I had the honor and privilege of taking part in vAuto’s annual Performance Managers meeting this week.

The meeting gives the Performance Management team the opportunity to share best practices, compare notes and craft plans to help vAuto dealers sell more new and used cars and make more money in 2015.

I found two insights useful to share, particularly as we all look ahead to the coming year:

1. The need to minimize discounts to maximize margins. It’s clear that dealers from coast to coast follow pricing and sales strategies that are built for negotiating the price of new and used vehicles. The problem: If you’re already offering a fair market price online, your managers and sales associates need to do a better job standing behind your offer.

A Performance Manager shared a story from a secret-shopping trip to one of his dealer clients. On the lot, he was looking at a 2012 Mini Cooper Countryman with an asking price of $16,800. “I asked the sales guy, ‘I saw this car online, but my budget’s only $16,000. Do you think I could get it for that?’ He said, ‘I don’t see why not.’ The guy lopped $800 off the car without blinking!”

This dealership, by the way, has since made such automatic margin give-aways less common. Its average used vehicle discount is now less than $400 and getting smaller.

I think every dealer would agree that in today’s era of margin compression in new and used vehicles, a truly fair market price deserves the opportunity to be good enough for buyers.

2. Lost opportunities in appraisals. Every dealer understands that you really make your margin in used vehicles when you buy them “right.” In today’s market, however, buying them “right” requires a process that’s more customer-involved and –transparent than it used to be.

It wasn’t at all surprising to hear that dealers who had adopted such processes (and the requisite oversight of measuring look-to-book ratios and other metrics) were doing a far better job of acquiring more of the right cars “right” at the curb, which translates to a faster-moving, better-grossing used car department. Similarly, these dealers appear to have fewer complaints about finding inventory and making too-little money on their retail units.

I have to say, it was quite humbling and inspiring to see all of vAuto’s Performance Managers gathered in a single room, wrenching on ways to help dealers become more successful retailers.

I left the meeting with an even deeper appreciation for how much these men and women continue to be an indispensable part of our company and your business.

{ 3 comments }

In the early days of vAuto, it wasn’t easy to get dealers to recognize that the Internet was changing the used car business, much less convince them to buy inventory management software to help them navigate this transformative shift in the market.

But some dealers got it right away.sam swope image edited 184x300 Sam Swope: Our Industry Loses A Community Advocate And Pioneer

One of those dealers was Sam Swope, the legendary head of the the Louisville, Ky.-based Sam Swope Auto Group. Sam passed away yesterday afternoon at his home in Louisville, surrounded by family.

“He was a fighter all the way to the end,” says Cary Donovan, Swope’s long-time director of used vehicle operations. “He was 88 years old and he just got low on fuel. I had lunch with him a few weeks ago and while he was moving slower, his mind was as sharp as ever.”

Sam’s passing received front-page coverage in today’s Louisville Courier-Journal. The article highlights his success as a car dealer and his commitment to the community. It states, “Swope showered millions of dollars on local charities. He had a soft spot for disabled children, animals and the elderly, those he felt were the most vulnerable.”

Two years ago, Swope formally retired from the business he started in 1952. But “he never really let go. The business was his lifeline,” Donovan says. “Our goal is to carry Sam’s vision forward into the future.”

I recall a meeting at Swope’s dealerships about five years ago, which I had requested to better understand why his dealership group was out-performing other dealers in used vehicles by leaps and bounds.

Sam shared his philosophy as an automotive retailer, which helped me see why he, Donovan and the rest of the Swope team seemed a step ahead of the industry: “We are not a new car dealer with a used car department. We are used car dealers who, in most cases, happen to have a new car franchise.”

Tonight, I’ll take a moment to remember Sam’s keen car business acumen and all the good that he embodied as one of the nation’s leading car dealers. I’ll also smile as I think of him riding his trademark Harley-Davidson up in heaven.

 

 

{ 0 comments }

 

About 15 years ago, I purchased a farm in Northwest Illinois, where I became a USDA-registered farmer. I had more than just a financial interest in the operation, as I was fascinated with the ways my partners planned and worked the land to produce corn and soybeans.

