With the 4th of July coming up, I wanted to throw up a quick post about Holiday schedules.  At our dealership, we have always just had Thanksgiving, Christmas, and New Years off for Holidays. I know of other dealerships that are closed on various holidays that we are open on. I know the car business is far different from banker hours/schedules but I think we should get more than 3 days off per year.

     I was just wondering what most dealerships out there give for days off on Holidays for their sales departments? I'm curious to see if we are in the same boat as most dealerships. Any feedback would be great.... 

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 and then they will fill it out for the customer. We have never tried anything like that. I know we have some room for improvement, so I think it might be worth looking into some different ideas.

     What have you guys tried that has worked? I want to hear about ideas that are a bulletproof way to get a perfect survey. Let me know what you guys recommend....

      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 end and couldn't really find any company that seemed like a good candidate. 2- I want to know if the majority of the dealerships out there use such a product and offer refundable warranties. We have been selling our warranties that way the entire 9 years I have worked at this store. When I did finance, the main part of my warranty pitch was explaining how great the refundability was and I think it really helped me be successful as a finance manager. I couldn't imagine selling warranties and never being able to make them refundable at the end of the term.

     Let me know what you guys think. We would love to get signed up with a comparable company so we can sell warranties the way we know how. Otherwise, we may have to change our warranty pitch and re-train our finance department. Any input would be great.

     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 sell their back end products and still have a buyable deal with the banks.  My other complaint is he is constantly pissing off our customers and tanking my salesguys’ surveys.

      Anyway, the point of all this is that I think there has to be a better way to set this up to where I don’t hate dealing the accessories department.  I get the argument that he needs to talk to the customer before they go into the finance office so the accessories can be put into the financing but that is the part that bugs me the most.  Maybe the solution is to make it where salespeople and sales managers get paid extra on deals where accessories are sold. Or maybe there is an alternate way to get the accessories financed. Who knows! Any ideas you guys have would be great because I’m sure that they are better than the current process that we have!

     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 company working the leads, we get little to know activity and we don't close at a very high percentage. I'm guessing I would get the same or worse results if I choose to set up the other chat leads and get my guys to work on them.

     Just wondering if anybody out there has had a positive experience with chat leads from cars.com and autotrader.com? I down with trying anything so long as I feel like it will make a positive impact and be worth the battle I'm going to have. Let me know what you guys think...

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 they are.

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:

1. Warranty penetration: 55% with $1000 in markup
2. Gap penetration: 30% with $400 in markup
3. Credit life penetration: 12% with approx $150 in markup
4. Chemical penetration: 25% with $200 in markup
5. Etch penetration: 85% with $261 in markup
6. Finance penetration: 75% with approx $350 reserve

In total, the goal is $1500 per car. That is new and used combined.

Lately, our finance reserves have been significantly higher than the $350 that we expect out of them. They are still averaging around $1500 per car but the majority of their other penetrations have been below the required penetration levels.

I was just wondering what other stores require out of their finance managers. Are the percentages that we forecast for attainable in today's market? Is the amount of margin attainable? Let me know what you guys think so I can determine if we need to make some adjustments.

     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'm wondering if there is a better way to increase my BDC attendance. I figured that the afternoon would be the best time of the day to do it because both teams are here and it is a more effective time to make calls vs. the morning. I can't do it at night because we get too busy and it would be impossible to get the guys to come up. I'm toying with the idea of not just doing the 2 hour block. Meaning, 2 guys or so come up at a time whenever they free up. I've even considered reducing the time to 30 minutes instead of an hour (even though they wouldn't be able to complete all the daily tasks that they have in such a short period of time). Any suggestions????

     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 stores have a process for closing out the month? Or do other stores even care about it?

    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 made the same points that I already knew: more pack money, more doc fees, more back end money, more shop money, less flooring, and overall more profit.

     I agree with most of his points but I feel like it is impossible to get to a 30 day turn unless I’m ok with my front end gross dropping significantly. I feel like the pros don’t outweigh the cons. We discussed going to a 60 day turn and felt like we could kind of get the best of both worlds by doing that. We would like the extra volume, but it doesn’t make sense if we make less money in the long run.

     Does anyone agree with me? Are there really that many dealers out there that are on a 30 day turn policy? If so, I would love to hear about how you made it work and if you experienced a significant drop in front end gross. Let me know…..