Tag Archive | "training"

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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Millennials: Recruiting, Training and Retaining them is Key to Dealerships’ Future

We tend to group people into generations to better understand their collective point of view. Millennials are no different. As the largest generation, out numbering Baby Boomers in size and, arguably, influence, understanding their point of view is increasingly important to cultivating successful dealership employees.

There are three distinct areas to consider to be successful at recruiting, training and retaining the millennial generation. The first area is to understand them. This is your key to developing a successful plan going forward. Second, how are you going to interact with millennials during the hiring process and into their employment? This is the execution of your plan. Third, how do you retain them? This will be your measure of success going forward with your newly hired millennials.

  1. Understand Them.

Who are millennials and why should you care? As a generation, they surpassed baby boomers as the largest generation in early May of 2016[1]. Their buying power will far surpass any previous generation.

For a better understanding of millennials, let’s compare and contrast the current generations in the workplace.

Baby boomers are currently ages 51 to 69 and number around 74.9 million[2]. They tend to put family first, value job security and have concerns about retirement. Boomers are IT adopters and prefer to communicate face-to-face or on the phone.

Gen X, which numbers around 66.1 million members[3], is sometimes referred to as the Lost Generation or “latch key kids”. With ages between 35 and 50 they are more concerned with maintaining a good work/life balance than their parents. As digital immigrants, they prefer to communicate via text and email.

Now, on to millennials. Aged 18 to 34, they number around 75.3 million[4]. Millennials are the most educated generation and typically have higher levels of debt. Additionally, they are slower to make major purchases such as automobiles and homes. Millennials are considered digital natives, having grown up with their technology. Not surprisingly, they are tech-dependent. They just expect their tech to work and are generally not savvy as to how the tech actually works. Their communication preferences are online and mobile.

  1. Recruit and Hire Them.

Now that we have an understanding of millennials, we can look at some ways to recruit them and how these might differ from the traditional recruiting methods. One thing to be aware of when recruiting, is the millennial generation is quite unfamiliar with traditional recruiting and hiring practices. Additionally, you can expect them to enter the job market many years later than previous generations and often be more highly educated.

When you are recruiting, be prepared for candidates who are entrepreneurial in nature and looking for rewarding careers that will have a broader impact, not just for their employer but society in general. As part of your interviewing process, you need to make sure they understand their role in the company’s success as well as the role of the dealership in their customers’ lives.

To assist you in your recruiting efforts, consider hosting “learn about the car business” meetups. You should also reexamine the careers section of your website and make sure you are not just listing the job requirements but also providing career benefits and a look at how the role impacts the bigger picture; how your dealership affects people’s lives for the better. You may also want to develop some educational pieces that can be shared across multiple recruiting and social media platforms.

  1. Train and Retain Them.

Now that you’ve hired someone, it’s time to review your training processes. If you are still sitting new employees down in the break room and having them watch hour after hour of VCR tapes starring sales trainers from the ‘70’s & ‘80s, you will lose millennials. Your training needs to match the times. Train like the year in which you are hiring. You need to take a look at when the last time was you updated your training processes and materials. Granted, in the basics of sales or F&I hold true. However, your training materials and the way you deliver training need to be current. You may want to consider using more one-on-one training. This is something that goes a long way with the millennial employee. It gives them a sense of belonging to a greater organization than just selling cars.

Here are a few additional points to think about when training millennials:

  • Use coaching – not telling
  • Realize that they want to feel unique
  • Incorporate lots of confidence-building tools and techniques

Last but not least, make sure your training materials are available across multiple devices such as physical job aids, tablets, computers and smartphones.

Okay, you’ve recruited them, you’ve trained them and now you need to retain them. Here are some tips for making sure millennial employees stay with you for the long run.

As noted previously, you are going to need to show millennials how their role at the dealership benefits others, such as how they are helping the entire operation succeed and what role the dealership plays in the community. Remember, you want to provide examples of positive impacts to this generation because, to them, it’s not just about the paycheck. Research has shown that many millennials will take a job that impacts the greater good rather than its higher paying counterpart.

You are going to need millennials working in your dealership. You can expect new car purchases by baby boomers to decrease. GenX purchase growth is beginning to slow. Millennials’ new car purchases are beginning to rapidly increase to the point that by 2020, 40% of purchases in your dealership will be by millennials[5].

Who better to sell a car or F&I product to a millennial than another millennial, someone they know, like and trust. Just like it has been for generations.

[1] Pew Research Center

[2] Pew Research Center

[3] Pew Research Center

[4] Pew Research Center

[5] Forbes Research

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Telling the Emperor He Has No Clothes

“The Emperor’s New Clothes” is a fairy tale by Hans Christian Andersen about an emperor who pays a lot of money to a scam artist for some new, “magic” clothes which he is told can only be seen by wise people. The clothes do not really exist, but the emperor does not admit he cannot see them, because he does not want to seem stupid. Everyone else pretends to see the clothes too, until a child shouts, “The emperor has no clothes!”

