I just started reading a book called What Would Google Do by Jeff Jarvis.  Although I am not very far into it, Jarvis’ book really makes the point that companies need to create and maintain an open dialogue with their clients and customers.  I guess I got this idea a while ago, and that’s why I started writing this blog.  It wasn’t motivated by a desire to do the latest “marketing thing” of the day, but rather as a result of a genuine desire to listen and respond to the industry. Jarvis’ book also caused me to do something that I had never done before.  I went to DrivingSales.com, a prominent car dealer social network site, and read what people wrote about vAuto.  It was extremely gratifying to see so many positive responses.  The themes of these responses seemed to be around the two areas of constant product innovation and very strong customer support.  These are really two fine points of distinction for any solutions company, and for this I’m especially proud of our team. Notwithstanding these positive reviews, I would like everyone to know that we’re not satisfied.  I recognize that these are extremely difficult times for our dealers.  We need to do even more in the coming year to support those that support us.  I recently communicated this message to the entire vAuto team when they assembled last month in Chicago for a company-wide meeting.  Everyone seemed to rally around the message, and I therefore have high expectations for our performance in the coming year.  Count on us to bring you much more new and innovative products and practices.  I’m hoping that my new book, Velocity 2.0:  Paint, Pixels and Profitability will also contribute positively to our mission of improving results from used car operations.  I’m very excited about the new book and I’ll be looking forward to hearing your response. I also think that success in the coming year will require a concerted effort by multiple dealer partners/vendors.  I would encourage dealers and managers to pull together their various solution providers and request that they work together in a concerted effort to ensure that their various solutions are tied together technically and philosophically.  In an era where headcount is cut  to the bare bone, dealerships must leverage the talent and skills of their vendor/partners.  I think that dealerships should view their solution’s representatives as extensions of their management team.  They should be treated with respect and held accountable to high standards as if they were on the dealerships payroll because, in fact, they are. As we launch our new Velocity 2.0:  Paint, Pixels and Profitability blog site, I want to renew my commitment to providing the best product and customer service in the industry.  In the past, I tried to stay away from talking too much about the vAuto product, in favor of concentrating on the velocity strategy of management.  In the coming year I will continue to focus on the latest strategies and best practices, but I will also attempt to engage the industry and vAuto users with respect to their ideas and suggestions for improving our software and service. I invite you to please comment openly and candidly on all related subject matter.  I’m not too proud to receive criticism, and I trust that you won’t be shy about providing it.  Of course, anyone can feel free to call me at any time. My personal cell phone number is 630-343-9016, or I can be emailed at dpollak [at] vauto.com. Thank you for your friendship all that you’ve taught us and we look forward to being even better and stronger in the coming year.

Yesterday I participated in an Automotive News webinar with Tom Kontos, the Economist from Adesa Auto Auction.  This seminar can be purchased and downloaded from the Automotive News website.  I think that you would find it informative and instructive.  I have a few thoughts from the seminar that I’d like to share. 

First, I concur with Tom Kontos’ prognosis that dealers will experience further tightening of used vehicle supplies in the coming year.  Further, prices will continue to be strong.  Obviously there will be some ebbs and flows throughout the year in specific segments based on fleet and lease maturities.  There are also always risks of the unknown based on volatile factors such as oil prices, weather patterns and similar phenomenon’s.  Further tightening of supply and continuing high wholesale prices will create stress for dealers in two respects.  First, they will find it difficult to purchase vehicles for prices that allow for a traditional profit margin.  This is because I don’t expect retail rates to rise equally with the wholesale increases. Banks are ever conscious of their LTV advances.  So what does this mean for wholesale buyers of used cars? 

It means that many buyers will return from auction without purchasing vehicles that they badly need.  Their conclusion will be that prices are too high to make any money.  This is largely based on their expectations of buying vehicles for prices that allow them to make traditional gross profits in addition to a traditional pack. 

