Blog

Inflation remains high despite prices cooling in July and August. In addition, rising interest rates indirectly increase the cost of borrowing, making it more expensive to buy a vehicle. As per Kelly Blue Book data, the average price of new vehicle prices increased by 12% from July last year, and used vehicle prices have gone up by 40%, as per data released by the U.S. Bureau of Labor Statistics. Inflation and high prices have caused issues of vehicle affordability for consumers and impacted dealers’ profitability. However, there is light at the end of the tunnel for both consumers and dealers. F&I products provide relief to consumer and dealers in inflation. F&I products such as vehicle service contracts (VSC) could help shield customers in inflation and provide financial security from costly repair and replacement expenses in the future. Customers most likely would be using their service contract after a couple of years when a part breaks down or in the event of a malfunction. With prices rising rapidly and the cost of parts and labor going up, customers are locking in the current rate and saving in the future. A VSC creates peace of mind that the expense of owning a vehicle is more fixed than variable. Increased age of cars in the U.S. Chart source: S&P Global Mobility The average age of light vehicles in the U.S. reached an all-time high in 2022 as consumers continue to hold onto vehicles. A study by IHS Markit shows that the average age of light vehicles is now 12.2 years. The global chip shortage influencing the supply chain and inventory and rising prices are the primary factors pushing the U.S. vehicle age higher. F&I products provide relief to consumers in inflation With the rise in vehicle ownership, consumers look for options to safeguard themselves against expensive and inconvenient repairs and replacements. Therefore, F&I products purchased now could provide relief for customers later. Let’s look at the examples below to see how F&I products help protect customers. Guaranteed Asset Protection (GAP) GAP helps pay the difference between the vehicle’s market value at the time of the incident and the outstanding loan balance. With limited inventory, rising car prices, and higher interest rates on loans, GAP protects customers against financial burdens. Exterior and interior appearance coverage Every day, drivers encounter things that are out of their control — the elements, the weather, and the playful toddler. But these encounters don’t have to devalue the car. Now more than ever, when the prices of new and used vehicles are skyrocketing, it makes sense to maintain the condition and appearance of the cars. Therefore, offering industry-leading appearance coverage, such as Cilajet, would add value to the customers’ purchases. In addition to the coverage, PRO offers comprehensive training to support sales goals and the growth of your F&I department. Tire and wheel coverage As per AAA data, drivers Paid $26.5 Billion in Pothole-Related Repairs in 2021. “In many parts of the country, winter roads will likely give way to pothole-laden obstacle courses,” said Mary Maguire, Director of Public/Government Affairs for AAA Northeast. “When a vehicle hits a pothole with any kind of force, the tires, wheels, and suspension get the brunt of the impact, and fixing any of those items is pricey.” Thus, considering tire and wheel coverages for vehicles would ensure additional security and savings for customers. Anti-theft product backed by warranty With vehicle theft up by almost 12% since 2019 and high prices of new and used vehicles, anti-theft products can offer relief to today’s buyers in the event of a theft. The immediate benefit for your customers is, in general, a lower insurance premium for theft. In other words, the insurance settlement may be far less than the cost of replacing a vehicle. Serving the needs of customers With more used vehicles sold amidst inflation and inventory issues, dealers and F&I managers should ensure their product portfolio aligns well with the needs of today’s consumers. In uncertain times, consumers tend to look for low-risk purchases and time-stamped guarantees. Certified pre-owned programs, appearance protection, and vehicle service contracts provide buyers with an extended piece of mind that can be tied to your dealership. Highlighting the limitations of CPO coverage may be in their best interest and yours. We can be your resource Over the years, PRO has helped dealerships turbocharge their profitability. With a dedicated team and strategies to support your success, you could successfully navigate the uncertainties of the market while growing your bottom line. Reach out to us today.  

