Selling Auto Protection Products in Brazil in an economic dowturn. How to manage the situation in a prolonged recession.

1. GROWTHIN A DIFFICULT ECONOMY
Global
Business Development
Revised September 27, 2016

2. Automotive Protection Products
Surviving and Thriving in an Economic Downturn
There are things your team can do
now to keep growth moving and
increase attachment rates at the
auto dealers. Growth during this
period is critical and attainable.
Brasil remains in an economic downturn what
can you do to lessen the impact and prepare for
additional growth?

3. Best Practices
Our world has changed, the distribution
channels of the mature markets may not be
the best distribution channels for the new
markets, review your options, review your
products ensure they match the market. The
computer changed our world, the internet
revolutionized the globe, if our products don’t
keep up with the new medium we are left to
only those distribution channels of the old
world. They may be enough to sustain but
growth comes from taking some bold steps to
the future.
When the economy slows down there is an opportunity for increasing the
attachment rates on auto protection products. During this period you won’t
use the traditional approach to the dealers and manufacturers. The new
approach must:
• Be delivered with certainty and conviction;
• Deliver a substantial value-add message to client executive management;
• Present a strong proforma that demonstrates the impact to the bottom line
if management engages the sales team to produce at new levels in Auto
Protection Products;
• The team must be ready to deliver a “how to” demonstration to guide
management.

4. Mr. Donaldson held executive roles with:
ü TransAmerica Commercial Finance Service Saver Warranty Division 1989-1991
ü Vice President Warrantech Corporation, International Business 1991-1996
ü Vice President AIG/AIU Warranty, International Markets Europe, Asia, South America 1998-2000
ü President International Markets & Executive Vice President of Latin American Markets The
Warranty Group, April 2000 - Sept. 2011

5. Automotive Protection Products
Managing For Growth In Difficult Economic Times
Mr. Donaldson has managed companies that survived and thrived in some of Latin America’s
major economic downturns. He successfully led a firm in Argentina through the collapse of the
economy in the early 2,000's, in Brasil in the 1990's through 2011, in Colombia during the war
period, in Peru and Mexico. With Mr. Donaldson's leadership, each and every company came
out of their circumstance stronger.
Mr. Donaldson shares some of his insights for not only surviving the economic downturn but
using this period to build your business and prepare it for an outstanding result as the economy
begins to bounce back.
HOW YOUR FIRM MANAGES THIS ECONOMIC DOWNTURN
COULD ESTABLISH A STRONGER FUTURE

6. Automotive Protection Products
Managing for Growth in Difficult Economic Times
ü Brasil is in an economic winter, the difficulties can be attributed to a number of things!
ü Inflation up, interest rates up, increasing unemployment and the government threatening to
increase taxes;
ü Auto sales down and credit tightening reducing overall opportunity.
How Your Firm Manages The Economic Down Turn
Should Establish Stronger Future Growth

7. Increase
Client
Contact
Review The
Current Rate
Structure
Modify
Programs To
The Market
Needs
Prepare To
Come Out Of
This Period
On Top
DO NOT TREAT THIS PERIODAS “BUSINESSAS USUAL”
GROWTH OPPORTUNITYREMAINS
TheApproach To ClientAnd Prospective Clients Changes
Carefully
Reduce Non
Essential
Staff

8. Increase
Client
Contact
ATTEMPT TO MAKE NECESSARYCHANGES EARLY
TOAVOIDADVERSE BOTOM LINE IMPACTS
Carefully
Reduce Non
Essential
Staff
The current economic conditions in Brasil have tested management of most
companies, the prolonged recession and the significant drop in automotive
production, and sales have strained all, the automobile dealerships and the
manufacturers. Most if not all automotive dealerships and manufacturers have
reduced staff and non-essential personnel because of the severe decrease in auto
production. It is a time to remain resolute.
During this period of continued economic strife, it is important to increase client
and prospective client contacts. However, there must be a clear value-add
proposition to each and every meeting. Tough times provide an opportunity to
increase overall value with the customer and show them how to increase their
margin through better penetrations. You should be able to increase client contact
without increasing SG&A.

