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Tips for recruiting and retaining the right talent in your dealership, and manage labor shortage Hiring and retention in auto industry Economic data indicates that over the past month, job openings have been rising considerably. Hirings are also up, but the companies are not coming close to filling the number of vacant positions or dealing with labor shortage in the auto industry. The need for the workforce has been high, especially when the demand for cars and trucks is rising. The auto industry has been facing hiring challenges before the pandemic, and dealerships will continue to have one after the pandemic is over. As per automotive news, the number of applicants rose only 2%. People have been blaming unemployment benefits as a significant factor to keep the workforce from joining back. However, several states have ended that program a while ago, and nothing changed. The labor shortage is bigger than the pandemic. What are the contributing factors of labor shortage and workforce challenges in auto industry? In a pandemic, many people found time to contemplate what work means to them, how they are valued in their job, and where they fit in company culture. In the majority of cases, this initiated the decision to say, yep, I’m out. Some called it soul searching, and others called it retirement or a fresh start. No matter what reasons people had, it all added up to make hiring and retention complex. Common reasons were: Some employees remain hesitant of plant or on-site environment Federal unemployment benefits until recently resulted in employees choosing to stay home Senior workers decided it was time to announce retirement The multi-month break from routine work allowed some employees to rethink their career and current industry How to fix it? The big question is how to attract the right talent to ensure that your dealerships stay profitable? The automotive industry will have to come up with still better and creative solutions to recruit workers. Hiring bonuses, common in tech firms, were a step towards attracting the right talents. Cash bonuses to employees who help employ a friend or family member also are taking hold. The auto industry is known for opportunities to make more. If the individual possesses skills to close more deals faster, knowledge to satisfy customers’ concerns, grit to manage sales objections, then the sky is the limit for this employee. Hence, a motivating pay plan is a robust strategy to hire and retain the best employees who will strive to reach higher goals. One of the pillars of dealership profitability highlights the importance of a motivating pay plan to ensure that you get and keep the right talent in your dealership. Hiring the right talent in dealerships To emphasize, the right talent will enable you to make more profits and create value for your dealership to help you stand out from the crowd. Such as providing an exceptional experience to customers on the sales floor or ensuring customers’ needs are met and matched with the right products. Additionally, data-based hiring will provide you with relevant information to understand the candidate beyond their resume. The assessments offer rich data on candidates’ strengths, limitations, and personality traits. Evaluating how well the individual would fit with your department, team, and work culture before hiring is critical. More importantly, a professional interpretation of the assessment data is the key to identifying and placing the right talent in the right role. A proper reading of the data would yield the best hiring, retaining, and promoting decisions. PRO Consulting has been supporting the hiring and retention of the dealerships’ staff. With data-based hiring, the dealers have experienced raised productivity and profitability. Contact us to find out how we can help you identify and place the best candidates aligning with your dealership culture and business.

