A .300 batting average in baseball is considered excellent, with an average higher than .400 nearly unachievable.
But is your company batting .300? Are you following the 300 percent rule?
This question may seem like old news for some business managers, but the principle still pertains and is more important than ever. Some new business managers, however, may have never heard this question before.
During a recent visit with a successful, seasoned business manager at a mid- to large-volume store, I asked him about hitting .300 and following the 300 percent rule. He gave me a deer-in-the-headlights look, signaling he was considering which side of the road would help him escape danger. Having seen that look before in a business manager’s eyes, I am not surprised by it.
In the RV business office, the business manager wears many hats and has many duties other than merely selling products. Responsibilities include titling units, handling payoffs, making bank deposits, writing repair orders, running delivery schedules and being the store’s compliance officer.
Business managers, in general, have four priorities to fulfill.
Priority one: Deliver the unit as soon as possible. Often, unprepped inventory will delay physical delivery. This changed a lot in the last 10 years. The business manager should look for a way to paper-spot whenever possible. Yes, only paper-spotting a unit and not having the consumer take delivery is possible. The marine industry has been doing this for years, and marine dealers have three VINs to handle: boat, motor and trailer.
When you expedite the unit delivery, accurate paperwork is critical. The business manager should double-check everything before the customer leaves the store.
To deliver the unit successfully and efficiently, the business manager should follow a specific, structured sales process that delivers the unit correctly, without mistakes. The F&I sales process should include an effective interview that leads to a menu presentation. The 300 percent rule falls in line here: present 100 percent of the products 100 percent of the time to 100 percent of the people. Also, you should have a 100 percent full disclosure of sold products that the customer sees and signs at the point of closing.
Priority two: Expedite the store’s cash flow. The business manager is responsible for initiating a seamless cash flow policy, including an in-depth contract in-transit review during the daily meeting. During the busy season, this list should be updated twice a day.
As dealer ownership continues to compress in the RV industry, multiple-location dealerships rely on a cash flow policy with no room for error. The expanded inventory floor plans, payrolls and fixed expenses require a systematic approach to expedite cash flow. The business manager must be ahead of the curve in this fast-moving environment.
Priority three: Protect the dealership. Some people call it CDA (Cover the Dealer’s Assets). In today’s business environment, CDA is a critical responsibility in every facet of the dealership. This priority is important not only when dealing with external customers but also when dealing with internal customers―the employees. CDA is crucial with everything a business manager does, from the extra duties to the deal itself. CDA also includes how a business manager discusses business or interacts with fellow employees.
In addition to the deal, business managers must contend with many other areas. They are interacting with lenders, vendors, state licensing entities, DMV offices and consumers when discussing disclosures on dealer agreements. If business managers find themselves with compliance officer duties, the word “responsibility” takes on a whole new meaning.
As you look at the responsibilities, remember, compliance policies are required by many government agencies, and compliance risk exposure is huge. Potential exposure is real and can be life changing for all involved. Compliance is more than just locking the office door.
So how does a .300 batting average come to be? Where does the “make money part” come in?
Priority four: Make the store money. In some circles, this is the No. 1 and only priority. Everybody has their own game plan, but as proved repeatedly, business managers can make a base hit when they handle the first three priorities.
I can still hear my baseball coach saying, “Base hits win more games than home runs.” I do not know how true that is in actual baseball statistics, but I do know a rally of base hits score more points than a single home run unless the bases are loaded. Bases-loaded home runs do not happen often.
So, business managers follow your process. Do an effective interview, present a menu, and close the customer. Print, press, then sign them out. Do not hesitate to put pen to paper as consumers are sitting there during their first visit.
- Deliver the Unit – “Dot” all the “I’s” and cross all your “T’s.”
- Cash Flow – Expedite and process the deal immediately
- CDA – Follow your compliance policies
- Have 300 percent rule in place – Present 100 percent of the product to 100 percent of people 100 percent of the time
By following these four priorities, you not only will be batting .300 at the plate but will be swinging for the warning track and chasing .400 as well.
Greg Artman is the national training manager for Diversified Insurance Management, a Higginbotham company. He spent more than 20 years in the automotive, RV, powersports and marine industries as a finance training and managing representative, of which the last 16 years have been with Diversified Insurance Management. He worked as management in numerous dealerships. 763.477.8127 or [email protected]