The Complex Issue Of Special Finance Personnel The Process of Hiring, Paying and Training Your Team

Let’s first address the quantity issue.  Growth is always accompanied by cost, and in the case of the SF department, it is through added personnel.  Keep in mind that every time you contract a SF deal you probably kill a tree due to all of the paper required to copy the stips.  The laborious process to sign and fund a deal takes time and it takes manpower.

Many dealers create a “department” with one or two people.  They put them in place, give them some finance companies and say, “Go get ‘em!”  Of course they have heard about their buddy’s store that does 50 SF deals per month and he expects the same results out of the “anointed” department.  Guess what, it isn’t going to happen. 

The average person can handle about 75 new leads per month – maybe 125 at the most.  Any way you view it, if you expect to add incremental growth, you must have more people lest you cannibalize your existing business.  Keep in mind the benchmark SF closing ratio of 17 percent, or roughly one out of six leads, meaning on average, one person in SF will deliver 12 or so units per month.

So now that you have an idea of how many people are needed in the department, we need to know where to go look for them.  Remember the Goebel-ism, “I have never seen a high-dive by the talent-pool in the car business, as it tends to be awfully shallow.”

Special Finance Manager

I personally believe that you first look internally.  Look to hire, develop and promote.  You are looking for someone that possesses the following traits.  They first must have integrity, then the ability to read and call credit – as well as apply it to the various programs offered by the available finance companies.  They also must be able to structure deals for maximum gross profit.  They also need to be organized.  Have you figured out yet that these people don’t grow on trees?

One of these traits – the ability to read and call credit – can be maddening.  I certainly believe it is an innate ability.  One of the most frustrating things I have attempted is to try to teach someone how to call credit.  I once had an intelligent F&I manager that had a Masters degree in business. No matter what, he could never grasp how to read a bureau, a customer statement and deduce whether a lender’s program might apply or even if it might apply.  If they have the ability, they will show it quickly.  If not, look out.

Often the person that you are looking for is already sitting in the F&I chair, or backing that person up.  It could be a sales manager or desk manager as well.  The key is that they are already part of your dealership’s organization and culture.  You know them and they know you.  Every time you go outside your own organization you chance running into the infamous “90-Day-Wonder.”  You know, the one you hire and in 90 days, after much agony and frustration, you wonder what on earth you were thinking when you hired them.  Then you wonder how on earth you will ever undo the mess they created.

What if you don’t have that person currently on staff to promote?  Then you have to look outside.  Generally the person you are looking for isn’t going to be found at another dealership.  Occasionally you will get lucky, but often it offers more pain than success.

There are two sources that offered me great success and are available in most markets.  Mortgage brokers, and even loan processors, generally possess the necessary credit skills as well as the communicative skills.  It is not a significant issue to teach them “cars.”

The other source is the personnel working for the various finance companies.  Branch managers, credit analysts and even their marketing representatives can be excellent sources for the opportunity. Of course, it may not endear you to their buyers.  Many of them become weary of traveling, territories being changed, or internal program changes.  They almost always have the ability to read and call credit, as well as being able to talk the language which can be an asset when selling a deal to a lender.

So now you have determined how many people you need, you have an idea of where to find them and how to pay them; all that is left is training. I hope you are up to the challenge, as most successful Special Finance dealers that I have worked with train their staffs daily. 

Ouch...yes, I said daily.  I know all the reasons that you think daily training isn’t possible, but somehow the dealership always makes time to make the daily bank deposit.  Why is it so hard to make time to train?  Is it less important?

So, how do you train?  The method I used as a dealer and recommend is simple.  Keep the meetings short (20 to 30 minutes).  They can be conducted by different people – even sales people.  With each meeting, work with a 1-page, 3-hole punched agenda to go in each individual’s training binder, with three to five bullet points outlined on it, leaving room for notes.  Cover your training points and conclude. These are teaching and role-playing sessions, not carping or save-a-deal sessions.  Those are handled separately.

What material do you use to teach with?  For starters, you are holding in your hands a great source of material, as well as our online version:  AutoDealerMonthly.com.  Both are filled with dealer and industry experts to learn from.  And they’re free!  Of course, there are a multitude of training workshops you can send them to if you need to supplement in-house training.

The bottom line is that a training program doesn’t have to be elaborate.  It doesn’t have to be expensive.  It need not even include DVDs or videos.  It just has to be “done.”  Most importantly it needs to be done in manageable “bites” and done consistently.

So, there you have it.  A staff defined, hired, paid and trained.  Simple, huh?  I realize that I have covered a highly complex component with more generalities than I prefer to, but space simply won’t permit any greater detail.  As always, questions are welcome, and you can address them to [email protected].

Next issue I will cover the fourth Critical Component – Special Finance companies.  Until then,

Hire and train well!
 
Vol 4, Issue 3