Which Game?

Football season is upon us. Everyone seems hyped at the pre-season showings, believing their team can “go the distance.” None of you can be that gun-shy with that feeling than FSU Alumni, of which I wear that badge proudly.

Sam Dantzler, President, Garage Composites

People who don’t “get” football (American, not that silly stuff they play in the U.K.), have clouded vision when they watch the game. Most think it’s just the same game, every play, until someone gets in for a score. But is the opening drive for Patrick Mahomes going to look/feel like a 4th quarter drive from Joe Burrow? The goal is the same… put points on the board and win. But are the plays run the same? Are the payers utilized to

run the plays the same? Willa field goal take us to the promised land, or do we need a solid 7 to take the W? Side note – Don’t we all secretly long to see those Bengal uniforms take home the Vince Lombardi Trophy one day?

Professional players of any sport understand that strategy changes, constantly. Understanding the immediate game that’s being played can make or break the season, much less the game.

We see this in our 20-clubs. How can the National Average (Metric) for F&I PUS be $978 while I have 2 dealers in one of my groups north of $1500 PUS. Multiply that $522 difference by the number of units you sell annually and tell me it doesn’t give you heartburn. Most dealers look to drive up their F&I number by $50-$100 quarterly in their implementation commitments. Why not $522? Is it really that difficult to bridge the

gap?

Our mid-year National Average Operating GP (HD) sits at 6.6% after a brutal run as of late with the brand. However, our benchmark (Top 20%) is sitting at 12%. Why? Why that level of disparity? Change THAT desking process, and revamp THAT turnover to F&I and we should all be able to get there, right?

The statistical delta lies in the game that’s being played. Wait, I thought we were all playing the same game? Buy and Wholesale, sell at Retail, and leave enough $$ for Uncle Sam. The rest are the spoils for “winning.” Yes, but HOW did you get to that final number? Is this your 4 th quarter drive or your opening pass of the pre-season game?

In 2001 and 2002, I joined Ed (Lemco) in England for several of our UK 20-clubs. Although much of the business was similar, UK dealers were consistently “giving” away at less than cost, with nothing on the bottom line to close out the year with. Ed looked at me and said, “They play a different game over here.” “Yeah… a losing game,” I snapped back. It didn’t quite evoke the laughter I was after.

You see, in the UK (at least in the early 2000s), the game of holdback and retail incentive was far different in the UK than in the states. The dealers had a significant ANNUAL target to hit with unit volume, be dammed the dealer margin. That target was set forth by the OEM, and payoff (British Pounds) were significant. So dealers would literally run themselves into the negative Operating GP, in the hopes of a 200,000-Pound annual payoff with one or two of the OEMs. That would clear the negative

cashflow and leave (hopefully) enough to play the game for another year. Um… no thank you?! Anyone else?

So for those HD dealers playing in the “Top 10%” of Operating GP %, what game are they playing? Well, the game they are NOT playing is transactional benchmarks. To clarify, they are indeed watching the transactional data like a hawk, but they choose not to live and die by the benchmark transactional ratio. They focus on the premium experience, one at a time. They’re not taking “all the deals,” but rather focusing on “all

the good deals.” As such, they will not “take” what OEMs “give” them as inventory, and they don’t forecast as many units as similar dealers, thus also keeping payroll down. You can see how high unit count, high payroll, and low margins will be a game that rarely (if ever) gets a dealer into the Top 10% on Oper GP %.

High F&I PUS starts with having a full suite of products and ensuring that every one of them is offered to every customer every time (300% rule). Process takes over from there as some have their BEST (literally) salesperson in this role, and others get there with having salespeople present the F&I menu that someone “in the back” has put togther for them, thus having ZERO turnover to another face with the salesperson. That however takes a salesperson off the floor for a given period, thus needing more staff or potentially running shorthanded.

The point is that every “game” you want to play, comes with a decision on which games you’re NOT going to play in that department/store. There is “another level” out there with multiple categories you’re tracking. What can you live with? What fits your culture best? What fits your brands the best?

IF YOU TYPE IN ALL CAPS TO HIGHLIGHT THAT SOMETHING IS IMPORTANT, then none of it is important. Similarly, if you’re trying to chase down every benchmark in the composite without understanding the game you’re specifically playing in that moment, you’ve got a great future playing whack-a-mole. Let’s hope that’s not FSU’s fate again this year.