The title is often used to describe a situation in which people are afraid to criticize something because the person in power believes it. As an agent, you know that automobile dealers often live in a bubble. They have only the people under them to listen to, and they can be mired in believing things that are not true and certainly not productive.

And sometimes the agent or product provider is the only person who can give them the proper perspective.

Rich Dealer, Poor Dealer

I have been in hundreds of dealerships all over the U.S. and Canada over the last 25 years, and I have extensive experience working directly with dealer principals. One thing I have viewed, firsthand, is that successful dealers view the industry differently than those who seem to struggle.

One difference I have observed is the overall attitude and mindset that separates the two. While we constantly hear about things like “positive mental attitude” and “the power of positive thinking,” the reality is that changes in the industry require more than just saying the words. A while back, I experienced the perfect example.

I often speak to dealer 20 Groups. After one of those meetings, a dealer principal who had attended asked me to visit his dealership because I mentioned I was coming to his city for another function. This happened to be a Ford dealership in a medium-sized city in the Midwest. One of the top F&I performers in his 20 Group used our process and suggested he call us. His dealership ranked near the bottom of his group’s F&I performance ranking. I made the commitment to visit when I was in town.

Before I went, I gathered some performance information about dealers in his area that we had trained and also had him send me his F&I performance numbers.

When I arrived at the dealership, I was greeted by a rather uninterested salesman who asked, “Can I help you?” Since I was not injured or in medical peril, I said I’d just like to see the dealer. Let’s call that the first clue this store was in trouble.

The dealer took me to his office and began explaining their F&I process, how it was not working, and wanted to know what they could do to improve. As I started asking specific questions about their process and methods, the dealer quickly started enlightening me as to the real problem: his customers. You see, his customers were “different” (second clue).

His customers were smarter than average and didn’t fall for F&I products. They all look up the invoice price of their vehicles on the internet, read all the articles about F&I rip-offs, and some are even insulted when they are asked to give credit information. Most of his customers had bought from him in the past and he didn’t want to offend them by trying to sell them stuff they didn’t need (clues continue).

His F&I managers had been with him for years. His sales staff had all been there a long time as well, and they didn’t really like turning their customers over to anyone else. He also had a new crop of customers moving into the area that didn’t speak English. His F&I income, per retail unit delivered, was at around $700. But given all of the above, didn’t I think his F&I guy was doing a pretty good job? I mean, with all of that, what could he do?

As I sat there listening, I leafed through the information our research team had given me and noticed that we had trained a Chevrolet dealer in the same city for one of our authorized agencies. They were at about $1,500 per retail unit delivered, had top customer satisfaction scores, and they were achieving outstanding penetration percentages across a range of different products. And that’s with two F&I managers who had a combined experience in the business of four years. When I asked the dealer how far away that store was, he stood up, took me out the front door, and pointed to the Chevy sign about a block and a half away, and across the street.

Here’s the Thing …

Now this is where I get into trouble. I can’t help myself. You see, we don’t sell any F&I products so I don’t have to worry about bruising the dealer’s ego or losing his business. I tell them the truth.

I told the dealer what the Chevy store was doing, (with their permission, of course), compared the demographic profile of Chevrolet and Ford buyers (very similar), and asked him if there was some kind of Bermuda Triangle-type vortex that customers passed through going that block and a half away and crossing the street that made them so different.

He immediately became defensive. He told me I didn’t understand and, in no uncertain terms, that, “We don’t do that to our customers!” When I told him that maybe his buying into that mindset was part of the problem, he honored me with a 15-minute lecture on what’s wrong with the car business and gave me his philosophy on F&I and the business in general.

After that meeting, I assumed that I would never hear from him again. It’s funny how things work, though. Two months later he called and said, “We’re ready to fix F&I. When can you come?”

They had hired a sales trainer I had mentioned to him on my visit to help their sales force. He couldn’t believe how much their closing ratios and grosses had improved. He was promoting two new F&I managers he wanted me to train and he promised they didn’t know anything so they would probably do whatever I trained them to do.

It’s now been a few years since I trained those F&I newcomers and they are consistently within $100 per retail unit of that Chevy dealer down the street. 100% of customers are turned over to F&I at the time of sale. Even though they have pretty much the same floor traffic as in previous years, they are closing a much higher percentage of that traffic and sales are up almost 60%. They are maximizing the F&I income on every unit they sell.

And results breed confidence.

