it makes sense to throw our turn policy out the window in some cases in order to avoid a wholesale loss. We will then give the car up to 30 days more ( max of 120 ) days and price it # 1 in the market to make sure we have a good chance of retailing out of the car quickly.        I recently attended the NADA Dealer Academy and used car turn was one of the many topics addressed during the week that I was there.  The teachers basically laughed at our current policy and told me that we should be on a strict 30 day turn policy with no exceptions. He ma...

     We have been making some changes to our internet process lately. We are evaluating our closing percentages to make sure we are capturing enough deals during each phase of the buying cycle. We do a really good job tracking accurate data, so I feel like our closing percentages are close to accurate.        The problem that we are having is that it has been 5 years since we have done a complete overhaul of our internet process. We feel like the data for national averages that we collected back in 2006 is potentially less accurate than it once was.  Here are the #'s that we have according to Polk reports:   56% of new vehicle leads will purchase a new vehicle 42% will purchase a vehicle in less than 30 days 16% will buy between 31-60 days 10% will buy between 61-90 days 32 % will buy in 91 days or more        I was hoping you guys could clarify to see if those closing ...

     I have never been a huge believer in negative reinforcement. The tough thing as a manager is to figure out what actions to take when you have repeatedly told your guys what to do and they fail to listen.  So what is the best way to handle a situation like that?        We have been trying for years to fix an ongoing problem we have had at the dealership. We ask our sales consultants to turn in a "guest trek card" every time they talk to a guest. It is a very easy thing to do, but they still struggle to stay on top of it and get all their cards turned in. There is always a million excuses as to why they weren't turned in (none of which I buy). I have tried to help them see the big picture and to understand the importance of tracking all of our customers, but they don't seem to care. I have taken half deals, but they don't seem to care. My final attempt was to put together a negative spiff program associate...

We just got another price bump from our vendor that we pull credit through. We have been pretty happy with them, but we feel like they are starting to get a little bit on the expensive side.   We are considering switching to another company if the cost is lower. I'm not really sure if there are that many companies available. I thought I would throw a quick post to see what other companies you guys use and what kind of fees they charge you. Let me know please... ...

     I have been hearing quite a bit lately about a website called truecar.com. I know enough about the company because of the information that I have read on their website.        One of the features that they offer is to show an average of the previous transactions on the same unit that you are considering buying. I really like the sound of a tool like that and I am starting to think that it could have a few similarities to Vauto.  We would like to see if that data of previous transactions is accurate and how they get the information. I would also like to know where they are getting the information from. Does anybody know anything about this company above and beyond what you can read on their website?        Also, they have a feature where dealers can sign up with them and the dealer will receive leads that will send the people to their store. Next question: Does that work? Is it worth the money for ...

     We have always had etch (ATP, VTR, etc) as a pre-loaded back-end product the entire 10 years that I have worked at this store.  We haven't really had any issues selling the product and usually have around an 80% penetration between new and used.        You would think with the success that we continue to have with etch, we wouldn't consider making a change. We are though! We are having more and more customers question what it is lately and they seem to be way more educated about it.  We figured we could get ahead of the curve a little bit and replace our etch with something a little less common.        After looking in to it for a while, we have decided that pre-paid key replacement program would be our best bet. We aren't willing to drop the etch yet though. It is still really profitable and it is too risky to give up that guaranteed back-end money. So, we have decided to test th...

     We are considering make a couple of changes to the way we handle our internet leads. First I will explain a little bit about what we have done with our leads in the past vs. now and explain our logic.        When we got a lead in the past, we would make an attempt to call the customer and set an appointment first. If we failed to make contact over the phone with the customer, we would then send out a price quote with 2 quotes on a new vehicle and 1 quote on a used vehicle the same day we got the lead.        For the last 2 years or so, we have done the exact same process with the exception that we switched to sending the 3 price quotes after 5 days. The reason why we made the switch is because we partnered with a company called Travor and they recommended doing the quotes after 5 days to give us some time to build rapport with the customer and identify what they were actually looking for.   &n...

     As I mentioned a few weeks ago, we are in the process of making some changes to our new car pricing strategy. Thanks to a lot of feedback, it looks like we are going to move forward with implementing a completely different strategy for pricing cars online.        As we have been ironing out the details with these changes, we have questioned whether or not it is a good idea to keep our prices for our new inventory on the dealership's website. Being a bottom-line-price store, it has always seemed like the logical thing to post your best price on our website along with photos and info on the car. We now feel like our competition is using our prices from our website to determine where we have certain lines priced and they are using those prices in order to one-up us with their internet pricing. We are pretty sure we want to take our pricing off our website so we can keep them guessing but we are reluctant because we know having th...

     We have had an eternal struggle at our dealership with getting sales guys to attend the BDC on a regular basis. I'm sure most dealers have had similar difficulties convincing their salespeople to leave the floor for an hour every day and go to the BDC. We have a few guys that see the vision and have bought in to the benefits of their efforts in the BDC. The problem is trying to get all of our salespeople to buy in so we don't feel like we are forcing them to go up.       I feel like we have tried just about everything to get them to cooperate. We have tried: letting them make their own schedule, trying to show them success stories because of hard work in the BDC, reminding them constantly, negative reinforcement if they fail to go up at least 75% of the time, and positive reinforcement by spiffing them for just showing up. Nothing has seemed to work over the long term. It sucks that you have to spiff them to do their job, that ...

