Track Your Subprime Operation

How many times have you purchased leads either from an Internet lead provider, or direct mail vendor, only to wonder:

In essence you bought leads and you had more questions than answers. This is also repeated each time an “up” walks on the lot as it relates to follow-up and closing opportunities. What about the phone calls that come into the dealership responding to an advertisement, where a sales rep is working with a customer and jots a note on the back of a matchbook to call the prospect back?

Obviously it is important to be able to track the various sources of leads, calls and lot ups that come into a dealership. How you do so is a bone of contention for many dealers. True accountability comes at a price, both a financial price as well as a commitment to process, technology, and additional work at the outset to put the pieces of the program together.

Every dealer and general manager talks about accountability for the sales, finance and management staffs. But few are actually willing to pay the price to establish and institute the plan.

Many dealers listen to a sales pitch and see how the software works and then have unrealistic expectations of implementation. If you are not willing to mandate and enforce compliance with the system, don't get it! Even if it is free!

Since you must change work patterns the effort necessary will be significant, however the results will be exponential. Do you remember when you first implemented DealerTrack, it was a bear, but now it is part of daily life.

In today's computerized world, everyone is promoting some type of CRM (Customer Relationship Management) system. Nearly 200 vendors representing some type of system were at the 2006 National Automobile Dealers Assn. convention.

Not all CRM systems measure the same things. All of them will gather basic data and some will allow you to look at that data in some fashion or another. But if you are running a subprime department, the things you are looking for are unique to the specific tasks required.

The ability to manage your look-to-book ratios, stipulation management and contracts in transit are among things you want to track for your subprime operation.

It is important that you can track not only who called from your various media and advertising campaigns, but who bought!

You want the system to mirror how your dealership should handle customers working them “backwards” (first the financing, then the vehicle selection instead of the other way around), keeping them in a credit decision as long as possible, getting approvals and landing cars on customers! This preserves your gross profit.

The ability to quickly inspect and measure the appointment ratios and shown appointment ratios are paramount to success. Your ability to quickly access the success or failure of your people's efforts in making and confirming appointments is a worthwhile tool.

The key is having a CRM that can quickly produce what you need with the least amount of aggravation to get there. It must be user friendly, otherwise your people won't use it or will try to short-cut the system.

Look for a solid program that is Internet based. Ask the vendor about their redundancy plan. This is the plan that the vendor uses should there be a problem with the server your data is sitting on. You will want to know how they plan on backing up your data and how often they do so.

This is not a simple process but if you are armed with the right questions you should be able to decipher the right answers and choose the correct system. Begin with the end in mind. Know what you want a system to do. There are no quick fixes, but there are solutions that stand out above the rest.

Tim Shea is president of Great Direct Concepts, a subprime consulting firm to auto dealers. Reach him at [email protected] and 800-430-5484.

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