Channel | Meet the Executive

2011…A Year of Feast or Famine

By: Tom Cullen

2011…A Year of Feast or Famine

In 25 years of working in this industry, I have never seen an opportunity quite like the one that exists today for consultative agents who support income development in the retail automotive distribution channel in North America.

For the third year in a row, the manufacturers have built fewer vehicles than have been scrapped. The average age of a vehicle on the road today is quickly approaching 10 years and we are having another cold, snowy, car-killing winter.

What does this mean to our industry? I don’t have the credentials to predict the market for 2011. However, I do have 25 years of working in this industry and a common sense view of what we can expect. Early in my career we had winters like the last two and the pain of owning an older car that jars every joint in your body when hitting huge pot holes is exponentially increased when the maintenance and repair bills are realized in early spring. Quite simply, the pent-up demand that exists in our industry today is unprecedented.

As agents, do we maintain status quo and go along for the ride, or do we embrace the opportunity and become the lightning rods for change that our industry so desperately needs?

The dealers left standing are grateful to be in the business. The great news for us is that the entitlement attitude that permeated the dealer body is gone. Our dealer customers still in the game have a new attitude of gratitude and they know they have to be “in it to win it” as they approach this new market.

However, what most of our dealers don’t have is a plan that is much different from the plans that were in place prior to the upheaval we have all experienced. Therein lays the opportunity for feast in 2011.

As agents who have struggled to keep our businesses solvent and growing while doing the same for our customers, it is tempting to ride the tide of an increasing market and take some well-needed rest. Beware! This is the famine trap of 2011. Giving in to this temptation will blind you to the opportunities that are thick around us. It will also put you and your customers at risk should another industry downturn or upheaval be hiding over the horizon.

To avoid this trap and grab the brass ring of opportunity in 2011, I would suggest a few New Year’s resolutions:

1) Be the voice of optimism within your company and in your market. Albert Einstein once said; “It takes five people with positive energy to make up for one with negative energy.” The older I get, the more truth I find in that quote. In our current market, being a positive influence is essential. Our dealers need to hear “glass half full” views from us every time we see them. It is too easy to listen to the media, disgruntled suppliers or so-called experts that never seem to shut up. Our job is to set an “expect to win” mentality with everyone we come in contact with. We can change the attitude of the world, if first we change our own.

2) Commit to becoming a student of the business all over again. The changes our industry has experienced in the last 10 years have been greater than the previous 50. We can expect only more change as we move into the future. As consultative development agents, we have to recommit ourselves to learning everything there is to know about our business as it exists today. We also have to be aware of and master the major issues that have an impact on our customers today. We can no longer be content with knowledge of how we used to do things. While those lessons gave us a foundation, most are no longer applicable. Focusing on just the F&I department of a dealership is not enough to keep us viable. It is imperative to expand our expertise and understanding to include the sales departments as well as the service and parts departments. The dealers total profit picture is going to be the measuring stick used to gauge our effectiveness as development agents in the future.

3) Set goals with defined realistic objectives, combined with accountability models so you can’t forget about them. Without clearly defined goals in this new economy we risk becoming a rudderless ship cast adrift in a sea of uncertainty. Writing down clearly defined and obtainable goals for both your dealers and your own business; and then creating a plan to achieve those goals within a specified period of time is the key formula for success. The goals will need to be adjusted from time to time as your work toward them but by writing them down with a plan and scheduled review dates, you will be able to achieve what is most important.

In our agency, the single most important aspect of what we do for our sub-agents, dealers and dealer management staff is to ensure that they work this same formula. It makes all the difference in the world and is more important now than ever before.

4) Commit to reviewing all of your products from the perspective of the dealer and the F&I manager. As agents, we naturally bring products to our dealer customers because they generate a commission for us. However, now is the time to take a look at all of our products, not only from the dealer’s perspective, but also from the perspective of what’s in it for the F&I manager to market it and whether it is the best available product.

The dealer needs to be assured that the products do not create a contingent liability when creating front-end profit generated through the sale. Our products need to support more than just F&I. They need to help retain customers in sales and service as well. Finally, our products should also generate back-end revenue and provide equity-building opportunities. As agents, a total dealer profit perspective must be understood and demonstrated to our customers if we want to keep them in the future.

