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Sample Assessment - Nickelsen Partners
- 1. Profit Improvement Opportuni0es
- 2. How We Came Up with Your Opportuni4es Opportuni4es Interviews and Financial Nickelsen Observa4on Statement Standards 2
- 3. The Two Opportuni4es for Montrose Ford ∎ Used vehicles: sourcing, buying, pricing, and merchandising ∎ Overall sales process: showroom, Internet leads, and incoming phone calls ∎ Others recommenda4ons – Consider a central used vehicle department 3
- 4. Opportunity #1 – Used Vehicles ∎ Market Days Supply: 102 is very high. – Vehicles with a 80‐day MDS would sell 50% faster. ∎ Inventory Aging: 35% of your inventory over 60 days is high. – 5% to 10% over 60 days is the benchmark. This creates excess wholesale loss and reduces turns. ∎ Price to Market: Overall price level is very high. – Does not reflect vehicle’s age or demand – Too few units repriced in past week Note: This reflects data as advertised by Montrose Ford on the Internet. It is not taken from Montrose Ford DMS or other systems.. 4
- 5. Opportunity #1 – Used Vehicles ∎ Market days supply – Vehicle supply and demand must be researched prior to purchasing a vehicle. ◆ This is done through tools such as vAuto’s “Market Days Supply” and the AutoTrader “Scarcity” report. – By taking your current 102 MDS to 75‐80 will give you more leads and a faster inventory “turn”. 5
- 6. Opportunity #1 – Used Vehicles ∎ Market days supply – Vehicle supply and demand must be researched prior to purchasing a vehicle. ◆ This is done through tools such as vAuto’s “Market Days Supply” and the AutoTrader “Scarcity” report. – By taking your current 102 MDS to 75‐80 will give you more leads and a faster inventory “turn”. 6
- 7. Opportunity #1 – Used Vehicles ∎ Inventory aging – By weekly “price management”, vehicle “turn” and “days in inventory” will be improved. – The most profitable dealerships usually follow this guideline: ◆ 0‐15 days – 98% ◆ 16‐30 days – 96% ◆ 31‐45 days – 94% ◆ 46‐60 days – 92% ◆ Over 60 days – 90% or lower 7
- 8. Opportunity #1 – Used Vehicles As Prices are ∎ Inventory aging reduced – By weekly “price management”, vehicle “turn” and “days in inventory” will be improved. – The most profitable dealerships usually follow this guideline: ◆ 0‐15 days – 98% ◆ 16‐30 days – 96% ◆ 31‐45 days – 94% ◆ 46‐60 days – 92% ◆ Over 60 days – 90% or lower 8
- 9. Opportunity #1 – Used Vehicles ∎ Inventory aging – By weekly “price management”, vehicle “turn” and “days in inventory” will be improved. – The most profitable dealerships usually follow this guideline: ◆ 0‐15 days – 98% ◆ 16‐30 days – 96% ◆ 31‐45 days – 94% ◆ 46‐60 days – 92% Detailed Page ◆ Over 60 days – 90% or lower Views Increase 9
- 10. Opportunity #1 – Used Vehicles ∎ Inventory aging – By weekly “price management”, vehicle “turn” and “days in inventory” will be improved. – The most profitable dealerships usually follow this guideline: ◆ 0‐15 days – 98% ◆ 16‐30 days – 96% ◆ 31‐45 days – 94% ◆ 46‐60 days – 92% ◆ Over 60 days – 90% or lower 10
- 11. Opportunity #1 – Used Vehicles ∎ Price to market – Your current “Detailed Page Views” percentage with AutoTrader is running at 1.45%. ◆ 200,000 page views with 3,100 detailed page views. – We look for 3‐5% as benchmark. – By rethinking the Price to Market, we can double that number – giving you twice as many opportuni4es. One rule of thumb is 1 sale per 100 VDP’s. 11
- 12. Opportunity #1 – Used Vehicles ∎ Adop4ng a velocity strategy and implemen4ng Nickelsen Partners prac4ces for the used‐vehicle department should increase gross profits by about $140,000 per month – some $100,000 net profit. ∎ A tool such as vAuto is required to accomplish this. – Requires new policies and processes for vehicle sourcing, pricing, merchandising, and selling that will be taught by Nickelsen Partners. 12
- 13. Opportunity # 2 – All Sales Processes: Their Design, On‐going Measurement, and the coaching of gaps ∎ Coach gaps in your sales processes to maximize closing rates for showroom, Internet and sales call prospects. – While you have inputs, you can improve the coaching of the gaps in all three. ◆ For the Phone and the Internet: – Leads > Appointments > Confirmed > Shows and Sales ◆ For the showroom: – First 4me sales – Unsolds that return – Overall closing percentage 13
- 14. Opportunity #2 – Sales Process ‐ Showroom ∎ Reducing the varia4ons in your sales processes with your showroom guests could add several sales each month. – Through January 27th you have the following metrics: ◆ Ups logged – 180 ◆ Demo’s – 120 for 67% ◆ Write‐up – 100 for 56% ◆ Sold’s Entered – 56 for 31% ◆ Delivered units – 44 for 79% ◆ Mgr TO – 62 for 33% 14
- 15. Opportunity #2 – Sales Process ‐ Showroom ∎ Reducing the varia4ons in your sales processes with your showroom guests could add several sales each month. – Through January 27th you have the following metrics: ◆ F &I turn –47 ◆ Appointments scheduled – 98 ◆ Appointments confirmed ‐ 8 ◆ Appointments show – 20 ◆ Appointments sold – 4 15
