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!

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.

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!

Christmas is over and New Years just passed. They say the New Year brings positive change and opportunity. Since the big celebration, 2 days have passed and there are 363 days left in the year. So I ask the magic question, "Is your dealership prepared for 2014?”

Being that we are in such a competitive industry that changes by the month it is common for sudden changes to be made at the dealership level. These changes usually involve Budget (spending), Human Resources, Vendor Selection and the question of what to do with the Internet Sales or BDC department. It is no secret that changes are being made in the glorious New Year as evident by how many more job postings are out now as opposed to just a few days ago. While changes may or may not be made at the dealership it is still important to consider if these moves are really the right thing to do.

Let's evaluate the four things that I brought up in detail.

Budget (Spending): Will the dealership continue on the same path as last year just because business was good or is the dealership increasing/decreasing spending?

This is a very important factor to consider because the tools made readily available change, the incentives given by the OEM change monthly, OEM requirements may change, staff may change and even Google may make changes. The fact is everything around is changing with companies buying out other companies to bring better technology to the table as well as eliminate competition. There is even talk of 2014 being a big year for more dealerships to be bought and sold.

When we look at spending we need to look at the costs associated with employees. Some dealerships downsize management to save spending while others increase a budget to afford additional management with increasing business. A dealership is profitable when the right tools are in place and the right people are hired and properly trained. If 2013 was a bad year for your dealership then it is time to evaluate strategy right now.

Human Resources: Are you planning on recruiting new sales people?

This is very important. Let's take a minute and think about the fact that each and every employee in the dealership is a human being that is trying to make an honest living. Each employee deserves the proper management, mentorship and training. In fact, if you are still hiring someone and launching him or her less then two weeks later then you really need to stop for a second and evaluate your situation. If you are not sure what you want to do with employees then do the dealership and the employee a favor and stop toying with emotions. When you hire someone to generate profit for your business it is your duty to provide him or her with the appropriate tools and training to help them maximize opportunity.

Sales professionals that get recruited and hired need to have proper training and guidance. Do not hire five people and get rid of two. Those two other people do not deserve to waste their precious time being treated poorly when they can find a normal career opportunity. Dealers do not like when people quit inappropriately and without notice. The saying of "treat others they way you wanted to be treated" applies here.

Vendor Selection: Are you worried that your service provider was sold to another vendor? How is the support and training that your vendor is providing your people?

I urge all dealers to evaluate and qualify your vendors. Review what services you have and make sure that these vendors are providing proper support with training to your staff. As a matter of fact sit down with your management, service and sales staff to make sure that they are using the resources properly. If your dealership has marketing tools that should help make sell the cars simpler then make sure your staff knows how to use the tools. Technology assisted objection handling should be practiced at the dealership.

If a change needs to be made then make a plan. NADA 2014 is right around the corner and there is no better way to look at opportunity.

Internet Sales/BDC: Did you fire yet another BDC/Internet Manager? Are you thinking about what better ways your Internet leads and Phone calls need to handled?

Let's stop and take a look at what the problem is. If you had a BDC Manager working at the level of a Sales Manager and they were earning a six-figure income then everything should be fine. If that same BDC Manager was not worth what they made then take a look at what it was that made you unhappy. If a dealership employs a BDC Manager at $70k or less and they are not getting the proper results it is because they are getting what they pay for. Internet and BDC Managers need to be involved in training. There are so much more aspects to the job then most other positions in dealerships. The Internet manager has to constantly keep up with marketing trends and improving ways that the dealership is bringing in more people. Sales Managers do not have as much responsibility. In fact they desk deals, talk to customers and should be managing their sales staff.

My suggestion to dealers is to figure out what they want to achieve and how they want to achieve it. Once you know that, hire the right manager and create a process of managing that manager. The process should include reports and meetings to discuss what is going on. Do not just hire someone, throw them in the department and let them work without expectations being set. Automotive Internet Sales and Business Development is a fast changing aspect of the business. Dealers that have been avoiding the trend and the educational opportunities need to start taking advantage of them now in 2014. Again, stop hiring people without the willingness to properly give them a chance. Dealers that hire Internet and BDC Managers and make a change in 90 days or less never give themselves a chance to really evaluate ROI.

