wake up by your payer people. It's a beautiful day. Go grab yourself another cup of Joe and say hello to Jim and Michelle Rhodes on the buy here, pay here morning show. Take it away. You too. Hey, good morning folks. Let's get a, uh, audio test first. I'm, uh, Michelle's away. You're stuck with just Jim today. And I'm just verifying my audio setup. I've got lots of great equipment, but it doesn't seem to be connected properly. So I just want to make sure the audio is making out. If somebody will just give me a quick mention in the comments so I can know that, in fact, you're hearing me this morning. um let's um get started with some announcements on uh monday we have brent carmichael joining and um I'm gonna have some fun with that we're gonna make that dealer's choice you guys can tell me what uh you want to make the uh the topic so we'll put some polls out there today Brent is quite experienced. He can join me and have a conversation on any topic that you guys want to hear about. So we'll just let you pick. And again, he's scheduled for Monday. And then we have a couple of V8 meetings next week. If you have an interest in joining a virtual group of eight, I think the dealers that are in those groups would tell you that they're finding that it's useful to be able to see other dealers numbers and see a little bit of information about their business models and how that whole thing operates so you can reach out to us we'll put you in touch with somebody who you know can share with you kind of what their experience has been and see if it might be a good solution for you and then I had one thing I want to talk about this morning You know, there was something troubling that came by email yesterday morning. And, you know, for Michelle and me, as, you know, folks who are trying to put a white hat look on folks in the industry, and that includes dealers and vendors and, you know, everybody that operates in our space, you know, there was something that came up that was a notification from a large vendor in our industry. And they basically reported that a competitor at a recent event stood in front of a bunch of dealers and let's just say it this way vendor one claimed that vendor two was going out of business or was exiting the buy here pay here space and you know they said that in front of a group of dealers and that caused you know the vendor who was uh reportedly you know exiting the space to get a lot of phone calls from their users and you know it's really at a minimum it's reckless and you know I would just say that you know this morning I'm not going to name the names of the parties involved but this just strikes me as something that you know I think at a minimum the folks who if they made that mistake and were negative selling, then I think they ought to own it and be public about it and transparent and just come out and make a public apology and clear that up because that kind of thing is just really, that's negative selling and it's really definitely not a white hat practice. So we just want to put the word out that know we we want to watch for that and we want to make sure that um you know just just watch that when you've got people that are negative selling against the competition uh that probably should tell you a little something about you know who they are and how they conduct business so you know that's certainly not something we're going to condone with white hat way so I just want to get a mention out there about that Again, today, we're not going to name the names of the parties involved, but it's something that we're going to be watching. And to to see if the parties who who did make that mistake, you know, we'll step forward and publicly own that and apologize. So, again, we'll be watchful. I have got some banners up there for some reason. Let me get that fixed and just. Got a super sensitive touch pad over here, so I'm touching some extra stuff I shouldn't be touching. What about audio? Can I get an audio confirmation from some of you? Again, I got a little different audio set up this morning, just making sure everybody can hear just fine before we move forward with our main topic of the day. So you can just shoot a note in the comments there or text me for that matter. I'll make sure my phone is silenced over here. But just let me know if you're hearing me so we don't waste a lot of time here without audio. So I got a confirmation here. Good. You're hearing me. Thanks for that. So that looks like maybe Mr. Michael Solomon. Good morning. And listen, I just want to get into our topic of the day. What I really wanted to cover was this idea of... How to how to determine if your sales volume has fallen off, which. You know, most of us would expect to see some sort of adjustment right in a post tax refund season period. So it's not surprising that our volume might be dipping somewhat. Obviously, when we look at April numbers, I go back and look at April from the prior year and see if your numbers are really often obviously the same with may see what your travel rates are. But short of spending a bunch of money on advertising, which obviously any of us can just start throwing more money at advertising, there are a couple of things that I wanted to bring forward today to just offer as a way to assess the process before we start going into that. Because what we don't want to do is invite customers into a process that's not functioning well. So if we're missing customers, we need to first understand why we're missing customers. before we go start throwing more money out there in advertising and see if there's something in particular that we can fix in that regard. So, you know, let's get to that. Let's start with I'm counting down for the top five, the five that came to mind for me. And let's let's cover this one first. So, you