The road to dealership success is constructed with proper hiring practices, employee development, and retention. Dealership employee development and proper hiring is an investment that will deliver tremendous benefits. Without a doubt, you have given it a thought and strived to raise employee efficiency and retain them for longer. However, what if you had a proven method to identify the right talent?  If you had an unswerving strategy to place your hire in the role where they would perform their best and positively impact your profitability? If we tell you there is a way to eliminate all the guessing work and annoying and time-consuming processes of hiring and placement. Would you still opt for the traditional, tedious methods? Nobody like to see their employees underperform or leave for a more satisfying role. Put an end to your tiresome and ambiguous hiring and placement process. There is a reliable and no-nonsense way to recognize how the candidate fits your team, culture, and work pace. Will the candidate contribute how you expect, or will they go above and beyond? How to ensure you have employees to maximize your profitability and provide exceptional service to your customers? You can obtain those answers through a proven assessment. A cognitive and personality assessment can give you more insights than you would think into a candidate’s potential and traits. Attributes such as collaboration, motivations, persistency, and more can be easily evaluated with such assessments . It will help you discover a candidate’s strengths and limitations. Evidently, recruiting employees who are driven and genuinely excited about their work produce better results. Motivated employees can lead to increased productivity and allow a dealership to achieve higher levels of output. Dealership employee development and right hiring could make a huge difference. Traditional hiring vs. data based hiring To give you a scenario, you hire an experienced sales manager. This manager has worked through several stores in the town and highlights their migration from store to store as an achievement. However, he comes with his own bag of habits or negative traits that he has absorbed over time from his peers and bosses. Furthermore, the candidate is good at hiding it at the interviews. Once you hire them, you realize that the new hire is good at disappearing from the sales floor from time to time, avoids training, and neglects the dealership’s goals. Consequently, you realize that all your time and resources in hiring this candidate went down the drain. The good news: you can take control of your hiring practices so that you can get an accurate understanding of the person before you hire them. To emphasize, taking advantage of a recognized assessment will allow you to place the people in the right role based on their qualities and capabilities. Let’s take a closer look at how hiring can be improved with the help of cognitive and personality assessments. Quality practices to hire quality candidates Employee turnover is a huge problem in the automotive industry. Therefore, to attract quality candidates, you need to change your hiring practices. Look over your current employees and assess if you knew their strengths and limitations better. Would you not place them in a role better suited to produce higher results? Personality and cognitive assessment are great tools to improve your hiring practices significantly. This tool will provide valuable data to make informed decisions and keep the guesswork out. Interpretation of results for efficient dealership employee development and hiring Assessment is only half of it. Correctly interpreting the results is a significant part. The assessment measures the candidate’s personality traits and maybe even gives you a brief remark on their personality type. How would you successfully use this information in your department? This is where professional consulting comes in handy. A professional interpreter can tell you how a specific personality type, say, ‘Analyzer,’ will fit in the sales or F&I department? Wouldn’t it be better to get an in-depth view of what this person could do to close deals or present F&I ancillary products by quickly evaluating the client’s needs? Consultants can draw a clear sketch of where this candidate would perform best based on their traits. Data based training and development Whether product sales or F&I, one of the core functions of your staff is to understand customers’ needs to serve them better. Similarly, the development of your employees should also be done based on their individual needs and traits. Taking a data-based approach to learning your employee’s potential and characteristics would help provide customized training. PRO Consulting specializes in training dealership staff based on data insights. In terms of employee performance, the results of tailored training have been significantly higher than traditional training. On the other hand, retaining efficient employees is another major challenge that dealerships face. The turnover rate costs dealers millions of dollars, and the current atmosphere is creating a revolving door of retail automotive talent. A COX Automotive staffing study shows, the sales consultants’ turnover rate is 67%, and F&I and other dealership roles are between 38% and 40%. It demonstrates that dealers need to take an unbiased look at their hiring practices, compensation plan, and overall culture or risk of losing talent to other dealerships or industries. Some of the strategies to decrease turnover are: Set realistic expectations in the job description Utilize cognitive and personality assessment to vet candidates before you invest your time and efforts Assess employee’s potential and traits to provide customized training Conduct regular check-ins to track progress and provide feedback Positive impact of dealership employee development and right hiring practices: Setting clear expectations and providing resources and training would allow employees to enhance their sales process, handle objections and close more deals faster. In addition, regular training and engagement with managers will make them feel valued. As a result, they will be more likely to succeed in their job, stay longer, and contribute fully to the dealership’s profitability.

