 |
Product Search
|
 |
|
Article Search
|
|
|
Resources
| |
|
Home > Factors Affecting The Estimated Rent Cost Of Mobile Cranes
We Have Found 1 Products for your search of Factors Affecting The Estimated Rent Cost Of Mobile Cranes.
Displaying Items 1 - 1:
The Five Critical Success Factors of SubPrime-Overview by Tim Shea
Five Critical Success Factors for Subprime Auto Gentleman, this is a football. --Vince Lombardi One of the greatest football coaches of all time, Vince Lombardi inspired his players to chase perfection and catch excellence. The Packers dominated professional football under his direction, collecting six division titles, five NFL championships, two Super Bowls (I and II) and acquiring a record of 98-30-4. They had become the stick by which all other teams were measured. Vince Lombardi moved them toward excellence by starting with the basics and perfecting the fundamentals such as reminding his players "Gentlemen, this is a football".Excellent subprime sales teams do the same today. They perfect the fundamentals. Just as blocking and tackling provide a foundation for success in football, there are fundamentals which provide a foundation for growing success in sub prime. I like to call those fundamentals the five critical success factors for Subprime Auto. 1. Dedicated subprime department / personnel
. Properly sold - subprime business is handled completely backwards from your prime business and should be separated from it.. This staff "owns" subprime and "smells the money". They are trained for it and paid solely off the sales from subprime, which brings accountability. . They know your lender's programs and niches and how to control the customer to maximize gross profit.
2. Proper lender relationships
. Proper mix of sub-prime lenders that purchase contracts covering the full spectrum of "B through D" paper. Typically dealerships should be working with 6 to 10 lenders, including some "deep" lenders with higher discount fees. . No one lender will buy it "all", but securing every possible approval is necessary to maximize profit for the department.. Your staff must properly manage lender relationships including Look to Book (submissions cost lenders money), Time to Fund, CITs, Bank Fees and more.
3. Appropriate inventory
. Driven by the average income in your market. Vehicles should be inventoried to match not only your customer's income and budgetary constraints, but also your lender's underwriting guidelines.. The majority of marginal credit customers need to purchase used vehicles due to budget limitations. Vehicles need to be purchased far enough "behind book" to afford discount fees and yet still enjoy significant profit. . Typically, they are program or auction vehicles, not retail trade-ins. Current year model program cars ("like new" invoice) create some of your best opportunities. Some new vehicles with factory rebates also structure well.
4. Efficient business systems - Managing a subprime department requires administrative work.
. A central log to track the dealership's subprime traffic separate from your prime traffic.. Ability to capture and keep customers involved solely in a credit decision until you are ready to move them to a product decision. . Processes and systems to work the customer: Initial Callbacks, Setting Appointments, Prioritizing Workflow, Interviews, Stip Collection, Income Verification and more. 100/50/25/10 rule - also referred to as subprime metrics - For every 100 workable leads, you should be presenting ~ 50% of them to your lenders. Of the 50% presented to lenders, you should be seeing an approval rate of ~ 50%. Of the net 25% approved, you should deliver between 40-60% resulting in a net 10-15% delivery ratio.. Desking software - very helpful for structuring deals and maximizing profit.
5. Marketing - a system to consistently generate and capture a high quality of lead and measure results!
. John Q Public - Television, Print, Inserts, Radio, Billboard -advertising reaches the whole market and follows the 100/50/25/10 rule. . Targeted Direct Mail advertising pre-screens prospects based on actual credit filters and improves your subprime metrics. Both work well. Lead quality and quantity are variables that need to be balanced to match your dealership's capacity and optimize your ROI.. Goal is to gain market share, and where and when possible, to sell across franchise lines to do so.
Managing these fundamentals will position your dealership to have growing success in subprime. To the degree your dealership is weak in any of these areas, that success will be hampered. In the months ahead, I look forward to investigating with you each of these fundamentals in depth. In the mean time, let's chase perfection and catch excellence.Tim Shea is President of Great Direct Concepts. For the past 11 years, Great Direct has been quietly helping automotive dealerships nationwide grow and manage subprime sales. Through their AutoLending Network™ program, dealerships are trained and equipped with a suite of tools to help increase subprime sales & profits and maximize ROI.
Tim Shea is the President of Great Direct Concepts, LLC. He has been assisting dealers in growing and managing their Subprime Auto for over 10 years. His concept is to give dealers usable processes that will affect their dealerships right away.
About the Author
All material © 2006 Great Direct Concepts LLC
|
