Prices for used cars have hit record highs recently and in the next few months, are expected to climb even higher (NADA: Trade-In Values for Used Cars Expected to Rise in June). Auctions are one source where auto dealers can find used vehicles to fill the lots, but an even better source is your own customer base. Why compete with other dealers by placing bids, when you can mine your dealership management system (DMS) for customers who may be ready to trade-in for a new, fuel-efficient vehicle?

One recommendation is to search your database for customers who purchased new cars three to five years ago—in particular, larger vehicles such as SUVs. Call them and let them know their used vehicle is in demand and offer them a free appraisal for a trade-in. If you can get it at the right price, you can make profit on both the trade-in and re-selling the customer’s old vehicle.

Dealers and salespeople, have you tried any promotions to get more used inventory on the lot? What has worked (or not) for you?

In the movie “Groundhog Day,” Bill Murray had to learn how to be a nice person and help other people (and genuinely mean it) before he won the girl and got his life on track. Only then could he escape the eternal blaring of the alarm clock that woke him up to re-live Groundhog Day, over and over and over…

Much like Bill Murray, many car dealers are also re-living Groundhog Day. Every day many dealers wake up determined to improve their bottom line. Cut costs. Increase profits. And if your dealership is still on a legacy Dealer Management System (DMS), you know that one of your highest overhead costs is the monthly bill from your DMS provider.

For additional information Contact: Mike Esposito, President & CEO Auto/Mate Dealership Systems Phone: 800-371-3970 Email: mesposito@automate.com

Auto/Mate in Pilot Program with Toyota Motor Sales USA to Integrate DMS

Clifton Park, NY (February 12, 2010) – Auto/Mate Dealership Systems, (www.automate.com) the highest ranked DMS in the 2009 NADA Annual Survey of Dealership Satisfaction, announced today that it and Toyota Motor Sales, U.S.A., Inc (TMS) have successfully completed the first phase of a pilot program that’s purpose is to prove the feasibility of a new TMS portal to be used for integrating Dealer Management Systems with TMS systems through the web based portal. During this first phase, the parties successfully integrated six pilot Interfaces between Auto/Mate’s Automotive Management Productivity Suite (AMPS) and TMS through this new web-based portal. This integration electronically transmits items such as warranty claims, parts orders/parts returns and new vehicle delivery information directly from AMPS to TMS. If implemented in a production environment by TMS, Auto/Mate and a dealership, it streamlines communications between the dealership and TMS, helps to insure completeness and accuracy of the data is submitted to the manufacturer, and should save dealers valuable administrative time. Phase One of the Pilot is successfully completed and involved six of potentially 13 total interfaces. The six interfaces are the following: 1) Parts Order/Parts Returns – Allows for easy entering and submission of parts orders and return data to TMS. Multiple parts orders can be input at one time with an option to choose which part orders to process. 2) Warranty Claim/Repair Order – Allows Toyota dealers to send Repair Order information for warranty and national service history, including Customer Pay information. 3) Vehicle Inventory “upload” – Allows Toyota dealers to receive and upload vehicles into the inventory file. 4) Warranty Payment “upload” – Allows Toyota dealers to receive warranty payments easily and post them into the accounting system. 5) RDR – Retail Delivery Reporting – F&I Deal – Toyota dealer can submit vehicle delivery data directly to TMS. 6) Credit Contract – F&I Deal –Toyota dealer can submit information about how the deal was financed, service contract information, etc. “I have been an Auto/Mate customer for over 10 years and am overjoyed with the results thus far in regards to this project. The interfaces that have been delivered so far have been tremendously user friendly and have done a great job in increasing the efficiency of my people in all our departments,” said Warren A. Price, President, The Price Automotive Group. “We are very excited to be involved in this pilot program with TMS/USA. The integration allows retailers to quickly and easily input and transmit vital data to the manufacturer,” said Mike Esposito, president of Auto/Mate. “Whenever and wherever we can help a dealer save time, we know we’re improving their bottom line.” AMPS is an easy-to-use comprehensive dealership management system with over 20 integrated modules to help dealers more efficiently and effectively manage their business. It supports an unlimited number of users, workstations and printers, and can be implemented in any size dealership. AMPS is available as both a cost-effective in-house and ASP solution. For more information visit www.auto/mate.com or visit booth # 675 at the 2010 NADA Exposition and Convention in Orlando, FL, February 12-15.

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About Auto/Mate Auto/Mate Dealership Systems was established 26 years ago with a simple goal: to provide an efficient and reasonably priced computer system to increase dealers’ profitability. Designed by former auto dealer executives, AMPS (Automotive Management Productivity Suite) by Auto/Mate offers more than 20 fully integrated modules to suit any size dealership and to address every need, including Sales, F&I, Fixed Operations, Accounting, CRM, Fleet Sales and more. Auto/Mate’s success has led to a continuous growth rate of more than 30% per year, with its system currently in use by more than 400 dealers. In three combined surveys conducted by NADA, Auto/Mate has ranked the highest in customer satisfaction over any other dealer system. AMPS by Auto/Mate Dealership Systems is powerful, scalable and has a unique, graphical interface that makes it familiar and easy to use. AMPS is an open system and will run on most computer hardware that a dealer has in place. When compared to other systems on the market, AMPS offers the most value per dollar, allowing dealerships to operate more efficiently and profitably. For more information, please visit www.automate.com.

