#351 - 5 Ways To Fix a Bad Month

This is the Independent Dealer Podcast, Education by Dealers for Dealers. Now, here are your hosts, Luke Godwin and Jeff Watson.

Hello, and welcome to the Independent Dealer Podcast, brought to you by Buckeye Dealership Consulting. Luke, good news, bad news, buddy. Good news, bad news.

What's the bad news at all? I watch financial news. CNBC only.

Okay. Yeah. Yeah. Well, if you didn't know, we had a presidential election just went on this week, so this. This episode will air on Thursday. So, sure. The vote will be counted, recounted, and.

Recounted the votes already counted. DJT is our president, buddy, and it was a red wave and glory to be. Right?

Yeah. So depending on who. Depending on your opinion, it could be either good news or bad news.

Oh, yeah.

What I'm excited for is to things to get. Just. Just get going again. Right. Like, I don't know about you, man. I had a horrible October. October. I mean, it was okay, But I was 50% of last October, and I was about 80 down from the month before. So based on most of my metrics, not a good month. I don't know if that's because people were waiting to see who was president. I don't know if just because people are stressed financially, inflation, whatever it was, but, man, I'm just. I just want to get back to business as usual. Right?

Yeah, A lot of people said that, Jeff, and I'm here to. To play the devil's advocate when it comes to. And it's. Dude, this is. I've been in the car business now 30 years, and every. Every election year, people go, oh, it's going to be a bad year before the year even starts. And so they've already got this mindset going. Oh, it's going to be horrible. It's an election year. Everything sucks. Well, the stock market's up. Car sales are, you know, doing. Doing just fine. You had a bad month. Okay, now what do you do, Jeff? That is. That's the deal. That's what this podcast is about, because I hear it so many times. Oh, we're having a horrible month. Oh, are you having a bad month? Misery loves company, Jeff.

Oh, yeah.

And I'm here to tell you it doesn't have to be that way.

Yeah, well, I would love to know how, because I'll tell you what, everything I try, I don't know if it's salesmen, you know, I've got a couple new guys. I'm trying to keep my inventory levels up. I'm trying to gear up for tax time, and I just can't get ahead of it. So, I mean, I'm getting hit on a lot of angles. Our lead count was even down last week and down probably the entire month of October from our typical lead count. So we, what is it that I'm doing wrong and how do I break out of this cycle other than just replacing my president?

Sure. We're going to talk about five different things to do to get out of this bad month. Is everybody having a bad month? You know, logic. So number one, Jeff, and I think you kind of hit on it. There was your inventory level and the inventory mix, I believe, and what I've seen with other dealers around. If you're having a bad month, it is directly related to your inventory. Now, you may have plenty of inventory because typically I would tell you the reason your month is off, because your inventory dipped too low. And when that happens, Google doesn't like you, your website doesn't look good, the drive by traffic looks horrible. Because if your lot's not full and, and looks like people are doing things, you're not going to have a good month. So number one is your inventory level. Right. So, Jeff, last month, did you have, because I've been to your A lot, I know what it looks like. Did you have it slam packed? Did you have 40 cars ready to go or 50 cars ready to go?

You know, we stayed fairly consistent. You know, because my lot's so small, if I fluctuate by 10 cars available, it makes a big difference. Right. If I go from 50, you know, cars, if I go up to 60 now it looks like I'm bursting at the seams. So. So yeah, we were a little off. And I would say our, you know, our mix is not horrible. It was okay.

Okay, well, the question is this. Do you have a buying plan or do you just camp out on OVE or or Manheim or ACV and just, just buy what comes up?

I definitely camp out, you know, but yeah, I do have my saved. You know, I, I try to focus in on 10 makes and models that I, you know, we try to stick to. So I would be fairly disciplined on that.

But is the inventory mix on your lot right. Right this second? So you have those 10 things you look at. So do you say, okay, I want 25 of these on my lot at all times? And that might be trucks. Do I have 20, 25 trucks? Do I have 25 SUVs and 25 or 50 sedans? Do I have that mix Right. Right this second? Because what can happen is this. Let's say you sell five trucks a month and all of a sudden you hit a month where you don't have any trucks. Well, guess how many trucks you're going to sell? This one. Zero. If you don't have those five trucks you usually sell every month in your inventory, you're not going selling trucks this month. And so. Yeah, but you can take five sales off the board for sure.