Market, car sales trend, and dealership profitability influenced by inventory shortage and high prices  New vehicle sales for September 2021 are expected to decline 25%, hurt by a shortage in inventory even as consumer spending remains strong, reported JD Power and LMC Automotive in a joint forecast. Thus, the dealership’s profitability in inventory shortage could be impacted. “September results show that there are simply not enough vehicles available to meet consumer demand,” JD Power said in a statement. The gap between supply and demand is rising and is causing a record high price of new vehicles. According to a new report from Kelly Blue Book (KBB), the average transaction price (ATP) for a new car in September was up nearly 10% from a year ago, reaching $43,355. Additionally, the sales of new vehicles decreased compared to the pre-pandemic era, squeezed by chip shortages and high prices. Therefore, it is critical to be creative to ensure dealership profitability in inventory shortage. Chart source: CBS News Average used car price sets another record Offering used cars seems to be an obvious choice for dealers. However, procuring quality used cars have been a challenge in itself. Furthermore, the prices for used cars are heating up, and affordability is decreasing. According to KBB, the average listing price for a used car rose to $25,829. Furthermore, the older, high mileage cars are in the shortest supply. This shows, affordability is a significant factor for many consumers, and they are looking to buy a car that fits their budget even if a car is high on mileage. Mitigate the loss of retail units and revenue The chip shortage has hit the car manufacturers and dealerships. However, if the last year has taught the industry anything, it is that the auto industry can move quickly to adapt to the changing scenario. The dealerships are doing everything in their scope to meet the needs of the consumers. From going fully digital to delivering vehicles at home, dealerships have transformed to serve their customers and maintain profitability. The shortage of inventory has undoubtedly impacted the sales and profits of the dealers. But there are ways you can mitigate the loss of retail units and revenue. The inventory shortage is out of control, but how you respond to maintain profit is not. Here are some of the useful strategies for you: 1. Service Drive Sales: Collaboration is multiplication. —John C. Maxwell. Service drive and F&I departments have different environments and business objectives. But it is essential to remember that everyone is still part of the same dealership team. Hence, working together with other departments will help everyone grow profit and serve customers better. Educate service personnel on what to sell, when, and how. Notably, discussing additional benefits of doing so may be a good idea, especially in commission-based service departments. With a strong collaboration among service and F&I departments, you could help the customers see the value in finance and insurance products. For instance, when a customer drives in for their vehicle’s service, it would be beneficial to offer them valuable products such as high mileage coverage, tire and wheel coverage, and paint protection based on their vehicle condition, mileage, and driving habits. This would be an effective way to raise dealership profitability in inventory shortage. 2. Create value for your customers: The more you focus on the value of your product or service, the less important the price becomes. – Brian Tracy With a change in consumers’ vehicle retention and driving habits, it is critical to understand what creates value for your customers. The dealership should use reasonable effort when assessing client needs. This will allow you better match the products to consumer needs. For instance, know what vehicle service contract (VSC) your customers currently have and what they might need next. In addition, customized programs serve a client’s individual needs, including market-driven options that complement manufacturers’ programs, such as Diesel Wraps, Extended Power Train Wraps, Certified, and Lifetime Wraps. 3. Add non-cancelable products to your portfolio: F&I is a significant stream of revenue, especially in this market condition. The best way to make up for the loss of profit from inventory shortage is to increase sales of non-cancelable products and warranties. We see that some pre-loaded and non-cancelable products, such as BrakePlus and EverDrive, have high penetration rates, as high as 90%. Moreover, in the long run, these sales add up to more guaranteed revenue. More information on BrakePlus follows: Your Value: Increase your front-end profit by $250 per vehicle 70%-80% penetration Noncancelable, re-insurable*, pre-loadable* *Contact PRO for details on how BrakePlus can work for your service, sales, parts, and finance department. Your Customer’s Value: Improves safety from other drivers while on the road Decreases chance of rear damage to the vehicle Product Warranty may be purchased with the system for added coverage PRO Consulting can help you mitigate the loss of retail units and drive your profitability. We have been in the auto industry for over three decades. We leverage our expertise in supporting the dealers to find unique solutions to raise their revenue significantly. Get in touch with us to find out how we can help you grow your dealership.