Alternatively, other dealers will buy vehicles and be wiling to accept less than traditional profit margins and perhaps less, if any dealer packs.  While this alternative isn’t ideal, it does address the realities of the moment of the market.  After all, what are your choices?  Either you don’t buy, which I think will ultimately starve your operations for badly needed variable and fixed gross profit, or you buy with a willingness to temporarily accept lower margins.  If this alternative strategy is adopted along with a high turn velocity mentality, it is possible to reclaim the loss margin through additional volume. 

I don’t however, want to be casual about the statement that volume alone can compensate for lost margin.  The difference between volume and velocity are three conditions that must be present in order to have volume with the prospect of profitability.  So what are these conditions?

First, you have to have the ability to identify and source the right vehicles.  Today, the right vehicles are not necessarily the vehicles of your new franchise brand or the ones that have performed well in the past.  Such vehicles may no longer be right for today’s market and/or they may not be available for purchase at the right price.  Rather, the right vehicles are the ones that your current market is craving with high demand and short supply (i.e. low market day’s supply).  The marketing cost to attract buyers on such vehicles is much lower and these vehicles are much less sensitive to price competition pressure. 

The second condition is to price vehicles properly.  As I’ve stated many times in the past, this doesn’t mean all high or low, but “know” which ones can and should be priced high and dropped slowly if necessary and which ones should be priced low and dropped rapidly.  Your ability to know depends on a physical assessment of the vehicle as well as its replaceability and its supply and demand.  Simply stated, cars with high supply and low demand need to be priced aggressively from the start, while cars that have high demand and short supply will command generous gross profits without too much hindrance from competitive offerings.

The third necessary velocity condition is to own your vehicles right.  You’ll never make any money in the used car business unless you own your cars right, and you can’t manage your cost of ownership unless you measure it.  Today, dealers should not own their vehicles fully reconditioned for any more than 85% of cost to market (unit cost divided by average retail market asking price).   

The next observation from yesterday’s seminar is that you must know the price at which you can sell a car in order to know how much to pay for it.  In yesterday’s used car business the retail price was determined largely from the wholesale price, and today the retail price drives a proper wholesale valuation.  If you know (and you should) what it will take to sell a car, simply back out your cost and your expected profit, and that represents the proper target acquisition price.  If you have to pay over that amount to acquire the vehicle, then you must be prepared to accept less profit, otherwise don’t pull the trigger.

During yesterday’s call, someone asked whether recent events have caused me to reconsider this position on purchasing vehicles.  The answer is absolutely not, and in fact I would like to hear from the individual that asked the question.  I don’t know what recent conditions they’re referring to that may have caused me to reconsider. 

The bottom line is that next year will be a challenging year from the standpoint of purchasing, valuing and pricing vehicles.  I would strongly recommend that your dealership invest in technology and develop processes to ensure that the velocity conditions are created and maintained.  If management is successful in creating the conditions favored by the market, then success becomes a natural and predictable outcome.

 

