a week of making the funder's
life diffcult, there's no deal
and no new truck. And good
luck trying to switch the customer to the used vehicle you
should have been selling from
the start.
Remember, your CSI score
is based on surveys returned
by customers who were actually delivered. It doesn't account for those who walked
away frustrated.
It would be a shame if that
scenario I painted is playing
out at your store, especially
since you got into the special f nance business to serve
those hard-to-f nance customers. You invested in training,
rebuilt your inventory and
opened up your f nance company spread, only to see the
whole enterprise undermined
by a poorly constructed compensation plan.
GETTING BACK ON TRACK
First things f rst, you cannot
let your people suffer for following the special f nance
process you constructed for
them. Remember, your salespeople would rather have 100
percent of a prime deal than
half of a subprime deal, and
rightfully so. So don't punish
them for sending customers to
special f nance.
And if you're asking your
prime f nance manager to
work subprime deals, make
it clear at the outset that you
appreciate the extra effort and
you will compensate them
accordingly. If their income
is based on PRU, don't let a
shortage of back-end funds
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hurt their average.
Let's say your F&I; manager's target is $1,200 per vehicle.
Let's also say that in one month
he or she gets 10 deals funded
by a subprime fnance company that offers a maximum
of $515 on the back end. Your
producer could sell a service
contract on every single deal
— a remarkable accomplishment — and still fnd themselves $685 below target.
The solution is to identify
the f nance companies that
limit the back end and pay
a fat commission on those
deals, and to not include them
when you're calculating PRU
and penetration rates.
When a dealer asks me to
set up a special f nance operation at his or her store, I get
started weeks in advance. I
send a questionnaire that asks
them everything but their underwear size. It sometimes
takes two weeks to complete.
There's a method to my
madness. I have to know everything about their sales and
fnance processes — and their
compensation plans — to be
sure we can achieve complete
buy-in from everyone who
will be affected by the new
operation.
Investing in special fnance can take your dealership to the next level, but it
takes commitment to do it
right. Don't sabotage your efforts by failing to address the
effect those subprime deals
will have on your employees'
paychecks.
Until next month, great
selling!
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M AY 2013 • AUTODE ALE R MONTHLY.COM
29