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Do you have the "RIGHT" Internet Sales Manager or BDC Director? I know I am going to get a lot of heat on this article, but it has to be said. I have worked with thousands of dealerships over the years and there have been numerous reasons given for mediocrity, and even failure. In the beginning of automotive Internet sales in the late 1990s, it was a novelty and an incremental business, but most dealerships were not able to truly harness it and make it a major profit center. However, over the years and through evolution of the automotive sales industry, and the country as a whole, there has been a lot of change — change in how people are researching, shopping, making decisions and ultimately buying a vehicle. There has even been change inside our industry by dealer principals, GMs and sales consultants. It seems that dealers are getting it. They understand that Internet sales, business development, digital marketing, and social media are all important. What I am seeing now is a scary pattern emerging. A lot of dealerships are not maximizing on opportunities right in front of them because they do not have the right person in place. The Internet sales manager or BDC director that they have in place is the wrong person for the position, and they are hurting the dealership! Here are some problems I’ve seen at dealerships: • A computer geek in the position who is not an automotive professional. There is nothing wrong with being a geek. I have a problem if they have no idea how to sell a car, and don’t have the respect of their team and employees. They can’t motivate and drive the department to success. • An IT professional is the head of an Internet sales department or business development center. Just because they are good at fixing computers or understanding technology does not necessarily make them the best choice to run a million-dollar sales department. “Internet sales” is still sales. • Instead of terminating a sales consultant from the showroom floor, they are given a “second chance” running the Internet sales department. I don’t get this one at all. If someone can not be effective on the showroom floor, why would you have that person be the head of a department where 92 percent of Americans go before they ever step foot into your dealership? • A sales consultant is promoted from the showroom to running the Internet department. Please understand just because someone can sell a car does not mean they can run a department, let alone an Internet sales or business development department. Just because they can sell cars does not mean they are capable of being a manager or a leader. There are a lot of successful sales consultants who sell 20 or 30 cars per month, but don’t work well with others. They have no concept of interdependence. • There is no Internet sales manager/BDC director at all. That is just bad, and again, makes no sense whatsoever. When 92 percent of people are going online, there needs to be major attention to this area. • A dealership’s manager also manages the Internet department. I have seen it all, my friends. The dealer principal or general manager takes on the Internet department as an “additional” responsibility instead of having a dedicated manager, or they dump the responsibility of the Internet department onto the GSM or sales manager. This is not a viable solution. Remember Basic Math The average dealership in the United States delivers fewer than 100 units per month. But the average dealership has: • A GM or GSM • One to two sales managers (new car/used car), or “closers” • An F&I manager • 10 Sales Consultants If you want your Internet or business development department to deliver units, you are going to need the right Internet manager or BDC director. Yes, you might need to fire your current Internet sales manager or BDC director. You might have been thinking about doing it for months now but weren’t sure. Let me make it easier for you. Think of your current Internet sales manager or BDC director: • Are they a family member or in a relationship with anyone else in the dealership? • Do they have any automotive sales or management experience? • Do they have an aversion to the phone? • Do they have the ability to take a “TO” from their employees, sales consultants, appointment setters, etc? • Do they have the ability or desire to proactively “TO”? • Do they have the respect of their team (or the dealership for that matter)? • Can they, or do they, lead by example? • Do they train their team? Do they know how to train their team? • Do they have “one on ones” with their team? • Do they know how to project and forecast, and not merely guess and hope? • Are they rude and or mean to their team or their customers? • Do they have Standard Operating Procedures (S.O.P.s), or do they just “wing it”? • Can they desk a deal? If you are reading this and you are a dealer or GM, do this calculation before you open the showroom tomorrow: Look at your electronic leads, phone leads and walk-in leads. Say your electronic and phone leads are 70 percent or greater of all leads. Now look at your manager running your Internet or business development department. Are you comfortable with them in charge of 70 percent of your opportunities? If not, make the change today. If you can’t promote that person as your nest general sales manager, you have the wrong person in place. If you would like a free personalized analysis of your Internet Sales Manager, contact me at the email below with “ISM” as the subject line. Sean V. Bradley is the founder and CEO of Dealer Synergy, a nationally recognized training and consulting company in the automotive industry. He can be contacted at 866.648.7400, or by e-mail at sbradley@autosuccessonline.com.

 

2012 Automotive Special Finance

 

Banks are buying again and they are buying deep. Sub Prime Business is back and it is extremely profitable. I work with dealerships all over the country and the feeling is unanimous… They are ALL loving it! Why wouldn’t they? Over 60% of the United States has less than perfect credit.