You can hardly turn on the news or open a newspaper without hearing or seeing headlines about another government program to rectify the ills of the economy. I have to admit that as a somewhat conservative leaning person, I have found some comfort in government programs that are directed towards economic recovery. Lately, however, I've become increasingly uneasy about what it all means for the future.Last weekend I spent some time with a friend of mine that is a bankruptcy attorney. I asked him if his business was "off the charts strong". Surprisingly he said that it wasn't. He explained that although there are more people than ever who are upside down on their mortgages and various loan payments, relatively few were prepared to file for bankruptcy. The reason is that the government is providing so much assistance and encouragement for lenders to reform and forgive debt that people don't want to file for bankruptcy. He explained that this is a perfectly understandable response as bankruptcy is often seen as a solution of last resort and one that carries a negative social stigma. After all, why would anyone file for bankruptcy when there is a hope that all or a significant part of their loans might be forgiven. My bankruptcy friend Bob further explained that this all too common response creates several disturbing concerns. First, it reinforces the notion that people can over extend themselves without having to face the consequence of certain repayment. Bob cited numerous instances where people that would otherwise face bankruptcy continue to spend and borrow with the belief that it will all be forgiven. Without an unpleasant backstop of bankruptcy, there is no incentive for fiscal responsibility. Bob also cited frustration in not knowing how to staff his office in the coming year. Bankruptcy work requires a great deal of administrative effort associated with completing and filing forms, checking on statuses and similar procedural work. Government programs, unlike the free market, distort the market and make it extremely difficult for business people like Bob to plan and deploy resources. For example, it's unclear whether he should lay off people that would otherwise be needed if not for the government programs, or whether he should hire staff in anticipation of present programs expiring. There is simply no rational way to allocate resources when the government is in charge of decisions that would otherwise be left to the free market. I think that all of us in the automobile business got a dose of this lesson with Cash for Clunkers. This government program stimulated both new and used car sales in the fall. Many were left wondering to what extent they should replenish inventories. Would demand revert to pre-incentive levels, or would it create a hang-over effect? Will there be another government stimulus plan for automobiles in 2010? If so, when, how much and for how long? Although I don't think another program is likely, you can begin to see the uncertain effect that government intervention has on businesses that are affected by such programs. As one that believes whole heartedly in the power of the rational market, albeit with some reasonable levels of regulation, I think that we must all recognize the dangerous consequence of continued government market intervention. After all, we all know the disastrous consequences of central Soviet planning as well as the stifling effects of European style socialism. As our economy shows signs of recovery, it is now time for us to call for reasonable expiration of undue government intervention.

There is an article posted on my blog dalepollak.com from November 12 entitled, “What the best of the best do when they make a mistake.”  This post profiles the shared experience of two of the best used car operators I know, John Chalfant of Edmark Superstore, Idaho and Roy Greenblatt of Matt Blatt Dealerships, New Jersey.

Each of these operators tells the story of how their used car inventory and operational results have suffered in the third quarter of 2009.  Chalfant and Greenblatt both expected to continue their big sales volumes through the end of the year, not withstanding the historical slowdown that generally occurs.  Both of them acknowledged having made a mistake, finding themselves with more inventory than they needed to maintain their usually 15 to 18 annual turn rate.  To their credit, they both pursued an aggressive strategy to “come clean” by quickly reducing their overstock of vehicles at the expense of gross profit.

Their decision to dump excess inventory rather than to hang on with the hopes of the New Year producing rebounds in values and volume stands in stark contrast to the approach taken by most traditional dealers.  Chalfant’s and Greenblatt’s quick liquidation with little regard for current profit will allow them to free up the necessary capital to reinvest in fresh inventory in the remaining weeks of the year. This fresh inventory will undoubtedly be purchased at seasonal lows and will position them to recapture lost profits in the first quarter of 2010 while their traditional counterparts will still be stuck with the higher cost inventory from the summer and fall.

This “coming clean” strategy is counter to every instinct of a traditional dealer.  To “come clean” as these two velocity dealers have done forces them to produce monthly financial statements that show exceptionally low gross profits. Most dealers would rather maintain their respectable average, albeit selling many fewer units.  What these traditional dealers do not confront is the negative equity that is accumulating.  Because automotive accounting does not require assets on dealers’ balance sheets to be marked down to their true market value, the cost of hanging on to the inventory doesn’t immediately evidence itself.

Even if market values rebound in the first quarter of 2010, these traditional dealers will find themselves competing against guys like Chalfant and Greenblatt that took their medicine early, replenished inventory at lower cost, and ultimately can dominant their competitors with vehicles at more competitive prices and healthy average profits.

