Remember when structuring a deal required pen and paper? Those were the times when we were forced to put in more effort and think for ourselves about how we ran our businesses. The emphasis has been on technologically assisted sales tools like lead engagement platforms and digital retail that employ artificial intelligence (AI) to perform the tasks of multiple people simultaneously. The fact that processes frequently break down completely and communications between dealers and customers are misunderstood is a problem that many people choose to ignore.

It is not surprising that as the world's reliance on technology grows, the automotive industry has also turned to artificial intelligence (AI) to streamline complex processes. Artificial intelligence has the potential to change the way vehicles are sold in a number of ways, including by enhancing customer service and assisting with communication.

Chatbots are one way that AI can help with the auto deal process. These digital helpers can communicate with implicit visitors, give website visitors details about the vehicles that are currently on the lot, and help them schedule test drives. Chatbots can also help in the lead-generation process by gathering contact information from potential guests and sending it to deal representatives.

Another area where simulated intelligence can be helpful is in the development of custom contract complications. AI algorithms can recommend the vehicles that are most appropriate for a customer based on data analysis such as that customer's search history and prior purchases. This ensures that guests receive options that meet their needs and wants while also saving merchandisers time.

The financial process can also be made simpler by artificial intelligence. Artificial intelligence systems assist in the identification of loan openings and the calculation of annual payment values by reviewing the client's credit information and financial history. Due to the time saved by not having to compare and research various backing options, both customers and dealer representatives benefit.

In addition to these benefits, AI has the potential to increase business operations' efficiency. Dealers can order the right assortment of vehicles by utilizing AI-powered force operation systems that help track and analyze the demand for different models. As a result, it might not be as important to offer discounts and other types of discounts that would increase overall profitability.

Even though there are many benefits to using AI in the car sales process, it's crucial to keep in mind that it should be used alongside, not in place of, human commerce. Dealer representatives continue to be the process's most significant and necessary element, and technology cannot replace their tenacity and special touch. Retailers can fully leverage AI while still providing excellent customer service by striking the right balance between humans and machines.

To save time and offer an effective customer experience, retail workers are being trained to use artificial intelligence and technology. Numerous tech retailers in the sector offer customer engagement services in addition to CRM. Many of these systems are even more feature-rich than CRM. However, many retailers frequently make the mistake of not managing these systems themselves. Sending and receiving messages to and from the wrong type of customer guests is a very common occurrence due to poor data mining and list building. As a result, customers can get dissatisfied, which may lead to problems like unfavorable feedback or even legal problems.

Dealer management should unilaterally take control of their systems and processes to address any underlying problems. Our lives should be made easier, and our processes should be more productive, thanks to technology and artificial intelligence. There should be a rule stating that nothing can be transferred without management approval. Retailers should start gradually embracing artificial intelligence and paying attention to patterns in its skills.

Stan Sher of Dealer eTraining Tells Stories Of Coming Up In The Automobile Industry!

Starting a career in auto sales at 20 years old and coming up over a 19-year career. He talks about getting hired, training, and selling the first few cars to get hooked with this career. Stan sold two cars on his first day after training.

I know I know...

No one wants to see "2020". But let's at least embrace the fact that a historical event (good or bad) has forced change on how we do things forever. We are working in an industry that for years has refused to accept that the "Internet" will be the new way to do business. 

Throughout the years we went from getting leads faxed in to high level developed CRM systems to search engine marketing and social media marketing of all sorts. We went from "A to Z" internet selling to "BDC" methods. The BDC of today is the billboard of yesterday. It is your marketing and advertising department that brings meat to the table. It is also the department that takes blame and abuse because no one is ever happy with the results. 

The false expectations of what a BDC does and how it does it create huge turnover and unneeded expenses that most dealers face. We spent many years training regurgitated scripts to handle phone conversations. What has not changed is the buying style of consumers. The questions they ask and need for discussing numbers upfront are still here. The lack of process improvement still creates a three hour or longer car buying process.