One of the F&I managers I trained called me recently to ask what they had to do to make our “F&I Masters” list. (They’re getting a little cocky. Good.) And the dealer principal now looks forward to bragging at his next 20 Group meeting.

I guess it’s true. Sometimes success is just in the attitude of the dealer principal. But sometimes you have to be willing to tell the Emperor he has no clothes.

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Radogna to Present ‘Reduce Your Exposure’ at Las Vegas Compliance Summit

LAS VEGAS — Jim Radogna, a San Diego-based compliance expert and trainer, will serve as the luncheon speaker at the upcoming Compliance Summit, organizers announced Thursday. The event, which marks Compliance Summit’s first visit to the Western states, will be held Aug. 29–30, 2016, at Paris Las Vegas.

“Jim’s reputation as a nationally recognized expert, trainer and speaker precedes him,” said David Gesualdo, show chair and publisher of Auto Dealer Today and F&I and Showroom. “We are counting on him to identify the pressure points regulators are focusing on and how to button them up.”

Radogna’s session, “Reduce Your Exposure: Who Is Targeting Your Dealership?,” will begin after lunch is served at 12:20 p.m. on Monday, August 29. His presentation is expected to include a rundown of the most currently active state and federal regulators, the results of recent enforcement actions and areas of high risk in variable operations, fixed operations and human resources.

“The laws and regulations impacting auto dealers are many,” Radogna said. “This presentation will focus on the top enforcement threats facing most auto dealers today and how you can prepare and adjust to lessen your dealership’s exposure.”

To register for Compliance Summit, click here. For more information, including sponsorship and exhibition opportunities, contact David Gesualdo via email hidden; JavaScript is required or at 727-947-4027.

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A Month’s Work in Three Days

Over the many years I have spent working with agents and F&I product providers, I have gotten a pretty good insight as to the best time to call on your dealer accounts. I’ll share the benefit of my anecdotal observations here.

Narrowing the Field

First, it’s not good to call on dealers in a week that begins or ends the month. On the last few days of the month they are busy trying to get as many deals done as possible to “make” their month. The first few days of the month are bad because they are closing out the previous month and figuring out what the month’s first paycheck will look like.

That leaves the middle three weeks, but even then, you have to be strategic

First, it’s not good to call on them on Monday. They are finalizing the deals from the weekend and don’t have time to see you. Friday is also bad, because they are looking forward to the weekend and are, as you know, distracted. You like to start your weekend early anyway, so it works out.

That leaves Tuesday through Thursday, three weeks out of the month. That’s a nine-day window, folks, and we’re not done yet.

Because the managers you need to see work weekends, they will very likely take Tuesday or Wednesday off. It makes no sense to visit the dealer unless you can see all the managers, right? Thursday is a better day.

So that leaves just Thursdays, three weeks out of the month. That’s three short days a month.

However, dealers tell us that they expect their reps to spend Thursdays doing some training, spend some time with their people and maybe take them to lunch. That takes most of the day. When you add driving time, you really can only service one account per day if you do it properly.

So that leaves three days for three accounts. That’s all you can really expect to cover in a month.

However, the dealer would like to see you more than once a month. After all, he makes you a lot of money, right?

So it looks like you need to limit yourself to one dealer account. That way you can provide the level of training and service the dealer has every right to expect.

Of course, you’ll have to figure out how to pay for the gasoline to get there.

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F&I Is Not About Menus

Everyone in our industry has their own vision of what our new, hyperconnected world, tomorrow’s vehicles and the F&I department of the future might look like. It seems every manufacturer, DMS provider and F&I menu software company has their own high-tech version of what the sales and F&I process needs to become. In this geekoid future of Snapchats, Instagrams, and Tweets, we’ll discover a glorious new world filled with cars that drive themselves and products that sell themselves, which are then delivered right to our doorstep via Amazon drones.

The ultimate fiction of this shiny new techie-world of virtual reality goggles, wall-size touchscreens and chat-bots is that somehow computers and menu software will soon be able to discover and fill customer needs, create customer interest, overcome objections and entice people to buy more stuff. And they’ll be able to pay for it all with digital money that rains down from a virtual cloud. Yeehaw!

Now I certainly don’t profess to know what the future holds. However, I do know that, while technology, computers and software can do a lot, there’s one thing they can’t do and won’t ever be able to do: care. Only a human being can care about another human being.

The Easy Button

Dealers, F&I managers and agents (and F&I trainers!) are always looking for an “easy” button — that new product, word-track or “close” that will magically get customers to buy F&I products with little or no effort. Whether it’s menu-selling software, a new closing technique or a video product pitch using a spokesmodel, hope springs eternal that someone has found a quick, easy and foolproof way for an F&I manager to sell more F&I products and make more money in less time with less work.

