First Approval Source - Enabling Dominators
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Transcript of First Approval Source - Enabling Dominators
Be a Market Dominator Increase
Inventory TurnsAnd Hold Margin
Myril ShawChief Operating Officer
http://www.firstapprovalsource.com
Today’s Topics
• Goals For Today• How We Know• The “Dealer Strategy Matrix”• The Virtuous Cycle• Where We Fit
http://www.firstapprovalsource.com
Goals For Today
• No one falls asleep• You are energized or
entertained or at least not bored stupid
• You learn at least one new thing
• You leave with immediately and directly actionable information
http://www.firstapprovalsource.com
How We Know
• About First Approval Source– Profit Services Provider
• Comprehensive F&I– Red Flags and OFAC compliance– Consumer qualification and loan sourcing
» Credit improvement– Backend sales– Contract preparation and delivery
• Quality finance leads• Web services• Social Media / Reputation management• Educational resources
– Experience and Resources• Over 75 years combined industry experience• Millions of dollars of loans processed• F&I Survey
http://www.firstapprovalsource.com
Quiz #1Do You Have A Goal?
Who knows what
BHAGstands for?
(And for extra credit, where did it come from?)
http://www.firstapprovalsource.com
Big Hairy Audacious GoalA long-term goal that changes the very nature of a
business’ existence.
BHAGs are meant to shift how we do business, the way we are perceived in the industry and possibly even the industry
itself.
#1 Answer
http://www.firstapprovalsource.com
The “Dealer Strategy Matrix”(developed by Dennis Galbraith)
Service Dominator
Skim Velocity
Bran
ding
No
Bran
ding
Gross Inventory Turn
http://www.firstapprovalsource.com
Price Based Sales
• Price Elasticity– Low price = High volume– High price = Low volume
• The Strategies– Skim – We’re expensive, so what?– Velocity – No one beats our price!
Skim VelocityGross Inventory Turn
No
Bran
ding
http://www.firstapprovalsource.com
Value Based Sales
• Price Elasticity Modified– Lower price with differentiation = Higher volume– Higher price with differentiation = Lower volume
• The Strategies– Service – We’re expensive, but worth it!– Dominator – Great prices and a great experience!
Service DominatorGross Inventory Turn
Bran
ding
http://www.firstapprovalsource.com
About The “Skim” Strategy
• Holding gross– No emphasis on delivering
excellence in service or experience
– “We’ve been in business for 30 years.”
– “We are your neighborhood store.”
• When it works– Clear geographic advantage– Lifestyle business
• When it fails– Competitive marketplace
Bran
ding
No
Bran
ding
Gross Inventory Turn
http://www.firstapprovalsource.com
About The “Velocity” Strategy• Turn inventory with price
– Target price over service or experience
– “You can’t beat my prices.”– “Lowest payments anywhere.”
• When it works– Reduced flooring through high turns
supports low margins as long as overall traffic volume is sufficient
– Strong backend sales• When it fails
– Down markets or rapidly rising interest rates
– Highly competitive markets where differentiation is required
Bran
ding
No
Bran
ding
Gross Inventory Turn
http://www.firstapprovalsource.com
About The “Service” Strategy• Hold gross and differentiate
– Outstanding customer experience– Emotes luxury– Customer service is king
• When it works– Stable buying communities where
customer loyalty, word-of-mouth and repeat business are critical
• When it fails– Service excellence comes at a cost;
in down markets when reduced sales force compromise in service approach the reputation damage my be irreparable
Bran
ding
No
Bran
ding
Gross Inventory Turn
http://www.firstapprovalsource.com
About The “Dominator” Strategy• Great service and great prices
– Attract customers with an excellent experience and pricing flexibility
– Customers come in when they see the price, they stay when they feel the experience
• When it works– Storewide commitment to
excellence in front of the customer and behind the scenes
• When it fails– Lack of training in selling value
and delivering qualityBr
andi
ngN
o Br
andi
ngGross Inventory Turn
http://www.firstapprovalsource.com
Service Dominator
Skim Velocity
Profits, Margins – The Target
Bran
ding
No
Bran
ding
Gross Inventory Turn
Unit Margin
Unit Margin
Store Profit
Store Profit
http://www.firstapprovalsource.com
Why Isn’t Everyone A Dominator?• Insufficient Commitment
– Owner/management fail to enforce:• Consultation versus sales• Luxury environment• Customer-first behavior• Well articulated and demonstrated value propositions – customers are not told brand value, they are immersed in it• Price never leads• 100% Professionalism
Bran
ding
No
Bran
ding
Gross Inventory Turn
http://www.firstapprovalsource.com
Why Isn’t Everyone A Dominator?• Insufficient Training
– Your store-your way, your way must be taught:• Greeting customers
– In-person– Phone– Email
• Value propositions – Features as benefits– F&I– Service
• Selling without price (full price is fair price)• Follow-up
Bran
ding
No
Bran
ding
Gross Inventory Turn
http://www.firstapprovalsource.com
Why Isn’t Everyone A Dominator?
