Up to the communication test? Si or no?

Communicating with all of your customers is important. Bilingual issues are prevalent in many markets. Is your dealership up to the customer communication test?

Consider some simple solutions. Look at having detailed service menus printed not just in English, but other prevalent languages reflected in your concentrated customer base.

This idea can be expanded on, with additional signs that show direction to your body shop, service write-up area and even designated parking areas. Remember, as a dealer, you must mirror your customer base. The rewards are many and you will see higher CSI and customer loyalty. Your dealership will show commitment to customers and the surrounding community.

Are your expenses really too high?

We often hear dealers comment that their expenses are out of line in a certain area. The logical questions that follow are:

  1. What's the expense as a percent of the departmental gross compared to a Benchmark?

  2. What is being charged to that account?

Prior to asserting that the expense is too high, first look at your gross profit and see if that might not be the cause of the high expense percentage.

It is very easy to look at an expense as a percentage of your gross profit and place the blame on a lack of expense control, when in fact the expense amount might very well be legitimate.

The next time you start reviewing your expenses, pause and compare your departmental gross profit to the Benchmark. If the gross is low, the resulting expense as a percentage of the gross will be high.

How to keep used inventory ready to sell

Here's a way to make sure your used vehicles are in good condition and ready to sell.

Next month, for every used car sold, put $5 in a pot.

Each day, walk the inventory and make a note when you find used vehicle problems such as the unit not being clean, dead battery, out of gas, missing buyers guides, etc.

Add to these notes any problems the sales consultants notice during the month.

Put a limit on the number of problems you will accept before the pot is reduced by a $5 penalty.

At the end of the month pay the amount remaining in the pot to your porters or lot attendants as a bonus.

You should find less problems with the appearance and condition of your inventory. You'll also see lot attendants take “ownership” for the condition of your inventory.

Saturday sales greeter can do a lot

Some dealerships employ a Saturday sales greeter. It can be great for business and cost relatively little.

Duties:

  • Watch the lot and make sure everyone is waited on.

  • Greet every customer to offer coffee, soft drink or bottled water.

  • Register customer for give-away — customers are otherwise reluctant to give salespeople full name, address and two phone numbers.

Benefits:

  • Sales people only log customers that they want to continue to work.

  • All your customers are waited on properly.

  • During busy weekends, customers don't leave your lot without getting waited on.

  • Accurate traffic counts — did your used-car ad work and new-car didn't?

Cost: 10 @ $10 = $100 or $400 a month

Importance of followup

Follow-up:

  • Manager matches the up log with the salesperson's follow-up sheets to make sure no one is left off.

  • Manager does a one-on-one follow-up every morning with the salespeople.

Try this for just four Saturdays and your traffic count will go up at least 20%.

One way to price customer labor

How do you price your customer labor? Here is how one dealer does it:

A menu operation takes 1.2 hours. You pay the technician $20 per hour.

Multiply this technician cost by your expense over cost of sales factor. In this case the percentage is 223%. You get these numbers from your financial statement. The total expense to run the department divided by the average month cost of labor sales. This equals what you need to cover your expenses per labor hour: $53.52.

Add this expense per labor hour to what you pay a technician for the job; $24 in this case. Your result is the customer price you need to charge to break even: $77.52.

How much do you want to make on 1.2 hours of labor? $10? $20?

Retail or wholesale manager?

Is your used-vehicle manager a retail or wholesale manager?

If you are unhappy with our results in this department, try this exercise.

Take the total number of units that were sold wholesale for the month. Divide this number by the total units sold both retail and wholesale. The result will be a percentage of wholesale sales to total sales. If your percentage is more than 40%, chances are the manager is not totally focused on retail sales and is spending too much time focused on the business with the least return.


Money-making minutes is provided by NCM Associates in conjunction with the Automotive Satellite Television Network (ASTN).