1. Give these customers to the newest Sales person
2. Round Robin them to the Sales team.

What a great excuse to call “Hi, my name is Tom and I just wanted to introduce myself as Bob is no longer with us…”

Now when a Sales person complains about traffic, just say “Have you talked to your customers today?”

How about talk to customers. When was the last time your Sales people talked to an existing customer instead of a prospect? Let’s remember all customers started out as prospects and will once again be a prospect for a repeat purchase. Here’s the easiest way to ensure Sales People talk to customers and build strong relationships, call them.

Want to make it really easy look to the Service drive where many people are still coming everyday. Sales people should be working the drive in the morning helping get customers in and out quick, while “catching up” with their customers. 2 Days after a Service customer leaves, the Sales person who sold the vehicle to them should use the visit as an excuse to call them. This shouldn’t be a CSI call but rather a call to strengthen the relationship, see where they are in the buying process, ask for referrals, invite them to an upcoming event or test drive anything just talk to them!

This simple yet effective solution will increase your prospects and ultimately Sales, besides what else is a Sales person to do…

Tomorrow what to do with Orphan customers

“Finance giant HSBC exits U.S. auto loan business

HSBC Finance Corp. will stop making new auto loans through U.S. dealerships and direct-to-consumer channels. The announcement came Monday, Aug. 4, in the bank’s report of second-quarter earnings.
HSBC had been shrinking its auto loan business since March. According to the SubPrime Auto Finance News, HSBC Finance CEO Michael Geoghegan said the move was because of returns that were too low to make the business worthwhile.

“Our vehicle finance portfolio actually improved credit quality over the period, but the business does not have sufficient critical mass or the pricing power to provide an acceptable return to the group,” he said.

HSBC does not finance auto leases, which have been under increasing pressure in recent weeks as vehicle residual values have plummeted.

HSBC, the consumer finance arm of English financial giant HSBC Holdings PLC, says it will take about three years for most of its $12.5 billion auto loan portfolio to be eliminated as borrowers pay down their loans.

Automotive News | August 5, 2008“

Now we can all look at this and say… “It’s just another repositioning by a bank in these times of recession” or “this is just a reaction to the housing loan fiasco.” … Well you could say that, but in my opinion you would be taking a big risk.

To paraphrase Winston Churchill – “This is not the end of the New Sales Business as we know it. But it is, perhaps, the beginning of the end”!

Let’s face it, recently we have seen manufacturer based finance companies leave the leasing arena and independents following suit. Residuals are under threat; manufacturer’s profits have been cut.
What does this mean for our business’s and for our offerings to customers? Well, for a start there will probably be an increased demand for lower priced cars which has the potential to increase used car sales, but only to those dealers with a professional Pre-Owned operation that is a business in its own right - funded, managed and prioritized but that’s not as many as the industry believe it is. Those dealers that have largely relied on their New Car business and Manufacturer for terms of trade to make revenues and keep their whole business profitable stand a good chance of going to go the way of the dinosaurs.

In addition extended vehicle retention by customers will mean that there will be more AfterSales opportunities but again only for those dealers who have a dynamic AfterSales operation, capable of once acquiring customers, retaining them. Let’s face it these seemingly small changes of emphasis within will ring the death knell to the majority of stores that have not dealt with and changed their practices accordingly with this before the ‘End actually arrives”. The most at risk here are especially those traditional family run dealerships and amongst them it could be nothing short of catastrophic.

Publicly traded dealer groups have grown in prominence and proven that corporations CAN and do run dealerships very well. They often have less business dependence on New vehicles and in general have better performing Pre-Owned and AfterSales operations than the average family run store.
Finally and looking long term, if the transaction price of vehicles continues to drop along with manufacturer revenue (a la GM), then manufacturers will be forced to review the biggest expense in the equation: retail distribution - dealers. Remembering also that Manufacturers only make money from 2 places – New Car Sales and Parts.

As publicly traded dealer groups have proven they have less reliance on New Cars, require less manufacturer support and are more likely to retain the service business in their own franchise store thus providing more parts business for the manufacturer then it’s a fair assumption that those corporate stores will be favored. The family business’s that will survive and prosper are those that behave like corporate – be professional in Pre-Owned and AfterSales, NO not just good, but professional

The objective is to keep the client “inside the bubble” throughout their ownership experience and into repeat purchases while making a fair and equitable profit from the business relationship.