know, first, how are we doing with organic efforts? And obviously it's easy for us to understand on social media. So let's talk about that. If it's a Facebook post, I'm not really suggesting, well, we certainly want to run ads and we would love to be able to go put an organic post that we don't, I'm not talking about putting any money. I'm not talking about boosting a post. I'm not talking about running an ad. I'm just talking about organic posts so that we're leveraging our audience of followers through social media. And the way we build our audience through social media is being consistent. We've got to be sure that we're out there disseminating a message that is of value on a regular basis. And so really now I'm not talking about posting something organically and expecting to sell three cars from that this afternoon. Now, that can happen. We hope that, you know, you have an offer in there that, you know, would attract people and you might actually, you know, produce some business right away. Mostly I'm talking about just checking to see are we are we being active socially and organically? So that's just about consistency. That's about being out there. And then the other part of that would be. email I find that uh dealers are not remembering I think they're kind of moving past and they're putting all their eggs in the social media basket and they're not really utilizing email effectively now with all these that we're going to talk about here I got something else to kind of we'll call it you know 5a because there's it's one thing to reach out to customers the question becomes what kind of offer are we what are we saying what is our message do we have something to offer when we do that whether that be social media organically a free email email still free folks so we can get an email out to those folks who are in our customer base list whether they're uh you know working leads uh prospects then we would want to utilize that that um you know that audience to be able to you know build up something that way so so again for today it's about not spending any money just trying to utilize what we're doing and examine what we're doing and see if there's something that we've changed because we can all felt fall into different practices like we can drop practices that we used to be better at and so this is part of what I'm asking us to go look at first before we start putting money into new ads and then the last one would be face to face and we covered this Michelle and I covered this in an episode some weeks ago about some really specific organic ways to create opportunities. And among the things, when I say face to face, I'm not suggesting that we all get in our cars and we send the whole team out to reach the community. You know, this is really about leveraging relationships. So social media was about our Facebook page, Instagram following where we're leveraging our followers. Emails about obviously leveraging our customer base. And then this last one face to face would be leveraging our local relationships. So are we doing that? Are we really getting out there and reaching out to those folks? And I'm not, again, suggesting we get in the car and go, you know, spread the message immediately as much as I'm suggesting that when we travel, whether it's sending out salespeople or whether, you know, we got tax out or we got detail folks, it's anybody on the team who's out that we're able to as we speak to folks that we're able to just conversationally. make them aware of anything that we've got going on at the dealership that folks need to know about and so this is just should be part of our routine uh practice and so we're not making any special trips we're just communicating with people in the course of our routine traffic so this is one thing we can do but really the question becomes in all of those whether it's social media email face-to-face do we have an offer for folks that is unique Because you can say, well, yeah, we have our car posts out. Well, everybody's got cars. Everybody's got financing. If we're talking about our competitors who are buy here, pay here, everybody's got cars and financing. So what is unique about the offer that we're bringing? And then is it compelling? Like, is the offer that we're putting out there enough to spur people to act? And so, you know, examples would be I think we talked about on our podcast before this idea of just we could do a double referral reward. And then the last part of this is the offer, does the offer have some urgency around it? So in other words, if I go out to my vendors and I hand them a little card that says, hey, just be aware, we're doing, you know, this could be my point of contact person at AutoZone or any of the people, Body Shop. It's like I just hand them a card and say, hey, you might want to spread the word. We're doing a double referral reward from now to the end of the month. So it's unique. It's something, you know, we don't typically do. It's got a timeline associated with it, so it's urgent. If you're going to do it, don't forget. Don't put it off until next month. If you know somebody, you're going to want to send them now because the reward is double. The referral reward is just an example. But the idea is, what do we have to offer that is unique and has some fear of loss associated with it so that we've got some sort of urgency and timeline around it? So that would be the other part that I would be suggesting that we get done there. now let's look at item four is looking at our leads and you know we meet a lot of dealers who don't have a crm so typically when we're talking about this kind of thing we're talking about working the leads in the crm but you know if if I think of an old-fashioned crm and maybe it's a big chief notebook I mean how are you tracking