Author Archives | jfuhrman

Who Is Your Tech Expert?

Who Is Your Tech Expert?

Years ago, it wasn’t cool to buy all of your stereo equipment from the same company. Your turntable had better have a different label than your receiver, which was different than your speakers, and so on. For those who were real music and stereo experts, you could justify these purchases based on quality you could test. You could actually hear the difference.

Technology, especially in dealerships, is remarkably different. Today, spending the most, having many different companies, or having a sizeable ad budget does little to help the performance of any software. In fact, your dealer clients’ most expensive software desking tool will come up with the exact same payment as one priced hundreds or even thousands less per month than what they spend today.

As an agent or agency owner, technology touches you through the dealership as well. Whether it’s positive or negative is totally up to you. If you are simply a “sign-’em-up-and-leave” agency, technology can help or hinder your sales depending on whether the dealer has the right system. However, if your agency is a committed partner to each of your dealers, you can impact how technology can help you with sales, penetration and, ultimately, mutual profits.

Consider the Source

I am not referring to simply giving away menus. That has a zero-sum gain. As a giveaway, you’ve created no value in the menu and can lose an account simply because someone comes along with a flashier menu. As a partner, you can advise dealers based on what you’ve seen working in your other stores. If the dealer is becoming software poor (paying for redundant systems and software), you can help by reaching out to them and referring them to companies that can help.

In addition, technology is constantly improving and becoming less costly as the improvements are made. With the advances available to dealers of any size, dealers can get technology to adapt to the way they do business rather than the other way around. Many tech companies change dealership practices to fit their technology. That’s backward in today’s high-tech dealer world.

Think about this: Who helped your dealers choose their current technology? The rep for the software company? A dealer friend? Advertising? Those are all great starting points. However, they are not where decisions should take place. The answers to your selection is the No. 1 question that is seldom asked: “How does this piece of software make my business better while interacting with what I already have?”

If that answer escapes you during your tech search, you need to stop looking and find the answer to the above question. How valuable would your agency be if you could provide such information? This is where agents are transformed from vendor to resource. You become a go-to guy or gal for your dealers.

Useful Advice

I had a dealer ask me about some different tools and the corresponding software. They were looking for a simple menu, a desking tool and a CRM. I advised them on what something like this would cost as well as what it can do. Should be the end of the story. Far from it.

Because the dealer was comfortable with (or afraid to change) their existing software, that didn’t integrate with anything, they passed on a package that literally would save thousands every month. Instead, they opted for engaging several companies to create a patchwork system that has done nothing to improve their current level of performance.

The single best piece of advice I can give to any agent is to think about the desired outcome first. Then see which vendor can provide the right mix of software to get your dealers to where they need to be. Make sure they have backup and support to make certain those who use the software are fully competent to operate it.

Finally, get proper training — not only on how the product works, but more importantly, train how it will help make more deals, deliver more product, accessories, or whatever outcome you need.

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New Technology Doesn’t Make You Compliant

New Technology Doesn’t Make You Compliant

Recently, I was visiting with a dealer and the recent rash of articles concerning compliance came up. As I shared what I knew on the subject and the current climate concerning fines and penalties, the dealer sat back, smiled and said, “I’m good. We use a menu.”

Since I was there to train the F&I managers (there were seven), I thought I’d take a look at the process in the store to make sure things were compliant. With the dealer’s support and permission, I pulled five random deals for each of the managers. What I found was that, while there was menu use, it was clear there were serious compliance issues.

Starting the Investigation

In looking through the deals, it became clear that the sales desk was packing payments and starting with higher than average rates without any type of disclosure. They were also limiting the F&I managers’ time to fully present menus and disclose how payments and terms were calculated.

After my initial investigation, I took the time to properly train the F&I managers to be able to present full menus effectively and in a timely manner. Part of that process was insisting that customers be interviewed on the showroom floor at the sales person’s desk. This met with a great deal of resistance and, ultimately, a showdown with the dealer and top management.

The dealer made it clear that he was very committed to being compliant and that his managers were clearly aware of this. But being aware and actually practicing compliance are two totally different worlds. Needless to say, this wasn’t a pleasant meeting.

Initially, I sat with the dealer and explained that I had now instituted a process within F&I that ensures compliance with the proper use of the menu. Now that the F&I managers understand how to interview and present the menu, they can see they have the time and that doing it correctly will actually improve penetration and profitability. I assured him that F&I was now totally compliant.

He then asked if there was something I wasn’t telling him. At first, I hesitated, since I was there exclusively to train his F&I department in using our menu. But he insisted on a full explanation. I shared that his sales desk, under the instructions of the GM, was packing and ranging payments with absolutely no disclosure of the products hidden in the payments. After a few minutes, he paused, picked up the phone and called the GM into his office.

