|Having turned the corner into hopefully a prosperous New Year for all, it is time to prepare for the upcoming “Christmas season” (or at least that is what the tax refund season always seemed like to me). Whether you are a Dealer, General Manager or the department manager, it is this time of year to make sure you are on your game. Additionally, it is the time when the phone calls, e-mails and inquiries from AutoDealerDaily.com always seem to sound the same. They go something like this: “Greg, I was just made the Special Finance Manager of ABC Motors. I have some experience, but would like to get some ideas of what is working in the market.”|
Generally upon investigation, the good-fortuned person inquiring has just been put in charge of Special Finance sales (the sub-prime credit leads, and the turnovers that the F&I Manager can’t get done). Notice I left out the word “manager”.I am sure the thought may be crossing your mind…”What’s Greg talking about this time?” My point, which I will elaborate on, is that most “departments” aren’t really what you would call departments. They have a person, or maybe two working in tandem, with the assignment of handling Special Finance sales (however they are defined at this dealership). Often this department may be headed by someone who worked at a different dealership and came with “Special Finance experience”.
Unfortunately, there is a far cry from being in charge of selling the Special Finance leads, and being a manager. That is not being critical of those that are in the aforementioned position, just a statement of fact. Of those that I talk and correspond with, I find only a small percentage of them are truly given the roles of being a manager. Few are empowered, nor expected to train or receive trained. The usual mindset is that if the person can attract some leads, handle the turnovers (aka create miracles), get deals approved and funded, that is pretty much all that is necessary. The expectation – “If we can do 30 or so deals at benchmark gross profits, that will be a good job.”
The person in that position, depending on the alignment of the stars, planets and moon might get lucky and accomplish that. Generally it doesn’t happen that way. Due to no ones specific fault, the process becomes a numbers game…I need more leads, more lenders, etc., to get to the “next level”. Often it’s a frustrating battle. What the Special Finance Manager really needs is to have their role defined, to be expected to manage, and be trained and empowered to do so.
Notice the word “trained” hidden in there? How many Special Finance managers are ever formally trained to manage? How many have written job descriptions that define their role? How many are expected to provide the same for those that they manage? How many of them are expected to lead (or assisting in) training the sales and support staff, or more so, even know where to go to start? Who in the dealership teaches the Special Finance manager the required compliance with legal and regulatory issues that could mean the difference in millions of dollars of lawsuits or even criminal action? Who is managing the manager, and holding them accountable for their actions.
In short, you dealer expects a General Manager to manage. The same with a Sales Manager, a Service Manager and even an Office Manager. Why doesn’t that mindset hold true with Special Finance Managers?
What is to manage you ask? After all, once you get past submitting the applications, contracting and funding the deals, what else is there? The Special Finance manager is also part Sales manager. I would offer let’s start with basic forecasting and budgeting. You need a realistic sales goal, with projections for front and back gross profit? What kind of advertising outlay will you need this month? This quarter? Based on what? Will you need any special equipment or software?
Department managers should be expected to maintain adequate staffing. This comes as a result of the sales goal. Using the Leedom and Associates benchmark of 1 sale for every six SF leads, how many leads are required? With the general rule that 80 leads are the max that one sales person is capable of handling, how many sales people do you need to have? Do they have job descriptions? Who is training them in the process of how to work with the leads? In compliance? Are you beginning to get my drift about being a manager?
What about reporting and tracking? A manager must have good data from which to make decisions or suggest action. What systems are in place to insure that you have an accurate recap of the leads that come in, and floor traffic? Do you know the appointment setting rate, show rate or sale rate from the leads that you receive? If you do, do you know how to use it to both forecast and train.
The underlying theme to these questions is that it takes managing you own time, the resources of the dealership, as well as the efforts of others, through proven systems and processes, to truly operate a successful department.
Some people will think that it may seem like a lot of wasted time for a small department. I would argue just the opposite. Planning, being organized, prioritizing your time and being able to efficiently multi-task can mean an enormous amount of additional profit to a smaller department. Not only does it allow superior sales results, It becomes the very foundation for a department or dealership to grow from. As additional staff is added, they are able to understand their roles, know what they are responsible for, how to go about accomplishing it, and blend with the existing personnel.
In closing, it comes as no coincidence that the departments and dealerships that have sustained long-term growth and success have managers or directors that truly are empowered, trained and expected to manage – not just sell and finance cars. It also relates back to my first and most important of my eight elements for success – commitment. Make the commitment to become a “manager” and the results will speak for themselves.
Used-vehicle values fell by an average of 1.9% in October, the largest decline since January but on course with seasonal patterns, according to the latest report from Black Book.