- Final Thoughts -

At this point you should know if you need to make appropriate changes at the dealership. If there is anything to take away from here it is the importance of expense control, vendor selection and showing the proper appreciation and respect towards the people that you hire. Think about these things as you operate your business and your business will not only be more profitable but also a better environment to be a part of in 2014.  We at Dealer eTraining would like to wish you a Happy and Prosperous new year.

Christmas is over and New Years just passed. They say the New Year brings positive change and opportunity. Since the big celebration, 2 days have passed and there are 363 days left in the year. So I ask the magic question, "Is your dealership prepared for 2014?”

Being that we are in such a competitive industry that changes by the month it is common for sudden changes to be made at the dealership level. These changes usually involve Budget (spending), Human Resources, Vendor Selection and the question of what to do with the Internet Sales or BDC department. It is no secret that changes are being made in the glorious New Year as evident by how many more job postings are out now as opposed to just a few days ago. While changes may or may not be made at the dealership it is still important to consider if these moves are really the right thing to do.

Let's evaluate the four things that I brought up in detail.

Budget (Spending): Will the dealership continue on the same path as last year just because business was good or is the dealership increasing/decreasing spending?

This is a very important factor to consider because the tools made readily available change, the incentives given by the OEM change monthly, OEM requirements may change, staff may change and even Google may make changes. The fact is everything around is changing with companies buying out other companies to bring better technology to the table as well as eliminate competition. There is even talk of 2014 being a big year for more dealerships to be bought and sold.

When we look at spending we need to look at the costs associated with employees. Some dealerships downsize management to save spending while others increase a budget to afford additional management with increasing business. A dealership is profitable when the right tools are in place and the right people are hired and properly trained. If 2013 was a bad year for your dealership then it is time to evaluate strategy right now.

Human Resources: Are you planning on recruiting new sales people?

This is very important. Let's take a minute and think about the fact that each and every employee in the dealership is a human being that is trying to make an honest living. Each employee deserves the proper management, mentorship and training. In fact, if you are still hiring someone and launching him or her less then two weeks later then you really need to stop for a second and evaluate your situation. If you are not sure what you want to do with employees then do the dealership and the employee a favor and stop toying with emotions. When you hire someone to generate profit for your business it is your duty to provide him or her with the appropriate tools and training to help them maximize opportunity.

Sales professionals that get recruited and hired need to have proper training and guidance. Do not hire five people and get rid of two. Those two other people do not deserve to waste their precious time being treated poorly when they can find a normal career opportunity. Dealers do not like when people quit inappropriately and without notice. The saying of "treat others they way you wanted to be treated" applies here.

Vendor Selection: Are you worried that your service provider was sold to another vendor? How is the support and training that your vendor is providing your people?

I urge all dealers to evaluate and qualify your vendors. Review what services you have and make sure that these vendors are providing proper support with training to your staff. As a matter of fact sit down with your management, service and sales staff to make sure that they are using the resources properly. If your dealership has marketing tools that should help make sell the cars simpler then make sure your staff knows how to use the tools. Technology assisted objection handling should be practiced at the dealership.

If a change needs to be made then make a plan. NADA 2014 is right around the corner and there is no better way to look at opportunity.

Internet Sales/BDC: Did you fire yet another BDC/Internet Manager? Are you thinking about what better ways your Internet leads and Phone calls need to handled?

Let's stop and take a look at what the problem is. If you had a BDC Manager working at the level of a Sales Manager and they were earning a six-figure income then everything should be fine. If that same BDC Manager was not worth what they made then take a look at what it was that made you unhappy. If a dealership employs a BDC Manager at $70k or less and they are not getting the proper results it is because they are getting what they pay for. Internet and BDC Managers need to be involved in training. There are so much more aspects to the job then most other positions in dealerships. The Internet manager has to constantly keep up with marketing trends and improving ways that the dealership is bringing in more people. Sales Managers do not have as much responsibility. In fact they desk deals, talk to customers and should be managing their sales staff.

My suggestion to dealers is to figure out what they want to achieve and how they want to achieve it. Once you know that, hire the right manager and create a process of managing that manager. The process should include reports and meetings to discuss what is going on. Do not just hire someone, throw them in the department and let them work without expectations being set. Automotive Internet Sales and Business Development is a fast changing aspect of the business. Dealers that have been avoiding the trend and the educational opportunities need to start taking advantage of them now in 2014. Again, stop hiring people without the willingness to properly give them a chance. Dealers that hire Internet and BDC Managers and make a change in 90 days or less never give themselves a chance to really evaluate ROI.

