Auto Dealer Monthly Magazine is the daily operations publication serving the retail automotive industry. This automotive publication serves dealer principals, officers and general managers with the latest best practices.
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industry expert / special finance
Hiring, Paying and Training Personnel
An 18-year former dealer principal with focus on Special Finance since 1989, Greg Goebel is CEO of Auto Dealer Monthly, LLC, the parent company of Greg Goebel Training & Consulting. He is a leading industry consultant, trainer, author and speaker serving retail automotive dealers. Contact Greg at 941.685.9629.
Greg@AutoDealerMonthly.com
that personnel is the third of the Ten Critical Components for success in Special Finance. I always preface it by saying inventory is really "2A" and personnel becomes "2B." You have to have inventory to be able to sell vehicles in SF, but you certainly have to have people to sell them.
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Personnel is a complex issue. First, you must know the number of people required. Then, you have to know where to find them and how to hire them. Of course, you must also have suitable compensa- tion plans. Then have to have the proper departmental structure and train everyone involved. Dealers who put all these pieces together are generally rewarded with a department that not only func- tions well, but also stays intact.
Let's first address the person- nel quantity issue. Growth is always accompanied by cost, and in the case of the SF department, it is through added personnel. Keep in mind that every time you contract a
wners and general managers still roll their eyes when I say
SF deal a tree dies due to all of the paper required to copy the stips. The laborious process to sign and fund a deal takes time and manpower.
Many dealers create a depart- ment with one or two people, give them some finance com- panies to work with and say, "Go get 'em!" Of course, they have heard about their buddy's store that does 50 SF deals per month and expect the same results out of the newly- anointed department. Guess what? It isn't going to happen.
The average person can handle about 75 new leads per month, 125 at the most. Any way you view it, if you expect to add incremental growth, then you have to have more people lest you cannibalize your existing business. Keep in mind the benchmark SF closing ratio of 13 percent—or roughly one out of eight leads—meaning on average, one person in SF will deliver 10 or so units per month.
So now that you have an idea of how many people are needed in the department, you need to know where to look for
them. Remember the Goebelism, "I have never seen a high-dive by the talent pool in the car business, as it tends to be incredibly shallow."
Special Finance Manager I believe you should first look internally. Look to hire, develop and promote. You are looking for someone who possesses the following traits. First they must have integrity, then the ability to read and call credit, as well as apply it to the various programs offered by the available finance compa- nies. They also need to be organized and must be able to structure deals for maximum gross profit. (Have you figured out yet these people don't grow on trees?)
One of these traits – the ability to read and call credit – can be maddening to find. I certainly believe it is an innate ability. One of the most frustrating things I have attempted is to try to teach someone how to call credit. I once had an F&I; manager who had a master's degree in business. No matter what, he could never grasp how to read a bureau and cus- tomer statement and deduce whether a finance company's program applied. If they have the ability, they will show it quickly. If not, look out.
Often the person you are looking for may already be sitting in the F&I; chair, or backing that person up. It could be a sales manager or desk manager as well. The key
is that they already are part of your dealership's organization and culture. You know them and they know you. Every time you go outside your organiza- tion, you chance running into the infamous 90-day-wonder. You know, the one you hire and in 90 days, after much agony and frustration, you wonder what on earth you were thinking when you hired him and you wonder how on earth you will ever undo the mess he created.
What if you don't have that person currently on staff to promote? Then you have to look outside. Generally, the person you are looking for isn't going to be found at another dealership. Occasionally you will get lucky, but recruiting from another dealership often offers more pain than success.
There are two industries that tend to have employees with the skill set you are looking for. First are mortgage brokers (and even loan processors) generally possess the neces- sary credit skills as well as the communication skills. It is not a significant issue to teach them "cars."
The other source is the personnel working for the various finance companies. Branch managers, credit analysts and even their marketing representatives can be excellent candidates. Of course, it may not endear you to their buyers. Many of them become weary of traveling,
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