It’s also time for me to “come clean” and acknowledge that Chalfant’s, Greenblatt’s and other velocity dealers similar experiences were inevitable.  The extraordinary sales and profit performance commonly experienced by velocity dealers can sometimes produce an intoxicating perception of invincibility.  In hindsight, what Chalfant and Greenblatt should have done would have been to forecast on a seasonally adjusted basis as do sophisticated new car manufacturers.  The velocity strategy will undoubtedly enhance the performance of any dealer in any economic environment—however, the macro environment does define the boundaries of opportunity.

Now it’s your turn to “come clean.”  The test is the trend of your used vehicle aging.  Most dealers, to the extent that they are measuring this, are reporting an increase in the average age of their vehicles.  If this is occurring at your dealership, it’s a tell-tale sign that you are hanging on rather than proactively taking charge and looking ahead.  Although this strategy avoids immediately confronting the errors and pains of your forecast, it will undoubtedly produce a penalty in the months to come.  The penalty will be the slow and low profit bail-out of your inventory in early 2010 while the velocity competitor is jumping out to an insurmountable advantage.

 

Today’s used car business is varied and complex.  What you have to do in order to be successful spans a wide range of skills from traditional lot management to virtual marketing.  It is unreasonable to expect success to occur by simply working harder and faster.  Rather, specific conditions must exist for success.  So what are these conditions? 

 

The first set of conditions are called “paint metrics”.  Paint metrics refer to the more traditional physical side of used car management.  Today’s paint metrics, however, are new ones that most dealerships do not understand or use.

 

The first paint metric is the market day’s supply of the vehicle and to know it before you determine whether you want to own it, how much to pay and how to price it.  The relationship of the vehicle’s supply and demand in your live market is a powerful predictor of how fast it will sell, and how much gross it will generate.  Dealers understand how this supply and demand dynamic works on their new car lot, but very few appreciate its effect in managing the used car operation.

 

Second, vehicles need to be priced properly.  This does not mean all of them be priced high, or low, but rather to know which ones can and will bring premium prices, and which ones will not.   This is accomplished by assessing the vehicle’s physical qualities and knowing the odds of fast turn and high gross determined by the time tested principle of supply and demand.  For example, it is virtually impossible to achieve fast turn and high gross on a vehicle that has huge supply and little demand. 

 

The third critical paint metric is managing your cost of inventory.  It’s always been true and will continue to be the case that you can not make any money with used cars unless you own them right.  This means that you must have a consistent and objective tool for cost management. The cost to market metric, which compares your unit cost with the vehicle’s average retail selling price is the best metric for determining how right you own the vehicle. 

 

In order to expect to have success in today’s efficient market, you must have vehicles that have low market day’s supply, priced right and owned properly.  The only way to achieve these conditions is to manage with the new paint metrics of market day’s supply, price to market and cost to market.

 

The second condition set that must exist in order to achieve success in used car operations is a high degree of pixel proficiency in virtual marketing.    The category of virtual marketing that dealerships are most familiar with is on-line classified sites, such as AutoTrader and Cars.com.  Although a great deal of money is spent on these sites, few dealers really understand the dynamics of what makes them perform. 

 

The first key pixel performance measurement is the number of search result pages (SRPs).  SRPs are the virtual equivalent of drive-by traffic.  

 

The second key metric is the number of vehicle detailed page views (VDPs).  This is the virtual equivalent of how many people came in off the street and said “I want to take a closer look at that one”.  Again, most dealerships don’t have any idea of how many times this key behavior occurs each day, week or month on the third-party sites that they pay to advertise on.   It has been proven that there is a mathematical correlation between the number of times that an on-line shopper views the detail page of your vehicle and the number of shoppers that physically show up at your dealership. 

 

Third, the conversion ratio of SRPs into VDPs is an important indicator of your dealership’s proficiency in on-line marketing.  Without an ability to control these key basic virtual marketing conditions, success may be elusive for any dealer.