9. Review The
Current
Rate
Structure
Modify
Programs To
The Market
Needs
ADAPTTO THE CHANGING MARKET
Higher inflation has the potential to increase the cost of parts and labor, ensure
you review rates and take action ahead of increased loss ratios. Most clients will
understand the need for an increase as they are seeing higher prices on products
and parts during inflationary periods. Ensure your team explains it correctly and
it will be accepted rather than rejected by the client.
Review products, longer term products may have too high a price for the current
market look to see what would be the impact if you reduced terms and price,
how much more would you need to sell to maintain the gross budget amounts.

10. Prepare To
Come Out Of
This Period On
Top
PREPARING TODAYFOR THE POSITIVE TURN IN THE MARKET
WILLPROVIDEYOUR FIRMAHEAD START OVER THE COMPETITORS
Ensure that your team begins preparing today for the growth you
desire as you come out of the economic downturn. To accomplish
this, you must increase your value proposition to the clients and
prospects today. Demonstrate to the current clients how to
significantly improve their return today and all year. Show them
what the increased potential is if they make the necessary changes.
Your clients need to have additional margins today.

11. I n f l u e n c i n g F a c t o r s
Affecting The Sale Of Auto Protection Products
Global
Business Development
Learning to address these factors properly will allow you
to grow and prosper in a time of economic difficulty.

12. 9 - I n f l u e n c i n g F a c t o r s
Affecting The Sale Of Auto Protection Products
Rising Inflation
Tightening of Credit
Increased Unemployment
Governmental Intervention
1
2
3
4

13. INFLATION: The Brasilian market has been an inflationary market during the 80’s and
90’s and only settled in the mid 2000’s, the past three years inflation has increased again
and is posing a threat to consumer spending.
How to Respond: For the Auto Protection products this means more focus in the claims
operations and shopping for best pricing in parts and holding labor costs to the
contracted rates. This is also a time where the claim center needs to keep a strong focus
on Fraud Prevention reviewing claims and reports weekly and monthly.
EMBRACE THIS TIME IN BRASIL AS AN OPPORTUNITY
Rising Inflation

14. Tightening of Credit: In all economic slowdown’s there is a tightening of credit, this can
sometimes be something that can be used to the advantage of the sharp Auto
Protection Programs.
How to Respond: This is a time where you double down on the discussions with Dealer
Principle regarding the need to increase exposure of the Auto Protection Products as
these plans provide substantial needed bottom line profit. Use a proforma to
demonstrate how the growth in these Service Contracts can benefit the automobile
dealer. The proforma will show a significant value-add for the client and a compelling
reason to focus on the sale of Auto Protections Products.
Even if you are on the right track,You’ll get run over if you just sit there –Will Rogers
Tightening of Credit

15. Unemployment: increasing employment trails the change in the market so you should
expect that unemployment will remain higher during the initial cross over to a positive
market trend. Don’t rely on the Unemployment rate to determine when the market has
turned positive.
How to Respond: This is a period where your account managers meet with the
automobile dealers and manufacturers to discuss the need for increased exposure of
the program to the buying consumer. A period when each opportunity should be
exploited to demonstrate the value of the products to the customer.
“Price is what you pay. Value is what you get.” -Warren Buffett
Unemployment

16. You Cannot Control WhatYour Government Will Do,
ButYou Can KeepYour Team Focused On Growth
Regulatory Agenda: In Brasil, during an economic downturn there is a tendency
for the government to increase taxes, this reduces purchasing power and slows
the change to a growing economy. Currently, the Brasil Government is
considering new tax increases. The most appropriate action your firm can take
during this period is to remain focused on the growth of business and less
concentrated on the bad news that seems to flourish.
How to React Internally: Keep the organization focused on growth, look for new
ways to attract the customer into your dealership.
Governmental Intervention

17. I n f l u e n c i n g F a c t o r s
Affecting The Sale Of Auto Protection Products
Rising Interest
Rates
F&I Infrastructure
Sales Professional’s
FEAR
Market Consolidation
Management
Procrastination
5
6
7
8
9

