Didn’t do as well as you hoped in 2010? Well, you’re not alone. There are plenty of valid reasons things didn’t go as planned last year, but each has a solution. To find it, you have to consider how you think and act. To help get you thinking and acting the right way, let’s count down the top challenges you faced last year and see if we can find a fix.
10. The lenders are capping all my deals and won’t let me sell any products.
The Cause: Given the credit crisis we just came out of, it shouldn’t surprise you that lenders are trying to limit their exposure as much as possible. The easiest way to do that is to limit your F&I products.
The Answer: What you need to do is keep a detailed log of the deals you were capped on. Be sure to note how much income was lost and present your findings to your dealer or general manager at the end of the month. The truth is, lenders do have some flexibility here. Sometimes a call or a meeting with your boss is all it takes to get them to loosen up. At the end of the day, lenders need your business, and they will only cap your products as long as they feel they can.
9. Half my customers are paying cash.
The Cause: Yes, interest rates are incredibly low, but you have to remember what the recession did to the consumer psyche.
The Answer: The key here is to work the percentages and offer those low rates to every buyer, every time. Sure, cash conversion percentages are low, but you will find that some will convert if they are offered a low enough rate.
8. We’re selling too many cheap cars.
The Cause: Put simply, consumers today are buying out of need, not want. That means the cars you would have wholesaled two years ago are now your best sellers. Obviously, that doesn’t bode well for your F&I penetration and income-per-unit numbers.
The Answer: Make sure management knows how many of your total units were under, let’s say, $12,000. While you can’t alter your actual profit per retail unit number, you want to make sure management is aware of the impact those vehicles have on your numbers.
7. The sales department isn’t turning people over to me at the time of the sale.
The Cause: Doggone those salespeople, right? Well, you don’t run the sales department, the sales managers do.
The Answer: Remember, it’s all about money. As suggested in the capping solution, you need to keep a log. Every time someone isn’t turned over to you, make a note of it in your log. Then, at the end of the month, multiply those people you didn’t see by your average income per financed deal. Then show your dealer or general manager the potential income lost because customers weren’t turned over to you at the time of the sale. Believe me, the numbers will speak for themselves and the problem will get solved.
6. You don’t understand. Our customers are different.
The Cause: Every time I hear this, I know of a dealership down the road that is producing more — sometimes double — the F&I income per retail unit delivered.
The Answer: This is one problem where you are often the cause. The best way to solve this is through training, because there are customers out there who want your products — you just have to know how to present and deliver them.
5. My pay plan stinks.
The Cause: If you can get your dealer to give you more money, great. However, after what’s transpired the last few years, good luck!
The Answer: I once had a student who stood up in front of my class and stated what I think is the true solution to this problem: “Give me a pay plan and I’ll give myself a raise.” If you work on commission, the easiest way to make more money is to sell more stuff.
4. These products are too expensive. People won’t buy them.
The Cause: F&I products are expensive, but they need to be to pay for the benefits they provide. The manner in which you present them is the key.
The Answer: Moving product is not so much about “selling” as it is about evoking the proper “psycho-neuro” response, which is an unconscious reaction to a given stimulus in a particular environment that can be measured and modified.
Take this dealership I once visited. Hanging from the wall of the F&I office was a sign with the heading: “The Benefits of Credit Life Insurance and Accident and Health.” What followed was a list of all the features and benefits of those products. For added effect, the F&I manager made sure all his awards and accolades were there for all to see. So what’s the problem? Well, every customer fears getting ripped off by the finance office, right? So anybody walking into this office is going to think, “Not only am I going to get ripped off, but I’ve got the world champion doing it.” People will pay. Just don’t give them a reason not to.
3. My dealer won’t pay for training right now.
The Cause: If you paid $3,000 to send someone to an F&I school and didn’t see any improvement in F&I income, would you do it again? In this economy, I don’t think so.
The Answer: Talk to the agent who sells you your F&I products. You can bet he or she will be willing to help you get some training. After all, if you sell more of the agent’s products, he or she makes more money.
2. I hate training.
The Cause: Well, the fact is, the training you tried might not have been what works for you. Just remember, you can only get what you put in.
The Answer: It’s important that you do some research and find the training that fits your style of learning. Just remember that you can’t rationally expect to improve your results if you keep doing the same thing. My dad had an old farm saying I’ve never forgotten: “Learn something new today, or you’ll be just as uneducated tomorrow as you were yesterday.”
1. We still aren’t selling enough cars.
The Cause: This certainly was a common complaint in 2010. It’s also the most frustrating, because we can’t do much about it. We don’t control the number of units sold; the sales department does.
The Answer: The key here is to control what you can control. Let’s say a dealership that normally moves 150 units per month now sells only 100 because of the economy. Well, what if you figured out how to increase your F&I income per retail unit by 50 percent? Is that not, for the sake of your paycheck, the same as selling 150 units?
The answer to a better 2011 is simple: hone your skills, keep a positive attitude and do your best every day. More importantly, take advantage of every training opportunity you can so you have the tools needed to be successful. Remember, this is still the greatest business in the world and you’ve got the best job in the dealership. And hey, 2011 looks like it might just be the best year in a long time for this business.