The average age of cars and light trucks in the US rises to 12.1 years. What does it mean for your dealership? Americans are keeping their vehicles longer The average age of cars in the US hit a little over 12 years. While the average age of the vehicles has risen steadily over the last 15 years, the trend has accelerated due to a steep decline in new vehicle availability and sales, according to IHS Markit, a leading data and information provider. Improved vehicles quality is another contributing factor. As a result, the consumers are comfortable keeping their cars and trucks longer. Does the rise in average age of cars in the US present a threat or an opportunity for dealerships? The answer depends on how you capitalize on it. Two decades ago, a car might have changed hands once or twice in 100,000 miles. Nowadays, it is not uncommon for a vehicle to have multiple owners and last for over 200,000 miles. By the time the vehicle reaches its third or fourth owner, there is still meat on the bone. Furthermore, according to IHS Markit, a decade ago, the average age of vehicles in the US was 10.6 years. In 2002, the average age was 9.6 years. With the economy struggling due to the pandemic and limited and pricey options for new vehicles, the trend is expected to continue. Additionally, the average age will likely be significantly higher than what it was a few years ago. The big question is, how does this impact dealerships? Is this bad news, good news, or a mixed one? The answer lies in how you look at it. From a customer-centric lens, there is a lot you can do in this situation to keep your customers satisfied as they hold on to their vehicles longer. In addition, it would also present you with opportunities to increase your profitability. Here are some of the strategies you can adopt to help your customers while keeping your profits higher: 1. Ask the right questions In an inventory situation where customers do not have the options they did, it is critical to ask the right questions to help them find a vehicle that would ease their decision-making. Asking closed-ended questions would help shorten the buying process and assist customers in choosing a vehicle that best matches their desired one. For example, asking, “are you looking to buy a car in a light or dark color?” In addition, implementing a choice-close strategy, i.e., asking questions with two options, would keep the interaction positive and the customer happy with control over choice. 2. Create needs awareness Customers are perceptive, and they can quickly tell if the dealership personnel are helping them or selling them. Significantly, the moment a customer feels heard and understood; buying comes organically. This creates a more fulfilling experience for customers and increases the likelihood that they would recommend your dealership to their friends and family. Therefore, when creating needs awareness, tailor the messaging and product packages to be meaningful to your customer. For example, if a customer is buying a high mileage used car and low monthly payments are essential to them, creating awareness of products such as appearance protection and high mileage vehicle service contract (VSC) would directly meet their needs. Asking questions in the following manner could help in making customers aware of the need for the product. If this vehicle needs to be taken into the shop, do you want to pay for it, or do you want us to pay for it? Do you want to pay for all of it or some of it? Products that add value to your customers and grow your PVR In the current scenario where the vehicle is held longer, a product that keeps the car looking good longer, like Cilajet/Express Appearance Protection would benefit your customer. Your customer’s value: Long-lasting appearance protection, making it easy to keep clean and shiny Provides an additional $500 trade-in value guaranteed at selling dealership Performance guaranteed for five years for new cars and three years for used cars How you sell it: Walk your customer through a scenario where Cilajet’s protection would benefit them. Educate your customer on the factors that determine the trade-in value Your value: Brings the customer back to the dealership for repairs Available for all vehicle makes Protects trade-in value High CSI Product promotes repeat and referral business Non-Cancelable (no chargebacks) Another valuable product for a customer purchasing a high mileage vehicles is Essential Enhanced High Mileage Vehicle Service Contract (VSC). It protects the customer from expensive repair costs resulting from the most common malfunctions of high mileage vehicles. Powertrain to exclusionary coverage is available with terms limited by time and miles. Your customers’ value: Coverage for likely repairs Roadside assistance up to $100 per occurrence Discounted deductibles to return to the selling dealership Your value: Vehicles that come with guarantees sell at higher prices Buyers become repeat customers by returning for service Your customers’ high-price repairs are taken care of 3. Present F&I products optimistically: Joe St. John, Business Development VP, StoneEagle, stated that data through May shows soaring F&I profits. The average F&I profit per vehicle sold in May 2021 was $400 higher per unit than in May 2019. Moreover, the sales of F&I products per purchase have also increased. StoneEagle data also shows that consumers now buy 1.49 products per vehicle, up from 1.23 in 2019. This shows that consumers have a lower risk tolerance than in the pre-pandemic era and they want to be in a favorable position when the unexpected happens. Therefore, offer F&I options with conviction to help consumers offset the risks. Overall, the way consumers buy has drastically shifted in addition to the average age of cars in the US. Adapting your dealership to accommodate these changes will keep you fluid and robust. We have been providing profit-enhancing strategies for over three decades. Reach out to us today to learn how we can provide you with

