The Bluetick Coonhounds of Special Finance

The official mascot of the University of Tennessee is Smokey, a blue tick coonhound native to the state.  The dogs were bred to track small game with agility and accuracy.

Alexander Automotive in Murfreesboro, Tenn., has a special finance plan that, like a field trial, covers lots of ground in rhythmic strides. Rick Lee, sales director, describes it as a culmination of elements: constant training, a consistent advertising budget, a BDC for incoming calls, capable managers, a defined sales process, proper inventory and the right mix of lending institutions to cover each segment within the market.

The three Murfreesboro stores—Ford/Lincoln/Mercury, Chevrolet/Cadillac, and Suzuki—sold 100 special finance units in March. Alexander Automotive has stores planted all across middle Tennessee (13 total), but the stores in Murfreesboro share many economies of scale that make sense for subprime business. “We have a full time training manager for all three stores,” said Lee, who is the sales director for the Murfreesboro locations. “We have a full-time buyer that buys all our vehicles for us. We have a centralized phone number and a BDC staff of eight people that set all the appointments, whether by phone or the Internet.”

On the Trail of a Prospect 
At Alexander, the hunt for subprime leads is no leisurely fox-hunt. Though each store has its own secondary manager and advertising budget, they share a knack for picking up scents from multiple angles. The three stores use six to seven paid lead providers who bounce prospects over to their Web site. Their primary advertising always includes a slogan for secondary customers and a 1-800 number. Lee said they also do a high volume of secondary advertising, including radio, cable infomercials, TV spots and print ads. Their advertisements always signal car loan help, not car sales, and use one of two special Web sites: or Managers meet once per week to tabulate the effectiveness of their ad campaigns.

“If you’ve been told ‘No,’….if you don’t like dealing with a car dealer…go to TNCredit,” the commercials trumpet. “The ads talk about getting the loan first, so you can then approach the dealership with a check,” said Dan Henderson, general sales manager for Alexander Suzuki.

Once a Lead is Treed….
If the lead is a cold walk-in, the staff responds in the first 30 seconds, like well-bred pursuers: “Are you here today to take advantage of our special low interest rates for people with above average credit?” they ask.

If the prospect says no, the staff engages him further: “Then are you here for our special finance program that can help you establish or re-establish your credit?” If the answer is yes, the staff can continue with a customer interview and start collecting credit information.

If the lead has made an appointment through the BDC, the manager calls the lead back as an introduction—but not before identifying (based on the mode of contact) whether or not the prospect is subprime.

In the last few months, Alexander’s process has taken an unconventional turn; the salespeople and managers have taken to calling themselves “loan consultants.” The reason? Most subprime patrons don’t want to deal with a car dealership. “They’re trying to circumvent the dealer—that’s why they go online,” said Henderson, who joined the Alexander team after he developed, through lots of trial and error, a winning secondary process with the help of a leading industry special finance consultant. “They don’t want to be embarrassed. They’ve been told ‘no’ by a dealer once too often.”

Henceforth, the salespeople are loan consultants. The BDC sets appointments to apply for a loan, not to purchase a car. “The loan consultant will contact his customers,” said Henderson, “We tell them that his office is located inside a particular dealership (Chevy, Suzuki, etc.). However, we make it very clear that we are not brand specific; the customer is free to choose from a wide variety of makes and models.”

Since the goal is to reestablish credit, the loan consultant conducts an in-depth interview of the prospect’s credit history. They discuss his or her credit difficulties, ideal down payment, and expectations for an automobile.

The information is forwarded to the sales manager, who pulls the customer’s credit. Based on that criteria, what the loan consultant discovered during the interview  and what the lending institution will allow, the manager enters the customer in DealerTrack and produces a list. “The manager will then introduce themselves to the customer,” said Lee, “and offer them some choices [in our inventory] to look at.”

Alexander Automotive intently focuses on which vehicles are stocked. “We probably have one of the broadest selections in our area, at any given time,” said Lee of the 230 to 250 pre-owned vehicles on the property. Thanks to the dynamics of their secondary business, “approximately 110 of those pre-owned cars will fit the special finance category.”

The “secondary” units stand side-by-side with the retail units. They mirror each other so closely in quality and brand, a shopper would not be able to tell the difference. “The difference lies in how we buy our special finance vehicles,” said Lee. “But in terms of quality, you won’t be able to tell. They’re not older, they’re not higher in miles, and they’re not inferior mechanically or in appearance.”

The managers make a weekly habit of reviewing their inventory to see which cars have enough equity potential for a secondary sale. “Anything we own that is less than $14,000, less than 60,000 miles, and is on the left side of NADA trade-in value is a candidate,” said Henderson. The select cars are narrowed down again by size and model. “We break it down on every single level,” said Henderson. The idea is to have a good mix to choose from, explained Lee. “We make sure we’ve got small cars, mid-size sedans, sport coupes, SUVs, large trucks, vans,” etc. Based on a 90-day trend of secondary unit sales, the stores’ in-house buyer restocks the lot with vehicles purchased at auction.

Once the customer selects a car, he or she reviews optional products with the salesperson. The secondary manager presents payment and disclosure terms, and proceeds with delivery.

The staff continues to follow the trail of the satisfied customer, calling them four times within the first 45 days, and staying in touch a minimum of every 90 days. They follow the same process with both prime and subprime customers. “We’re firm believers in treating everyone with the same respect, even though the secondary customers follow a different path to purchasing a car,” said Lee.

Nurturing their Instincts
Bluetick hounds have a warrior-like approach to hunting. Warriors like to train and their training shows.  The staff of Alexander Automotive is just as serious about their training. They train twice per week to ensure all skills stay sharp.

The training sessions began as an experiment to help lighten the load of individual meetings required at Alexander. Managers were gathering every morning (and still do) to review the previous day’s deals. They were also expected to meet with each salesperson one-on-one. But between deals, calling prospects and handling follow-ups, Lee knew that his managers’ time was stretched thin. Lee initiated a new position—full-time trainer. He visualized this position holding these mandatory training sessions twice per week for all three stores.

Training Manager Scott Rose holds training sessions at one of two campus meeting. He blends classroom resources (like the Joe Verde Training Network™) with employee feedback. The results are highly customized sessions that can touch on anything from how to greet a customer to how to explain an incentive. For instance, during the January-through-April tax season, training sessions will focus on the proper verbiage of tax incentives, how to process tax paperwork, etc. “If we see that we’re having a challenge in one area,” said Lee, “we can very quickly change our training agenda for the coming weeks.”

Sometimes Rose passes out workbooks; other times, he walks the staff through a PowerPoint lecture. Whatever the case, Rose always sets aside time to explore new ideas through reenactment drills. He likens these one-hour sessions to “interactive brainstorms.”

“At least 50 percent of the training we do is role-playing,” said Rose. “Otherwise, people tend to get distracted because they’re worried about what sales they’re missing. You can’t keep people’s attention without being interactive.”  Rose encourages the staff to cut into the action with questions. “Then we’ll try [role-playing] a different way, if we have to.”  Between classes, Rose blocks out time to meet with each salesperson for individual mentoring.

After eight months of tweaking the new sales training program, Rose will soon launch an additional training program for managers. In addition, Rose hopes to spark more referrals from special finance customers by teaching dealership personnel “how to make the experience so good that people will send others who have special finance needs to our dealership.” He also wants to stage more in-depth role-playing for special finance interviews.

 “Our objective is to figure out what brings the customer here,” said Rose, “…how they got into the situation they’re in and how to make things better for them.”

Special Finance Insider Vol. 2, Issue 2