Hiring the right person is critical to optimizing success in every department of your dealership. We put a lot of time and resources into the process for a good reason. Recruiting the wrong fit for an important role can be a huge inconvenience. Not to mention, a potentially significant waste of time, money, and increase in employee turnover. Learning to search for qualified professionals and assessing their traits can enable you to hire, retain, and train the right talent for your dealership. Identifying the right person for the right role requires two essential factors. 1. Awareness of your dealership culture: Self-awareness of your dealership’s shared values, goals, and practices is crucial to make sure that any potential hires fit your company—but to determine that, it is important to know your own culture. What kind of workplace do you hope to build, and what traits do you value most in your employees? 2. Awareness of the candidates’ traits: The second step is to measure the dynamics of the individual—their behavioral characteristics, decision-making styles, and energy to assess how they fit with your culture and what could help them thrive in achieving the shared goals. The barrier to hire and retain the right talent One of the barriers to hiring the right person is neglecting to consider evaluation strategies beyond the face-to-face interview. The interview may not always be the best way to evaluate someone’s true personality. This doesn’t mean you should abandon interviews altogether. But it means adding more tools to your interview arsenal beyond evaluating resumes and a few rounds of interviews. Furthermore, additional assessment tools in conjunction with interviews give you a more well-rounded sense of potential candidates. Pair the process with personality assessments to determine an individual’s strengths and limitations. Everyone has a unique make-up and natural way of operating in life—from home to work to socializing. Additionally, your unique wiring is what creates the one-of-a-kind you and gives you your individuality. Moreover, identifying and comparing those traits with the company culture and needs would allow you to hire and retain the right talent. A practical resource to learn about the candidates’ traits Data-driven hiring: There are valuable resources that one may utilize to determine on-the-job traits and how they play a role in team dynamics and the overall culture of the dealership. PDP is one such tool that provides precise behavioral metrics and descriptions to help the hiring team make data-driven decisions. Some of the key benefits of leveraging the tool are: Prioritizing and weighing critical strengths for the position Analyzing individual’s perceptions of the job requirements Preparing effective advertising to attract the best applicants Matching applicants to open jobs Conducting structured behavioral interviewing Strengthening hiring managers’ knowledge and skills for making the right hiring decision Ultimately, selecting the best talent for the right role Creating strong teams with the data-driven tool Understanding team culture is critical to building stronger teams and dealership profitability. Too often, a group of people put together in an office environment is considered “a team” without a lot of thought about the group’s make-up, purpose, or intended outcomes. Therefore, an assessment tool such as PDP helps assess team effectiveness and removes the guesswork. Furthermore, utilizing the tool could support teams in developing skills to turn conflict into productive directions. Discover their ‘why’: Another applicable hiring practice is to find out what inspires your potential hire the most. Does your candidate have a deep sense of purpose? Hence, it will serve as your point of reference for all their actions and decisions and enable you to determine what makes them committed and passionate about their goals. It is essential to learn about their ‘why’ because it lets you see: The source and strength of their inspiration—what they do, how they do it, and why they do it. Whether they have a sense of contribution to something larger than themselves How they might behave when a situation demands characteristics such as work ethics and determination. Over the years, PRO has helped dealerships build efficient teams and hire the right person for the right role. In addition, our team is certified in effectively utilizing PDP for better hiring, which ultimately leads to higher profitability and reduces employee turnover. Contact us today to see how we can help you leverage this tool and positively impact your dealership teams.

Great dealerships need great leaders Leadership is a word we often hear—simply put, it is an individual’s ability to influence, motivate, and enable others to contribute toward success. Though it is a role some tussle to uphold, it can be mastered. If you’re a current or aspiring manager, it’s crucial to focus on good leadership as it can be a huge asset to advancing your career. In addition, dealerships need great leaders as leaders help direct a dealership’s resources for improved productivity and achievement of goals allowing for mutual success. Effective leadership comes with life-long learning about oneself and the responsibilities of being a leader. Individuals have their own inner lives, and they are driven by their beliefs, aspirations, values, and fears. These interior elements vary from one person to the next, guiding individuals to take different actions. Interestingly, the choices people make for themselves and their teams are extensions of reality in their hearts and minds. Therefore, those who seek to lead impactfully and take dealerships to the next level must look at their internal experiences and decipher their traits. We often observe a basic level of self-awareness managers have about themselves, such as, I am a team player, I can’t trust anyone, or I believe in transparent communication. Often top-performing sales personnel become great managers, but what separates managers from a leader? The difference between managers and leaders Managers and leaders complement each other but are commonly two separate people. A leader inspires and encourages others to achieve visionary goals. Whereas a manager deals with their department’s day-to-day operation and ensures the tasks are being performed as expected. They focus on their performance but carry minimum responsibility for their peers. Generally, managerial tasks in dealerships include: Review inventory to ensure the proper mix of stock Stay abreast of and comply with federal, state, and local regulations Direct and schedule the activities of department personnel Make sure the service quality meets customers’ expectations Plan training and development for team members What does it take to become a great leader, and why do dealerships need great leaders? Leadership skills are critical to maximizing the efficiency of the whole team, which facilitates achieving the overall vision and goals of the dealership. Though different leadership styles can be utilized at different times, some qualities are essential to transform great managers into great leaders. Constantly learning and striving for growth Great leaders refuse to remain stagnant and continually seek opportunities to develop themselves and their teams. They strive to improve their self-knowledge to identify strengths, limitations, and areas of improvement. Furthermore, leaders have a vast appetite for learning beyond their role in the industry and appreciate the company of experienced professionals to accelerate growth. Their team members’ personal and professional development is equally valuable to great leaders. Good at identifying people who are better than them at specific jobs Great leaders do not shy away from acknowledging their limitations. Instead, they fill the gap by finding people who are better than them at specific jobs. Knowledge of one’s own traits and teammate personalities provides understanding for employing the right