Implement these strategies now to boost dealership sales and thank us later. Every business wants to grow more, succeed, and increase profit. Dealerships are no different when it comes to profitability. Yet, there is no simple formula to boost dealership sales. Your profitability depends on multiple factors, and identifying such factors is not as simple as it may sound. As they say, the road to success and the road to failure are almost exactly the same. The only difference is the road to success is much longer. Boost dealership retail and f&I sales by following these 4 steps: 1. Level up your employees’ skills The process of improving a dealership’s profitability starts with the right person in the right role. To emphasize, hiring demotivated sales and service personnel can diminish customer relations and trust and influence your profits negatively. On the other hand, if you have the right people on your team, you could close the deals faster and build a strong relationship with the customer. Additionally, having skilled and adequately trained personnel would significantly grow the prospects of making a second sale. Significantly, a dealership with well-trained employees is like an equipped handyman who has all the necessary tools and techniques to get their job done. To emphasize, employees do not come to work to fail. They either possess insufficient training, or they might be in the wrong role if they have been trained and are still underperforming. It requires a management decision. Therefore, personality and cognitive analyses to place the right person in the right role are critical for recruiting and retaining a strong workforce. As the automotive industry insider for over three decades, we cannot point out the benefits of employee training enough. For example, well-trained personnel efficiently grow customer satisfaction. Consequently, a satisfied customer can become a brand advocate for your business. They cost less to serve and are typically willing to pay more than other customers. They often act as word-of-mouth marketers for your company and are highly likely to refer their friends, family, and acquaintances to your dealership. 2. Leverage technology and expand your market with AI-powered tool  What if we told you that you can get more than your fair share? What if we told you that you could have a bigger piece of the pie? You will never be asked to trade off your ethics or your moral standards. Instead, leveraging AI-based technology can provide you with data to get in front of your shoppers first and reach out with relevant offers and messaging. Additionally, putting your highly trained people in front of highly qualified prospects—based on the data insights would create the perfect opportunity to get “more than your fair share.” In other words, instead of closing 2 out of 10, they can close 3 or 4 out of 10. Furthermore, advanced tools can equip you with data to win more business and insights into what channels your shoppers are using, what are their motivation to buy, and ways to connect with your potential buyers before your competitors. An AI-powered marketing tool can help skyrocket your sales and help you pave your way towards success. Reach out to us using this form  to learn more or schedule a demo of this marketing tool. See for yourself how your dealerships could significantly benefit from advanced AI technology. 3. Introduce F&I with conviction to boost dealership sales To grow your dealership profit, you need a strategy for your finance and insurance products and departments. Evidently, change in the customers’ driving habits, and behavior is influencing the purchasing decision now more than ever. As a result of the pandemic, people’s risk tolerance has shifted towards the conservative direction. In other words, people are less willing to take risks. Therefore, it is an opportunity for the F&I staff to present useful products, help them understand the benefits, and reduce your customers’ distress. GAP coverage, vehicle service contract (VSC), and ancillary products such as Brake Plus and Forever Start could serve the unique needs of your customers and enhance their overall ownership experience. For example, selling about three products per vehicle retailed equates to earning an average of $200 to $300 more PVR. Offering products that speak to what the manufacturer does not cover can close the deal faster and grow your profits. 4. Stay aware to stay ahead Yes, you have been in the auto industry for a long time. Yes, you have gained good experience. Yet, there is always going to be more you can be aware of to beat your competition. Staying ahead of the industry trends, cutting-edge products, and beneficial services could make a huge difference. Knowledge of little details such as product features, benefits, and coverages could do the trick. For example, do you know that you could offer GAP coverage of higher value—150% LTV, which has better coverage, and less risk at almost the same price as GAP 120% LTV? You can access the GAP 120% LTV vs. 150% LTV comparison here. We can help you boost your dealership sales You must have heard information is power? Staying in the know will not only increase your profit but also increase the trust of your customers. The PRO team specializes in identifying opportunities to make sure you stay ahead in the game. Contact us for the inside story on what makes a dealer more successful than the other and how you can claim your seat among the top dealerships.