But I went down to the used car factory and they just didn't have trucks for me. So what do I do in that situation where it's like, sure, I would love to stock five, you know, 15 to $18,000 2013 Silverados, four wheel drive quad caps. Like, where am I getting those? Do you have them for me? Because I can't find them. So if I all of a sudden sell five of them over the weekend, it's going to take me four to six weeks to find the cars and get them through recon.

Yeah.

Before they even get back to my front line. So how am I supposed to, how am I supposed to do that?

You got to stay ahead of it. That's a great question. And so if you know you have five car, five trucks that you're going to have on your lot at all times, you, you better have five waiting to be put on your lot. Because if you don't, you may have a weekend where you sell five and then you're out of luck. You've got to go outside of your comfort zone when it goes to buying. You've got to look, look further, you got to dig deeper and you got to buy something you may not be 100% comfortable with and make it work. And so you got to have the mix. You don't have the mix. You're not going to hit your numbers.

Yeah, when I do step out of that area, I do find that it bites me in the butt and I just end up arbitrating that car or having to dump a ton of money into it. Because I was like, oh, you know, that 2.5 cr is probably not really a 2.5. And then it shows up as a garbage can and it's like, oh, I shouldn't have been so desperate to get a truck on the line. I recoil and I'm like, okay, I'm not going to be desperate. I'm going to wait for the right one in the right price category. Because, you know, I went to town on some like, you know, Dodge Ram work trucks. Great price, great price point. They're just sitting. Those people step around this Dodge Ram work truck. Well, I can't, I can't Give it away.

So I have trucks, but it's not the right one.

They all want a Z71.

It's not the right one. And that's what you got to be very careful with. Make sure your mix is right. If not, if you don't have the levels you need, you don't have the right mix, your sales are going to suffer.

Understood. And, and to your point, what I am doing, when I say 10 makes and models, honestly there's probably five that if I had my car lot full of those five, they would move. Right. So I do need to get super aggressive on finding those real key five that I know are fast movers and making sure I've got 10 of each one on the lot at all times. Right. Because I know those will go the second they hit the front line.

And I want everybody to make sure. One last thing on this. You could have a car that has been killing it for 18 months and then all of a sudden something happens. And this has happened to us in the past. We sell a lot of Honda Accords and a lot of Toyota Camrys and you just think for a while you can buy and sell any Honda Accord. Well, guess what? All of a sudden something changes. The body style might look a little bit different. You may say that's the same car, but it's not. And when it's not, you load up on one type and the other types. The one that's selling, you get stuck with a bunch. So be careful. This changes. Always audit it. Always look and see what's selling best on your lot. Cool.

What else do I need to do?

Number two, look at your marketing.

Okay.

And that may seem obvious, but make sure you're doing a website audit every day. What you may find is you have a broken link in your website. Audit your 3rd party vendors as well. If you're on Cargurus or you're on cars.com or your own car auto trader, make sure that the links are working. Make sure that all of a sudden you need to get pushed all the way down to the bottom because something might be going on in there. What we see is on our website sometimes if we get lacks about how we posted pictures, um, or for some reason the carfax link isn't working today. All these things matter. So make sure you're auditing your website. Make sure you're, you're tracking your critical metrics. Are we getting the same amount of leads? Did did for some reason our marketing drop off, did we, did we forget to pay a bill somewhere? Did we cancel something that was really working that we didn't think was working. All these things matter. So just make sure that if you're having an off month, look back and see if you made a change last month in marketing or didn't do something you've been doing in marketing.

That's the key I think that we have is we have a slow month. And so I get on my team about social media posts, posting cars to Marketplace, being active and they get all excited and get active and that leads to sales. And now they're too busy to keep doing what.

Yeah.