Enter Digital Retailing…

A “buzzword” of a few years ago. A tool that many digital marketing companies have offered on most dealer websites that operated as a lead generator. Thankfully these companies have created almost like a desking tool where the customer can virtually desk their own deal, heck they can even complete their transaction and secure financing in minutes, leaving them only to pick up their vehicle or have it delivered to their home. The idea for working the process properly was never quite used which is why statistically we know that a tiny percentage of people using these tools complete a full transaction.

Now I had the good fortune of taking a job managing a BDC for a year in a wonderful store that uses “Roadster” for their digital retailing tool. I also continued to consult and build BDC departments in dealerships so I worked with the likes of CarNow and General Motors Shop, Click, Drive tool. It was a beautiful experience because as a trainer I completely trained myself to have better phone discussions that get straight to the point. The store had a process to get a commitment and prepare the deal while talking to prospects on the phone. If they start negotiation simply ask if they are ready to do this today and get a credit application. 

When the appointment was set we saw over 70% show ratio and the deal was 40-50% done. The customer experience was phenomenal. The dealership operated efficiently selling over 250 units per month. My phone training changed and my philosophy of selling cars improved. Keep in mind that those of you that have followed me will remember that I have been preaching “Technology Assisted Selling” for almost a complete decade. It’s HERE!

So now I take a job as the General Manager of Dealer Retention Services where we handle outsource BDC operations for dealerships all over the nation. I quickly found our shortcomings with handling customers on the phone. I created a conference call with all of our dealer partners and General Managers and asked for permission to use their digital retailing tools and improve our conversations. They all gave me free reign to do just that and were happy to hear about my way of thinking. I trained my team of 30 agents how to understand shopper behavior, what sites to use and how to use digital retailing tools. They now operate efficiently and more effectively than 95% of the BDC agents in the entire automotive industry. 

Now when we set appointments for dealers, customers come in with more real expectations and negotiations while they still happen as quickly and to the point. Maybe we stop expecting 100 calls a day per agent and drop it to 70 but we get 5 quality conversations that turn into real deals. Would you rather have 50 appointments on a Saturday where the process has to get restarted only to give the customer a bad experience or 25 appointments knowing that 17 will show up and 14 will buy?

My point is that in 2020 while it was a bad year for the entire world there were lessons that we should have learned. We will get through this! Pandemics will not stop us from being successful but they will bring the change that we need to embrace so we can continue to move forward!

Dealer Retention Services to expand offerings for auto dealers by hiring Stan Sher to improve dealership business development and customer service operations.

Aug. 8, 2020 / PRZen / TOMS RIVER, N.J. -- This has been quite a year for the world. We are living in a time where changes are forced to create a new norm. This is evident with the direction that Dealer Retention Services in Toms River, NJ has decided to take in order to adjust to market demands. The firm hired auto industry executive Stan Sher as the General Manager and Director of Operations. In this role Stan will create a bigger corporate structure with all departments including human resources, call center agents, sales and marketing. "I have watched Stan create beautiful things in the auto industry between his high level of training experience to his social media marketing personality to adding structure to businesses in various industries and I decided that we at Dealer Retention Services need just that for our continued growth," said Tom Esposito, Founder of Dealer Retention Services.

The global pandemic has forced auto dealers to re-evaluate their own structure with regards to handling virtual sales and service opportunities. The business development center is still poorly managed in many dealerships and executive management still continues to struggle with hiring and paying the right people to get the job done. In the interest of removing heavy payroll costs car dealers are turning to Dealer Retention Services to handle this operation. In the first month of taking over the position this virtual BDC has increased closing ratios for dealer clients by implementing immediate process changes. This is something that is difficult to do in such a short period of time.

Other examples include the only two dealerships that utilize Dealer Retention Services that are part of a seven store group that reported to be the most profitable dealerships in the group. The dealerships in the group are operating with a smaller staff and have limited hours of operations due to the Covid- 19 pandemic. Dealer Retention Services has been setting over seven hundred quality sales and service appointments per month for these dealerships. "Dealer Retention Services has been a true partner for us during these tough times between helping with customer service and helping generate a solid return on investment for us," said Greg Kemp, General Manager at Island Chrysler Dodge Jeep and Island Subaru on Staten Island, NY.

