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sales & training solutionDalePollak

AutoNation CEO Mike Jackson “said he wants

AutoNation to handle all the major brands

within a market”(Automotive News 2011)

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how to avoid “gotcha!”moments in usedvehicle acquisitions

Every dealer has had a “gotcha!” used vehicle moment. This occurs when a dealership acquires a vehicle with high hopes of seeing it perform well at retail, only to watch it age into a money-loser.

Sometimes the “gotcha” moment comes after a sudden market shift — perhaps gas prices go up, or consumer confidence crashes. More often, though, the market isn’t chiefly to blame. The “gotcha” moments that are most common and more costly typically follow an acquisition decision that wasn’t: a) fully informed by market intelligence to determine if the unit and its trim/equipment configuration was right for the dealership in the first place or, b) devoid of any objective market insights at all — in other words, someone’s gut instinct or best guess.I would submit that today’s used vehicle marketplace and dealership operating margins leave little room for “gotcha!” moments that are simply the result of ill-informed guesswork. I would also add that there’s an even greater risk for these “gotcha!” moments, given the wide variety of vehicles and their individual equipment/trim configurations that can make or break a unit’s appeal with customers.

Thankfully, however, today’s technology and tools give dealers the market intelligence and ability to avoid big-dollar “gotcha!” moments before acquiring a vehicle on trade-in or at auction. Even better, these tools and market intelligence help dealers effectively sketch a retailing roadmap for every vehicle they acquire to maximize its profit potential and avoid a post-acquisition “gotcha!” moment.

For example, let’s say the market intelligence indicates a 2009 Buick Enclave’s condition, equipment configuration, mileage and consumer demand rating make it a stand-out. A dealer who reviews this intelligence before acquiring the Enclave would be able to determine what to pay to acquire it and meet the store’s profit objective, and how best to play up the Enclave’s

unique “story” in the vehicle’s merchandising and pricing plan to quickly attract the biggest pool of interested buyers.

This kind of holistic, technology- and market-guided acquisition decision making — part of what I call “provisioning” inventory — strikes me as much more effective and less risky than purchase decisions fueled by little more than a hunch. This acquisition intelligence should measure what I believe are the seven key indicators of a used vehicle’s profit and performance potential:1. demand — Thanks to keywords and clicks on vehicle classified/shopping sites and search engines, dealers can now know the number of shoppers in a given market area who are looking for a specific vehicle.

2. interest — Today’s tools and technology are also able to sniff out genuine interest — such as the number of clicks on a Vehicle Detail Page (VDP) for a specific unit on third-party and dealership Websites.

3. volume — This indicator shows the number of the same or similarly equipped units that have recently sold in a dealer’s specific market area.

4. market days supply — This indicator shows the rate that specific vehicles (with the same/similar equipment and trim) sell in a given market — a critical insight to map a unit’s merchandising and pricing plan.

5. Profitability — This indicator accounts for a vehicle’s potential acquisition price/associated costs, the retail asking price where the unit will most likely to see action and a dealer’s gross profit goals. This trifecta, like the market days supply in No. 4, is essential to know early to minimize “gotcha!” moments and adjust your retailing plan to account for a unit’s strengths and weaknesses.

6. availability — This indicator measures the degree of difficulty a dealer would encounter trying to find a vehicle for acquisition that meets its profit/cost parameters at online/physical auctions. With today’s supply constraints, this indicator can sometimes turn a “purchase” into a “punt” —there’s no point chasing a unit if it can’t be found without significant expense or effort.

7. experience — This indicator would assess a dealership’s past retailing experience. It’s last on the list for a reason: A store’s past “gotcha!” or a dearth of experience with specific vehicles shouldn’t preclude acquiring them if the market suggests the decision is “right” for a dealership.

It’s important to note that heeding such market-based intelligence doesn’t guarantee that “gotcha!” moments are gone for good. Today’s used vehicle marketplace is far too volatile for anyone to overlook the risk inherent in every used vehicle acquisition.

I would submit, though, that dealers who pay close attention to what market intelligence tells them on every vehicle they might acquire will have far fewer “gotcha!” moments than those who don’t.

Dale Pollak is an author and the founder of vAuto. He can be contacted at866.867.9620, or by e-mail at dpollak@autosuccessonline.com.

“Thankfully, however,today’s technology and tools give dealers the market intelligence and ability to avoid big-dollar ‘gotcha!’ moments before acquiring a vehicle on trade-inor at auction. moment.”

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sales & training solutionGrantCardone

60 autosuccessonline.com

Lazy is not a normal state of a person, but one that is educated, encouraged and allowed. Walk into any company with lazy staff and I assure you someone in the organization has been educated, encouraged or allowed the behavior. I just wrote an article on this topic at Huffington Post (“Lazy is the New Entitlement” http://www.huffingtonpost.com/grant-cardone/lazy-is-an-entitlement-co_b_939883.html) You can’t find a two-year-old child on this planet who is lazy unless, of course, there is something wrong

with them. It is not natural to be lazy. It’s not hard, however, to walk into a dealership and see signs of lazy everywhere. The salesperson who doesn’t approach a customer. The manager who won’t take a turn and spends his day hiding at the desk. The finance manager who won’t see the deal back into the lender who turned the customer down. Why is this tolerated? Why is it allowed? Great question. The only reason the criminal allows others to commit crimes is because he himself is committing them. Any honest person with a backbone will stand up and say “enough.” Lazy has become a contagion of epic proportions — like an insidious disease that can’t be seen, more dangerous than terrorism. Lazy will break any team, a marriage, a company and even a country. The Chinese are not lazy. If your company doesn’t have a policy against lazy, then laziness will exist. Snap and pop when you wait on a customer. Attack a phone call with urgency, intention and enthusiasm. If you aren’t hitting your targets, don’t take the day off that you feel so entitled to. Lazy is the opposite of industrious. Which do you choose to be?

Grant Cardone is an author and the CEO of Cardone Training Technologies, Inc. He can be contacted at 866.865.3175, or by e-mail at gcardone@autosuccessonline.com.

lazy is adisease

“It is not natural to be lazy. It’s not hard, however,

to walk into a dealership and see signs of lazy

everywhere. The salesperson who doesn’t approach a customer. The manager

who won’t take a turn and spends his day hiding at the desk. The finance manager

who won’t see the deal back into the lender who turned

the customer down.”