- 16. Opportunity #2 – Sales Process ‐ Showroom ∎ Reducing the varia4ons in your sales processes with your showroom guests could add several sales each month. – Add “live market pricing” – Add the used car “folder” – Early manager “hi” to 95% 16
- 17. Opportunity #2 – Sales Process – Internet Leads ∎ Improving the handling of Internet leads will bring addi4onal prospects to the showroom. – You are currently not tracking your “efficiency” here ◆ The numbers are low for this inventory level. This is the result of the high Price to Market prices and the high market days supply. – We did not do any assessment of the business development center 17
- 18. Opportunity #2 – Sales Process – Phone Calls ∎ Improving prospec4ng and handling of incoming phone calls will add addi4onal prospects in the showroom. – Aker listening to 6 calls recorded on CallCommand, I’d give them a ra4ng of 5‐6 on a 10 scale. ◆ Long waits and failing to ask “what alracted you…” are big opportuni4es. – You could deliver a lot more prospects to the showroom with improved velocity pricing and by buying lower Market Days Supply vehicles. 18
- 19. Opportunity #2 – In summary… ∎ Reducing the varia4ons in your sales processes with your showroom guests could add several sales each month. – Through the 25th of January, 234 guests have been logged in the showroom. ◆ Es4ma4ng a 70% logging accuracy, this means that some 400 guests are probably visi4ng the showroom. ◆ As the phone and Internet processes improve, this will con4nue to improve. ◆ If processes were improved on incoming phone and Internet to benchmark standards, this should go to the 500 range. ◆ Applying a 25% closing ra4o, that brings monthly sales to the 125 range. – This will bring an addi4onal worth $30‐50,000 a month in Gross Profit ‐ $20‐30,000 in Net Profit 19
- 20. Recommenda4on #3 ‐ Consider a Centralizing Used‐ Vehicle Sourcing Department We’ve helped over 20 dealerships and dealer groups set up and maintain a central used vehicle sourcing department ∎ Skilled, focused resources ∎ Sourcing ∎ Economies of scale ∎ Transporta4on ∎ Avoiding bidding against same‐ ∎ Recondi4oning tracking group stores for vehicles ∎ Recondi4oning ∎ Geong vehicles to the “right” ∎ Vehicle “folder” prepara4on store in the group if they aren’t selling where they are 20
- 22. Nickelsen Partners Can Help Montrose Ford of Capture These Opportuni4es ∎ Used vehicles: buying, pricing, and merchandising ‐ $100,000 net profit. ∎ Improving overall sales process: – Showroom, Internet leads, and incoming phone calls ‐ $20,000 net profit. 22
- 23. N‐DOTS: The Nickelsen Dealership Opera4ons Toolkit N‐DOTS Daily operations tracking Log for tracking used- Comparisons to standards vehicles from purchase to ready Tracking against monthly goals Key metric reporting by buyer Sourcing resource Work plans for planner improving performance “Top 10” lists for Work Plans and Sales & Service Sales Prospect monitoring Used‐Vehicle Daily Doc Top 10s Input Sheets Tracking Tracking Logs for phone and Internet prospects and appointments Activities each day for each Salesperson or Service Visual tracking of Advisor appointments Automated update to the Daily Doc 23
- 24. Proposed Drak Schedule for the First 4 Days Day 1 Day 2 Day 3 Day 4 Review & planning with Salesperson training Salesperson training Morning Variable dealer (split sessions) (split sessions) Manager Mee4ng “Building a High‐ Con4nue used‐vehicle Incoming Sales Call Observe and coach Performance planning; inventory review Training and one‐on‐ones Dealership” Measurement Start used‐vehicle Internet Lead Management Create drak versions of Work Plans: Dealer planning; Sourcing, Training and Measurement key sales materials and key variable pricing and Managers merchandising The speed of implementation will be determined by the recommendations of the lead consultant and the dealership’s initial ability to fund. 24
- 25. Other Considera4ons… ∎ You have ordered First Look as your used vehicle tool – I don’t think this tool supports a Central Used Car Sourcing Department as well as vAuto. You might want to reconsider this decision, if possible. ∎ Other Montrose stores have similar used vehicle challenges: – High Price to Market – High Market Days Supply – Too many vehicles that have aged 25
- 26. Montrose Toyota 26
- 28. Montrose Buick‐Cadillac‐GMC 28
- 29. Montrose Mazda of Kent 29
- 30. Montrose Mazda 30
- 31. Profit Improvement Opportuni0es Prepared by: Steve Nickelsen, CEO Nickelsen Partners, LLC snickelsen@nickelsenpartners.com 330.697.3725 January 2011
- 32. Profit Improvement Opportuni0es hlp://player.vimeo.com/video/16861715?4tle=0&byline=0&color=f3f4f3
- 33. Profit Improvement Opportuni0es Prepared by: Steve Nickelsen, CEO Nickelsen Partners, LLC snickelsen@nickelsenpartners.com 330.697.3725 January 2011
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- Covered this topic in more detail in Webinar #1; here is a brief summary\nOne person did everything; the new way is to align with skills and pay levels\nBehaviors are different; DISC\nMaster tech doing an oil change\n
- This is the actual group at Kelley’s.\nUSE HIGHLIGHTER.\n
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