person for the right role. Measuring characteristics and dynamics is relatively straightforward with data-based behavioral analysis tools such as PDP. PRO Team’s well-trained and certified consultants can support hiring and placing individuals in the role where they can contribute to the highest of their capabilities. Focus on their team as much as they focus on their customers The automotive industry is people-centric, and employee satisfaction matters as much as customers’ satisfaction. Furthermore, dealership culture influences customers’ service, directly impacting referrals and sales. Therefore, employee development, proper training, and positive work culture are imperative to retaining talents in your dealership. Great leaders recognize the value of their people and their professional needs. They are mindful of identifying ways to help, enrich, lift, and empower their teammates. Anticipate market trends and adapt to changes quickly Shifting ahead requires leaders who can take bold and strategic actions. Having the vision to anticipate what lies ahead and taking proactive steps to market conditions can keep you and your people ahead of the power-curve and able to react more quickly when things to change. Great leaders stay abreast of the trends and recognize that uncertainty is a part of the auto industry. From digital financing to touchless deliveries and everything in between, effective leaders adapted quickly to save the day. Consider both the bigger picture and the details Tracking the big picture involves stepping back from time to time to scan the horizons beyond the auto industry, for instance, assessing the effect of high-interest rates on vehicle affordability and sales revenue. Conversely, focus on details such as how much you have to make up on profit per retail unit to stay even with last year. Do I have a high penetration product to increase profit per vehicle retailed, or is there a hi-tech marketing tool to increase the market share of my dealership? Constantly evaluating the market and utilizing industry resources for awareness of the trends and indicators would enable managers to broaden their perspectives and transform into leaders. Dealerships need great leaders for mutual success Great leaders adapt to their surrounding environments and empower the team to succeed. Furthermore, an effective leader understands the strength and limitations of their team, is decisive—adapts quickly to changing situations, and treats the team with fairmindedness and equity. Dealerships need great leaders to foster a culture of growth that leads to mutual success for dealers and their team. We are here to support your success The auto industry is experiencing fresh challenges and could see significant changes as the market shifts. PRO has been supporting dealers with innovative strategies to keep profits high. Reach out to us to see how we can boost the profitability of your dealership.  

Employee turnover in dealerships is a long-standing challenge. A COX report states that 72% of franchised dealers say finding and hiring the right employee is challenging. The turnover eats into dealers’ profits, and impacts revenue in many ways, including wasted time, resources, and training costs. In addition, the improper fit delivers poor customer experience and impacts sales and upsell opportunities. Your dealership could combat high employee turnover and nurture a top-performing team for the success of your stores. It could be done in the following ways: Understand the prime reasons why they quit Build a positive environment and productive team Combating turnover with—better hiring and employee growth and training Understanding the reasons why they quit: COX study found that the top reasons why employees consider looking for a new job are as follows: 48% better pay 27% more advanced opportunities 25% better work-life balance Creating a motivating pay plan could help reduce employee turnover in dealerships, improve productivity, and retain the best talent. Furthermore, dealership’s success depends on its people and their behavioral traits that create the highest level of job satisfaction and endurance. If the salesperson possesses the right mix of behavioral characteristics, they don’t need to overwork to succeed. Getting the proper behaviors from people is very much related to their compensation—rewarding requirements of the job expectations and disincentivizing any behavior outside of expectations. Three critical factors to consider while developing a motivating pay plan Gross profit: Finance Manager solely compensated on gross profit of car deals and not incentivized to sell a balance of products for a fair price. As a result, behaviors can occur that lead to misunderstanding for consumers on what they are purchasing and how much they are paying for it. Customer satisfaction: This should be a key consideration while developing a compensation plan. A plan that clearly articulates and appropriately rewards critical behaviors enhances CSI and consequently leads to low cancellations. Setting the right expectations and objectives: Produce income for the F&I office/ dealership that is balanced and fair to the consumer. Consistently presenting options to consumers and setting a clear goal of how many products they need to present and how many a consumer is expected to purchase. Building a positive environment and productive team: 67% of franchised dealers say motivating and retaining quality employees is a challenge. Creating a supportive work environment is elemental in building an effective team and enhancing the perception of the retail auto industry. A positive environment would let the employees feel cared for and see a future for themselves in the dealership. In addition, it would allow you to retain quality employees in your stores. Here are a few ways to create a supportive environment and build productive teams: Recognizing employee accomplishments. Making your staff feel valued, and appreciating their contributions produce organic determination to go the extra mile. Hand-written thank you notes and employee recognition programs such as celebrating appreciation day on social channels make a dealership a great place to work. Leadership programs. Effective leadership comes naturally to some, while others could use leadership programs to help build team management skills. emotional intelligence, clear communication, constructive feedback, and problem-solving abilities can be developed to bring out the best in the leader and their teams. Even the small changes in the team and culture lead to big success in the long run. Ways to combat employee turnover in dealerships— Better hiring: Taking the benefits of personality and cognitive assessment will help you get ahead of the problem and identify the right person for the right role. Additionally, the personality and cognitive assessments help you understand the focus area of training for your team. Assessments provide insights on how to better communicate with your staff. Employee growth and training: When dealerships do not have a strategic training and development plan, it leads to inconsistent store experience. In addition, impacts employee performance. With comprehensive training, your sales team can transform into friendly, knowledgeable, and trustworthy people customers need to complete their purchases. Furthermore, proper training guides sales teams to effectively offer related products to increase the value of a sale. Thereby enhancing employee performance, raising employee satisfaction, and preventing turnover. The problem of employee turnover in dealerships could be curbed through tangible solutions. Concrete ways to build powerful teams and reduce employee turnover include building a positive work environment, creating a motivating pay plan, and providing recurrent training to enhance employee performance and drive growth. PRO has been supporting dealership success for the last three decades. Call us today to get custom solutions for your unique needs.

