PRESENTING YOUR DEALERSHIP TO THE PUBLIC

Anthony Melchiorri of Hotel Impossible always instructs the General Manager or Owner of the hotel to park in the farthest parking spot away from the building. Why? So they get the largest overview of the property as they approach it on foot. As you drive, even in a parking lot, you are preoccupied with operating the vehicle, and, your visual outlook is limited by the car that surrounds you. Walking on foot hopefully is now instinctual for you, so it’s now time to look around. You also walk slower than you drive, so you have more time to soak it in. The point is to back away from the thing, and look at it as you approach, to get a more open, developing perspective on it. Sometimes, you should even go park across the street, get out of your car, and look. Just look. Take a few minutes to truly view the property, and see just what it is that other people seeing. The question then becomes, is this image the one you intended to present?

Do hotels = car lots? Yes, in the manner of speaking that either one has to present itself favorably to the public. Every commercial establishment has to follow this rule. In the customer’s mind, a trashy exterior almost always equals a trashy business. Your business image, regardless of your practices, is first formed by most people as they approach your lot. Some people won’t give you a chance to show them what a great business person you are, because they have already driven away, having been turned off by the physical image you gave them. In some areas, it may not be your fault, because you are on a road that gets a lot of trash thrown out of cars. The point is how you address it. If this is your problem, make sure someone gets there just before normal business hours to clean up. People who are used to the area will notice the effort you make. People who are not familiar will still notice your shining gem in the middle of the rest.

Consider it this way: most experienced car buyers view how well a car looks to determine if the person took care of it mechanically. A trashed car almost 100% of the time is also not taken care of where it counts, in the maintenance. You, as a dealer evaluating cars for purchase, notice that, and even if you do not realize it, you tend to take off driveline points when the paint and interior have been abused or neglected. In other words, sometimes, you aren’t going to give the car much of a chance to prove itself if you are not happy with how it looks.

And, when you sell a car, one of the most important things you spend money on is the appearance, because you know that the customer is the same way.  It’s human nature. You have by now realized that no matter how much wax and buffing you do, if a car smokes, skips, or has slipping gears, all you managed to do was waste a little more of the customer’s time than you would have if they had not been drawn in by the shine. Word spreads fast these days, and you need to be keenly aware that people will soon know that you as a business person spend a lot more time polishing the outside than making it work functionally when it counts.  

Car people know that if you can get them in the car with keys, a good test drive is the ultimate sales tool. Be careful, though, there are all too many dealers who are still dumping the sawdust in the gearbox, so to speak, when it comes to customer service. I am fully cognizant of the arguments from BHPH dealers who feel that appearance doesn’t matter, erroneously thinking that just because they finance, customers are beating a path to their doors. Consumers, no matter what the credit score, want to be treated like valued customers.

Have some pride in what you have built, or what you have been entrusted to manage. Clear the junk, pull the weeds, and get out the paintbrushes. It’s a good idea to get a friend who does not work for you, one who is willing to be honest, look at the place, and give you his or her opinion.  


In the future, we’ll talk about polishing the inside, cleaning the upholstery, and doing an occasional tune up on the driveline that is your business practices. Once you present your business physically from the outside, you have to close the sale by showing the customer how well it works. 

NO CREDIT CHECK! YOUR JOB IS YOUR CREDIT! EVERYBODY RIDES!

No Credit, No Problem, as the ads say. But No Credit Check = BIG Problem for you as a dealer.

I fully understand that the clientele coming into the Buy-Here-Pay-Here lot have a low credit score. That is actually a given. But a consumer credit report is more than just a numeric score. This report costs between three and five dollars, but information on it besides the score can save you thousands in the long run. If the deal is going to be in-house finance, wouldn’t you jump at an additional chance to make sure the buyer is going to pay you?

First, the Credit Report helps you satisfy the requirements of the FTC’s Red Flags Rule. The rule requires that you verify the identity of the individual applying for credit. The report can verify addresses, employment, and past credit history.

Second, there is information to be gleaned from amongst the delinquencies here. What you are looking for is *which* delinquencies he has. If the buyer has defaults or collections on “regular bills” such as house utilities, rent, and cell phone, then your regular car note bill will be a problem, also. Next, look for repossessions. One or two repossessions may be normal, but try to make some sense of why they had that default. When in doubt, ask. If the answer is a combative or argumentative one, then you should be cautious, because the next dealer he argues with over payments will be you. If the repo was over a dealer’s failure to fix a problem, then you may have a person who happily signs your “As-Is” statement today, but will hound you endlessly or refuse to pay over even minor issues (real or imagined) with the car. It could be that they were promised fixes that just didn’t happen. You won’t know until you ask. And if you do move forward with the deal, make sure that what you promise is in writing, and ask them twice if they understand your position.