Along with improving in-house operations Stan Sher is bringing his Dealer eTraining service offerings. Over the years Stan has implemented a successful recruiting process for auto dealers to hire and maintain quality personnel. Stan is also an accomplished Sales and BDC trainer in the industry. Dealer Retention Services will utilize these services to enhance offerings. Service offerings include Outsourced BDC (Sales & Service), Database equity mining, CRM cleaning, Recruiting, Sales Training, BDC Training (Phone/Internet/CRM). Stan Sher will be available to strategize with dealers to find their areas of opportunity to improve one and implement a manageable process. In this big role Dealer Retention Services will expand their marketing footprint as well. "I am excited to join this wonderful team and to help grow our cause to help the automotive industry improve the way they sell and service automobiles," said Stan Sher.

Dealer Retention Services has been in business for seven years serving auto dealerships nationwide. Tom Esposito has over thirty years experience in all facets of automotive retail including experience as a corporate executive for the Asbury Auto Group. Stan Sher has over seventeen years experience in automotive retail and business operations. He also carries a wide network of partnerships with the most elite automotive executives in the world. The website for Dealer Retention Services is https://dealerretentionservices.com/

Follow the full story here: https://przen.com/pr/33354386

Congrats You Opened A Dealership Now What? 

To be in the automotive retail, training and consulting business for 14+ years one would tend to pick up some important business life lessons. At Dealer eTraining I have always kept an open mind when it comes to seeing how a dealership operates. I was fortunate to sell thousands of vehicles in my day and manage multiple dealerships. I was also very fortunate to work with great Owners/GMs and not so great Owners/GMs. One thing that has always baffled me is seeing the difference between a solid, profitable operation and a failing, money losing operation.

Here are some of the things that I WOULD NOT do if I opened a brand new dealership.

1. Drop $100,000 foolishly in monthly advertising expense:I have seen this happen and it is painful to watch. The brand new dealer has relationships with vendors and advertising agencies that have never truly looked after their best interest. However, these agencies have made a ridiculous amount of money from them when they were a GM at other dealerships. How about dropping $35,000 on a radio commercial? Talk about burning through money.
   
   You build a very weak website. You start with a weak social media marketing plan. You do not invest in getting quality photographs of inventory. You sign up for TrueCar, Edmunds, CarGurus and rely on getting 20 leads a month off your website and the scraps that the OEM gives you. Now you wonder why you are not converting. Hmmmm....
   
   You do not need an advertising agency. You need to sit down and create a reasonable budget of $15-20k to start to drive traffic. There are so many great sources out there. Right now you need traffic without putting yourself into a huge financial hole.
    
2. Hire too many people: Let's hire 2 sales managers, a finance manager, 4-5 sales people, a BDC manager and a GM. Let's hire a service director with 2 service advisors, a parts manager, parts advisor, 3 techs and a detailers. The dealership is not turning a profit but staff has to get paid so now the payroll is through the roof naturally. Does this make any sense?
    

   No one knows that your dealership exists yet. Your marketing and advertising has not quite stirred a buzz yet. Your traffic is slow. Your product may or may not be hot in the market. Yet you take on this crazy expense. How about managing the people to do their jobs. No one is going to stress out about success or failure of the dealership more than the owner that has to cut a check. 
   
   I get it. You want to build Rome in one night. But hey slow down a bit. Do you have disposable pockets? Can you really afford to fail?

   
   Maybe start with 1 sales manager, 1 finance manager, 2-3 sales people, a CRM, NO BDC Manager, NO GM, 1 service manager, 1 service writer, 1 working parts manager, 2 techs and 1 detailer (or outsource a detailer to save money on payroll). Imagine how much bleeding you will stop right away. Hmmmm...
    

3. Buy exotic used cars from OVE that are not selling anywhere else: 
   
   Like the song by Prince "Let's Go Crazy" you are about to really do something nuts. Take a facility that needs a lot of work with a low line new car franchise and try to cater to upscale clientele by putting 30+ exotic vehicles online. You do not even have Starbucks coffee, a comfortable customer waiting lounge and other amenities. This is fair since you are brand new and with growth you will get those things. Yes the calls will come in and some will sell quickly (maybe). But are you managing your floor plan? Do you really think that you will be able to turn some of these cars in 15-30 days? 
   
