This may seem like an odd question, but it’s at the root of a lot of challenges so many dealers have in being as successful and profitable as they can be in their used vehicle departments.
Over the last two weeks at the NCM Institute, we were able to work with both a Used Vehicle class and a General Manager Executive Management class, where the primary discussion was used vehicle management.
One of the facts we deal with is that the average used vehicle manager at a dealership has been in that position for less than one year. For discussion sake, let’s say that one of the reasons could be that their predecessor got promoted to GSM or even GM. The rest likely failed at being able to move the department successfully and profitably forward.
Two weeks ago during introductions, in the Used Vehicle Management I class, a young man stated that he had just been “promoted” to used vehicle manager 2-3 weeks prior. He had been the new vehicle manager for about a year before that and sold cars for a couple of years before that. Without trying to put him on the spot, we casually asked him how much training he had gotten all the way back to his “selling days,” and then as he became a new vehicle manager. He was given very little as a salesperson and effectively none upon being “promoted” to a new vehicle sales manager. This really is the norm in our industry. The very good news for this young man (and the dealer that chose to send him to us for some education and training); is that he is going to have a much better chance to be successful in his new and very challenging position as a used vehicle manager in today’s unforgiving marketplace.
This scenario of someone being “promoted” to used vehicle manager from a new vehicle manager is very common, actually. It is likely that this person has become a good closer and desk manager. They may have even become good at working with salespeople on a daily basis to help them become more successful and productive. This, however, does not prepare the person for almost any of the skills necessary in becoming successful as a used vehicle manager.
Maybe one of the most key skills is the appraisal process. This is every dealership’s #1 source of used vehicle inventory. We had a dealer’s daughter in class once who spent a number of years outside the dealership gaining experience in other environments. This included working as an appraiser/buyer at CarMax. When we were going around the room talking about people’s appraisal experience and philosophies, this young woman kind of stunned the guys in the room with just how thorough of an appraisal process she learned and performed while working at CarMax ... it took her five minutes to explain the process. When she was done, the one question that had come to my mind was "How much training was she provided in order to do appraisals that thoroughly?" She thought about it for a second and said 6-7 MONTHS!!! We then went around the room asking others how much training they had before they were allowed to appraise cars. As you might imagine, the consensus was pretty close to zero.
As we often say, we are only trying to uncover upside OPPORTUNITY for our students to identify and return to their dealerships with realistic ways to achieve them.
So, is your used vehicle manager more of a sales manager or an asset manager? More and more dealers are realizing that in today’s market, if they are going to get the greatest gross profit, and equally, or more importantly, the maximum return on investment, they need someone to be a full time asset manager of their multi-million dollar investment in used vehicle inventory.
Beyond the appraisal process (which is so vital) there are also the STRATEGIES for: the software tools we use; pricing and re-pricing; reconditioning; internet presence (price, pictures, descriptions, placement); wholesaling (both primary wholesale and over-aged wholesale); trade-walk/stock-walk; model inventory; and so much more.
With the majority of sales forces being combined, selling both new and used vehicles, there really are plenty of people that are good closers and desk people. Think seriously about making sure you have a dedicated used vehicle ASSET manager -- it’s more than a full-time job itself.