If this is not your objective, it should be.

You will notice I am not using the term “customer” and am instead replacing it with the word “client”. “Client” infers owning the relationship and making it more intimate. Go to any fast food restaurant, and you are a “customer”. What are you to your Real Estate Agent, Stockbroker, or Attorney? We (the dealership) provide the “second most” expensive item most people ever purchase. Should we not treat our relationships as more important than a visit to the drive-thru?

Keeping clients successfully “in the bubble” is accomplished by consistent performance of two tasks:

1. Meet their needs;
2. Communicate with them constantly.

I realize these are very broad statements; however, every process, procedure, or action performed in the dealership must focus on one or both tasks. Anything else provides no “value added” benefit to this goal, and should be eliminated as waste.

Does your client want a specific vehicle? Do your best to find it…but proactively maintain contact throughout the search process.

Is your client’s vehicle in for service? Proactively call them with updates as the service experience progresses. Clients are more amenable to upsells and are less prone to conflict if they know you will call them in a predictable and timely manner. They (like you) are looking to plan their day (or days) around an inconvenience. Help them, and build a positive relationship.

After the work is complete and vehicle picked up, mail a hand-completed “thank you” card. These cards are available from dealer marketing supply houses. Remember: you are building a relationship, and the goal is keeping the client “in the bubble”. They won’t know you care unless you tell them.

Two weeks later, place a phone call to the client to ensure repairs are satisfactory, and schedule the next service visit.

Remember: this is a “wholistic” process. Every employee who is a “touch point” with the client must be actively involved for the common goal of repeat business. There is no “passing the buck”, saying “that’s not my job”, or “go see the Manager” to your client.

What can you improve today…right now…to keep your clients in the bubble?

We all know that tried and true adage “Don’t expect what you don’t inspect”. By and large, we (as industry professionals) view performance measurement (be it statistics, calculations, or other “number crunching”) as drudgery when in fact it should be embraced passionately.

Realistically, there is no other way to know where you were, where you are, and where you can go in the short term. Further expanded, there’s no other way to create a long term plan for profitability. Anything else is a fanciful guess.

Anything measured can be improved. I realize this is a very broad statement, and yes, this concept “works both ways”. The inverse of a profitability improvement might be an expense reduction simply because expenses were monitored and reduced. A profitability increase may have resulted because sales volume was monitored and attainable goals were established and tracked.

Technicians must also embrace performance measurement as a means for professional improvement. As the revenue generators within your Service Department, they must be personally vested in knowing their performance in terms of efficiency and productivity. A loss of fifteen labor minutes per day over the course of one year represents SIXTY (60) labor hours – a full week’s pay – lost.

How will they know if they don’t measure?

Service Advisors should have realistic targets which tie to shop capabilities. Measurement of Service Advisor performance should be based on closing ratio: what should have been offered (based on time/mileage/wear), what was offered, and what was selected by the client.

Once again, all of these elements can (and should) be measured.

But this is only one-third of the story.

Back to the Future

Just like the time circuits in the Delorean (from the movie), measurements are only useful if you know where you are and where you were. These two elements, combined with measured knowledge of your shop’s resources, can help you realistically predict where shop performance is headed.

Continuous measurement of performance combined with resource changes also provides you with the opportunity to change the future. Shop volume down? In comparison to what time period? What changed?  What can be done to effect change in a positive manner?

The key word in this concept is do. Measure, compare, do. Measure, compare, do. Over and over again, consistently, as a routine process using the same benchmarks and standards. It is important to remember the “do” element is not “change” for the sake of change alone. Changing something successful for the sake of change is just as bad as clinging to a failed process because “that’s the way we’ve always done it”. Remember: there are no “sacred cows”; if it helps profitability today, fantastic…BUT…it should be monitored to ensure continued benefit, and adjustment if performance falters.

How many measures are there? Theoretically, the sky’s the limit; however, a good starting point lies within your DMS for elements such as hours per RO, effective labor rate, etc. However, these automated measurements are only accurate as data provided (remember the saying: ”garbage in, garbage out”). Solid knowledge of DMS performance measurement is absolutely necessary to ensure reports are accurate. If you intend on using this information, I strongly recommend completing all DMS-supplied training pertaining to reports (whether it be on-line or classroom based). Once you understand how the DMS uses data, you can determine how easily this data may be communicated inaccurately.

