Dot Program This spiff program is designed to move old age inventory, but can be modified easily to promote whatever you need it to. Pull an inventory sheet and divide your cars into 4 categories based on age. For example 1-60 day cars, 60-90 day units, 90-120 day units and 120 day and older. With the inventory segregated on sheets, go place dots (the little half inch stickers) in the lower corner of the windshield. Place the number of dots according to the category of age: less than 60 days get no dots, 60-90 day units get one dot, 90-120 day units get two dots, and 120 day and older units get three dots. The dots are not distracting to customers, but very visual to the sales people and will act as a "stealth signal" that the vehicle is aged. As the vehicle ages, you simply have to add a dot each time the vehicle hits a new age group.

From here there are tons of variations to motivate your sales people. My favorites are:

1. For each dot they sell they get to place their business card in the hat for a drawing. The more aged units they sell, and the more aged they are, the better chances they have to win the drawing. After a specified period of time draw for something cool like a plasma TV or laptop computer.

2. Assign a dollar amount per dot, $50 per dot or whatever your budget will allow.

3. Team contests, pit teams against each other to accumulate dots and award prizes based on overall volume of dots.

4. Auction prizes and money for dots. Allow a month or so (it can't be much longer, they will lose interest) to accumulate dots. In sales meeting bring in prizes, cash, whatever and auction the prizes of different value for dots rather than cash. Again, the more aged units and the older the inventory they clear out the more they get.

That's right, I truly believe the traditional role of a desk manager is obsolete and will continue to evolve further away from its current definition in the next few years. Sales Managers that want to be on top of their game, be promoted, and be more successful, need to change their way of thinking.

Look at an old school desk/sales manager, their primary skill was to be able to successfully negotiate and work a car deal. This meant knowing how to calculate a lease vs purchase and manipulate all the numbers for maximum gross. This meant knowing the inventory extremely well; to be able to direct the switching of cars for better a better book sheet and a chance of an approval. Desk managers in the past held all the cards. Customers and Sales People didnt have access to the knowledge that desk managers did and thus desk manager were in a position of power. When it came time to close a deal, the sale manager could hold staunch stance in their negotiation. When a sales person didn't do their job, it was fair game for the sales manager to rip into the sales people, throw the incomplete credit application back them and yell and scream to get the job done.

Today, the job is completely different. Customers are incredibly well informed and the landscape of negotiations is very different. Today's desking programs can pencil deals 10 times better and faster than any human can. Desking tools, with a few simple inputs, can calculate the perfect deal including selecting the best inventory and bank program for the best front and back end gross. Software has really made desking deals a remedial task. What are desk managers left to do? The number one role of a desk manager today is to be a support, leader, and coach for his team. People are the only things that computers can't manage (not alone anyhow). A desk manager today must know how to motivate and coach someone to success. The old school mentality simply won't work, and desk managers need to become professional leaders. Through professional coaching and motivating, a desk manager will build a high performing team with little turnover that creates amazing results.

So are desk managers obsolete? The old school mentality, or role, of being a desk manager is obsolete. The position itself is not. However, the future is quite certain: to succeed you will have to be a much better capable of winning over your team and leading them to success.

Having just finished a wholesale with Ford, their restructuring is fresh on my mind. I cant speak for the GM dealers; but as a Ford dealer I'm seeing first hand that they have made some great progress on their turn around plan. It's no secret that historically dealers and manufacturers have had a rocky relationship, especially the domestics.

Even as long ago as the early 1900s the factory has shoved cars and expenses unnecessarily to the dealers. Like many economic trends it's cyclical, but with their recent market share slides, the domestic dealers have really taken a beating in the recent past. It is so frustrating going into wholesale meeting, facing your factory rep who has to force an insanely big days supply of cars on the dealership. Here we are, trying to tame our massive flooring expenses, increase our turn, decrease lot rot and they wanted to push unneeded cars on us. To make it worse, it generally was the stuff you didn't want. You know, the cars you couldn't even sell well at lower volumes. At least if they wanted to pile cars on us, dump on the vehicles that were in high demand; we may be overstocked but we at least had a big market to tap into. But no, it was never like that. Their answer was typically something about your commitment to the factory or "look at our new promotion coming out." I was always amazed at how well the factory rep could justify buying a 7 months supply of odd color Tauruses and hearing him explaining that by that act alone our sales will skyrocket. They did earn many creativity points in my book.

