Looking Ahead to 2016:
In our last visit, we talked about how to prepare for the end of the year. If you haven’t read that entry yet, go do it now, and get that part done. Go ahead, I’ll wait here.
Oh, you are back. Good. Now that last year is set on course, let’s look ahead.
A few things that you bring over from last year become your building blocks for this next one.
First: Your Advertising.
- Does it meet your needs?
- Are you even tracking and qualifying your campaigns?
- Are the selections made generating leads and sales?
- Is there an option you are not using?
We talked before (Here) about the Internet. Obviously, if you are reading this blog, you are familiar with it enough to be on it. That’s just step one. Next step is understanding it.
The Internet is a powerful tool for marketing. It is Thor’s Mjolnir in a world of 16-oz claw hammers. Keep in mind, that it is the one marketing tool that is universal and instant. That means as soon as you click to submit the changes to a website, it is visible to the entire known connected world within microseconds. Even phone calls and handshakes can reach only one live person at a time.
As we said before, though, remember that the Internet can destroy just as quickly as it builds.
Financial Planning. This means taking a good look at this year’s results. Do you have a solid idea of your expected expenses for 2016? Do you have an equally decent grasp of your income? These things are important.
Staff Analysis: Do you have the Right Team? Did you read my warnings about that on THIS page?
Sales Goals: How many units (and at what markup) per month did you move this year? Was that a good number for you? If not, how do you fix that? This is the time to form your strategy.
This is also a very good time to sit down and take a long hard look at your receivables.
Look at your percentages of bad debt, slow pays, etc. Find out what your percentages of Collected vs Expected are. If your DMS gives you a monthly cash flow value for your active receivables, compare this to the average principal and interest collected each month.
If this number is not right for you, then fix it. How? First, look at your underwriting. It’s the primary cause for poor loan performance. Do you have one of those “everybody rides” signs out front? If so, go take it down. The reality is, that Everybody cant ride. Learn to read a credit report, and use the information from it to make better decisions. Go read THIS again.
Another place to look at is ease of payments. People wont make payments if its a pain. Are you one of those Cash Only dealers? Here’s a tip: Consumer Advocates have long advised people to never make payments in cash. Besides, virtually everybody has a debit card, so get yourself a card processor, and start taking payments the easy way. Yes, it costs a little bit. It’s part of the cost of operating a business in the 21st century.
One other reason for low payment performance is an over-sized payment. Yep, we are back to THIS again. Even if you made the right-size decision at the time of sale, it may not be the right size now. Pick up the phone and ask. Nicely. Be open to working with them, if they need it. Be their partner, not their enemy. The referrals will be well worth it. I tell you that, but I will also caution you not to be their patsy or doormat, either. There is a balance.
Finally, give the original sales rep an incentive to help. In their slow times, have them call some of these slow pays they originally sold, and have them use the persuasive power of sales to try to get the payment made.
I hope you have a great year.