• Non-Supportive Infrastructure– Training environment and plan missing– Unfriendly phone system– CRM that is hard to use or not useful– Inadequate website
• Poor lead generation• High bounce rate
– DMS that fails to facilitate sales processes
Bran
ding
No
Bran
ding
Gross Inventory Turn
http://www.firstapprovalsource.com
Your BHAG – Be A Dominator The Virtuous Cycle
http://www.firstapprovalsource.com
The Virtuous CyclePeople
• People – Traffic In The Door– Traffic sources:
• Traditional advertising• Sales people cold calling• Shows• Email marketing• Social media• Your website converting leads
– A credit application is not a lead form• Digital advertising• Community/charitable sponsorships with branding• Walk-ins• Word of mouth
http://www.firstapprovalsource.com
Quiz #2How Good Is Your Website?
What percentage of
Website visitors
leave without taking any action?
http://www.firstapprovalsource.com
96% - 98%
#2 Answer
http://www.firstapprovalsource.com
The Virtuous Cycle People – Take Home Tips
• Maximize the effectiveness of your shows by leveraging social media
• Social media is about influencers – children and grandchildren
• Ensure that leads can be captured easily and everywhere on your website – especially vehicle view pages (improve the bounce rate)
http://www.firstapprovalsource.com
The Virtuous CycleProducts
• Products – Sell Everything– What are you selling?
• OEM manufactured vehicles• Used/brokered vehicles• Financing• Backend products
– Extended service agreements– GAP Insurance– Credit Life/disability– Property insurance
• “Pro-Shop” products• Parts and service
http://www.firstapprovalsource.com
Quiz #3How Important Is Financing?
What percentage of
Boat and RV buyers
finance some or all of their purchase?
http://www.firstapprovalsource.com
80%
#3 Answer
http://www.firstapprovalsource.com
The Virtuous CycleProducts – Take Home Tips
• Offering financing increases units sales by 25% - 35% (80% of buyers finance; 55% of buyers who leave to arrange financing, don’t come back)
• Ensure that you understand the buyer’s financial position early so that you can guide them to the right product
• When presenting backend products, offer the consumer prices “with protection” and “without protection” – “Is $15/mth worth a good night’s sleep?”
http://www.firstapprovalsource.com
Selling Backend Products
http://www.firstapprovalsource.com
The Virtuous CycleProfit
• Profit – The payoff– Areas to drive profit:
• Vehicle margin– Full price is fair price– Selling benefits not features– Enthusiasm is contagious and profitable
• Financing– Maximize funding reserve
• Backend profit– 100% on Extended Service– GAP– Insurance referrals
http://www.firstapprovalsource.com
The Virtuous CycleProfit – Take Home Tips
• When you provide value through the experience, price is the last consideration
• People purchase an experience not a vehicle – the experience starts on your website and carries through every aspect of the in-store visit – make it all count
• Never be afraid to maximize your funding reserve – sell payments not rates
http://www.firstapprovalsource.com
The Virtuous CyclePopularity
• Popularity – Building the buzz– Technology is the amplifier:
• Pictures – Lots – Everywhere– Pictures of:
» Products in use» Happy buyers» Test drives
– Pictures on (both your pages and customer pages – provide instructions):» Facebook» Twitter» Instagram
• Videos– YouTube– Vines
• Reviews– Solicit reviews– Reputation management
http://www.firstapprovalsource.com
The Virtuous CyclePopularity – Take Home Tips
• Use a rewards program to encourage customer referrals
• Create and promote a YouTube channel – video sells
• Ensure that you have a social media savvy employee focused on your social media and reputation management programs (90% of shoppers search online reputations before they visit your store)
http://www.firstapprovalsource.com
The Virtuous CycleLet The Spin Begin
• People buy product• Product sales drive profit• Value based profit builds popularity• Popularity invites people
• Rinse and repeat
• Being a Dominator is a function of a free spinning Virtuous Cycle with management support and process excellence throughout the store
http://www.firstapprovalsource.com
First Approval SourceWhere We Fit
We
enable
DOMINATORS!
http://www.firstapprovalsource.com
First Approval SourcePrimary Services
• The provider of CreditMiner for the Marine and RV industries– Replaces your website Credit
Application– Appears on your Finance tab, your
Get Pre-Approved tab and on every VDP page
– Guaranteed to at least double your finance leads• The provider of comprehensive F&I
Services– Red Flags and OFAC compliance– Consumer qualification and loan
sourcing– Credit improvement– Backend sales– Contract preparation and delivery
http://www.firstapprovalsource.com
First Approval SourceOther Services
• Web services
• Reputation/social media management
• Educational resources
http://www.firstapprovalsource.com
First Approval SourceStandard Rates Profit Services
OnlyCreditMiner Only Profit Services and
CreditMinerFirst Approval Source Profit Services with
Broker authorization with
Coast To Coast Yacht Sales
First Approval Source Profit Services with Credit Miner Virtual Credit
Consultant finance lead generation
and Broker authorization with
Coast To Coast Yacht Sales
Setup $0 $497 $0 $0 $0
Soft Credit Pull NA $3.50/pull (pre- paid in batches of 50)
$3.25/pull (pre- paid in batches of 50)
NA $3.10/pull (pre- paid in batches of 50)
Per Application $0 NA $0 NA $0
Usage Dealer retains 65% of monthly F&I Profit
for first 60 days, then
Flex Fees
$497/mth $0 plus Flex Fees, provided the
previous 12 month or time since signed
average FAS invoice is $450 or greater,
otherwise ,the lesser of the amount
needed to make the average monthly amount invoiced equal to $450, or
$450. During first 60 days, Dealer
retains 65% of monthly F&I profit
over $450.