On the other side, you could never get the stuff you really needed. Aren't some commodity restrictions a joke! I mean, I get it from a manufacturing site and all, but do they not get how frustrating it is to be forced to take a 3 years supply of Crown Vic's and then be limited on the good stuff? Only 25% manual trans on the mustang GT, 40% crew cab mix, 1 hybrid for every 10 escapes and a host of other frustrating road blocks to getting the inventory right. Oh to be a Lexus dealer and not have Crown Vic inventory birthday parties. The end result: it has been difficult to maintain steady inventory levels at an appropriate days supply to manage the flooring. (I understand some import dealers have not had this issue nearly to the extent us domestic have dealt with and to that all I can say is be grateful for your brands.) In any case the past is behind us and I'm hear to report, from my view, those days are over and behind us. I just finished a wholesales meeting where virtually every line was held back and I was asking for more. The tables have completely turned, rather than fight to not take inventory, I'm looking for ways to get more. I even noticed that the calculation to figure our needs were at a REAL 60 day turn. That's a huge improvement to the past 60 day turn numbers they use to bring that when really calculated out figured to be a 120 days supply called a 60. WOW, the capacity has really been cut, and the benefits are going to be huge (much bigger than a change in wholesale). Obviously the change in wholesales is nice but the effects are going to be much farther reaching than that.

Off the cuff, we as dealers can get excited because we will have a much easier time managing our flooring account. We all know flooring is all about turn, and turn is directly connected with days supply. The key is keeping the right days supply for optimal turn ( I dont mean to get into a discussion about turn, days supply or any of that, just to say that we should have an easier time at managing this.) Next, because the supply of cars is so much less, we wont be forced to discount so deeply to sell. I dont think its right to say that we will not see this effect over night, nor do I think it will be as much a conscious decision, but naturally as supplies are kept lower because of production, values should rise. Gross should increase slightly but more importantly; I am super excited for leasing. I cant wait for the day that residuals are truly strong enough for Ford to be comfortable pushing them again. It is a shame that we have moved so far away from leasing. Again another topic for another time. Lastly, the restructuring plan will hit our used car business. Most notably our vehicles shouldn't depreciate in the same manner. The rate of depreciation should be slower, so our customers won't be so far upside down; although worse than the depreciation factor causing negative equity is us dealers placing customers in longer and longer term loans (another topic for another day).  

All in all there are MAJOR changes taking place right now for the domestic stores and I have to seriously applaud Ford for their commitment and execution thus far of their restructuring plan. Already results have been very tangible. Personally, I see the brand increasing in value dramatically over the next 5-10 years. Its not an easy job, but they are making a difference. Great job and thank you Ford!

Three types of Power One of my favorite leadership books is, "Principle Centered Leadership" by Stephen R Covey. In it, he talks about three types of power, a lesion that I believe is helpful for all of us.

The three types of power are:

Coercive Power-Basically this means to lead out of fear. Followers follow because they fear the consequence, imposed by the leader, if they dont follow. Such as being humiliated in a sales meeting, being yelled at or reprimanded or perhaps they fear losing something good like a bonus or vacation day that the leader will revoke. The worst is when they fear losing their job. Its not a good leadership situation when your group follows by fear because the followers are only acting committed on a superficial level. In the end the employees generally sabotage the leader (usually when the leader is not looking) and their loyalty only will run as deep as the fear. You will end up trapped in a downward spiral. If you find yourself in this leadership pattern, it's not something you can fix overnight. The road to regain the trust of your group can take a while. Be patient, winning over of the team's trust is worth it.

Utility Power- this is when the power of the leadership comes from the exchange of goods. The followers have what the leaders want, like a sales person's time and talent. The leader has something the follower wants, like commissions. The followers follow because they want the benefit that the leader can offer. This is a simple and most common form of power. It is not negative per se; it is effective, but not the ultimate goal. One problem that utility power presents is that it rewards each person for their achievements and can create a by product of individualism. Competition is good on the sales floor, but not at the expense of a positive culture. The problem I run into is how do you continually improve your spiff programs. They get bigger and better; until you max the budget then you have to bring everyone back to reality. If utility power is all you have, what will you motivate the team with in that situation? (most car people will then move back to coercive power and this is when the yelling and screaming meeting comes in, a further downer)

Legitimate Power-this comes when the follower believes in the cause of the leader. The follower trusts the leader, respects the leader and honors the leader. This power is hard to get! It takes time to cultivate and takes patience to earn. But once earned, it can transform your team to a whole new level. One thing that really catches my attention regarding legitimate power is that it is based on the leader honoring and respecting the follower. At first, I thought it may be a misprint, but after thinking about it, that is 100% correct. If we want the respect of our team, it is our job to honor and respect them first. Too many times we as leaders take the stance that "they owe me the respect and when they show it, they will earn mine.: A leader who is not willing to earn the respect of the followers, in my opinion simply owns a title.

If you want to earn the respect of others, honor them first. Stay consistent to the principles you believe in and be patient. The respect will come. If you want to earn trust and respect faster, go further out of your way to take care of your team. Leading a team in a dealership is hard work. There are some unique and demanding dynamics that present some unique challenges; I think that's why I like it so much!