When confronted with what I found, the GM became extremely defensive and even began justifying why he had to pack payments. He even went so far as to say that, if anyone came and checked, he could use the “signed” menus as proof that nothing funny was going on. The dealer looked to me to either support or expose that statement. I told them that the worksheets showing payment ranges would be more than enough to warrant investigation and would be used as evidence should this matter get to court.

Rely on the Process

You would think, at this point, the GM would surrender and comply. Not a chance. He actually suggested to the dealer that this could all be solved if we went into the files and destroyed the worksheets. That way, we could still use the menus as evidence of compliance. I’ve been in this game nearly 40 years. That statement was a first.

The dealer turned and asked me for a real solution. I explained how sales desking software set for full-disclosure selling that would transition deals straight to the menu would be a great first step. But I cautioned him that, just like the menu, software in and of itself is not the failsafe to protect the dealership from exposure. It has to be accompanied by a fluid process that allows the sales people to present facts, close the deal and introduce the customer to finance.

There has to be a process, a level of real accountability and dealer support before anything can change. Then and only then can software be installed to really do what it is intended to do. Dealers and managers must truly understand that software, properly designed and installed, is not a sunk cost. It is an investment that can generate a measurable return — provided there is an enforced process behind it.

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Pop Quiz: Agent or Partner?

Pop Quiz: Agent or Partner?

Are you an agent, a partner, or both? Before you answer, please complete this multiple-choice quiz: An agent is …

  1. just a vendor
  2. just a product salesperson
  3. an indispensable part of a dealer’s operation
  4. clueless

Before we check your answer, here’s an old lesson in marketing. In “The Marketing Mode” (1969) and “The Marketing Imagination” (1983), Prof. Theodore Levitt of the Harvard Business School set out to discover why people buy products. In both books, he quoted advertising expert Leo McGinneva, who said, “People spend their money not for goods and services, but to get the value satisfactions they believe are bestowed by what they are buying. They buy quarter-inch holes, not quarter-inch drills.”

The value your dealers see in you are not based on numbers alone. Let’s take a look at two ways agents make themselves invaluable to their clients.

1. Improving Vehicle Sales

As a trainer, I work with agencies of all size. Regardless of whether it’s a one-man show or a multistate operation, there are some common traits that separate highly successful agents from their mediocre competitors. The one that stands out for me is focus. You show me the agent’s primary focus and I’ll tell you how they answered the quiz.

Any agent can show a dealer numbers and compare service contract penetration rates. Typically, those agents are shown the door when a prettier reinsurance program comes along. Even if they visited the dealer often and sincerely meant well, their relationship is short-term.

Success is understanding that the questions are the answers. Simply put, the agents who uncover the dealer’s top priority — and then work with the dealer to formulate a plan to achieve maximum results — become true partners. So, if you had to guess, what is your dealer clients’ No. 1 priority?

  1. Make sure the agent’s products are sold.
  2. Beat his buddy dealer’s PVR.
  3. Sell and deliver vehicles.
  4. He doesn’t have one. He’s clueless.

Let’s say you’re the best agent on the planet. You sign a dealer and begin working with the F&I manager. Because you’re so good, the manager is soon at 50% penetration every month with every product. Now, what would happen if you took your focus away from your products and turned it toward the dealer and their desires?

The next logical department is the showroom. So let’s say you come up with some tips and training to work with the sales team and they pay off with 10 extra units the first month. Based on the aforementioned penetration rate, that’s five more sales for each of the F&I products you represent. What would that mean? To you, maybe a little, maybe a lot. But what do you think it would mean to the dealer? Well, he won’t be thanking you for the extra tire-and-wheel income. You’ll be a standout agent for helping sell more vehicles.

2. Cutting Costs

Another way to improve your value proposition is to help your dealers save money. Let’s say the dealer is using what I call a “celebrity” product — a desking tool, for example, that comes with robust software and an in-store training session with a “celebrity”-endorsed trainer. You soon learn that the tool, while somewhat effective, is costly.

In your travels, you discover that another client has a similar desking tool, but it also comes with a fully compliant menu and even has a CRM. Oh, and it comes with live, in-dealership training hosted by a top industry trainer. Best of all, it could save the dealer thousands. What would you do with that information?

Bear in mind that you don’t get paid anything just because your dealers use this software. Heck, you don’t even represent it. But what would the dealer think if you were able to save them thousands each and every month? Wouldn’t it be easier to recommend training for the finance manager with the money saved? Couldn’t the dealer pay for training for the sales team with the savings? And again, who does the dealer believe has a sincere interest in their success? What do you think that would do for you when the next agent comes along with a prettier brochure?

Remember, you’ll never convince a dealer to fear losing your products. But if your focus is right and you really partner with your dealers, you can make them fear losing you.

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