Brought them the sales. And so then we go through a whole month where it's like, guys, when was the last time you posted to Marketplace? Oh, I just completely forgot. Or oh, I got too busy. Or when was the last time you did a video or a walk around or a happy customer post? Oh, it's been weeks. Yeah. Guess what? That's why our sales have slowed down. Right. We have changed some of our marketing strategy from just a tactical. You know, my Facebook ads run, right. Like I spend the same money on my Facebook partner to run ads constantly. But it's a lot of those little teeny like hands on guerilla type marketing things that your salesman can do that also bring in leads.

And what you'll find is a lot of times in a smaller dealers, it's, it's a roller coaster ride. You have great months and you think you're doing everything right and the next month it's off. And the reason is because. Exactly what you just said. And because of inventory. You have a great month because your inventory is perfect. You sell it all, next month it's down. You were so busy last month, your marketing went to crap. You didn't worry about it because you figure, oh, it's going to carry over. It's just a roller coaster ride. You got to be consistent.

Yeah. One thing we're doing too is obviously you guys listen to last week's podcast with Tax Max. We're gearing up for tax time, right? So a lot of our marketing starting this month in November is going to be for our, the fourth quarter Tax Max program. So we'll get the banner up on our website. We'll, we'll get our Facebook partner to start running ads about, you know, deferring your down using the Tax Max program. You know, I think that's going to make a big difference for a lot of these customers that are kind of strapped and struggling to, to be able to, hey, I'm, I'm going To not wait six months for my tax return or four months or whatever it is. I'm going to get a car now and that should help my sales team, you know, to get more leads and start turning some of those good customers or repeats into better deals. So, you know, the tax max program, obviously call them guys, get set up and use our discount code, which is podcast 2024. And you'll get 40% off the VIP package. So the VIP package is the one you want to use. They handle everything. They, they, they do the whole thing. You show up in the morning and you see you have a customer there that's got their taxes filed. So it's a really cool program.

Yep, for sure. And that'll help with your marketing, no doubt, and get you ready to, to hit it, hit the ground run in the first year. The next thing you got to look at, Jeff, and this is probably something that everybody always looks at. It's your, it's your sales team. If you, if you're having a bad month, I'd be willing to bet you if you go in and audit your CRM like you're supposed to, you'll see that your sales team is not doing what they're supposed to be doing. You got to stay on top of them. And I, I know it sounds it, it sounds like you shouldn't have to. These are grownups. You're paying them a wage. They get paid by the cars they sell. But sometimes they have issues in their life that makes them not want to come to work and not do their job, not post to Facebook, not understand they need to market themselves. But your sales team has to be trained and they have to be ready. And Jeff, talk about training sales team, we're going to be putting on a thing at the buy your pay here form next Monday morning that's going to talk about how to train your sales team. It goes a long way. If you don't train them, you will not, they will not sell cars. Yeah, an eight car guy is not going to work for you.

It's. It's train them and then retrain them. And the guys who have been trained, what happens is when they have a good month, they start feeling like they've figured out the system and they know how to short circuit the sales process and jump from your first step all the way to your last step because they did it once with one guy and it worked out. Now they're going to start trying to do it with everybody. They're not going to go through proper vetting. They're not going to go a proper application. They're not going to sell the program. They're not going to, you know, do the down payment. Fine. Find out. They're gonna jump the steps because they think they know better. Guarantee you. I guarantee you, if you have a good salesman from last month who has become a slow salesman or lost his sales this month, it's because he's short circuiting your. Your process.

Yeah, for sure. And that was number four, Jeff. And it's broken processes.

Yeah.

And the number one broken process is in your sales department. They forget. And we're going to talk about this as well at the buy here, pay your form that we're going to show you how to develop a process for your sales department. If you don't have a process right now, if you don't think you have a process like right now, you actually do, and your salesperson's made it up and it's not here, and it's not very good. I promise.