Below is an interesting letter that I received earlier this week and my response. I'd be interested in your thoughts. Thanks Hey, Dale. Enjoyed your article in Sept. and Oct. '09 issues of Auto Success about Volatility and Velocity. I agree. We don't broaden our horizons enough, and with a shrinking market share (domestics), we will have to do so in order to appeal to a big enough share of the buying public. Also agree with your discussion of hiding true wholesale loss. However, when talking to my sons regarding the broader topic of all "packs", and your feeling that charging retail in the fixed end to used car reconditioning is wrong. That battle was over long ago. NADA and twenty groups successfully justified the case for that on labor, and subsequently on parts, and won that batle and I disagree with you wholeheartedly on bringing up that old turd again. You seem to be only for velocity at minimum gross. It is not sin to make money. If you prevail with your argument for removing all ways to make gross, we will all be fighting over deals at $300.00 gross per deal. Tell me how that makes sense. Regards. Larry   Thank you so much for your feedback. I completely understand that challenging retail rates for reconditioning is like questioning the religious principles of the faithful. There are however, a few points in which I respectfully disagree with you. First, while it is true that NADA and 20 groups put the retail labor and parts issue to rest, I happen to know that this matter is now being reconsidered at NADA. Of course I do not speak for them, but I work with NADA closely enough to know that there is much discussion and concern as to whether it continues to be the right thing to do today. In other words, don't be surprised if you see some modification by NADA on this issue in the near future. Now, regarding the issues of packs (retail reconditioning included), it's important to understand that the purpose of a financial statement is to clearly and properly reflect the operating results of a business enterprise. To the extent that dealers use packs, create reserve accounts, use reserves here and there to touch up their financial operating results as needed, all you're doing is denying yourself the ability to see your business clearly. The most common example of this is dealers showing little or no wholesale loss because they have applied a credit from their reserve pack account. Do you really think that decisions about future acquisitions and sales benefits from this practice? I don't think so- I believe that you are engaging in a practice that perpetuates the errors of your ways. Wouldn't you rather see every single transaction for what it is? I would if I were you. The retail reconditioning pack, however, is a peculiar animal because unlike most other packs, it's not a matter of whether the work was done or not, but rather how much to charge for it. In the past, before the Internet, you had the ability to richly reward your service department and then pass that additional retail rate on to the consumer in the price of the vehicle. Today, however, consumers are too savvy to pay your retail reconditioning rates as a component of the price that they pay for your vehicles. In essence, you're confronted with two poor alternatives when using retail rates for reconditioning. You can either price your vehicles at non-competitive price points or you can price cars competitively and accept the lower front end profit. Some dealers would rather do the latter because they believe they pay more commission on the variable gross profit than the fixed. The problem with this approach is that you then become very frustrated with your average profits and react with the traditional response of raising prices. In other words, it becomes a vicious cycle which ultimately causes your used car operation to spiral to ever lower return on investment. Sadly, you really can't eat your cake and have it too. This brings me to your statement that, "If you prevail with your argument for removing all ways to make gross, we will all be fighting over deals at $300.00 gross per deal." Larry, I am not removing any way to make gross and profit but rather only pointing out that the way that dealers make profit today is different from the way that it's been done in the past. On a recent one of my blog postings, I asked the industry to answer the following two questions: • Can you really expect to get lucky on the used car lot as much as you used to now that the Internet has taken hold in the used car market? • Can you expect to get lucky on the used car lot as much as you used to now that banks won't advance nearly as much as they once did? The answers are no, but that doesn't mean that you can't make good money. So I ask you, how will you make up for the loss of the big grosses that you once got on a regular basis? Most dealers respond with "volume" but that's not exactly right. The correct answer is "velocity". The velocity principle of management says that you stock cars that have the greatest demand and least supply, price them all properly (not all high, not all low) and own them right. Your insistence on packing cars prevents you from pricing them right (I can prove it to you) and owning them right. Your packs cause you to violate two of the three most essential principles of making money in the used car operation - proper pricing and proper cost of ownership. Larry, I don't mean to be unduly harsh in my response. I completely understand where you come from. It's no coincidence that you are the dad on one side of the argument, while your sons seem to be on the other. I see this movie all the time. The leading role is played by the dad that has made a lot of money in the past using practices and principles that proved successful. Today however, the dynamics of the market have changed. With all respect and care, I strongly urge you to rethink your position on this issue and talk to the velocity dealers that already have.