your traffic incoming phone calls web inquiries text messages however people reach you and make inquiries how are we responding like how quickly are we responding to them and then how quickly are we following up with them so I would be I'd really look closely at the first and second response and I think the big thing that I'm concerned about with that, one of the things we see across a lot of the dealers that we work with in a CRM system, their idea of a response is, hey, thanks for reaching out. Here's our app link. Here's a link to submit an application. And I just think, gosh, we can do so much better than that. Yeah, we responded in 30 minutes. Great. Well, all you really did was did the same thing everybody else can do. What is it that is unique that engages the customer and makes them feel like they want to do business with you? I'm sorry, but an app link doesn't do that. Everybody can send me an app link. Everybody can look at my credit score and my credit profile when I send in an app link. You haven't done anything in that scenario to earn my business, you know, so I'm reaching out to you. But now if I'm going to continue to have a dialogue with you, because I may be chatting with some other dealerships as well and making my decision. What is it that you've done to have a chance to to have to be able to make sure that you've got a way to keep the conversation going and have a chance to really bring them to you? And so to me, that's really just back to human interaction. And this is something that I think we've got to work to make sure that we are engaging. And so however that looks, again, I just think if you're sending templates and there's no real dialogue and you're not connecting with this person on some sort of human level, then we shouldn't be surprised that the engagement and the response is low from them. There's just nothing there aside from if they're really in a tough spot and have to have a car today, that's one thing. And if you're the only person who did respond, then maybe you're going to win that business. But if you're competing against others, I'm going to just ask you, what is it about you that separates you from the competition? What's going to make you unique? They probably can all send an app link. They probably can all ask the customer to fill in an application. Well, how would that win the business? So it's really a question of what are we gonna, What are we doing? So when we start to look at the process in that way, I would say we've got to figure out what is it that we can do to win that customer in that interaction. And so now it's a question of analyzing that process. How quickly are we responding? What are we saying when we respond? And now we can begin to say, well, we're spending a lot of money to create these leads. And now the question is, are we handling the leads that we've got well now? That's the first thing I'd want to know before I started putting more ad dollars out there. It's a little like our problem with underwriting and putting more contracts in a portfolio when we're not collecting well. We got to go fix our collection problem because we're just adding contracts to a portfolio that's not functioning very well same thing here we're inviting customers into a lead process and we're not handling our leads very well and so why would we expect our sales and our closing ratio to improve why would we expect more appointments and we've just got to begin to analyze those things and so I think it's really important to dig into you know those elements of the uh of the process first so now when we talk about that it's like how do we respond and now that leads to training refreshers so number three you know counting down would be training let's get in there and examine how we're communicating with customers and look at our closing ratio look at our number of appointments that we set let's look at how many of those appointments showed I recommend tracking in addition, and I know most CRMs don't exactly do this, but I would always like to know how many of those customers who came to the law actually did a test drive. Now, there's a whole separate subject about one of things I would invite dealers to consider. If you're kind of set in your ways and you're not seeing much traffic and you're not or you're not seeing much closing, then I would say one of the things I would recommend you look at is quit asking your customers to do an application on the front and allow them to drive And then, um, have a chance to find out how many customers test drive, and then you can do an application. I mean, why do, why do we need to do an application on a customer? I know what your answer many of you is going to be, because I would say the overwhelming majority of dealers are doing an application first. And what I'm simply suggesting here is when the, the, the applications are being done online or the application is being done in the building. and then we don't test drive and we don't close the deal. I'm saying this is one thing you could look at is getting more test drives before application. Obviously, you got to have the customer at the building to do that. But this is some of the things you can look at in the interest of trying to convert more customers. It's really about you know establishing some sort of connection again if if I'm doing because I just told you the vast majority of dealers are just asking the customer to apply first apply first here's our application whether it's an app link you know online or send them to the website or customer visits the building we march them in and put them at a desk and fill in an application well I'm just simply saying if there's some problem with your sales process and you're not selling as much Maybe look at that. Let's look and see if there's something we could