$0 plus Flex Fees, provided the
previous 12 month or time since signed
average FAS invoice is $300 or greater,
otherwise,the lesser of the
amount needed to make the average monthly amount invoiced equal to$300, or $300.
During first 60 days, Dealer retains 65% of monthly F&I profit
over $300.
$0 plus Flex Fees, provided the
previous 12 month or time since signed
average FAS invoice is $650 or greater,
otherwise,the lesser of the
amount needed to make the average monthly amount invoiced equal to$650, or $650.
During first 60 days, Dealer retains 65% of monthly F&I profit
over $650.
http://www.firstapprovalsource.com
First Approval SourceFlex FeesAverage Monthly F&I Profit (12 mth running average)
From: Up To and Excluding: Percentage Retained By Dealer:
$0 $2,000 40%
$2,000 $3,000 50%
$3,000 $6,000 60%
$6,000 $9,000 70%
$9,000 80%
http://www.firstapprovalsource.com
First Approval SourceSpecial Rates – This Week Profit Services
OnlyCreditMiner Only Profit Services and
CreditMinerFirst Approval Source Profit Services with
Broker authorization with
Coast To Coast Yacht Sales
First Approval Source Profit Services with Credit Miner Virtual Credit
Consultant finance lead generation
and Broker authorization with
Coast To Coast Yacht Sales
Setup $0 $0 $0 $0 $0
Soft Credit Pull NA $3.25/pull (pre- paid in batches of 50)
$3.10/pull (pre- paid in batches of 50)
NA $3.05/pull (pre- paid in batches of 50)
Per Application $0 NA $0 NA $0
Usage Dealer retains 70% of monthly F&I Profit
for first 60 days, then
Flex Fees
$450/mth $0 plus Flex Fees, provided the
previous 12 month or time since signed
average FAS invoice is $425 or greater,
otherwise ,the lesser of the amount
needed to make the average monthly amount invoiced equal to $425, or
$425. During first 60 days, Dealer
Retains 70% of monthly F&I profit
over $425.
$0 plus Flex Fees, provided the
previous 12 month or time since signed
average FAS invoice is $300 or greater,
otherwise,the lesser of the
amount needed to make the average monthly amount invoiced equal to$300, or $300.
During first 60 days, Dealer retains 70% of monthly F&I profit
over $300.
$0 plus Flex Fees, provided the
previous 12 month or time since signed
average FAS invoice is $625 or greater,
otherwise,the lesser of the
amount needed to make the average monthly amount invoiced equal to$625, or $625.
During first 60 days, Dealer retains 70% of monthly F&I profit
over $625.
http://www.firstapprovalsource.com
First Approval SourceSpecial Flex Fees – This WeekAverage Monthly F&I Profit (12 mth running average)
From: Up To and Excluding: Percentage Retained By Dealer:
$0 $2,000 50%
$2,000 $3,000 55%
$3,000 $6,000 65%
$6,000 $9,000 75%
$9,000 85%
Plus: This Week For Attendees•Access To NADA Guides online – no charge•OFAC Compliance reports for cash buyers – no charge•Coming soon: Administered Incentive Reward program for you and your customers
http://www.firstapprovalsource.com
First Approval SourceBut…
• We have a finance manager (or, I am the finance manager)– We are NOT the “fire the finance guy” company
• We do not demand that you do 100% of your financing through us
– Flex Fees should encourage you to allow us to assist you most of the time
• You can, if you wish, keep existing relationships– We can share relationships
» Even if there is a Re-Direct in place, we will never charge for a transaction that we did not initiate
• Skilled Finance Managers should be leveraged in assisting maximizing profit through the sales process, with financing presentation and with backend product sales
– We can handle all the paperwork
• Reputation/social media management
• Educational resources
http://www.firstapprovalsource.com
First Approval SourceYour Profit Services Company
• The best customer service in the industry
• One stop shop for all your profit needs
• Most aggressive rates anywhere
• Your provider for CreditMiner
http://www.firstapprovalsource.com
Goals For Today
• No one falls asleep• You are energized or
entertained or at least not bored stupid
• You learn at least one new thing
• You leave with immediately and directly actionable information
http://www.firstapprovalsource.com
First Approval SourceYour Profit Services Company
QUESTIONS?
For a copy of this presentation:Myril Shaw