18. The Best Training Program In The World IsAbsolutely Worthless Without
The Will To Execute It Properly, Consistently,And With Intensity. - John Romaniello
F&I Infrastructure: During a slower period of sales it is important to utilize this time
demonstrate your client automobile dealers that have an F&I structure, how to place
your products for higher attachment rates. The objective in an F&I structure is to
place the products with the highest gross profit potential ahead of other products
offered by the dealership. F&I personnel are more open to suggestions during a time
of slower sales. Now is the time for focused training.
F&I Infrastructure

19. The Trick Is In What One Emphasizes. We Either Make Ourselves Miserable, Or We Make
Ourselves Strong. The Amount Of Work Is The Same. – Carlos Castaneda
Sales Professionals by nature are creatures of habit; that is why it is the responsibility of
management to provide training and guidance unique to the market needs. During a time of
economic downturn sales professionals become wary of each customer coming into the
dealership and assume the customer will not purchase the extra items. They have no proof of
this but assume it with all potential consumers.
We call it F.E.A.R.
False, Evidence Appearing Real. We suggest a short training session about approaching each
and every customer during this period with an upbeat attitude and one where we assume
nothing has changed so we would offer each customer the opportunity to purchase the
Automobile Protection Products. Review the client penetrations, if they are not increasing
during an economic downturn get out and go over the FEAR training program.
Sales Professional’s FEAR

20. Learn From The Past, Prepare For The Future,And Perform In The Moment..
Market Consolidation: During an economic downturn the weakened dealerships, those
that are under capitalized have a potential to fail and or attempt to withhold payments
or slowdown on payments, this is a period where you could lose some clients.
How to React: Focus efforts on the stronger dealerships and apply efforts to keep all
customers on time with payments. If one dealer becomes slow on payments, place them
on notice and stop future sales. Maintain team focus on growth initiatives so that if you
lose a client you are not losing revenue.
Market Consolidation
- Mike Van Hoozer

21. Procrastination: During this economic downturn many of your clients will be slow to
react to the new economic realities; they will treat the situation as business as usual and
in many cases not accept any of the changes your team may suggest. Your clients may
reject or fear change. This failure to act many times hurts their companies if they are
not financially sound it could cost them the company.
How to React: Focus efforts on a presentation that offers specific actionable items,
establish a specific schedule, perhaps it is a 30-day or maybe even a 45-day plan to
change how the dealership presents the products. Ensure that you and your team follow-
up daily, indicate during your presentation that you will follow-up daily with executive
management to understand the results of their actions.
Management Procrastination
Willingness To Change IsAStrength, Even If It Means Plunging
Part Of The Company Into Total Confusion ForAWhile. Jack Welch

22. Best Practices
Our world has changed, the distribution
channels of the mature markets may not be
the best distribution channels for the new
markets, review your options, review your
products ensure they match the market. The
computer changed our world, the internet
revolutionized the globe, if our products don’t
keep up with the new medium we are left to
only those distribution channels of the old
world. They may be enough to sustain but
growth comes from taking some bold steps to
the future.
THE BRASILIAN MARKET WILL TURN POSITIVE until the market turns
positive it is critical that Management maintains a positive attitude.
Express positive information to all the management team and keep them
focused on how to encourage the teams to build the programs and worry
less about the market. Those who focus on growth and improving the
client value proposition will be the winners regarding growth and market
share in Brasil.
Attitude is a major factor in changing the momentum to a growing
economy; it is our managers job to be a part of a bright future and to be as
positive as possible in encouraging the team to stay focused on growing
our business.

23. Change is not a threat, it’s an
opportunity. Survival is not the
goal, transformative success is.
– Seth Godin

24. IfYouAre Not Taking Care OfYour Customer,Your Competitor Will. – Bob Hooey
Stay In Contact With The Client
Critical to your continued success is great contact with
your clients. If you have reduced staff ensure that your
team is sensitive to the need of continual contact with
the clients.

25. Positive Developments:
With the successful Olympics now over Brasil can be proud of
it’s performance for medals and for the success of the games.
This should be good for positive movement forward and some
return to consumer spending.
Keep your sales staff motivated and use the success of the games
as an example.

26. http://www.ddf-incorporated.org
Thank you and
Good Luck
James L. Donaldson
Global
Business Development
http://www.ddf-incorporated.org