I thought of those days over the weekendcarinfield Another Similarity Between Dealers And Family Farmers—Technology  while reading a New York Times article. It discusses the ever-more critical role that technology plays in helping today’s family farmers succeed in an increasingly difficult environment.

Take the opening lines from the Times article, titled “Working the Land and the Data:”

“Kip Tom, a seventh-generation family farmer, harvests the staples of modern agriculture: seed corn, feed corn, soybeans and data.

“I’m hooked on a drug of information and productivity,” he said, sitting in an office filled with computer screens and a whiteboard covered with schematics and plans for his farm’s computer network.

Mr. Tom, 59, is as much a chief technology officer as he is a farmer. Where his great-great-grandfather hitched a mule, “we’ve got sensors on the combine, GPS data from satellites, cellular modems on self-driving tractors, apps for irrigation on iPhones,” he said.

…But for farmers like Mr. Tom, technology offers a lifeline, a way to navigate the boom-and-bust cycles of making a living from the land. It is also helping them grow to compete with giant agribusinesses.”

As I read this article, I couldn’t help but think of how much farming has changed since the not-so-distant days when I would occasionally ride along as my partners would harvest or plow our fields.

I also thought of how much data and technology have changed the car business. I recalled countless conversations with dealers who, like farmer Kip Tom in the article, have come to rely on data-based insights to achieve the level of efficiencies and profitability today’s challenging automotive retail environment requires.

The piece goes on to highlight how some tech-savvy family farmers are taking their competitive advantage to the next level, expanding operations while their tradition-minded neighbors struggle to survive—a dynamic that’s familiar to most, if not all, dealers.

As I finished the piece, I realized that the same essential story could appear in any automotive industry publication, albeit with a different headline: “Working the Deals and the Data.”

 

{ 3 comments }

Using Market Share To Map Your 2015 Sales Goals

11.26.2014

  I received an extremely astute question from a fixed operations director in Gainesville, Fla.: Dale: What’s the best way for us to forecast our sales goals for 2015? We typically look at current year volume as a guide for the future. However, this approach seems like we might be misleading ourselves, especially if we [...]

0 comments Read more from Dale →

3 Ways To Win Amid A Declining Wholesale Used Vehicle Market

11.26.2014

  Let’s be honest: Some dealers have taken historically high wholesale used vehicle values for granted. These dealers have eased up on their efforts to quickly retail every used vehicle, knowing that they’ll probably do OK if they decide it’s time to wholesale a unit. At some stores, dealers have realized a profit as they [...]

0 comments Read more from Dale →

AutoSuccess Podcast: Fundamentals of a Retail First Focus

11.21.2014

I recently participated in a podcast with Thomas Williams of AutoSuccess Magazine.  Please click here to listen.    

0 comments Read more from Dale →

A Return To Campus Spurs Memories And Inspiration

11.17.2014

  I had a most extraordinary and inspiring experience last week when I returned to Indiana University (IU) for the first time in nearly 35 years. This visit was part of my responsibilities as this year’s Poling Chair at IU’s Kelley School of Business to share my entrepreneurial experiences and insights with students. I felt [...]

2 comments Read more from Dale →

3 Ways To Minimize A Seasonal Slump In Your Used Vehicle Department

11.08.2014

As the fall season is firmly upon us, I see three potentially problematic trends for dealers in used vehicles. First, inventory levels are climbing. For many dealers, the increases are due to a rise in the number of off-lease and trade-in vehicles that flow from new vehicle sales. Some dealers have also chosen to increase [...]

2 comments Read more from Dale →

When Family’s On The Line, Cox Really Shines

10.29.2014

  I had a rough, and pretty scary weekend. This past Friday night, my son Alex called from the emergency room at Emory University Hospital. He was suffering from severe abdominal pain. I did my best to comfort him over the phone, and we exchanged messages through the night as the medical team conducted multiple [...]

4 comments Read more from Dale →

A Look At The Perils Of Positive Thinking And Selling Cars

10.28.2014

  I was fascinated by a column in the New York Times that suggests that too much positive thinking can be a bad thing. The author, psychology professor Gabriele Oettingen, has studied the effects of positive thinking and concludes that it “fools our minds into perceiving that we’ve already attained our goal, slackening our readiness [...]

0 comments Read more from Dale →