   We are talking $100,000 cars @ 30 = $3,000,000 in used car inventory.

   
   Call me crazy but think of how much inventory you can have for $3,000,000 that can turn very fast and move a respectable profit of about $2000-2500 per unit. If an average used vehicle median price is $20,000 you can have 150 in stock. But wait...there is no room for 150 units in stock. There is only room for 50. 
   
   How much money can I save and not have to pay for floor plan? Looks to me like $2,000,000. Now you create a turn strategy with solid merchandising and you will sell 30-40 right away. Your biggest worry will be to replace the inventory. There are many solutions for that. Your investment is $1,000,000 not $2,000,000. You can now drop $10-30k into the right long term tools like vAuto (or similar tools), quality staging and photography and maybe even more advertising sources. Still not $2,000,000. You sell 40 cars in your first month at $2000 per unit for an $80,000 profit. Respectable way to start.
    

4. Handle an abundance of new car inventory:
   
   Let's assume that you have a new car franchise which typically is not very popular and does not sell many vehicle. However, the OEM does not care about your struggles. They want cars on the road and big numbers. They gave you a rooftop to grow their brand. They also gave you way more new inventory than you should have in the first 30-90 days. What do you do?

   You do whatever it takes to advertise these vehicles. You are on a highway with massive competition which means that you need to do heavy conquest marketing. Remember that crazy $100,000 advertising spend? Let's take $10-15k and go heavy on email marketing campaigns with companies like Cactus Sky or City Twist. I would also go heavy with direct mail in some cases. You want your local demographics to see the brand awareness and really welcome you to the area.

   
   I would go hard with social media with blogging and press releases to promote the dealership and the new cars so that people understand why your brand deserves a chance. I would also start an employee pricing sale promotion to all local businesses (Hospitals, Fire Fighters, Police, Board of Education, Retail Businesses and Professional Services). This involves getting creative and contacting HR departments of businesses. They will gladly let their staff know about the promotion as an added benefit. You will get UPs and phone traffic from it. The investment is just a few hours of your time and creativity.

   
   Make a plan to sell 20 new cars your first month. With all of the advertising mentioned in this section there will be enough traffic to sell at least 20 cars. So let's say you sell 20 @ $1,500 (remember it is new cars) you will only make $30,000. Add that in with the $80,000 you made with used cars now you sold 60 cars and made $110,000 from sales. Hopefully you did not drop more than $25-30k into advertising.
    

5. Completely Ignore Service Operations:You overstaff the department. No one does any work all day. You have no advertising plan to drive traffic. You are lucky to see 3 customers per day. Your service department is barely grossing $20,000 per month. The number one profit center in the dealership that should cover your expenses is failing you. Your service director is not willing to come up with a solution or ask for help. Personally, I would fire them and get someone that will turn it up. 

   
   Again, get involved in the community. Offer some aggressive deals on oil changes, wheel & tire work and other basic services. My solution is to do direct mail, email marketing, social media marketing and get involved with sites like Groupon (especially if three of your local competitors are on it). You will make minimal profit on some ROs and take a small loss in the beginning. However if you treat the customers right they will come back. 

   
   Initially the service director and 1 service advisor should handle the job. Only 1 person should work parts with the service writer helping out in the beginning. Make a goal for the first month to get an average of 10 customers in the service drive every single day with a goal of $2,000 per day. This should earn roughly $50,000 for the first month.
    

6. Hire a BDC right away:
   
   Naturally you will have leads from your advertising sources that sales people need to be working and following up. That's right I said "Sales People". Now is not the time to staff people to do the job that your sales people are not willing to do. Think expense control! Think about that $4,000-5,000 that you will spend on an additional employee.

   
   Eventually when the store is moving 100 units and service is making six figures consistently every month you can build a BDC department with a goal of taking you to the next level. The next level means going from 100 units per month to 150 units and service revenue going from $100,000 a month to $200,000 month. In fact, if you get some solid people to sell cars and work in service you might not need a BDC. If you do go with a BDC think of making it the GRC (Guest Relations Center) as a support department for sales and service. They will be responsible for appointments.

