Comment

Comment by Dan Smallhouse on May 25, 2009 at 1:43pm

One reoccurring necessary expense Dealerships I have found to overlook is Credit Bureau Access charges. They assume there are no other options out there and are beholden to either their DMS, CRM. F&I Software Manager to provide this function thus overlooking options that can be provided with Credit Bureau vendors such as companies like the one I currently work for; 700 Credit.

It pays to shop vendors who specialize in this area, including all of the new credit compliance products, necessary to have in place with the advent of OFAC and Red Flag Rules Regulations. They can not only help in managing application flow so as to make it simple for employees to adhere to the new regulations, but also provide well needed training, reporting functions, and Credit Bureau Expense Management for dealership employees and management.

With some dealerships incurring monthly costs upwards of $1K/month the savings I have found at times can be up to 33% and perhaps higher, depending on credit bureau volume and compliance product fees. Don't overlook this area, it can pay big dividends to shop around.

Comment by A Jay Gould on May 22, 2009 at 11:39am

Every expense in the dealership is controllable.

Comment by Steve Emery on May 22, 2009 at 11:19am

Biggest Expenses involve the "Variable" and can be the least managed, as they are in the "Front End" controlled by "Sales" Managers.

Inventory Expense- New Floorplan Interest (which may be covered up by credits) and Used Wholesale loss (which may be covered up by a pack). Do you have a Buying Plan to stock what is selling the fastest at the desired month's supply? Do you have an Age-ing plan to deal with units before you are buried in Interest Expense/Wholesale loss?

Advertising Expense - Do you have a Budget for each campaign? Are you measuring the cars you sell by Campaign (or Internet Lead provider)? What is your Cost Per Sale for each? What is more effective...trying to find new customers or advertising to your current data base?

Sales Comp - With traffic down, are you aware of every opportunity and are we doing dynamite product presentations? I have seen Dealers shift some comp to contests/spiffs for putting customers into CRM and test drives.

In Fixed Ops, you can focus on Semi-Fixed Expenses

Service Shop Supplies - If we can charge for this, are we on every RO? Are we tracking usage by Tech, $Shop Supplies/flat rate hr.?

Parts Freight - Are we collecting from each Special Order? Are you tracking "freight recovery" by counterperson?

Hope this helps,
$teve

Comment by Bert Martin on May 21, 2009 at 9:49am

Courtney I have NEVER asked for a dime to assist a dealer in need in discussing his/her needs, wants, desires, plans, DMS, statistical data, internal control, etc. etc. etc. If we can form a trusting relationship then we can move forward to further introspection, control issues and process planning. My website explains all areas that can be reviewed with HELP. However, my experience tells me MOST dealers would rather whine and cut than try to really understand their fixed operations. Most 20 group moderators have little or no expertise in the fixed arena. It is nor never has been my intent to bash anyone.

Comment by Tom White Jr. on April 23, 2009 at 1:29am

@Courtney Cole Amen and thanks for that... Social Media is not about selling or telling, it's about SHARING... While this is a wonderful opportunity to connect vendors with the dealer base, let's understand that this is about information first, and selling a distant second...

Comment by Courtney Cole on April 23, 2009 at 1:19am

I appreciate what you are saying; however, both of you are VENDORS. A whole lot of us are all over our expenses and processes. How do you think we are going to survive? During these times, we are reluctant to "pay" someone to look at our expenses and processes.

Or maybe we are in a 20 Group and look at this on a monthly basis. There is no question in my mind that both of you have value to add to the dealer base. I would just ask that before you "bash" us dealers that maybe you write a couple of "suggestive" articles on what we should be doing in these times.

We are much more likely to do business with someone that offers to help first before asking for our business immediately. As a dealer on a social network, I am much more likely to do business with someone that offers by starting an amicable relationship first AND then later asks for business.

Comment by Bert Martin on April 22, 2009 at 9:03am

For the same reason they not ask for help in improving their processes.
Process improvement requires introspection, true concern, empathy and passion.
Expense reduction is little more than a statistical comparison of percentages and requires knowledge of vendor relations and everyday operating processes.
Most dealers are ill equipped to effectively understand expense reduction because they do not understand the processes that drive revenue in the operating departments.

Comment by Chris Stevens on March 10, 2009 at 12:01pm

Absolutely. I have an appoinment requirement for Saturday spiffs. If they can't do what they need to do durring the week to help the store make it happen, why should I pay them to do their job they already get paid to do!? There's always a method to the madness!

Comment by A Jay Gould on March 10, 2009 at 11:54am

Spiffing on Saurday,usually your busy day is not a great ideal, BUT you could put a spin on it with a weekday qualifier like so many appointments,sales,ect to qualify to participate in the weekend spif. Best of both worlds, your staff works harder during the week to participate in the weekend spiffs,but hold the line, either they qualify or they don't.

Comment by Chris Stevens on March 7, 2009 at 6:10pm

Jay hit it on the head. I don't know ONE dealer that is doing better now than they were a year or so ago. If they are, I guaruntee they are doing exactly what Jay said. Traffic is down, there is more time to spend on each deal - in sales AND finance. You have to maximize every single opportunity every single time. Same in service, although our RO counts are still increasing for the most part, everyone knows as a WHOLE, the store needs to make every customer and penny count.

We run different spiff programs in sales and service to acheive the goals WE need met, knowing business is different than it used to be. It doesn't make sense for me to spiff my guys / gals for a 20 car Saturday, when it's not within reality. We try and spiff on what is realistic PLUS an additional 10 - 15% increase.

Times are tough.. need to make the best of them!

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