Let’s agree to this one tenet: There are individuals in this world who simply cannot handle a payment agreement. Whether their bad credit is voluntary or due to their own incompetence, they do exist. There are people out there who, as they sit in your office, are already planning their trip to the bankruptcy attorney. There are some who sign whatever you ask, but have no intention of ever handing you another nickel. These are the people that you just have to learn to say “No” to.

Collections activity must be studied. Who or what is the deal, and was it paid in full or part, or is the consumer making payments on it? Was all of this bad activity before a certain time? Is it all happening right now? Remember, bad credit follows for seven years. A six year old late payment or default has almost as much effect on the credit score as one from last month.

Finally, the credit report can show employment consistency or residential history. If this buyer moves around a lot, and not just within the area, we are talking about city to city or state to state, he is a fairly large risk.

As for bankruptcy proceedings, look for active ones, or how long since last one, or any patterns that may lead to one very soon.

If you say No to this customer, then quite possibly, someone else will sell him a car. If it is a competition you are looking for, why make it the one who has the most repossessions or largest losses?  

Remember that saying No doesn’t make you a bad person, it can make you a smarter business owner. 

IS THE INTERNET PASSING YOU BY?

I mentioned before that the Internet has almost completely replaced print media and airwave (Radio & TV) advertising. It’s true. Most newspapers that have folded (sorry) or gone to electronic –only versions put their position squarely on the Internet.

We talked previously about Facebook. My mistake, I got this out of order. Too many dealers don’t even respect the Internet first.  Many dealers out there began selling cars before the internet existed, but that was long ago. Most people research or look for cars online, not the local newspapers. Even Auto Trader turned its’ weekly paper magazines into one of the largest auto sales websites in the world.  

When people want to buy something, especially large purchases, they go look for it online first, and sometimes, only online.  Your print media ad is increasingly not being seen. In these days of satellite radio or direct connect MP3 players being played in cars, your radio ad is also being lost into nearly empty air. We have DVRs that let us skip the television commercials. But people will watch a YouTube video of a car we are interested in. More people in the last week saw a Craigslist or Backpage ad instead of a newspaper ad for a car.

If you did not understand much of the last paragraph, that is okay, but it is time to consider hiring someone who does. Almost every retail outfit in today’s world needs an Internet Specialist who knows these websites, can follow them, and knows how to manipulate the ads shown on them. This specialist can also get you on Facebook, Twitter, GooglePlus, and will embrace whatever the next Social Media phenomenon that arises.

The other part of this is the expense. You will spend less in a whole year specializing in Internet advertising than some dealerships spend in a quarter on television, radio, and print. You will also inarguably reach a larger, wider audience. Think of it this way: the non-Internet media is limited to your local area, and can take days for the ad to even be seen or heard. The Internet is global, and works at light speed. Dealers have reported selling cars to buyers thousands of miles away within an hour of posting an online ad. 

Over eighty percent of people will research the purchase online.  Almost a third of car buyers would prefer to handle the entire purchase electronically. The so-called “Millennial generation,” those born in the 1980’s or later, is increasingly becoming a very large portion of car buyers. These people grew up on connected computing, and most of them rely on it exclusively. The first of this generation are now in their thirties and the number of the rest who are of car-buying age grows each year, as the number of pre-internet car buyers drops. Even people born in the 1960’s to 1970’s grow more and more connected to technology. More than 90% of that generation has internet. Smart phones and wireless portable devices such as tablets or small laptops put the Internet in their hands anytime, anywhere.   


The light-speed velocity of the Internet also has an effect you have to be aware of that we discussed previously: The ease and speed at which people can talk about your business. Before Internet, people would tell an average of ten to twenty people about their bad experience, and that process took weeks. Now, one single Social Media post can reach thousands of people in minutes. Keep in mind that the Good News travels just as fast, and reaches just as many people. What you have to manage is the response. What I think businesses miss is the opportunity to simply thank people for good reviews. It conveys the message of your awareness, appreciation, and responsiveness. Prospective Buyers will notice that just as much as your response to bad reviews. Here’s more good news: the internet society actually pays attention to personal reviews, and uses them as much or more than advertising claims to make purchasing decisions.    

