DOES SIZE MATTER?

Kim Macpherson

January 2007

"Selling cars and making money, that’s what we do.” That is exactly what a small used car dealership in Halifax, Nova Scotia is doing. This small city with little more than 350,000 people feels a lot bigger when you are standing in this dealership’s showroom, packed with customers and sales people and managers writing deals one week before Christmas.

Daniel Taylor, owner of Manufacturers Auto Exchange, is originally from New York. He grew up in the car business with his family that owned dealerships all over the state. From washpit to owner, large in personality and size, he can seem intimi-

dating at first – until you watch him go through his showroom talking to his customers and staff.

Manufacturers Auto Exchange is quite a success story. It has been in business for over three years. Small city, small store, big success! This dealership has achieved the gold award from the Bank of Nova Scotia for gross sales achievement. However, 80 percent of the deals written at Manufacturers Auto Exchange are sub-prime. This dealership averages $4,200 in gross profit per deal and is selling on average between 82 to 98 cars per month. I must highlight the fact that the dealership can only park 60 cars in inventory at any given time, it is very small.

Manufacturers Auto Exchange’s team has a sales process for both prime and sub-prime customers. The following are a few things they do to ensure success in dealing with their subprime customers.

1. Discover the sub-prime customer before vehicle selection.

2. Discuss credit with customer and prepare case for the lender.

3. Teamwork between used car buyer and finance manager so the cars meet certain criteria and can be booked out for maximum profit.

4. Salespeople, sales managers and finance managers work as a team, not in individual departments.

5. Every customer is greeted by a manager before leaving the store.

5. One manager is the chief; he runs the sale process from the meet and greet to delivery straight through to funding.

6. Code of ethics ensuring each customer is treated with respect.

7. Constant training and review in every department to make sure there are no short cuts in the sale process.

8. Proper collection of all bank documents before delivery.

9. Proper and efficient packaging of each deal.

Mr. Taylor ends our conversation with a chuckle, “Subprime is the largest profit centre in the entire store. It always makes me laugh when other dealers warn me about ‘that kind of customer.’ Any dealer still not selling to ‘that customer,’ who is neither ‘special’ or ‘sub’ anymore, is just not in the game and they are losing thousands of dollars.”

I have to say, I have been in many dealerships across North America from Ocala, Florida to Detroit, Michigan. I have negotiated with the best of them in Toronto and have had many laughs in Newfoundland. This dealership is different.

I will leave you with one of its success stories about a customer that had come in three years ago and purchased his first car at close to 30 percent. The salespeople told him to always make his payments on time and come back in a year. He did. His credit situation had changed and they traded in his car and refinanced him on another at around 15 percent. They told him to come back the next year and to keep making his payments on time always. He is now approved for the third time at the Bank of Nova Scotia on a newer and nicer car. The dealership never lost a dime on those deals. In fact, it not only made money selling that customer a car, but he is one of the best advertisements in Halifax for Manufacturers Auto Exchange!

If that is not enough to convince you to get into the business of sub-prime, you should get out of the business.

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Belly to Belly

By Kim MacPherson • 23 Mar, 2016

This article, written in 2016, addresses the ongoing discussion about online vehicle purchases and the potential elimination of salespeople during this transition. At the time, and still today, I strongly believe that people prefer doing business with individuals they know, like, and trust. However, I did not anticipate the global shutdown and the subsequent need for society to adapt to online communication and relationship-building. Surprisingly, like many others, I discovered the ability to establish robust retail business relationships with customers without ever meeting them face-to-face, let alone in person. This experience has prompted me to include this old article in my blogs, showcasing how far we have come. It serves as a reminder that we must all embrace change and remain open-minded. In this ever-evolving digital era, we have learned that building and maintaining relationships can be effectively accomplished online. It is a testament to the adaptability and resilience of both businesses and individuals. Let us continue to embrace new opportunities and adapt to the changing landscape of the modern world. Enjoy this article "Belly to Belly" by Kim MacPherson March 23, 2016 Why you should still try get Belly to Belly with your customers? Technology is changing the how we SELL vehicles not the way. In sales your job is to build a relationship and trust with your customers by uncovering their challenges and offering solutions. The fact is you will have a much easier time of doing that if you are in person. Become an advisor to a friend looking for help in an area where you are the expert. I think we have gotten away from how valuable that relationship is, thinking it can be replaced by technology.

