Profit Quest
How did 2006 shape up for you? Were your sales up or down? Did you reach your goal for the bottom line? If your sales were down and your profit lower than expected, you can either take comfort in the adage that misery loves company or you can go on a quest to fix it.
Q&A
I know many dealerships that rotate their managers and then bring in a fleet of new sales personnel and turn them loose. However, new blood without guidance and education in your sales process may not yield the results you want. Prior to the annual manager rotation, evaluate your current processes. Map them out and ask yourself and your managers what is working and what is not. Once you figure out what is not working and why, you will be able to identify solutions. Make small changes and give them time to work. Your sales did not plummet overnight; they fell short over time and it will take time to rebuild them.
The long view
When you go into a store to make a purchase, what procedures do you notice and how do you respond to them? For example, some of the successful high-end clothing stores train their sales consultants to serve every customers’ needs and to think long term about each customer they serve. This “long view” applies equally to dealerships and their customers, each of whom represent more than today’s car deal. Every customer who purchases a vehicle also represents a lifetime of service opportunities and probably three to four additional vehicle sales.
Just as customer service is key to building customer retention, having what the customer wants to purchase is the key to building profitability. F&I products are in the beginning of another round of change. No longer can the F&I professional lean on reserve and service contracts as a main stay of revenue. I marvel that some of the “Old Guard” balk at promoting aftermarket accessories in the F&I department when today’s customer wants a vehicle that looks great, performs well, and features something other than vanity plates to distinguish it from every other vehicle in the parking lot.
The next time you are stopped at a traffic light, take a look around you. How many vehicles do you see with stripes, special wheels, and special tailgates? The customer purchases these extras somewhere – is it from your store? F&I is more than finance and insurance; it has grown into products. The F&I department of tomorrow will utilize every opportunity to gain profit by offering products that power repeat and referral business.
Ideas that work
When you are at conventions such as NADA, slow down when you approach the exhibitors. You just might find the answer to one of your “why-it-isn’t-working” questions. The F&I department needs both quality products and a sound process in order to build profit for the dealership.
Dealer Marketing, February 2007