It's Frank's sales process. One thing I found is we were completely missing out. You know, we use BlitzPay here, another sponsor of the podcast. Of course, that's my job to make sure these sponsors happen. So I'll plug them here. But they weren't taking the. They weren't getting the right information at the time of sale. They were just skipping over it because they thought this whole Blitz pay thing was so easy. And. And because they get the automated text like, no, guys, let's still get their debit and credit card at the time of sale so that we can get them set up on autopay right now. We don't have to wait a month until their first payment comes due to get them set up. And so hard to get.

Hard to get them on the phone then, is it?

What's that?

It's hard to get them on the phone when that first payment comes due, isn't it?

Yeah, yeah. You send them a text message, all these things like they're not responding. So let's get the credit card information now. Let's get them set up on autopay. This is how we take our payments. There's no other options. Just fill it out with your debit or credit card. So anyways, that process was completely broken and our auto pay suffered because of it.

Yeah. But blitzpay is not. Not hard to get your money when you use them. So make sure. Jeff, we saw the other day on the. On a Facebook forum talking about how hard it was to get out of a. Another credit card. Processors, you know, contract, contract. I hate it for people. And I know a lot of people are leaving a certain company and going to blitzbag, and I encourage everybody to do that. You know, figure it out.

Right?

Yep, yep.

And, and that's a whole nother episode we plan on doing very soon is about those vendors. So we won't, we won't go into that too far today. But when you talk about those broken processes, that is so crucial all the way along, right from your, your sales, setting up the expectation, which our biggest headache is the, you know, the warranty, the warranty that we give, you know, what's the expectation at the time of sale. And it's very easy for your salesman to say, oh, yeah, if that breaks, we'll take care of you. Oh, we'll take care of you. Oh, just call in. We'll take care of you. You know, like, oh, my gosh, that kills me because again, it's just, it's easy for them to do. They want to get the car out the door. I mean, I can't tell you how many times we just get fall into lazy wording that creates headaches down the road.

Yeah, we've talked about that before with the we O and things like that. But, you know, broken processes are costing you sales every month. And so I encourage you to audit your sales process, train in your sales process. Write it down, make sure it's there. One other. Two other processes that can lead to bad months, Jeff, and they kind of go hand in hand. Is your. Is your buy in process, which we talked about earlier with inventory, have a written buy in process. And you talk about, I have 10 models. It's what we do. Okay. And your recon process. Recon can cost you sales if you look at a month, Jeff. And, and your leads are, and your leads are the same, and your applications are the same, and your application approvals are the same and your test drives are the same, but your sales are off. Let me tell you what you have. Have a recon problem.

Interesting.

They're test driving the cars, and for some reason they're not buying the car after test drive. And they may not even be telling you why they're not buying the car. They may take it for a test drive, and all of a sudden the brakes are squeezing like crazy. The car is pulling hard to the right. It's skipping. It's not cleaned up. Right.

Yeah.

And all of a sudden you, you're missing sales. And the reason you're missing sales is not because of your marketing, not because of Your sales people, it's. Cause you're a recon process in your recon team, so make sure you're auditing every process in the building.

Yeah. And one thing we fell into a phase of it was our. Our reinsurance, our Buckeye products that started flailing because we started skipping the upgrade from our warranty to a service contract. Right. And it's like it just. It just fell off the radar somehow. The salesmen weren't talking about Upsell. You know, they were. Our CPI product wasn't being pitched as. As a winner. It was kind of being pitched as like the fallback. Like, oh, well, if you don't bring me insurance, then we have the CPI product. Like, no, no, no. CPI first. Like, so it's so those little teeny things. So one thing I try to do is my. My showroom small enough I can listen in on a lot of the deliveries. We also have cameras over every sales desk with a microphone. So if I really need to, I can go back into the footage and kind of listen in. It's hard to hear. But I encourage you that, like, you do need to be listening in or recording the closings of your salesman for quality and training. Right. Like, you don't know that they've just been saying the wrong words or delivering it the wrong way because you're not in the room hearing it. That's a big issue.

Yeah.

And.

And off sales people forget about it. But all off car sales don't only affect car sales. They affect gap penetration. They accept they. They mess with VSC penetration. And there needs to be a process in all that. And Buckeye, luckily, they'll come and help you train on this. But the more VSC you sell, the more gap you sell and you reinsurance, that means more money in your pocket. So make sure you've got a process for all that.