In some instances, DMS data may not be quite what you need. In these circumstances, you may have to create your own spreadsheets. Microsoft Excel is the de-facto “world standard” for spreadsheet creation and is well worth your time to learn.
 

If so, you may fall into the trap of sounding bored or insincere. Your last greet of the day will lack the same energy as the first and your customers will pick up on it. Instead, treat each contact as the unique contact that it is.! Each customer has his or her own personalities, communication preferences, and wants and needs. Try to make their experience with you as different and special as they are and you will see your sales climb.

So, whilst sat in the service reception waiting for the diagnosis (expecting the worst), a sales man sat down next to us and asked, “Do you know anyone who might be interested in buying a Kia.” This was a great conversation starter, not pushy or to invasive. We scratched our heads but couldn’t think of anyone - no matter, the ice had been broken. The salesman introduced himself and asked why we were there. My mother, pleased not to be sat staring at the TV in the corner that she couldn’t hear, told him – everything. Before I knew it my mother (the lady who 2 minutes earlier wouldn’t even discuss the possibility of changing her car) was outside being shown the new features of the latest model year. We went back to the waiting area with my mother full of thoughts and questions about the new car. The salesman, who had left us, came back and said that he’d just spoken to the technician working on the car and that he had at least 15 minutes left to work on the car and why don’t we go for a test drive in the new car while we wait. ‘Yes’ said my mom with a large grin on her face. Needless to say, the test drive was a success. We went back to the waiting room, again my mom full of thoughts and questions, especially as the salesman had told her that she could have the new car for about the same payment as what she was currently making.

My mother had gone from ‘I’ll never change that car’ to ‘I could have a new one for a similar payment’ in about 10 minutes, whilst sat distressed at the possibility of getting a large service invoice. Not bad for 10 minutes work and very little effort on the salesman’s part.

A few minutes later the service advisor appeared shaking his head, the diagnosis wasn’t terminal, but it was expensive – nearly $1000. He took us through the items and my mom sighed, not sure what to do, what to authorize and what to wait to do next month. The service advisor left us and about 30 seconds later the salesman came back. “How is it?” he said with a concerned look on his face.

“Not too bad,” said my mom, “about $1000.”

“Ouch” responded the salesman, “I could help you with that.”

“What, how?”

“Well if you change now, we’ll take care of the repairs and take your car as the deposit.”
“So…”

“All you have to do is sign-off on the new one, you can drive away today, no deposit and service invoice charges and practically the same monthly payment, why don’t we go and look through the figures and I can check I few have the color you like in stock?”

At this point the car is as good as sold. My mom went from distressed about her car needing repairs (and I’ll never change) to, I could get a new one to, where do I sign, in 25 minutes flat. The easiest sale known to mankind! A no brainer…why wouldn’t she change!

So if you don’t work the service drive…try it…just once and I guarantee you’re sales will soar with very little effort on your part.

For example, if the weather forecast calls for snow in 3 days you DON’T have time to advertise Winter tires in the newspaper, or on radio or TV. However, you do have time to create a 20% off Winter Tires 2 Day Web Special, post it on your web site and more importantly EMAIL it to a particular segment of your customer database, like vehicles over 2 years old, or by model. Just tell them to mention “Snow” as the coupon code word. You get a quick injection of business by utilizing a “Call to Action” and the customer gets a great deal.

Plus, you can truly track your response rate since you know how many emails were sent and how many customers used the coupon code when booking the appointment.

This is just one example of season email marketing, you can also advertise “Get ready for Spring Specials”, “AC tune-ups for Summer”. Just remember be creative and segment you customer database so that no individual owner is receiving more than 2 to 3 emails per month. This includes all emails such as Dealership Newsletters, Sales emails and AfterSales emails. Any more than about 3 a month and you risk being added to the customers dreaded spam list.

So get out there and utilize your CRM to direct market in a quick, measurable and profitable way!”

• Somebody else is cheaper
• It’s more money than they expected to pay
• They can’t afford it or don’t have the budget room to do it
• They want you to give them a higher discount
• They can’t make the decision without their spouse or partner
• They don’t really want it

When you hear this, you need to ask them more questions before you can respond to their objection properly.

Remember to remain positive in the face of rejection. Depending on your business, you will only make the sale to a few of the prospects that you will meet. Realize that this is not a personal rejection of you, but rather that they have not yet seen the benefit or value that your product/service offer compared to what they are currently doing/using to solve the need or want.