Training » Making Lemonade from Lemons

Making Lemonade from Lemons

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Everyone that has anything to say about Special Finance all agree on at least one thing. No matter how many cars or how much profit they make, it’s never enough. For the amount of effort required, Special Finance Departments are always expected to do better than they do, yet nobody seems to be able to pinpoint the short comings. They point fingers at the Used Car Manager (“The inventory stinks!”), the Special Finance Manager (“He can’t get a deal bought!”}, the Salespeople (“They can’t qualify a customer!”), the Sales Desk (“They can’t work a deal right!”) or the BDC (The leads they get stink!”).

Sound familiar? Some if not all of those comments are probably heard at your dealership’s Manager’s Meetings on a regular basis. So what can be done about it? Either let the war go on, with each department trying to blame the other, or call a truce and find a solution.

Regardless of the source, your dealership’s leads are only as good as you make them. The main reason that leads don’t produce appointments for a dealership is nobody has really worked them. What typically happens is whoever is making your dealership’s calls attempts to contact the lead once or twice. After getting no response, they assume the lead is dead, and it’s filed away in the no-sale category. Let’s analyze this for a moment.

Who does your dealership have making these calls? If your dealership has a BDC, there is no reason for this lead to be filed away and forgotten. The BDC’s primary responsibility is to make contact with your leads and/or customers. They should continue attempting to contact until either the customer buys a vehicle from your dealership or specifically asks not to be contacted again. If your dealership has a specific person making these calls, be sure the process is the same. Your dealership has only two types of customers – those that buy and those that don’t!

The secret to phone success is perseverance. Continue to call until someone actually reaches the customer. Make the initial contact, set the appointment and sell the process. Sell the concept of rebuilding the customer’s credit. “Sell a loan and get a car”. Continually leaving messages accomplishes nothing. Stagger the calls, so you do not try to reach them at the same time each day. The mission is to secure an appointment. If the initial contact is say, Monday at 1PM, and there is no answer, call back during the next day at 3PM. Work in two hour intervals. Why call back the next day at the same time? Follow up on Monday at 4pm as well as Tuesday at 6PM. Use this 2 hour stagger arrangement for the next two weeks until this lead is contacted and an appointment is made. In the meantime, be sure to send a follow-up letter this lead, which at least lets them know your dealership received their inquiry and have been trying to contact them.

If customers are not being worked properly, then it’s time to rethink your entire process. Too often it seems that a dealership is missing out on the special finance business in their market while the dealership down the street is doing extraordinarily well. The reason more often that not revolves around the process the dealership employs. The sales desk gets the prospect first and the desk and the salesman work the deal like a primary customer, only to find out after the deal is made that the customer has credit issues. Special finance customers must be worked backwards from a regular customer. Keep the customer focused on the credit issue and away from an inventory issue. Teach the sales force how to properly qualify a customer. Make sure that all special finance appointments come in asking for a manager who is already expecting them. Doing this helps upfront to know how to deal with a customer when they first come in to your dealership. Make sure the sales force knows to refer these people directly to the proper people or all is lost again.

Speaking of salespeople, make sure to properly train the sales force on how to deal with a special finance customer. Consistently successful dealerships know that these customers need to be work backwards. The first order of business is to assess their credit issues. Find out exactly what their situation is and work the deal accordingly. Keep the customer focused on the credit rebuilding process and away from the inventory. This will close a lot more deals.

Inventory is always an issue but should never prevent your dealership from making a deal. If the used car inventory is not properly aligned for Special Finance, there are two choices: pass on every deal because there isn’t enough profit on that particular vehicle or deliver a car, make the most profit on that particular deal, reduce your used car inventory by one, and go on to the next deal. As my dad used to say, “It’s just a hunk of steel that needs to go away.” Get it off the lot and get another one to replace it. It’s not like there aren’t any more used cars to go around.

More importantly, is the Used Car Manager up to speed on what he needs to buy. Does anybody let him know what inventory is preferred by the special finance lenders your dealership uses, or what vehicles tend to do the best with special finance customers? To get the best inventory, everyone needs to be on the same page. Communication is always the key.

If the problem is getting deals bought, the question is “Who is working these deals?” Are the sales desk or primary F&I manager working the deals? If there are problems getting deals hung, consider splitting the primary and special finance departments. A dedicated department focusing solely on special finance can rehash deals more efficiently, as well as having someone who knows the lenders and how to structure a deal accordingly. Remember that anybody can deliver a vehicle; the real talent lies in getting the deal funded quickly and without any deductions.

Things are never as bleak as they seem to be. No matter how bad things may look, with a little bit of cooperation, success is within your dealership’s reach. Stop the finger pointing and get everyone moving in the same direction. Soon your dealership’s special finance efforts will be everything you hope for and more. If you’d like to find out how to be 49.5 ways to be more effective at special finance, drop me and email and I’ll send our booklet.


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