be doing differently in that part of the process to have a chance to convert more customers. At this point, if your sales volume is low, you don't have a lot to lose. And I'm simply saying you can say that's an old school approach. And I would simply say it's a human first approach. It's a human first approach. And so I just am saying I'm not I'm not I'm not following the electronic process and I'll try it for a time. But if it's not working and that's what we're talking about here today for sales volume is falling off. and we're starting to examine what's what's maybe not working then I would say let's let's go back to trying the human approach and see if we can actually win more customers that way so training training training is just get back in there check with your people and make sure by the way that applies to us too if I'm a kind of a sole operator or, you know, it's me and my wife running the business and she's taking all the leads or I'm taking all the leads and I'm meeting the customers. We can look at ourselves too, because we can develop bad habits. We can get away from what we used to do. And so we should certainly, you know, look at ourselves too. But this is also thinking about our sales team. Get back in there. Let's do some training refresher. Because when the consultant advisor in me says, when sales tank, when something shifts and sales drop, as a dealer as somebody who's a coach advisor as a as a sales manager maybe I need to know that my sales process my training and my process hasn't changed I need to always know that that part is consistent so that I can be sure that I can look elsewhere I'm going to offer you a couple more ways of things that we can begin to look at we can if we can be sure that our training process is good and that we're still following the same process And that all is working fine. Then we can move on to some of these other things. Let's talk about pricing. And really what I'm talking about when I say pricing, we can also just roll inventory overall into that. The thing that comes to mind here is we're working with some dealers out there, and I remember one case in particular several months ago where we determined that a dealer was selling almost everything. It was upwards of 90% of what they were selling was from a certain price point and down. And so I would recommend that all of us go back and look at What are we selling? So we're having this conversation in May. So what's happened? We've come off a tax refund season. Some people were still enjoying some tax refund traffic in April. So we've sold through a lot of that inventory. And so now we need to go back and look at what is the situation with our inventory? Is pricing and available selection on inventory a factor now. Have we sold through the good stuff? Have we sold through the fresh stuff and now we're left with the older units? Or have we sold through the more affordable inventory and now we're left with mostly the high priced units? We got to go look at pricing. We got to go make sure that we're not missing customers based on price. And then the last one for me, and this can all be kind of talked about together. The number one thing to look at when it ties back to pricing is going to be down payments. You know, this is still true. Way back when I got in the car business, got in the buy here, pay here business in particular, you know, it was said to me that, you know, nothing dictates volume and buy here, pay here more than down payment. I think that's generally still true. And because what you're really talking about with most customers, what are they looking for? They're trying to figure out what will it take to get in a car today? Like I'm in a tough credit spot. And I'm we know about our customer in the buyer payer space. They're not great at saving money. We're past tax refund season now. So what we're talking about is a customer who probably hasn't saved up a lot for a big down payment. And if our business model doesn't allow us to get there, because what I'm really suggesting is, you know, what's the difference between a customer who's got, you know, fifteen hundred dollars down versus a thousand? I'm just picking numbers, whatever your model is. the difference between having $300 to $500 less down payment than you would like, I want you to think about what that looks like because this customer is going to be with you for three years. And do you really believe that the difference between that thousand and $1,500 as an example is going to be the difference in them being successful with their payment. And so you have to ask yourself, is my pricing on my lot price of cars and a pricing on my down payments such that I have got a solution for customers who are in a tough spot haven't saved a lot of money so you know this is the first place to go to look and to figure out if we're if we are missing some business around down payment and by the way you can advertise down payment it's just be careful we did a podcast uh with allison harrison the attorney out of ohio uh months ago and you can do a search on that I think we used uh triggering terms just look up triggering terms on our on our playlist on youtube And when we talked about that quite specifically, you can advertise these triggering terms, finance terms. So just quickly, what that means is when I say triggering terms, when you put an ad out there that says, you know, this car is $1,000 down or $999 down, that triggers in an advertising context that you're promoting financing, right? You just offered, if you said $95 a week, That suggests financing. So now you've triggered the idea that you're offering financing and you're required by law to disclose now the terms, which you can disclose. Put in a fine print, create a disclosure and run your ads that feature down