Let's talk facts and figures. 

Now you have $110,000 + $50,000 = $160,000 Profit

Keep your costs lower by not employing too many people, having proactive staff that actually works, investing in the right advertising tools and managing your inventory properly. The worst case scenario should be that in the first month you will break even. This is how you can start to see what the potential is and how you can move the needle. With every new month you want to grow the profitability 10-20%. You can now start doing other things to sell and service more cars because the budget can increase. When you look back in 12 months you will be amazed at what you have accomplished. 

Think about what happens when you are doing $150,000 in sales and $200,000 in service. $350,000 per month affords you expansion for facility improvements, more staff, a BDC (GRC), better tools, more advertising and more inventory. This is all positive and real world stuff I am talking about. This is a sure way to build a $1 million a month store at some point.

But here is the scary parts of what I have seen. I have seen dealers that sell 30 cars per month barely cracking $50,000 in profit. They do $20,000 in service. They have an expense of $200,000. Is that insane of what? How many months of losing $130,000 can you go before you lose everything? This can happen to anyone.
 

(Photo Credit: http://www.freeimages.com)

The key is to really open a new store by being patient and managing the current available reasons. There is nothing scarier than opening a brand new dealership. I have been a manager and director in a brand new store. My owners were smart and broke records every month. In only 9 months our store was doing 250 cars per month.

I sincerely hope that this has been eye opening and entertaining to read. If you are interested in discussing this article please contact me or comment on here. Thank you.

Evolution Of The BDC: Has your dealership evolved?

A few years ago I performed speaking sessions at multiple conferences including Internet Battle Plan and Digital Marketing Strategies Conference. I even was a guest on a webinar for Dealers Edge. This was and still is a very hot topic. Year after year I find the same car dealers talking about embracing this part of this business. They say that it is the most important part of their business and that they invest more into advertising. What they do not say is why is they continue to replace people in the Internet or BDC department of their dealership. They lie to themselves and point the blame on the lack of quality of people that they hire. They do not admit that they do not understanding the real function of this department.

It is the lack of understanding that leads them to make drastic changes. I decided to record a segment of my presentation to share with automotive industry professionals to better understand the concept. It is my hope as a training services provider to educate and provide proper guidance to dealers and general managers across the retail automotive industry with this important topic. What this video describes might be very eye opening but it may open lots of horizons. Here is the video...

Does this make sense? Do you understand the evolution of the BDC and why it should be practiced a certain way? Please leave some comments and share this with the industry. Keep in mind that having a BDC is not for every dealership. There are dealerships that want to make their sales people do BDC work. This is actually a great idea assuming that they set it up the right way. Let's help our business grow instead of fall.

Remember those days when customers would come in to the dealership saying “Well Kelley Blue Book is saying my trade in is worth $xxx” after you opened them up at $2,000 below that KBB figure? Sure you do. You cannot forget how many times you wanted to say “No problem. Call KBB and see if they will cut you a check for that figure.”

How many sales consultants get flustered and do not know how to respond? How many would get upset or offended because they felt that the customer just turned up the heat on them?

http://www.freeimages.com/license

In all my years of selling cars and managing dealerships I remember using a great rule of thumb. In most cases if you took the KBB value for a trade in vehicle in fair conditioned and deducted around $1,000-1,500 you would pretty much be right on the money for what the trade in value really is according to Galves or auction data. I have tried this hundreds of times and was always in that range. Back in the old days we would tell the customer that “KBB is a research site that takes provides average figures but they do not actually buy and sell vehicles.” This was very true at one point in time. But as Bob Dylan once sang, “The Times They Are A-Changin” and yes they are.

My business partner, Peter at Auto Ad Builder the other day and I had a disagreement about how KBB operates. I talked about how Kelley Blue Book took over AutoTrader Trade In Marketplace just this time last year. I also discussed how they now promise to buy the trade in vehicle if the dealer is not willing to accept the Trade In Market value. But we took it even further. I told Peter that KBB trade values are shockingly very close by give or take a few bucks to the data that a manager or used car manager is using when appraising vehicles. He disagreed with me and told me that it was not true. He logged into MMR by Manheim too compare values to five vehicles that I was looking up on KBB. Peter was very shocked, surprised and impressed.

