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Nov. 13, 2006 – Grading a dealership’s changes

November 13, 2006
Filed under Features

For the past six months, S&W Powersports, a Jasper, Ala., dealership, has had technology products, services and expertise at its disposal as part of the Turning Technology into Sales and Profit program.
Jim Wilson Jr., the owner of the family owned dealership, was asked to grade those products and services halfway into the year-long program.
“I know all the suppliers involved in this program had hoped to show immediate results with their technology,” Wilson said. “They wanted to come in and give my sales and profits a quick shot in the arm. But it just hasn’t worked out that way. A big part of it is our fault.
“We’ve had tremendous people turnover in our parts and service departments. That’s slowed down our ability to use, learn and benefit from all the technologies provided.”
Wilson adds that “100 percent commitment was lacking from our side.
“But, in the last few weeks, I’ve stabilized our situation, and can turn more attention to working more closely with them, getting the full impact of their expertise,” he said. “Despite our employee situation, overall, I’d say the job these people have done is wonderful. The changes have been subtle and, at times, unnoticed by the suppliers. But to me, the impact on my dealership has been vast.”
“Jim Jr.’s dead right!” said Larry Koch, founder of Tousley Motorsports in Minnesota and consultant for the series. “Our progress in getting results is based on both the technology provided and dealer commitment to properly using the technology. If you don’t have both, progress is slowed.
“With his employee issues cleared up, we should make much more progress and measurable results in the next six months.”
Here’s a look at what progress has been made and Wilson’s grading of the products and service.
Business Management System
MIC Systems installed a business management system in April called BrainStorm. MIC did an initial training session and provided S&W daily help for the past five months, Wilson said.
“I’ve seen a change in my employees,” he said. “They’re turning more and more to the computer for answers on how to do their jobs better. It’s becoming more intuitive for them.
“Parts and service people are starting to realize that the BMS can make their jobs easier. That’s a good thing for the dealership. The more they accept the technology, the more efficient they become. The more profitable we become.
“Second, I’ve become aware that I can do my own job better using the daily operating report that the BMS puts out. I’m kind of an old dog and still run my business by the seat-of-my pants. My management style has been to look at my bank account and if there’s money there, I’m doing well.
“But I’m starting to realize that running my dealership can be a lot easier and faster if I start managing by reports, instead of intuition alone.”
Wilson said the dealership is only using a small part of BrainStorm and expects to be using the entire system in the coming months.
Wilson’s grade for the system: “B”
Its potential, according to Wilson: “A”
What needs to be done now: “I need to set up a ‘point’ or ‘go to’ person among my employees, who can answer computer-related questions from the other employees,” Wilson said. “I don’t have that person in place yet, so we’re not getting full use out of the software.
“Second, (MIC Systems’ Neil Frame) and his people need to come back for another round of training. I’d like to see him back here in Jasper, doing another two-to-three day face-to-face session with us.”
The provider’s response: “From our standpoint, we’ll work with him to help him create an internal BMS point person,” Frame said. “And, we’ll gladly come down to Jasper for more employee training. Jim’s right. They’ve just begun to tap into the potential of their BMS. Six months from now, we expect S&W will fully embrace that potential.”
Web site enhancement
ARI created S&W’s new Web site, www.sandwpower.com, which debuted in June.
ARI’s WebsiteSmart online site has been popular with customers, Wilson said. “I don’t sell directly off of the site, even though I’ve got the
e-commerce capability,” he said. “But we get a lot of people coming in, saying ‘I was up on your Web site last night and saw such and such motorcycle. Can you show it to me?’
“WebsiteSmart’s like an electronic Yellow Pages with inventory. There are lots of people that comparison shop or do research on a purchase before they come into our store.”
Wilson’s grade on the Web site: “B+”
Its potential, according to Wilson: “A”
What needs to be done now: “To rate this technology higher, I’d like to see more information up on the site, more closely targeted to our customers interests,” Wilson said. “More inventory. More changes for key buying periods, like our upcoming Christmas season.”
The provider’s response: “A key to making WebsiteSmart effective is constant information updates and relevance,” said Dave Perry, director of marketing for ARI. “We’ve got the season and weather manager options built into the S&W site, so his products, promotions and emphasis will automatically change to address his key hunting and Christmas seasons.”
Direct mail program
ARI also developed a series of direct mailers for S&W that focused on technical service, accessories, credit support and power generators.
“We’ve gotten some generator sales directly from them,” Wilson said. “But like the Web site, I want to get the full impact out of these direct mail pieces.”
Wilson’s grade on the program: “B”
Its potential, according to Wilson: “A”
What needs to be done now: Wilson would like to see “if we can get more targeted in our promotion messages and expand the target audiences. For example, the mailers should focus on specific events — offering winterizing service for the end of boat season customers and prospects, special offers on accessory items for our prime Christmas season and ATV specials for fall hunters.”
The provider’s response: “We are going to work with Jim Jr. to create more focused messages, addressed to a more focused target audience,” Perry said.
Sales training
Dealership University has helped S&W compete against the discounters that are slashing prices below wholesale levels, Wilson said.
“Tory Hornsby from Dealership University has gotten us up and running on their training and it’s helped,” Wilson said. “It’s not so much for my dad and I, who’ve been selling for a long time. But it’s made a difference with the younger salespeople.They love the advice they get.
“I rarely hear salespeople saying ‘best cash price’ to prospects as their opening offer anymore. As a result, we’re closing more deals. And the profit on these deals is bigger.”
Wilson’s grade on the training: “B”
Its potential, according to Wilson: “A”
What needs to be done now: “We just want more of their time,” Wilson said of Dealership University.
F&I kiosk
Motorcycle Management Consulting set up a F&I kiosk, which is run by Dealers Finance Source (DFS). The kiosk provides an online link to DFS’ services and sales staff, which seek credit approval and sell F&I products, like GAP insurance and extended warranty, directly to the consumer. For this service, a dealership pays a transaction charge and also has a profit-sharing arrangement with DFS.
“I’ve got a love-hate relationship going with this right now,” Wilson said. “I love it for what it can do. I hate it for some of the glitches we’ve had, both on our side and on the kiosk side.”
Wilson said the kiosk program offers potential for up-selling back-end services and increasing tough credit sales.
“Of the people with weak to poor credit, we’re getting about 50 percent loan approval and 100 percent of those people that get approved for loans are buying the back-end services,” he said. “The profits from those back-end services are close to whole goods profits.”
The downside for S&W has been the process time. “Part of that’s our fault,” Wilson said. “We were working off of satellite transmission for our entire dealership and it’s slow. Bell South is putting in a T1 line, as we speak, to help eliminate that transmission speed problem.”
The other issue is with the kiosk customer service staff.
“If you’ve got poor credit, it just takes them longer to get an approval. Sometimes up to an hour or so. A person with great credit and knows it doesn’t want to sit around and wait,” Wilson said. “This has changed the way we address customers when they come in the door. Instead of talking about their credit worthiness when we’re getting ready to close, we raise the question earlier in the selling process.”
Wilson’s grade on the F&I kiosk: “C+”
Its potential, according to Wilson: “A+”
What needs to be done now: S&W is installing the T1 line and Wilson said the kiosk staff needs to “work out their customer service issues.”
The provider’s response: “Our goal is to develop a process that will be beneficial to all customers — not just the credit-challenged,” said Julia McCarthy, president of Motorcycle Management Consulting. “Turn around time, especially for the credit-challenged, will always be an issue. If we can improve the process for all customers and then set realistic expectations for the more challenging loans, we will be on our way to earning an ‘A+.’” psb

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