THE SOCIAL MEDIA SUPERHIGHWAY

Facebook, Twitter, and similar Internet interaction sites are quickly becoming the average person’s first line of contact with the outside world, and the Internet has almost completely replaced print media and airwave advertising. Be a part of it. Embrace it instead of avoiding it. Point one: You don’t know unless you are there. If you do not have Facebook and Twitter account, open one today.
Facts: 57% of all American adults have a Facebook account, and 64% visit the site or read notifications daily.  The average adult has 340 friends. Young adults 18-29 have over 500. Most of these will be local people.  Half of the people who use the internet who do not have Facebook themselves live with someone who does. (Pew Research 2014)

Someone “liking” your dealership Page on Facebook exposes you instantly to between 340 and 500 people. Every time you post something new, it shows on the pages of those who liked your page, and is visible to all their friends. Posting purchases (with permission) and tagging the buyer does what no other print or airwave media can: it says: “Jane Smith bought a 2009 Ford Fusion from ABC Auto Sales.” It does this instantly. Not even Jane will personally tell 500 people where she bought her last car. But Facebook just did. And in the picture, she is smiling.

When you tell someone you bought a car, the invariable questions are: What did you buy, who did you buy it from, and did you get a good deal? Each person you tell has to ask, and you have to answer those questions repeatedly. The purchase status answers the first two. Then, if just one person comments on that status, and asks Jane, she only has to answer it once, but 340-500 people just got the same information. All at the speed of light. Tag your sales rep in the status, too, and Jane’s friends will know who to ask for. Hundreds of potential referral clients and all you did was copy a picture to a website, type a car description, and a couple names. Extreme Business Person Bonus points for a two-minute video of Jane gushing about her purchase.   

Use Facebook to promote your dealership and its’ community position. Get involved in the local charity events, and post that to your page. People really do respond positively when local businesses participate. Other business owners who participate will also be more open to doing trade with someone who has the same social involvement level. Besides that, the networking connections you develop could help you in more ways than you imagine.

Be supportive of the locals. Congratulate the high school or college team for making playoffs. If you are in a college town, images of mascots are huge draws. Ask the local team to come by and take pictures with your staff to post to your page, and donate for the trip to Capital City for the big game, or to purchase instruments for the band.  Host the fund-raising car wash.

Bonus: people can write reviews and put them on your page. Not just their friends, but anyone who sees the page will see the review. If it’s all good, then you get a lot of good press for free. If it’s bad, then maybe you should review your business practices and training. Even if you do get a bad review, the public wants to know how you handle it. If you respond positively and quickly, then that shows that businesses may make mistakes, but you are willing to address them. Never respond angrily or with accusations. Contrary to popular belief, the customer is not always right, but to his friends, he is. Do not post fake reviews. They will be exposed, and you will look much worse for it.


Shakespeare said that the evil that men do lives after them, the good is buried with them. It is true. One hateful, angry tirade will be findable on the internet and reposted for years and years, and be available to anyone on any search page even long after your business is closed. In this age of screenshots, even deleting it will not make it go away. Make sure that the business owner or general manager approves all except routine postings. You have an image to protect, and recent news shows that it can be ruined or permanently scarred with just one bad status. Take a couple hours one day and search for the term “Social Media Blunders.” You will be entertained and disgusted, but most hopefully, enlightened and educated at the raw destructive power of just one sentence. 

RIGHT-SIZING YOUR CUSTOMER

Did you right-size your customer in the car, or did you put your customer in an avoidable default position?

Verifying and working within the customer’s personal requirements, salary, and budget timeline makes for better deals, greater satisfaction, increased overall revenue, and higher numbers of referrals. Managing your Receivables goes beyond simply taking the money in after the sale. It has to start from the first time the customer asks if you finance, and be a part of all negotiations.    
“Personal requirements” simply means verifying that the car being delivered fits the consumer’s needs.  A family with two kids in car seats will not be happy with a coupe within a short time. Take the time to ask personal questions and qualify the unit to the buyer.

An unsatisfied buyer will find a lot of things wrong with a unit that a happy buyer will overlook. Keep in mind, too, that the consumer will find a way to also make you the bad guy for not putting him in the car he wanted first.