My next statement was “Do you know why that is?” to which he responded, “Not at all but it is interesting”. I explained how powerful each and every single one of Cox Automotive companies is with their data. The data integrates so that all of their systems whether it is vAuto, VinSolutions, HomeNet, KBB, Manheim and even Dealer.com understand how the industry is selling cars. These systems are built so intelligently that they are setup based on consumer behavior. I first realized this a few months ago when VinSolutions was being installed at one of our client’s stores. These sites and systems share data as part of being a division of such a massive company like Cox Automotive. I even explained the game changer that took place when DealerTrack became a part of it.

HOW DOES THIS HELP YOU SELL MORE CARS?

Please understand that these companies provide tools for dealers to be able to sell cars and some of the tools are provided to consumers to be better educated. Since they own all of these powerhouse companies and share the data of what is going on in the business the data is almost accurate. The data can be used to help close more deals. In fact, one of the things that make Dealer eTraining so unique with our training method is that we train our dealers how to leverage the technology. We have created and trained word tracks to Internet, BDC and Sales Consultants as well as helped managers understand how to work deals smarter.

In the car business change is very difficult to grasp because we are all use to making a significant income doing things a certain way. In some cases our egos stop us from moving forward. Thanks to technology and multibillion dollar data companies our business is able to evolve and change for the better. The sales process must be more efficient, professional and customer centric thanks to tools like Kelley Blue Book. So stop saying that it is just a consumer friendly research when in reality it is now your sales assistant.

Imagine that you attend a classical music concert. This concert has a 90 piece (90 musicians) orchestra and a conductor (the leader or guide) that communicates to the orchestra on how to play the next note(s). Now take a look at the sales department of an automobile dealership. The department has managers that usually consist of a general sales manager, one or more sales managers and a team of sales consultants. Much like the orchestra conductor it is the duty of sales managers to guide and lead their team of sales consultants to success. Let's talk about how to "Orchestrate Sales Departments".

In some cases a conductor is also the musical director in which case they take on a bigger role than just to guide the orchestra. The musical director is responsible for choosing the program for the orchestra, manage the orchestra and even be involved in auditioning musicians. This is much like a general sales manager that is involved in recruiting for the sales team as well as manages all advertising for the sales department.

So how do we orchestrate sales departments?

The sales managers properly manage a well-orchestrated sales department. The sales management team in this case is very hands on. They are dedicated to constantly making sure that their sales people are always working when at the dealership. This includes making sure that they are following up with their customers and utilizing the CRM. Sales managers are also responsible to be around the showroom to monitor sales people. This is because sometimes they may have to jump in on a TO depending on what is happening in the deal.

Another aspect of a well-orchestrated sales team is how the team setup. For example, some dealers are staffing the sales department according to skill set. The automotive retail industry has increased focused on customer retention through data mining. One of our clients at Dealer eTraining built a five person sales team to just work a system called “Auto Alert”. This team specifically works all data mining opportunities that include lease retention, refinancing, vehicle upgrades, selling to customers that visit the service department and more. This is a five person team does the whole process from start to finish.

The sales department still has a five person BDC to handle the 1000+ leads and incoming calls. They still have fourteen sales consultants on the showroom floor that takes UPS. The idea of having different people in different roles of the department is to have everyone bring something important to the table. The BDC will focus on having 10-20 appointments daily and 40-50 appointments on Saturdays. The sales consultants will focus on working with the incoming traffic and selling cars. The “Auto Alert” team will focus on following up with the dealership’s database and selling cars to those customers. An orchestra in the same way has people in place to play certain instruments, harmonies and sections in the music that the conductor communicates to them.

How do we make it “well orchestrated”?

It starts by evaluating what we are working with. What are the skill sets of the people that are working at the dealership? What kind of tools is the dealership using? From there we setup small teams within the general sales department to handle what they can handle best. This is where the BDC or Internet department is created. This is also where the retention or data mining department is setup. Now we take our core sales consultants and train them to properly handle customers by understanding how customers are coming in and how to properly sell them. In some cases depending on the size and budget of the dealership there may even be an in-house digital marketing or social media team too. 