GAP claims are rising. What products are you offering? How are they going to impact you and your customers?. GAP claim are rising: The influencing factors GAP claims are designed to protect consumers by paying the difference or the gap between the value of a vehicle at the time it is totaled. That is, stolen or not recovered vehicle value and the balance owed to the loan. For dealers, the product helps customers who suffered from the total loss back to the market for a new car. To emphasize, the frequency of GAP claims is rising to new levels. This could mean both your dealership and your customers could be at risk of significant and unnecessary hits. FI magazine reported: Between 2014 and 2018, the average new-vehicle GAP claim payout grew 19.5% or 4.7% per year. For used vehicles, in the same timeframe, the GAP payouts increased too. It rose by 18.5% per year, and producing a four-year total increase of 95%. Experts blame factors such as insurance companies becoming more likely to total vehicles due to rising replacement parts complexity and related costs. In addition, a greater number of complex vehicles on the road, higher collision rates, and a rash of severe weather events add to the claims surge. A high growth in GAP claims could also be a result of high car prices. This means, customers are paying too much for cars due to the rising costs because of inventory shortage. Therefore, it is critical to ensure that the products you are offering will provide higher coverage to your customers in a situation like this. It is essential to consider why better GAP coverage is critical for your customers and you as dealership personnel.  • GAP coverage protects your customers if they owe more on their loan or lease than the value of their auto at the time of loss. • The need for the coverage is increasing. Consumers are willing to pay more for vehicles they desire and are ready to accept longer terms and higher interest rates to obtain those vehicles. • Discussing this difference in GAP coverage with your customers upfront prevents difficult conversations in the event of a claim. What should you offer: Could you be offering something with higher value, better coverage, and less risk to you at the same price? GAP with a 120% LTV vs. GAP offering 150% LTV makes a considerable difference may be nearly the same in cost. The right GAP product will improve coverage for your customer, your relationship with them and better protect your profits. Consider the following comparison between the two typical GAP offerings, namely GAP 120% LTV and GAP 150% LTV, and which coverage would benefit you and your customers more. GAP analysis chart for your and your customer’s benefit Year one GAP risk evaluation: The comparison between the 120% LTV and 150% LTV clearly shows that 150% LTV GAP coverage would benefit your customers significantly. Not every customer might fully understand the difference or the benefit of choosing one coverage over the other. Hence, demonstrating the math would give much-needed clarity. Significantly, showing genuine interest to your customers in helping them choose the better plan. It would build trust and foster loyalty in them towards you and your dealership. On the other hand, as dealership personnel, it would save you valuable time. Moreover, it will help you avoid uncomfortable dialogue with your customers when they file for a GAP claim. Stay Ahead of Marketing Tides The PRO team specializes in identifying opportunities like this to make sure you stay ahead of market tides that could affect your profit. Contact us for the inside scoop on what makes a GAP product work for everyone.