One of the best ways to close a deal is offering customers a bi-weekly payment plan.  Not every F&I menu has a bi-weekly payment calculator, but for those that do, it’s a great way for dealerships to increase gross.

 

By-weekly payment plans are becoming increasingly popular as a faster way to pay off credit cards, mortgages, autos and similar type loans.  Instead of making monthly payments on the loan, the buyer pays half of the monthly payment every two weeks – or 13 monthly payments each year.  How does it work?  There are 12 payments a year on a regular monthly payment schedule, or 24 half payments.  On a bi-weekly payment program (every two weeks) the buyer makes 26 annual payments throughout the 52-week year, which results in the extra monthly payment.

 

On a bi-weekly payment plan, auto loans can be paid off 6 to 8 months faster.  For example, a five-year auto loan that would normally take 60 months to be paid off, can be paid off in 52 months.  The customer also builds equity faster so that trade cycle can be shortened.

 

The by-weekly payment plan is set up using a third party company, also called a transfer company.  First, paperwork for the sale is drawn up and submitted to the regular finance company just like any other vehicle purchase.  Then, arrangements are made with the transfer company to make the monthly payments.  The money the transfer company uses to make the payments is taken out of the customers banking account every two weeks. The money is set aside in an interest free escrow account, and paid to the finance company at the end of them month.

 

There are no upfront costs to the dealer involved in setting up a bi-weekly payment plan.  It’s also convenient, because the transfer company automatically withdraws money from the buyers banking account.  Withdrawals can even be arranged to coincide with the consumer’s paycheck. Another consumer benefit is that the buyer’s credit rating improves because the finance company receives their money on time.

 

F&I menus that have a built in bi-weekly payment calculator make it easy for dealers to offer this plan at the time of sale.  The calculator shows buyers exactly what they will pay, and for how long.  Most importantly, it helps customers purchase the vehicle they want, including add-ons and options, with a payment plan that they can afford.  Which means more satisfied customers and increased profits for the dealership.

 

 

Wooed by the fancy capabilities, and perhaps prompted by a grumbling Internet sales manager or other salespeople who complain about the current system, many dealers become convinced they need the latest, greatest CRM features to stay competitive. But do they really?

 

Before investing large sums of money to implement a new CRM, a dealer should ask the following: Is the current CRM system really the problem, or is it the process that has resulted in the CRM not being utilized to its full capabilities?

 

Process does not have to involve advanced technology. One of the most successful car salesmen I ever knew worked in the late 1980’s, before computer systems in dealerships had CRM capabilities.  When any customer walked in the door, he took their name and information and entered them into his own database on his own computer. The minute the prospect walked out the door, the salesperson printed out a letter and mailed it to them. Then he followed up on every letter with a phone call. He did this with every customer, repeatedly. After several years he never had to prospect for another customer. This person devised his own CRM methodology and became successful because he was committed to the process.

 

The point is this - if people believe that following a process will make them more money they will follow the process. CRM is simply a tool to help them follow the process

 

How do you know when the time is right to buy a CRM? When your current system is outdated or does not integrate well with the dealership’s DMS. “My staff doesn’t use it,” is NOT a reason to buy a new CRM. If they don’t use the current one, what makes you think they’ll use a new one?

 

 

F&I has a unique ability to add to a dealership’s revenues.  This is done by working the F&I “Book of Business”.  It requires that the F&I office use its book of business like a portfolio manager, mining the data it contains to bring customers back into the showroom.  In this way, profitable relationships with customers are developed and maintained over time.

 

DMS F&I reports that can track the details of multiple items within a single sale such as incentives, service contracts, warranties and accessories, are the key to making this happen.  When your DMS can provide this kind of data, it makes it easy for F&I to locate potential aftermarket prospects, market and sell add-on parts and services.

 

Here are some of the ways the F&I office can use its DMS to generate more business:

 

Service Contracts – Use your DMS to extract the names of people who have previously bought a car.  Merge these names into letters, emails or telemarketing promotion that offer “buy now” incentives. 

 

Accessories – Again, using your DMS, identify potential accessory buyers based on their past vehicle purchase, and then mail or email them information about accessories that are available for their vehicle.  In many cases, you’ll not only generate income for parts, but installation fees for service as well.

 

Trade-Ins - Encourage previous buyers to trade-in their vehicles for a newer model can result in increased profits in the resale of the trade-in and the purchase of a new car. 