The GSM (conductor or musical director) must be fully hands on by guiding; coaching, leading and helping the sales team to be successful. What managers forget is that their individual success and incomes comes from how well their sales consultants perform and deliver. This is why proper leadership is important to the success of the dealership. The goal should be to effectively orchestrate sales departments in dealerships.

There is a lot of talk going on about car dealership turnover. It seems that everyone has an opinion about it but not a whole lot of solutions. I am going to do some "REAL TALK" in this post because it is time that the sugar coating stops. I have spent a great deal of time between consulting dealers and working for dealers on a case by case basis over the last six years after spending eight full years in retail sales and management positions. It is no secret that turnover has been an issue for ages in dealerships but only has become a HUGE topic of discussion in recent times.

So, what's the problem?

1. Management (or Lack of Proper Management): Managers get put into managerial positions without understanding the concept of what management is. I have noticed people get put into management positions that are willing to hold the title for half of what a good manager should be earning. Dealers need to have mandatory management training for managers that are being promoted and managers that are being hired into the organization. 

2. Poor Recruiting / Interviewing Skills: In order for any business to be effective there needs to be an appropriate process for recruiting. This includes asking a specific set of questions, testing and evaluating a candidate's personality, giving everyone a fair chance to interview that applies so that a proper hiring decision is made and most importantly, setting proper expectations from the very beginning.

3. Training (or Lack of Training): It is very sad that dealers will hire new employees or start a new department (like a BDC) without investing some time and money into training people the right way to do the job. Why do we hire sales people and throw them out on the sales floor to figure it out for themselves? This is because the "lack of proper management" does not consider it their duty to build a strong team for themselves. Is it pure ignorance or is it the fear that training costs too much money? Dealers, I got news for you! Every time a traditional company hires someone for a position they always train the new hires on everything from company policy to how to do the job properly. Why are we not doing this? Do you think that a training problem can help retain and grow good employees? Training does not have to be expensive but it needs to be effective. 

4. Poor Work Environment: This goes back to "Lack of Proper Management" because that is the only way that a work environment can be poor. There are managers that bully or belittle their sales people. There are dealer principals that love to make employees feel scared that they might lose their job by constant warnings or threats. I have seen dealers interview managers behind their current managers back just to test the waters and sometimes make a rapid change with hopes that they will soon sell more cars. 9 our 10 times that miracle never happens. A poor work environment is generally the product of all of the aspects of turnover that I am discussing in this article. 

5. Pay Plans: Stop trying to cut corners and save a couple bucks. Let your people come to work, train them, motivate them, help them, mold them, PAY them fairly for their performance. Keep the pay plan consistent. Everyone should have the same pay plan and opportunity to earn a decent living as long as they perform. Do not cut pay plans, as it does not add to your bottom line. It does hurt your business in the long run.

6. Scheduling: Give people a fair work life balance. Stop operating slave shops. I noticed that there are huge dealers in Michigan that are open shorter hours than most of us and still they do huge numbers. I personally think dealers should close at 8:00 pm during the week, 7:00 pm on Fridays and no later than 6:00 pm on Saturdays. Sunday’s all dealers should be closed. Great employees enjoy coming to work, produce and make you a lot of money when you give them a chance to breathe.

7: Lack of Patience: Stop panicking every 30 days! Start thinking about your whole year in general. There will be record months and sometimes there will be slower months. We have all seen it. It is the circle of life. We need to keep the momentum going by making sure that we doing everything we can in order to be profitable and maintain a great staff. The people that you employ are the backbone of the business. If you are not happy with someone is performing then train them, coach them and guide them before you fire them. Give people a chance to prove what they are capable of doing. Turning over a manager every 3-5 months is INSANITY! If you do not provide tools and training you cannot expect a replacement to do much better. Drop the ego. Stop being greedy. Start thinking about the people that work hard every month to help you stay profitable and how you can help them make you even more profitable. 