On a previous posting entitled Two Old Timers Teach the Industry a New Trick on October 21, I wrote about 2 dealers in their late 60's that were starting up a centralized buying service company called SunStar, located in North Carolina. Scott Wood, Director - eCommerce/Digital Marketing at SunStar who leads this new company, recently wrote me the below note. With Scott's permission, I'm posting it on the blog with the hopes that others in the industry will provide input and response to Scott's questions. My second purpose is to connect Scott and SunStar with dealers around the country that are looking for alternative ways to source vehicles. I'm certain that the old way of doing it won't work so well in the coming year. Please feel free to provide Scott with your thoughts and contact him directly (scott@sunstarautos.com) if you think that his model works for you. I have absolutely no personal or financial stake. Thanks. Hi Dale - Glad to hear Nashville went well for you. After some testing & validation in Sept. and early Oct. with our NC dealership, we've kicked off the centralized purchasing for Don Elliott's TX & NC dealerships and, just as of today, tasked with buying a portion of the cars for Dwain Taylor in KY. In looking at our "stocking service" as an independent entity, I have spent some time thinking about how the charge to dealers for the service should be structured. I, of course, would be interested in hearing from you on this subject. Right now I anticipate charging on a per vehicle purchased basis rather than a flat monthly fee. One idea I've come up with is tying the charge to the MDS (Market Day's Supply) of the vehicle purchased. In other words, keeping in mind that the "going price" for the traditional independent buyer is in the range of $100-$200, lower MDS cars could be billed to the dealer at a higher rate ($200?) and higher MDS cars at some lesser amount - essentially a tiered system based on the MDS. Part of the theory rests on the fact that locating, evaluating and buying high demand, low supply cars requires more expertise and time on the part of the analyst than buying higher MDS cars, though there is a place for both. Again, since you've included some "independent analyst" comments on the blog, I'd be interested to know if you or others you hear from have thought about how to charge for the service. In the "per car fee" scenario SunStar now includes the added services of: • Arranging transportation - not a biggie, but possibly some slight extra brokerage income via Central Dispatch (?) • Adding the vehicle to the dealer's website or inventory management tool so that it's out in the market quickly, with a description and photos (when available) within "X" hours of purchase - - that's a biggie to me and I would speculate your average, independent buyer doesn't perform that service, wouldn't you? Thanks for taking the time to keep in touch and write the blog entries. I can't make Sunday school this time due to the kid's soccer tourney, but would love to come up sometime and get some more of the gospel.

Over the past several weeks I've received numerous requests to meet with dealership personnel to review the basic fundamentals of velocity management. I'm finding it increasingly difficult to set dates and appointments in the near term. As a result I will be conducting periodic velocity training classes at our office in Oak Brook, Illinois on Sunday mornings. I realize that it's short notice, but the first one will be held this coming Sunday from 9am to noon at our office. There is no charge for the class other than your time and travel. There is a Marriott Courtyard across the street from our office, and if we plan correctly, there may be no need for a rental car. Presently I have approximately 15 seats left for this Sunday and I'll be happy to work with anyone that would like to attend. Simply send me an email at dpollak@vauto.com with the subject line Sunday School Registration as well as your name and the name of the dealership in the body of the email. I'll confirm your reservation as quickly as possible so that you can make appropriate travel arrangements. Note that Chicago has 2 convenient airports, O'Hare and Midway. With a Saturday night stay, there may be some bargain basement fares. I think that weekend stays at Marriott Courtyards are probably also reasonable. Once I've confirmed your attendance, I'll provide you with a contact at the Marriott, and we'll discuss ground travel. I look forward to hearing from you.  