payment and then just do full disclosure about the terms when you offer that financing. I think down payment is still our biggest driver of traffic. You know, when we can offer an affordable down payment or when we can just get to an affordable down payment, then that allows us to move the needle in terms of volume. And look, this is a whole business model slash underwriting conversation. I'm simply saying if we're looking at reduced volume, then maybe what's happened is we've sold through our most affordable stuff. Now we've got more expensive stuff and we're holding out for more down payment. And it can even be that we spent too much money on a particular car or a particular group of cars. And so now we feel like we have to hold out for more down payment. Well, let me just offer this idea. You know, when you... you make a mistake and I've been there like I was a dealer I would sometimes spend too much on a car or buy a car today and the ac quits working on the way back to the dealership right and so now I got ac compressor and all the stuff and and I got an extra thousand dollars in this car I wouldn't count on so that can happen it can be an actual mistake that I overlook it can be just bad luck but what I'm I really want to kind of drive home today is that what we got to be careful about is making a second mistake because we own the car for more. Now we're holding out for more down payment and setting that down payment based on cost. And look, I get it. Cash and deal is a big part. We can't make those kind of exceptions all the time. But when we make a mistake of owning a car for a little more than we should, a little more than its market value, then we don't want to make a second mistake by setting the down payment high based on that. And now the car just sits. And so that's kind of in that shame on us category. We're making a second mistake, the car sitting. And so this is something that we can move the stuff. We just got to maybe go back and assess your inventory. When I say pricing, I'm talking about the selling price of the car. Why? Because a lot of you out there are trying to do. your financing based on a certain term you're trying to stay at 36 months and you're quoting all your payments on 36 months well even though the customers a lot of times will sign that contract it's just it's pushing them up into a higher payment because your price is here your term is here the down payment's here guess what payment's got to be up here and so now we gotta we gotta watch that super closely and so sometimes when we're not paying really close attention to it, then that can begin to really become a problem. We look up and say, why aren't we selling anything? What's the deal? Where did our volume go? I would just simply say, it's something that we've got to be watchful about and make sure that we're not creating a second problem by holding out for more down payment. And so just look at down payments, look at pricing, let's just make sure that those things are you know, are going to make sure and help us to not be a hindrance when it comes. When we do succeed in creating interaction with a customer and we do get them to the lot or whatever that process looks like for you, however you might move them through the process, then just understand that we got to make sure that we aren't missing them. or failing to connect with a customer based on those kind of elements. So let's just take a real hard look at those pieces. And I mentioned a couple of podcast topics from the past. I'll put a note in there that you can still find on YouTube. We have two playlists. We've got our White Hat Wednesday and single playlist. There's actually more than that. But the ones related to the morning show will be White Hat Wednesday playlist and then all morning show broadcasts in the YouTube channel. So hop over there subscribe to that again you can do a search on that triggering terms topic you can probably do a search on down payments these topics that we're talking about today you'll find content specific to what we're talking about you know we just crossed 300 episodes in two years so odds are we've talked about the thing that you're wrestling with right now so you know fish out some of that stuff be a subscriber over there on youtube and you'll find all that uh information there so uh we'll wrap up for that in that area today I just think we wanted to make sure that people understand that that's the that's the stuff that I think we can do without spending any money go back and assess you know where we're at with those things and make sure that we've got um know got our processes down that we're doing what we can organically to to reach customers and let's leverage those uh relationships and audiences that we already have and before we start throwing more money at the thing let's figure out what's out there that we can do so that's um that's the idea I just want to make sure we get those things covered and so we're going to wrap up there let you guys get back to your friday hope you have a great weekend don't forget we got brent carmichael on monday if you have a topic that you'd love to hear from brent uh go over to the bhph success group I'm gonna put a facebook poll in there uh shortly and let's get some feedback on topics and then if you or you can text me a lot of you have my number just text me and let me know what you'd like to hear brent talk about and uh we will uh we'll have him here we we love having brent come around because like I say you know our audience always learns something uh I i always learn something when brent comes around so we're excited to have him here on monday so just let us know what you'd like to hear from him but again thanks for tuning in we uh we appreciate you uh listening and we'll uh we'll see you back here on monday