- Final Thoughts -

At this point you should know if you need to make appropriate changes at the dealership. If there is anything to take away from here it is the importance of expense control, vendor selection and showing the proper appreciation and respect towards the people that you hire. Think about these things as you operate your business and your business will not only be more profitable but also a better environment to be a part of in 2014.  We at Dealer eTraining would like to wish you a Happy and Prosperous new year.

Do you spot check your employees?

Do you spot check your customers?

If you are confused about what I am talking about then read on...

Too many times when a manager asks their people if they did something they get an answer and they take their word for it.  In some cases this happens because of too much trust or just because the manager is too busy to check the situation themselves.  The same happens in a car deal when working with customers.  I am going to use the example that I saw about a week ago when I was onsite doing consulting at a dealership.  The General Sales Manager at this dealership is one of my mentors who I used to work with years ago where together we fixed a dealership.  I was watching him work the desk on a Saturday.  He gets a credit application and runs the credit.  He then looks over the application and the credit report to analyze how to work this deal and the banks.  In this particular situation, the customer stated that they make $10k per month yet on their credit report it shows that they have an open mortgage for over $1 million.  He saw really quick that something is not making sense.  He had the sales person go out and verify income only to find out that the customer makes way more money and gave them a figure to use that they can get away with so they do not have to show all of their income.

The point I am trying to make here is that it is important to verify everything before moving forward.  This is how successful managers build success while maintaining compliancy in the dealership or any business out there.  We have all heard the saying in the car business, "stop taking shortcuts".  The saying applies exactly to this post.  Always inspect what you expect.

Do you spot check your employees?

Do you spot check your customers?

If you are confused about what I am talking about then read on...

Too many times when a manager asks their people if they did something they get an answer and they take their word for it.  In some cases this happens because of too much trust or just because the manager is too busy to check the situation themselves.  The same happens in a car deal when working with customers.  I am going to use the example that I saw about a week ago when I was onsite doing consulting at a dealership.  The General Sales Manager at this dealership is one of my mentors who I used to work with years ago where together we fixed a dealership.  I was watching him work the desk on a Saturday.  He gets a credit application and runs the credit.  He then looks over the application and the credit report to analyze how to work this deal and the banks.  In this particular situation, the customer stated that they make $10k per month yet on their credit report it shows that they have an open mortgage for over $1 million.  He saw really quick that something is not making sense.  He had the sales person go out and verify income only to find out that the customer makes way more money and gave them a figure to use that they can get away with so they do not have to show all of their income.

The point I am trying to make here is that it is important to verify everything before moving forward.  This is how successful managers build success while maintaining compliancy in the dealership or any business out there.  We have all heard the saying in the car business, "stop taking shortcuts".  The saying applies exactly to this post.  Always inspect what you expect.

There are many schools of thought as to how an internet sales department or even a BDC should be setup.  In fact, similar ways of thinking apply to managing the success of a whole dealership.  After years of attending conferences, seminars, working in dealerships and consulting dealerships I have learned something that is still being misunderstood.  What is being misunderstood?

The fact that managing a process or even a department is a science.  It is true that we cannot learn in school about how to build and manage a car dealership.  In fact, after working with some high level executive managers I learned the difference between what it takes to be an average performer versus an above average performer (superstar).  The difference is all about who is willing to push the boundary further.  Dealers, General Managers, Sales Managers, Service/Parts, and Internet/BDC Managers need to ask themselves the following questions:

1. Are you working hands on with your people?  
2. Are you providing on the job training to mentor your people through best practices?  If you are, is it becoming a natural habit?
3. Are you leading by example?  Do you expect your people to do everything that you are willing to do?
4. Do you micro manage your CRM?
5. Do you give your vendors a difficult time in order to achieve the success that you need from them?

These are five very important questions.  It is important to strategize for the future success that is currently being built.  There are many obstacles that come everyday that range from lack of traffic, lack of training, technology glitches, team members state of mind not being in the game, etc...

Once these things are understood, get prepared to tackle everything that gets in the way.  Learn from the best dealers in the country on best practices even if they are not in the your market.  There is a reason why some stores are selling 500 units per month and the average dealer is only doing 80-100.  Mystery shop your competition especially if they are outperforming your dealership.  Always, always, always be prepared to make adequate strategy changes because what has worked 30 years ago will not work completely the same way today.