Thanks to the leadership of Nancy Pollak, Krista Lyons, Michelle Black and Susan Taft, yesterday our company kicked off its green initiative.  We’re on a path to achieve our Earth Flag. 

To this end, we have undertaken an aggressive initiative of conservation and sustainability.  We’re in the process of transitioning all of our cleaning chemicals to ones that are eco friendly, eliminating non-recyclable products and embarking on a significant energy and water conservation program.

This initiative reflects the commitment of our company and associates to give back to our community and earth.  We’re all extremely blessed with abundance, and we all vow not to take it for granted. 

I would be interested in hearing about ideas and methods that anyone else may be using to be better stewards of the environment.

On October 20th I posted Incoming wake up call. In this posting I spoke about dealer Keith Kocourek's impressive jump in used car market penetration relative to his competition.Just in case anyone thinks that improvement happens by accident, below I am posting another communication that I received from Kocourek yesterday. In Kocourek's latest note he celebrates the success of achieving 10,000 VDPs from his AutoTrader investment. Today, most dealerships don't know what a VDP is, or have any clue as to whether they should get 10, 10,000 or 10,000,000 per month. The fact that Kocourek is celebrating this achievement suggests that he is in control and command of the conditions that lead to online success. He knows what most dealers do not, and he's benefiting from his knowledge and control of the variables that really drive performance improvement.

I've come to understand that in the increased complexity of the used car business there are a multitude of new things that matter, many of which are outside of the scope of current management attention, for example SRPs and VDPs. OK, for a simple 101 lesson on SRPs and VDPs. SRP stands for Search Results Page and VDP stands for Vehicle Detail Page. When a shopper on a classified advertising site views a page of inventory resulting from a search, and your vehicle is on one of those pages, it constitutes an SRP. If they find your vehicle so compelling so as to click on it for more details, that counts for a vehicle detail page, VDP.

Why does this matter? Because an SRP is the virtual equivalent of a shopper driving by your dealership and a VDP is the virtual equivalent of somebody coming in off that street and saying, "I want to take a closer look at that car." Can you imagine running your dealership without knowledge of the drive by's or walk-ins? Well, if you don't know SRPs and VDPs you're missing the virtual equivalent of these two critical pieces of information.

Kocourek knows that just as there is a mathematical correlation between the number of walk-ins and the number of vehicles sold, there is also a mathematical correlation between how many SRPs convert to VDPs. Further, Kocourek knows that there are five factors that drive SRPs, four of them in his control. So stop and think about Kocourek's improvement. He's driving success by controlling variables of which most dealerships are completely unaware.

Take a few moments and read the exchange between Kocourek and me below. Take note of his reference to "Dwayne" and "Digital Debbie". These are not actual names of individuals, but rather names that velocity dealers have coined for individuals tasked with specific new functions and responsibilities. In other words the "Dwayne" and "Digital Debbie" positions have well defined and consistent job descriptions, responsibilities and performance measurements. A so-called "Dwayne" or "Digital Debbie" can pickup and move from one velocity store to another without skipping a beat. It is this type of standard discipline and measurement that I am passionate about implementing in velocity minded dealerships around the country.

Congratulations to Kocourek, his managers, AutoTrader and his AutoTrader rep for driving to the critical performance of achieving 10,000 VDPs!
Dale - Huge, Huge, Huge jump in VDP's this month, we are tracking for over 10,000 for the first time ever.....Almost hard to believe. Keith

Keith - This is an amazing performance given the size of your market. Dale

Dale - The early model listings just started on Friday. I will keep you up to date on how that works. We are working to become VDP masters. We are starting videos w/cheese at the Ford store. We will track the results against the Chevrolet store using Liquid auto.

I am meeting with our GM's tomorrow to put a process in place to hire Digital Debbie and streamline Dwayne’s responsibilities in all four stores.  We are planning on making one person responsible for all four stores in both of those positions......That makes it really, really cheap.  Keith