Quality has no substitute: Don’t build a system in which mediocrity is rewarded Sales and F&I teamwork: In a meeting with one of our long-associated dealer clients, the discussion kicked around why it is critical to have a team where all players fit best together and not be separated like oil and water. Bringing the Sales team and F&I together and encouraging Sales and F&I teamwork takes effort, but this is what differentiates a thriving dealership from a mediocre one. On one hand, there is a Sales team chasing the number of vehicles sold, and on the other, there is an F&I team pursuing higher profit per vehicle. Sales and F&I have their own roles in the court. However, better coordination among the players leads to scoring more shots and winning championships. Therefore, it is important to assess the following: Does your Sales team complete proper paperwork before turning the customers to F&I? Do they inform your customers about the next step in their buying process or leave them in the dark as to what’s next? Is the checklist completed before turn-over to F&I? Ultimately, it is not the quantity but quality that counts. As Red Auerbach stated, you do not win with the five best players. You win when those five players fit together best. Benefits of better coordination between Sales and F&I teams: The best outcomes are achieved when sales and F&I work together to maximize every opportunity. Transferring F&I knowledge to the sales managers is a good idea for improved profitability. Several customers express that an unpleasant experience in the buying process is the abrupt way the sales team turns them over to the F&I department. As a result, the customers do not understand what to expect. Customers trust the process better when you inform them adequately and set the right expectations. Additionally, working as one team would significantly reduce the customer’s resistance to the F&I process and products and raise dealership profitability. Moreover, better collaboration among departments will enhance customers’ experience, positively influencing the CSI score. When sales and F&I develop better coordination, develop a strategy, and act as a team, they will succeed collectively. As Phil Jackson infers, develop a game plan, and throw yourself into the action. Actions that the dealership leaders can take to improve Sales and F&I teamwork and profitability: 1. Communicate effectively: What we call front-end operation, the sales and F&I teams need to clearly understand their role in helping a customer complete their purchase. Profitability starts with setting up the shared goals between departments and creating a winning strategy. Hence, promote a culture where teammates communicate clearly with customers as well as peers. This would foster teamwork and transfers the trust built by the Sales personnel to the F&I manager. For example, before directing customers to F&I, the salesperson should set the right expectations and tell the customers what will happen next and how the Finance manager will help complete the paperwork necessary to put their car on the road. As Coach K said, teaching and practicing effective communication brings everyone together as one. 2. Encourage sync meetings and inter-departmental alignment: Each week, F&I managers must be encouraged to review dead deals with Sales managers to identify solutions and see if there is a way to go. Review the three Cs of credit. Namely: Character—defined by credit and loan repayment history. Capacity- measures income and ability to service a loan or line of credit. Collateral- asset(s), in this case, the car you have them on. A fresh set of eyes and ideas with colleagues could help teams find constructive outcomes and raise the dealership’s profitability. As Tom Thibodeau said, we can learn something from everybody. 3. Data driven approach for hiring the right person in the right role: Sometimes the best talent for the job is working in a different position in the dealership. Finding the right person for the right role demands in-depth review and assessment. Personality and cognitive assessment are a data-driven approach that provides objective data for better decision making and building stronger teams that fit best together and your culture. Ensuring everyone understands their role as a player on the court toward getting a team win will assure better results and happier players. As said by Michael Jordan, you must act to make it happen. We support many multi-rooftop dealerships and help build efficient teams that perform together to attain common goals and profitability.  Call us today, and we can help you identify the diamonds in the rough and polish them into a gem to ensure your success.