The latest easy buttons are the high-tech electronic F&I menus that have more bells and whistles than a $35,000 Tesla. The only difference being they’re actually available, and you don’t have to stand in line to buy ‘em. Some of these menu software companies now offer desktop or large tablet touchscreens or their menu on an iPad. Some even include computer-generated graphics and video product presentations. Most allow the customer or F&I manager to easily move products around to see how adding or removing them will change their payment.

Some of these menu software programs are truly impressive. They have the ability to combine previous purchase information and new customer data to determine which products they’re most likely to buy. These menu software programs mine the dealership’s own data to see what F&I products the customer bought last time, as well as the odds the customer will purchase a specific F&I product this time.

Even I have to admit this is a huge improvement. In prehistoric times, we actually had to get off our butts and walk down to the accounting office and pull the customer file out of the file cabinet to see what F&I products they bought for their last vehicle.

Many of these software programs include self-serving “customer surveys” that are designed to eliminate the needs discovery process. I put the term in quotes because these brief surveys include a few questions designed to replace the antiquated idea of having an actual conversation with a customer. Most software designers aren’t too keen on human conversation, so the assumption is that most consumers would prefer little or no conversation.

Once the customer completes the survey, the F&I software operator knows which products they should offer the customer. Apparently, knowing the answer to only six or eight questions allows a computer to know all of the products a customer is likely to buy. Here’s what the computer says you need, here’s what it covers and here’s your new payment. Now talk yourself into it.

All of these menu software programs can structure the deal and create a menu designed to ensure maximum profit. And all are promoted as a surefire way to increase F&I product sales and profits. On the surface, they are certainly pretty slick. And this futuristic dream of software that sells F&I products continues to be updated, upgraded and improved upon every year in an effort to move us all toward what they really desire, which is to get agents and dealers to buy their software.

But is a high-tech menu on a big screen what the customer wants?

Do you really believe most human beings desire less human interaction and more preprogrammed, premeditated, computer-generated digital sales presentations based on odds, algorithms and logic traps? Do you really think self-serving software created specifically to benefit the user, not the customer, is the way anyone wants to buy anything? No one who has ever been trapped in an automated phone system loop, those automated torture devices that misunderstand what you say or require an endless series of button pushes to complete even a simple task, wants to envision a future with more of that.

That’s not progress. That’s hell on earth!

Putting Technology in Its Place

We have cameras in hundreds of F&I offices and record thousands of F&I transactions every month, and I have yet to hear a customer request a better menu, complain because the options were offered on a paper menu or demand to see a touchscreen version. In reality, most customers couldn’t care less how F&I products are offered. While one generation may prefer viewing a menu on a computer screen to a paper version, they certainly aren’t going to buy any F&I products because of a pretty menu.

All a customer wants to do is get their paperwork completed as quickly as possible so they can take delivery of their new vehicle. The fact is, most customers do not walk into an F&I office wanting to buy additional products. Nor do they want to be forced to wait while an F&I manager creates a custom menu with those products. If customers are being forced to wait while a menu is being prepared, we’re wasting their time. Can you imagine a restaurant forcing every customer to wait while a custom menu is created just for them? That restaurant wouldn’t last a month.

What a customer is really buying is the F&I person presenting those products. Customers appreciate having someone take time to review the options, answer their questions and help them make an informed decision. They resent having to listen to a sales pitch. It doesn’t matter whether that sales pitch is made using a brochure, a paper menu or a 60-inch flat-screen monitor. It’s still a sales pitch.

Every customer asks themselves this question: “Is this person trying help me, or is this person trying to sell me?” How they answer that question in their own mind will determine whether or not we’re able to sell them. If they think that F&I person is trying to help them, they’re going to be very interested in what they have to say. If they think that F&I person is trying to sell them, they couldn’t care less what that person has to say.

Helping customers demands that an F&I professional seek out, with eagerness, reasons why the customer needs each and every one of their products, and helping them see how that product will benefit them. If a customer trusts that person, believes they know what they’re talking about, and feels like they’re genuinely trying to help them, they will value that individual’s knowledge, expertise and input. It doesn’t matter whether those products were offered on a high-tech menu or a bar napkin.

F&I is not about menus. It’s about helping customers make an informed decision about the options available in connection with their purchase. Customers don’t buy F&I products because they understand every nuance of the coverage. They buy them because they feel someone understands their unique situation and is trying to help them make the right decision for them and their family — in other words, an F&I professional.

In the F&I office, we have a responsibility to offer every customer every product every time. You don’t need a custom menu to do that. We don’t need F&I software operators spending more time customizing menus. We need F&I Professionals who are genuinely interested in helping customers, and care about people. Because customers don’t care how much you know, until they know how much you care. And no menu can do that.

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