The F&I manager review of products has to be done through the prism of how to successfully present the product in conjunction with all of the other products. Training in real-world terms has to be done to ensure the products are viable and support the sales and presentation method. We need to drill down to feature F&I as part of the sales delivery and customer retention process in our stores.

5) Look at the dealers profit opportunity in all departments, but primarily the service department. Fixed absorption isn’t just a great industry buzz phrase; it is the key to survival in the future for our customers. We have to support this initiative. When I first started in the retail automobile business, I was hired as an F&I manager. I was familiar with credit insurance and when service contracts were explained to me they were represented as “Blue Cross/Blue Shield” coverage for your car. Of course, I never read the actual service contract and represented the product just like that to the poor customers I initially came in contact with. A very painful experience with a customer in the service department caused me to amend my presentation to be more accurate. Also, working for a forward-thinking dealer helped bring my focus back to the importance of the service department as he insisted that all managers rotate for a month in each department to see first-hand how we impacted each other.

That experience helped me understand the importance of a collective effort in dealership management. I also became aware of the value “fixed-absorption” played in the viability of the dealership. Twenty years later, we still need to pay particular attention to the real need our dealers have to generate revenue in service. We have to deliver cutting-edge processes for our customers to use to claim what is rightfully theirs; service department revenue. Make the commitment in 2011 to understand how you can help your customers increase their absorption and service retention.

6) Commit to a service mentality. Ensure you provide world-class service without ego or entitlement. One of the dangerous traps that is easy to fall into is that of entitlement, especially with mature agencies that have many long-term dealer clients. It is easy to measure the volume of work that has been done for a customer and forget to treat them as we did when we just landed the account. Familiarity breeds contempt. That call from a pushy office manager at 5:45 p.m. on a Friday could be easy to blow off and handle Monday. Resist that temptation. Every customer is a gift, treat them and everyone in that manner. You never know when that seemingly insignificant employee will be the glue to keep you in an account or will verify your value to the dealer.

Feast in 2011. Remember your success is determined by the success attained by those you serve. When something goes well in an account, deliver the credit to the people in the dealership; correspondingly, when something goes wrong, take responsibility for whatever it is and drop everything to correct it. Be the customer service standard in your market!

Because of market conditions and opportunities, the goal of growth and excellence in 2011 is more than obtainable. Resolving to have a clearly defined plan to realize that goal will separate you in the market place. Scheduling periodic progress reviews will put you on track to ultimately feast in 2011.

This article was written by:

- has written 2 posts on Agent Entrepreneur.

Tom Cullen is the president and co-founder of Vision Marketing Group & Associates, LLC. Tom is also the president of Repair Assurance. He has more than twenty-five years of experience in the automotive industry and through his endeavors with Vision Marketing Group & Associates and Repair Assurance.

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The views expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views of Agent Entrepreneur or any employee thereof.

9 Responses to “2011…A Year of Feast or Famine”

  1. Elizabeth says:

    Well written and timely message. Positivity and innovation are key. Often I experience dealers with great ideas/processes brought from their 20 groups etc. They are fired up; bursting at the seams with plans…but they quickly deflate when those plans are not implemented. That is our role as agents. To implement the innovative processes and continue the positivity through profitability.

  2. Definitely strong advice at an opportune time!!! Thanks!!!

  3. Todd Snell says:

    Great article, spot on!!!

  4. Timely, well written, and accurate.

  5. Andrea Marshall says:

    Exactly. Either you are the proactive positive change or you fail to reap the rewards that 2011 and 2012 are teeing up to bring.

  6. Brad Noel says:

    Tom has some great insight here backed up with his experience on all sides of the business. Well done!

  7. Andrew Sheaffer says:

    I couldn’t agree more Tom. Great article!

  8. Rob Volatile says:

    Well written, and timely. I feel very much the same specific to what we can expect in 2011. I am very optimistic about the future and feel that the industry as a whole learned alot about itself in the last few years. These lessons should never be forgotten as we work our way back to the “good times”. Well done Tom!

  9. Mark Anthony says:

    Tom has written an outstanding and motivational article that can be applied not just to the automotive industry but every sales driven organization in the United States that is serious about attaining and exceeding sales goals.

    There is not only great practical advice here for 2011, but provides sales people with a road map and gameplan for the next decade.

    Great article.

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