Increase Gross Profits and Maintain CSI Scores

By Kim MacPherson • 12 Jan, 2008

Kim Macpherson January 2008 The finance and insurance manager is a sales professional. Following simple steps to the sale, uncovering and understanding the customers needs and presenting solutions insures success. Step 1: Meet and greet Introduce yourself to your customer in the sales associate’s office, letting your customer reach a comfort level with you immediately. Customers rarely feel comfortable moving from the sales associate’s office to the business office to meet you for the first time. It has taken the customer hours, sometimes days or even months, to become comfortable with their sales associate and you look like a loan officer at the bank. Hint: When you introduce yourself to the customer sit on the same side of the desk, no computer, and build a relationship. Step 2: Interview In the sales associate’s office, ask the customer a few questions to uncover clues that will tell you about his needs giving you the ability to offer solutions. Customers have one set of needs when buying a car and a different set of needs when protecting themselves and their investment. The best way to uncover needs and solve problems is to maintain control by asking questions. Success will be achieved by asking the following: 1. How long to you typically keep your vehicles? (Clue #1, warranty) 2. Do you have a trade-in? 3. Do you have full coverage insurance? 4. In the event of your death who would you want to receive the title to your vehicle? (Clue #2, life insurance) 5. Do you have with you (stips you need): driver’s license, voided cheque, insurance papers, and ownership for your trade? 6. Where do you currently do your service work? 7. How often? 8. If we could make it cost effective would you prefer to do your service with us? (Clue #3, service package) 9. Review credit application. Introduce the “what happened, what changed?” form. (Clue #4, warranty and life insur- ance) 10. Is there any additional income? 11. If you were unable to work due to illness or injury how would you make your payments? (Clue #5, disability insurance) Commit these to memory and be able to ask them in whatever order is comfortable; but ask them. If you can, make this a dealership policy. It will protect you legally if a dispute were to arise between you and your customer regarding what the customer was told or how they were handled in the finance office. The finance department can support their argument if everyone has the same steps and script to follow. Once all the questions have been asked the finance manager lets the customer know he is going to need 10 minutes to look over the deal and gather required documents. After that he/she will return to review and complete the paperwork with the customer, handle funding and get them on their way as soon as possible. Step 3: Produce presentation/menu sell Based on the interview, the finance manager will line up four different packages for the customer’s approval. Each package has the monthly payment associated and are pre-sented highest to lowest cost of coverage. When a package is refused, it is important to let the customer know what they are forfeiting. For example if they say no to life insurance, make it clear that if something were to happen to them their loved ones are responsible to make the car payments. Here are a few items to consider in finance beyond the road to the sale that will increase gross and improve CSI. The “cash customers” are most of the time not actually buying with cash. They are using an alternative finance source, usually a line of credit. This is not so good for the customers and makes selling product in the business office difficult. The solution? Every customer that purchases a vehicle must see a business manager. Giving you one more chance to convert them to one of your finance sources, and in most cases stop them from making a bad financial choice. Dealing with the high interest rate objection can be very easy if you establish control with your customers from the beginning of the transaction. A printout from their credit bureau is available for when they ask why their interest rate so high. The response is, “Based on the information you have given me this is the best interest rate the banks have offered you. If you like we can have a look together to make sure I have not missed anything?” Present their credit check to them for review; highlight three of their credit blemishes. Let them know you have reviewed their credit again and the rate they have is in fact the best rate available to them at this time. To end this uncomfortable moment ask this question, “Do you have any other questions before we continue?” If you ask this question, most times the customer will agree and move forward with you. A smart finance and insurance manager will thank the sales associate for the deal, commit to have the vehicle delivered as soon as possible and come to the sales associate’s office to introduce themselves to the customer and begin the interview. The associate will feel appreciated and want to help make the finance manager’s job easer. You will be surprised how many customers come to your office already prepared to purchase product. Apply these steps and watch your finance department become your largest profit centre in your dealership.