If the buyer does not mention financing, then it is your job to do so. Unless they are counting cash out, finance is invariably going to be part of the deal. Be upfront and honest about your offerings, and ask for the information from the buyer. How much down? What are his or her pay periods? Find out before showing or discussing specific units.

There is no sense in getting a buyer interested in a unit that at closing, you find out won’t work out for them. Their disappointment in having to “settle” for a lesser unit can lead to a lost sale or overall dissatisfaction with your business.

Financially, someone with just $400 in disposable income will not be able to pay a $450 per month payment for long. Likewise, if the payment is leaving the buyer close to his edge, a car that is a fuel hog or needs frequent repairs is not going to work out. 

It is in your best interest in every case to try to find a way to keep the buyer in the car. If the car or the payment did not work from day one, then that task is nearly impossible. Repossession should be an absolute last resort to working with a customer. It is expensive, and can get complicated really fast. No matter how you arrived at that, the dealer is always going to look bad. Too many dealers substitute this for a collections phone call, and you will soon find, these dealers have the worst reputations in town. Ironically, they are also the very first to bitterly complain that customers won’t call or communicate with them. Contempt and distrust of the customer breeds contempt and distrust of the dealer. That little piece of circular warfare we cover later. 

Appoint or hire someone with great people skills and a good grasp of personal finance concepts to act not only as your initial financing consultant, but also as a customer solutions representative. Authorize this person to talk to the customers when the payments are late, and charge them with finding a solution to getting the account back to current. You may need to empower this person to make minor modifications or allowances. This position will pay for itself in increased revenue, and happier customers. Happy customers who are riding bring a lot more referrals that the guy sitting at home angry because you picked up his car. 

Be proactive and understanding. Watch the local news for notices of major plant closings or work outages, and make a plan to work with those people affected. After all, you’d much rather see your name on Social Media as the Awesome Friend who helped out a person in need rather than the Rotten Jerk who kicked people while they were down.

Lastly, be realistic. If a person had his last five cars repossessed, then, the odds are yours will be the sixth. Sorry, but some people just cannot do a payment schedule, whether it is their own personal choices or just bad fortune. Sometimes, it really is better to say No than to enter into a contract that is certain to fail.

Avoidable default is one of the biggest, and most toxic, cancers a dealership can have. It’s also the single most preventable.  

DOUBLE-CHECK THAT PAPERWORK!

A few minutes spent catching VIN, mileage, spelling, and deal number mistakes before closing could save hours or days trying to make corrections and getting contracts re-signed. Making sure the deal is right the first time, every time, also has a positive effect on your reputation.
No one is perfect, and mistakes are sometimes made. It is important to verify the numbers are printed as agreed, including Sale Price, Payment terms/dates, and taxes and tag/title fees.  
Misspelled names, mistyped VINs, mileage, or driver license information and missing disclosures or forms can cause headaches at registration. Check with your local DMV or tag office for a list of required forms. Many states issue a Title Manual that will be very helpful in answering questions, and provide a documented basis for your decisions. 
 
Other forms that may not seem important now will be at some point down the road. For example, in Florida, if you are collecting the Tag/Title fees COD, you MUST have the COD agreement signed by the customer at the time of the deal. Otherwise, you cannot send the Registration Stop Request in later.
 
Missing insurance, arbitration, or repossession agreements can cause legal issues.  
 
This is your time to separate yourself from the consumer for just a few minutes to check these things and verify without distraction. Remember that this set of papers is a legal contract that binds both the consumer AND the dealership. Sometimes, it is a good idea to have someone else check the deal pack. Some of these issues can have the effect of having the deal rejected by a third-party lender.
 
A good idea is to always have your sale documents in a certain order. If you inspect the deal pack in the same order every time, you are more likely to notice a missing form. Presenting the forms to the consumer in a certain order each time will also smooth out the closing process. Take the time to present and explain each document, pointing out the key elements of the agreement.
 
Always remember that mistakes are infinitely easier to fix before closing than after delivery. 

Welcome

Let me explain:

I’m Louie. I work for Wayne Reaves Software & Websites. I’m a Senior Tech Support Analyst, and do IT work for the office.

I was in the Used Car business once, have sold franchise cars, and I was also a mechanic, and once, manager of a Tire Store. I consult with used car stores, and advise various people on it and how our software interacts with them.

Seems like a weird path? Yeah, it is.

But, I have done this for thirteen years now, and I’ve learned a few things.

I thought I’d share them with you.

Commentary is welcome, keep it clean, and respectful.