     Our store has always been a bottom line price store. It has worked out very well for us in the past and continues to work well with the exception of one thing, internet pricing.         We have always used the exact same price when we do price quotes for internet leads as we have our bottom line price for a walk-in customer. Our strategy has always worked on used cars because we price our cars so aggressively. Our strategy should work on new cars because we also price everything aggressively but it seems like we are losing the pricing war online.  We are still pretty competitive on most cars, but we seem to be getting killed on pricing when it comes to the expensive stuff ( F-150's, Superduty's, etc ).        We are considering of implementing a totally different pricing strategy and starting an internet pricing matrix aside from our current pricing matrix. We are nervous to do it bec...

     We are currently doing some mystery shopping to compare several things at our dealership to other dealerships. The main intent of the mystery shopping is to compare processes, level of training in sales people, and pricing. As we have done this we have found that, although we are really aggressive on pricing and trade allowances, we are definitely on the high side when it comes to fees.        The 2 fees I'm referring to are probably standard fees at the majority of dealerships. We charge a documentation fee and an additional fee for vehicle theft registration (VTR) or "etching". I'm not going to tell you what we charge for those for the fact that I want to see where everyone else comes in at and I don't want anyone judging us :). We are a large Ford franchise, so I want to make sure we are comparing apples to apples. If you respond back to my post, let me know what you charge for both fees or if you even hav...

     We are having a tent sale that we started over Labor Day weekend and runs through the next couple of weeks. The purpose of the tent event is to stir things up a little bit around here and get the sales guys excited about something. We have kind of felt like things had been really dead and boring around here lately, so we decided to put together this used tent event.        Here's what we have done to liven the place up so far: We put a huge tent on our used car lot with banners and balloons, we bought tons of food and drinks for both customers and our sales guys, we created a "wheel of love" that every customer that purchases a used car gets to spin, and we put together a pretty aggressive spiff program for the sales guys. The wheel pays out tons of prizes that are paid for against the gross of the deal so there is technically no cost attached to each prize. Our goal is to do this whole thing for a relatively cheap c...

     I did a post last week on "not missing customers" and we are still deliberating what is going to work best for our store. I have always worked at this dealership the entire time I have been in the car business and we have always had an open floor policy. It has always seemed to work in the past, but now we are having some serious coverage issues as I talked about last week.        I would like everyone's opinion on a closed floor vs. an open floor. I have only been exposed to an open floor and have formed my own opinions as a result. The problem I am facing is I feel like I need to make some changes but I am not convinced that a closed floor is our best bet. I'm sure their are pros and cons to both approaches. I would love some feedback from anyone out there that has worked under both systems so I can make a more informed decision ...

     We have had an ongoing battle with our sales guys to make sure the lot and the phone station (where they get sales calls and internet leads) are being watched at all times. The obvious reason for that is to make sure that we aren't missing any customers that drive through the lot. We switched to a new facility about 4 years ago and our lot/phone station coverage has been a constant issue. The old facility was set up to where you could easily see the entire lot from the showroom, so there was never an issue with customers going unnoticed.        We have tried to institute a schedule for both the phone station and the "spotter station" to make sure we have a guy in both places at all times. Needless to say, it has been like pulling teeth to manage that schedule. We currently don't adhere to the schedule at all and rely on our guys actually doing there jobs and rely on us babysitting them.     &nb...

I wanted to do a follow-up post about the 'funding deals' post that I did last week. I really appreciate all the comments that were made. It didn't take long to figure out that our store is ridiculous when it comes to how many days we allow to fund our deals. I have been thinking a lot about the comments that were made and about ways to tighten up our process. There was a few issues that I wanted to bring up about the topic.   1- Do your finance guys do all the work when it comes to funding? Are they in charge of capping the deals, getting the deals upstairs to be sent out, checking any funding delays with both banks and credit unions, and fixing any problems in order to get the deal funded? I want to make sure our guys have the same amount of responsibility. All that stuff that I just mentioned is pretty time consuming when it is added to doing deals full time. About that.... How many deals a month are your finance managers doing? I think part of the reason we t...

    We have been putting a huge emphasis on funding lately. We have had some changes in our F&I department recently and it has led to some big time funding issues. I think we have always done a good job getting our deals funded quickly, but I have nothing to compare it to. I actually think that we don't give ourselves enough time to get our deals funded compared to most dealerships.       Our rule is that every deal needs to be funded in 14 days or less, otherwise the finance managers get penalized. The 14 days start at the actual date of purchase, not when the customer comes back in to finish up all the paperwork. There are tons of reasons as to why deals go past 14 days. The most common ones for us are: It takes a week to get the customer back to finish paperwork, the finance manager takes several days to cap the deal and get it upstairs, the accounting department takes too long to send the deal to the bank, and the bank issues a fundi...

