Don't make secondary, 2ndary#%@* By Bob Morey
Too often we see dealers who sincerely want to get their fair share of the secondary-finance business but don't get to first base. An abridged version of our training in this area follows this simple formula: Px3.
In the business of selling anything, understanding the 3 P's are the basis for success.
The 1st P is for Prospect. You must have a goodly quantity of folks through the door who have a need for your product. In the Secondary market, the number of people you attract to your facility is simply a function of how effectively you advertise. No one medium is particularly better than another so long as the story you put forth offers a modicim of"Hope"
Additionally, the Prospect pool for secondary finance that comes to you will reflect the level of "Hope" you build into your advertising. Too much Hype with the "Hope", and too many of your prospects will likely need a co-signer to pay cash. Which leads us to the second P, your People; sales and finance employees.
Your People not only require ongoing training and updated tools to match the ever-changing fabric of the financinal carpet we tread daily, but they have to buy into the value of seconday finance as a worthy and well-compensating profession.
To the extent: that your People see a smooth running, consistent process that frequently offers them success; and explains, reasonably, reasons for occassional lack of approvals, un-funded deals and scarcity of secondary-friendly inventory; your secondary department's bottom line will reflect minimal to exceptional ROI.
In other words, they will buy into it if it works and they understand the workings of it. Let the salesman occasionaly structure his own deal, and then critique it for him. Have your sales people and Secondary F&I manager attend auction with your inventory buyer and make them find the vehicles that will match your lender's qualifiers. Make your People believers.
The last P is for Product. Look at the inventory requirements for secondary finance through the eyes of your lenders and your secondary F&I person. Analyse the vehicle requirements of all of your lenders, (they're not so different from one to the
other). Decide whether you're area's demographics and your advertising draws in upper , middle or lower level paper and then, buy accordingly.
Lastly, don't let the quality of a poor product dictate future business. If you can't justify spending reconditioning money to make the vehicle safe, wholesale the vehicle. As-Is does not have the same meaning to people who have to pay 21% interest rates. They'll camp out on your door step longer and tell more people how you put it to them.
In the business of selling anything, understanding the 3 P's are the basis for success.
The 1st P is for Prospect. You must have a goodly quantity of folks through the door who have a need for your product. In the Secondary market, the number of people you attract to your facility is simply a function of how effectively you advertise. No one medium is particularly better than another so long as the story you put forth offers a modicim of"Hope"
Additionally, the Prospect pool for secondary finance that comes to you will reflect the level of "Hope" you build into your advertising. Too much Hype with the "Hope", and too many of your prospects will likely need a co-signer to pay cash. Which leads us to the second P, your People; sales and finance employees.
Your People not only require ongoing training and updated tools to match the ever-changing fabric of the financinal carpet we tread daily, but they have to buy into the value of seconday finance as a worthy and well-compensating profession.
To the extent: that your People see a smooth running, consistent process that frequently offers them success; and explains, reasonably, reasons for occassional lack of approvals, un-funded deals and scarcity of secondary-friendly inventory; your secondary department's bottom line will reflect minimal to exceptional ROI.
In other words, they will buy into it if it works and they understand the workings of it. Let the salesman occasionaly structure his own deal, and then critique it for him. Have your sales people and Secondary F&I manager attend auction with your inventory buyer and make them find the vehicles that will match your lender's qualifiers. Make your People believers.
The last P is for Product. Look at the inventory requirements for secondary finance through the eyes of your lenders and your secondary F&I person. Analyse the vehicle requirements of all of your lenders, (they're not so different from one to the
other). Decide whether you're area's demographics and your advertising draws in upper , middle or lower level paper and then, buy accordingly.
Lastly, don't let the quality of a poor product dictate future business. If you can't justify spending reconditioning money to make the vehicle safe, wholesale the vehicle. As-Is does not have the same meaning to people who have to pay 21% interest rates. They'll camp out on your door step longer and tell more people how you put it to them.
posted by Morey's Muses | 6:29 AM
|
2 comments