So let's wrap up with the biggest one. Luke number five.

Number five is owner attitude, man. You may, you may understand here this morning that I'm all jacked up on coffee and Jeff likes that. He wanted me to come in excited today. And so I'm here excited because I have a great owner's attitude. And I know that if. If there's a problem, it's probably me, it's because I'm not doing my job. So, yeah, we've got some resolutions for that. Number one is a vacation. You know, if you're.

If.

If you're only you or maybe one other person, close this shop for a couple days, man. Take it's you Know, it's fall. Go to the mountains, go do something. But. But take a vacation. Get out of the store. Go play some golf. Do something fun, because it will help. Number two is something we're doing this weekend, Jeff. We're going down to buy your pay your form.

Yeah.

We're going to the convention.

And you.

You may think that the convention is more work, but it's really not. You're around other dealers that are probably having some of the same problems you are. You can learn from the things at the conventions. You get training there. It can really bring you back. Re energized and ready to go.

Yeah.

And absolutely the number one thing you can do is what, Jeff.

I don't know where you're going to go with this, but I like retail therapy. That sounds.

Listen to the podcast, man.

Oh, yeah, that one. That one, too. Yeah. Podcasts and filling your brain with good info. Right. Good knowledge, good motivational content.

Yeah. And. And the thing's not to do, Jeff. It's. It's Misery loves company, man. This is about owner attitude. Don't call your dealer friends and ask how their month was, because nine times out of 10, they had a bad month and they want to tell you about it. And. And you know, it was so bad. You know, don't get in Facebook groups and complain. That sucks. It's not going to help you. Don't not do anything and think it's going to change, because it's not. Tom, don't blame the time of the year. We can look at higher historical data and we can forecast to know, hey, this month's going to be a little off compared to historical data. How can we make it better? We're going to forecast for that. We're going to know it. So we're not going to say it's a bad month. Hey, we hit our forecast. We had a good month even though sales are off. Right. Don't blame the. The weather. And this is a big one in the Southeast, man. And it is. And it's getting to be a big one. It's going to be a big one in the winter up north.

Yeah. Northeast really has an issue.

Yeah. You know, but you talk to Dan Real, and Dan reels up in the snow belt, and, man, they get hammered during the winter. But you called Dan, he's like, no, this is the time of the year. This just, you know, we prepare for this. We're going to come out of this, though, and we're going to crush it. Right. So you can't blame the time of the year in the weather. J.D. tomilson down in Florida, they got hit by two storms back to back, two or three weeks in a row, man. And they still killed it in October. They still sold 100 cars. I mean, that is freaking insane. So anytime you may have bad weather, think about these people in Florida. They did they get hit over and over, over, and they're still selling 100 cars a month, man.

Yeah, well, that's. Luke, all five of those points are really good motivation for me to make sure that my November doesn't have an excuse to be down. You know, I don't need to blame the end of the year. I don't need to blame the weather. I don't need to blame the election or the fact that it's only a four week, you know, month and then that we have holidays coming on where everyone's going to be gone. Like, you know, I know for me, I think a lot of my stuff is to really buckle down on a little bit of my inventory, which is number one, a little bit of my marketing. But honestly, I think my sales team and my broken processes are probably the biggest issues that I have that I really need to get into. And making sure we're converting these leads into sales and handling each at bat the best possible.

Yeah. And one last shout out to a dealer who had some real bad issues in October was Jack Carter. They were shut down for a week because of a freaking chlorine spilled next to their dealership. And I saw that he wholesale and retailed like 200 and something cars last month or something, some crazy number like that. So his attitude was the reason they did that, his staff. So it's man, you can do this, guys. Just in girls, just put it together and point forward and you're going to win, I promise.

Yeah, well, it was great, Luke. Hopefully you guys are listening to this on your way to New Orleans. We'll see you all buy here, pay here, forum. If not, we'll talk to you next week.

Yep.

Thank you for listening. Please leave us a review. We'll catch you in the next episode.

Sam.