Let me clear up some misconceptions about Special Finance. There are two different ways that you can engage the sub prime market (or not engage it at all).

The first way, is the most common way. It is being “reactive”, meaning that your dealership tries to get people that have “bad credit or no credit” approved when they are in your showroom.  Usually these are people that walk into the dealership, or start on the phone or Internet and are treated like a conventional or normal opportunity. Meaning, they are put through the “normal” “road to the sales” process and during that process it comes out that they have bad credit or no credit and then the dealership tries to put a deal together AND tries to get the deal approved.  

The second way is being “proactive”. Meaning that the dealership actively seeks people that have “bad credit or no credit” and they usually have a different process than a conventional opportunity or they have a different (or specialized) team that handles these opportunities.  

Then there are dealerships that do NOT want to deal with ANYTHING related to “Special Finance” they are under the impression that “these people” are “mooches”, “roaches” etc… In other words there are dealerships that think that there is NO value in working with people that have credit challenges.

Here is the reality check people… OVER 60% of people have less than perfect credit. It is way more than you can imagine.  So in other words there are MORE people with credit issues than there are people that don’t have credit issues. So, why in the world would you not engage these people? Why would you NOT maximize these opportunities?

Now let me add to the equation that sub prime deals average HIGHER GROSS per copy compared to convention deals.  My clients are averaging over $3,500 per copy with their Sub Prime deals versus their $2,ooo a copy for their conventional deals.

And as far as the ridiculous notion that “these people” are roaches or mooches” or that you do not want to contaminate your dealership with “these people” is beyond ridiculous!  Please think about what this country has been through in the last 3-4 years with the real-estate market, with the job market, with Wall Street. Not to mention all of the traditional reasons for credit challenges… Over Due Medical Bills, Divorce, Bankruptcy etc… We have seen tumultuous times and so has YOUR PROSPECTS, so has YOUR CLIENTS. This doesn’t mean JUST “poor people”. There are a lot of “rich” people that have bad credit. There are a lot of people that make a lot of money that have bad credit. 

So, when I speak to highline dealerships and they are appalled at the thought of engaging in sub prime, it perplexes me. Why…? Because rich people with bad credit or people that make a lot of money with bad credit can AFFORD to pay a down payment and a lot of time they can afford a LARGE (or larger) down payment compared to a financially challenged person.

Ok, now that I have convinced you that Sub Prime Opportunities are NOT only relevant, but are valuable.  I want to go over what you and your dealership need to do to make sure you are successful in your initiative.

Here are the TOP 5 Things that you need to have or do to be successful in Sub Prime:

 

1. First and foremost, you need to have a complete plan as to what you want to do. Create a complete game plan… How many sub prime deals do you want to deliver per month. How many leads / credit apps are you going to need to buy or generate in order to deliver the special finance units that you want to. How many people are you going to need to handle the amount of leads / credit apps that you are going to buy or generate.  Who is going to handle the Special Finance leads? Sub Prime prospects are COMPLETELY different than a traditional prospect.
2. You are going to need the RIGHT inventory. Meaning that you need vehicles that “Book Out” the best. You need vehicles that are going to fit the budget ranges (price and or payment) of your sub prime prospects.
3. You are going to need the proper banks / lending institutions to ensure you can get deals approved and funded. You need a myriad of banks. Not just one or two. You want a diversified list of financial partners that have different programs, rates, fees that can fit EVERYONE’S unique situations.
4. Leads… you need “opportunities to do business” in order to do business! Meaning… you need people to sell to.  So, you ware going to want to find third party providers that have experience in generating QUALITY Special Finance Leads. Key word meaning “Quality”. You don’t want to deal with fledgling companies with no track record or unrepeatable sources. Leads are VERY important. Remember, there is a HUGE difference from being “Reactive” to Special Finance” versus to being “Proactive” and having a “REAL” Special Finance initiative or department.
5. Process, Process, Process… What is the outbound phone call process, what is the inbound phone call process, what is the outbound email process, what is the inbound email process, what is protocol for objections and rebuttals. What is the “What If….” Process. Meaning, you need to know what to do, when to do it and why you are doing it.

 

Bottom line is that Automotive Special Finance is a HUGE opportunity to incrementally increase VOLUME and GROSS.

If you have ANY questions about this article or Automotive Special Finance please feel free to call me at 267-319-6776 or email me at sean@dealersynergy.com