 

Used Vehicles - Decide what types of used cars you can easily sell, and query your DMS by make, model and year for a list of people that you can contact.  Send them an email or letter with a basic appraisal of the vehicle and invite them to come in to the dealership. 

 

Lenders – Data on which banks have been buying the most deals and what types of loans they have been approving is also information that can be pulled from you DMS.  You can generate lists of which banks are running hot and cold over a given time period. When you find a bank that is buying deep, you have a better chance of getting marginal deals financed.  This can increase the number of vehicles that are sold each month.

 

Service Leads - Leads can be generated from the service area by using your DMS to mine repair order information.  

 

The F&I Menu – Probably the best tool for increasing profits on a sale is your F&I Menu. Using the menu for each and every deal insures that you’re showing 100% of your products to 100% of your customers, 100% of the time.  No potential income generator gets missed or overlooked

 

Whatever direction you take, the most important thing is that you spend time working your portfolio.  The information contained in your DMS is often an untapped goldmine that can skyrocket F&I sales

 

Not too long ago I was in a meeting with the Sales Manager, Office Manager, Fixed Ops Manager, and IT Manager of a dealership.  During the meeting, the IT manager asked me when we were going to update our Dealer Management System (DMS) manual.  I paused for a minute, considered the question and then asked each of the other managers if they had ever read the current manual.  Not surprisingly, the answer was no.  I then asked if any of them had ever read the manuals for their previous DMS system, which they had used for over 10 years.  Same answer.

Let’s face it, when it comes to software training, the likelihood of any of your employees (excluding the occasional techno-centric IT Manager) reading lengthy and admittedly boring technical manuals is slim to none.  They simply don’t have the time or inclination to plow through pages and pages of data to learn how to execute the handful of tasks needed for their specific job.

So they learn the system from someone else in the company, who was trained on it by someone else, who…you get the idea?  Think of the old telephone game with pretty much the same results.  Or they simply get into the system and try and figure it out on their own. 

The end result is that many employees have limited knowledge and understanding of their DMS system or how to use it to its full advantage.

But the problem doesn’t stop there.  When it comes to new releases and software versions, employees typically ignore the written documentation sent to them by the DMS vendor. In most cases, they’ll install the updates, log onto the system as usual and, when they run into trouble, call technical support for help.

To combat this particular situation, one of our customers suggested that whenever there are changes or modifications to our system, we should send out emails instead of letters because “people read their emails.”   So for their next update, we sent out both a letter and an email. Two weeks later we received a call from the CFO who made the recommendation, wanting to know what was going on with their system. Did he read the release letter? No. Did he read the release email? No.

How do you break this pattern so that employees – and the dealership - get the full benefits of their DMS at all times without increasing costs?

It’s called Just in Time Training.  Unlike web-based training or system tutorials (both of which still requires an employee who is motivated to learn), Just in Time Training provides employees with the information they need at the exact point in time that it is required. 

Just in Time Training enables users to get the information they need at the time they need it by clicking on a relevant task or function keyword located on the page the user is viewing.  The requested information immediately appears, is concise and to the point, and can be supplemented with visuals such as videos, flow charts, PDFs or even web-links.  It gives the user the exact data required in a way that can be easily assimilated and quickly applied.

Just in Time Training is the new best practice in technology training.  Incorporated into a DMS, it can rapidly and effectively train employees on whatever it is they need to know.  It’s an automated, self-study learning method that will increase efficiency and profits without additional costs.

 

I have always felt that government regulations within our industry can be used as a sales advantage. "How so" do you ask? Take the issue of full disclosure in the F&I office. What GSM hasn't pulled his or her hair out when looking at penetration rates for their F&I products. You ask your F&I manager what's happening only to find out that they are not showing all of the products to the buyer. How do you as a GSM handle this (after they unscrew you from the ceiling)? The first thing I would do is to make sure my F&I office had the tools that they need to correctly sell the products and this starts with an F&I Menu. Not something such as a spreadsheet or a piece of paper with products on it but a system that will allow the F&I Manager to smoothly move from the deal to additional products on the deal and back to payment. So where do the regulations come in? Well I would have a statement on the wall in the F&I office that this dealership is a full disclosure dealership and in following in that spirit we ask that our F&I Manager disclose all of the products that are available for the Buyer to purchase with their new / used vehicle. Remember we want to show all the people, all the products all the time. Using the menu the F&I manager can quickly add products to the deal along with showing the features and benefits of the products. In addition the F&I Manger can print disclosure statements that the buyer needs to sign saying that they were presented all of the products and understand the payments. Now you might say "Mike, is that bending the regulation to your benefit?" Well not really. It is really using it to protect the store. I have had experience where in the dealership I ran, my F&I Manger did not tell a buyer about life insurance we offered. The buyer had a heart attack and his wife came after us saying that we should have told them about the life insurance. The long and short of it is we went to court. We lost (we're in NY of course).

Anyone not using an F&I Menu is leaving gross on the table and is opening their store up for possible litigation.  Simple as that.