     We are currently with Dealer Specialties. They are the company we use that takes all the photos of our new and used cars. They also have an inventory management system to help us track which vehicles are advertised correctly with photos, trim, equipment and comments. Our representative for Dealer Specialties branched off from them about 6 months ago and started his own company. We have been satisfied with the quality of his work but have become increasingly unsatisfied with Dealer Specialties' management tool. There always seems to be problems with their website and they always have excuses as to why I have cars that have been on the lot for several weeks and still don't have any photos. Needless to say, we are getting very frustrated and are looking to make a change.        I have been approached by Platinum Dealer Services and Dealer Net Solutions in the last few months and am starting to look into both of those companie...

     We recently promoted one of our top guys off of the sales floor to be our next finance manager. He has been with the store for 5 years and has definitely put in his time and earned the promotion. We have considered him for the promotion for quite a while but have failed to offer him the position due to some issues he needed to work on. We just had one of our two finance guys quit and were put in a position where we needed to make a decision quickly to fill the empty spot. Despite his shortcomings, we offered him the position because it was definitely our best option.        We have never questioned his ability to be a finance manager and he is definitely capable with regard to everything that the job will demand. He has always had a consistent problem with punctuality and has taken off way too much time for vacations in the past. Those problems have never really been an issue due to the fact that he has always performed at such a ...

     Our dealership has always done really well with regard to Ford customer satisfaction surveys. We train our salespeople regularly on the importance of doing a proper delivery and explanation of the survey and expect them to do it on every single new car sold. In addition, we require them to make a 1 and 2 week follow up call to remind them of the importance of the survey and how it is graded. I know we can never have it done perfectly 100% of the time, but I feel pretty confident that our salesguys do a good job the majority of the time.        With all that said, we still get customers that, no matter what we do or say, are never pleased and refuse to give us a completely satisfied comment. Which pisses me off! I swear they do it just to spite us. Anyway, I have heard about other dealerships bribing their customers in various ways to give them a perfect survey. Or, they bribe them to bring the unfilled survey into the dealership a...

     We are recently having some issues with our newer salespeople getting certified with Ford. We used to not care if our salespeople were certified, but lately we have put a lot more emphasis on it. Even though it has been more of a focus lately, we were one of only a few dealers in our region that missed out on a bonus from Ford because we didn't have 80% or more of our sales floor certified. It is a particularly sore subject because I would have got paid on a % of that money for Ford.        As a result of missing out on that money from Ford, we have changed our policy on new hire certification to 90 days for base certification and 180 days to be master certified. There is a lot of tests involved to become master certified so I feel like 6 months is plenty of time to get them done. With that said, we are still having lots of our guys complain and request more time to get the tests accomplished. We are now making it mandatory th...

     We are a little bit behind the times with regard to chat leads at our dealership. We have known for a while that chat leads are a very viable source to get more deals, but for some reason we have dragged our feet a little on getting it set up. We are now in the process of getting everything set up.        We have decided to make it to where our sales guys aren't doing the actual chatting with the customers. Instead, we hired a company that will handle the leads for us 24/7 and try to set appointments for the sales guys. We decided to go that route for 2 reasons. 1- Our sales guys aren't here during nights & weekends. 2- We were worried about some our guys' computer skills and their ability to chat effectively with our customers. The company sounds pretty legit and don't charge too much so we figured it would be a good route to go.        The reason for my post is I was wondering if...

     We have been with a company for many years that has offered a program to make our extended service contracts refundable in the event the customer doesn't make a claim against the warranty. It has been a great program for many years and has helped us to sell extended warranties at a pretty high level. Unfortunately, this company has now lost its backing and is closing up shop.                                         The reason for my post is two-fold. 1- I want to know if there is any other company out there that offers a product to make service contracts refundable. They need to be a reputable, well-established company in order for us to consider them for the fact that we don't want to deal with this again.  We have done a little bit of research on our en...

    We currently use Vauto to manage our used car inventory and absolutely love it. To anyone who is unfamiliar, it is a program that is used to manage inventory, track turn and market day supply on every vehicle in inventory, and compares your price to every "like mine" vehicle out on the market. It is a great tool and has helped us be very successful with our used car department.       With that said, we are having some issues with our new car department and are considering making some changes. We were hoping to find a similar tool to vauto that we can use for our new car inventory. The most important criteria we are looking for is market day supply info and a price comparison function.        Is anyone aware of a company that offers a product close to what we want? I contacted vauto and they don't have anything available for new. Let me know if there is anything that you guys are aware of. Thanks!...

     Like everyone knows, the finance department is arguably the most important department of the dealership. Dealerships are relying more and more for strong #'s from their finance department in order to be successful. With that said, the GM has asked me to spend time with our 2 finance managers and evaluate the entire department. I am going to review their #'s over the last 12 months and find areas where we can improve the department both in overall gross and product penetration. I'm happy to spend as much time as is needed with them due to the fact that I get paid on the overall gross generated from the sales department. If they do better, I do better.        With that said, I know what we expect from them is a very lofty but attainable goal.  The reason I know our goals are attainable is because I was able to do them on a fairly regular basis. I did finance when times were better and banks were easier to deal with....