8. Poor Communication: If you are not happy with something then start communicating. Create an action plan with meetings to discuss what the problems are and how the team should work to fix it. If you want to command everything and take full control of dealership operations it is important to start communicating. Stop dropping $10,000 on direct mail and wonder why your BDC department is not converting these sales calls into appointments or why your sales people have no clue what the customer is talking about when they show up with it. Successful dealerships communicate well with each other and in turn operate like a well oiled machined.

9. Investment vs. Expense: Stop treating legitimate and important business expenses (which by the way you all write off your taxes) as an unwanted or unneeded expense. You want to build a BDC? Hire the right people with the right expectations in the beginning and invest in the right training program to get the department off the ground. After the department is set up invest in an accountability partner that will continue to help the BDC stay on top of their game. Do you have a reassurance company that works with your F&I department every month? How much do you spend on that service every month? If that makes sense, consider investing in Sales, Internet, and BDC training for the same exact reasons. After everything, is the BDC still an expense in your mind? If it is then take a look at what your sales people are doing at work on a daily basis. Are they following up on leads? Are they making calls? Are they standing by the door waiting for UPs? Could they be doing the job of the BDC? It may very well be so that they can. If you will eliminate a BDC department then invest in training the sales people to do their job. 

This is "REAL TALK" so take it for what it is. There is no magic formula for how to be a successful dealership. There is only common sense, a great attitude, well planned out business practices, a smaller ego, excellent training programs / methods and a general respect for the people that you employ. This is how your dealership can at least lower turnover by a minimum of 50%.

Hi,

It's me again. Me who you ask? Stan Sher, founder and President of Dealer eTraining. Yes, I know it has been a while since you have heard from me. But I am still here. I never left and I never will. I just enjoyed my peace and quiet for 2 years while working and doing my thing. But guess what...

I am here to tell you that there is a huge possibility that in your dealership there are too many hands in the cookie jar. What do I mean? You really want to know? Well here it goes...

There are dealerships that operate in a very organized fashion with tight but effective processes while other dealerships operate under mass chaos. The chaos happens the culture of the store is not properly set and managed. So what happens is that you have an owner that does things without communicating with everyone. The things include giving certain people secret pay plans, signing up for vendors and letting certain managers know about it last minute or having multiple people involved in solving one basic problem. The other problem with this setup is that everyone has a brilliant idea that they want to try but no one wants to execute it properly. In fact if it is executed the person that set it up ends up no longer being employed at the store. I am talking about mass chaos to the fullest potential.

Why does this drive me absolutely insane? As a business consultant to automotive dealerships I often get hired into dealerships to find their problems and create a solution for them to follow. Sometimes I get hired to be hands on to solve the problem myself. The most frustrating thing in the world is when you try to fix something while other factors are working against you. This makes you wonder...

Is it me? 
Is it the quality of people employed at the store? 
Is it the processes or lack thereof?
Is it ego on the part of the decision maker?
Is it a time management issue on all sides of the store?

As you read this you may feel like this post is written in a very unorthodox fashion. If this is how you feel then GREAT because this is my whole point of writing this. I have been reading a lot of great posts on here about dealership culture because it seems that too many stores have a problem in that department. I talk about my old days at Teddy Nissan and how beautiful our culture was built in the first year of business. I look at dealer groups like DCH (where I started my career), AutoNation (where I sold many cars) or even how Brian Benstock operates Paragon  Honda and I think back to a positive culture and how process oriented these stores have always been. The processes are all documented and practiced as needed. I am here to say that leadership in dealerships have to sit down and take a look at the chaos that goes on in the stores. The key to success is a simple sounding 10 step process that requires time and effort.

1. Evaluate the problems in the store.

2. Outline the problems.

3. Outline ideas for solutions to the problems.

4. Hire the right people and fire the wrong ones.

5. Get everyone on the same page.

6. Setup a process for everything.

7. Invest in ongoing training programs for Internet/BDC, Sales, Finance and Fixed Operations.

8. Manage the process and training.

9. Reevaluate how things are working every month.

10. Enjoy the profits and success. Repeat these steps.

The other thing that is most important for everything to work is that everyone treats each other with respect and professionalism. It is incredible how many problems and liabilities can be avoided when these steps are taken. Let's go out there and have some fun selling cars!