first approval source - enabling dominators

Be a Market Dominator Increase

Inventory TurnsAnd Hold Margin

Myril ShawChief Operating Officer

[email protected]

http://www.firstapprovalsource.com

Today’s Topics

• Goals For Today• How We Know• The “Dealer Strategy Matrix”• The Virtuous Cycle• Where We Fit


Goals For Today

• No one falls asleep• You are energized or

entertained or at least not bored stupid

• You learn at least one new thing

• You leave with immediately and directly actionable information


How We Know

• About First Approval Source– Profit Services Provider

• Comprehensive F&I– Red Flags and OFAC compliance– Consumer qualification and loan sourcing

» Credit improvement– Backend sales– Contract preparation and delivery

• Quality finance leads• Web services• Social Media / Reputation management• Educational resources

– Experience and Resources• Over 75 years combined industry experience• Millions of dollars of loans processed• F&I Survey


Quiz #1Do You Have A Goal?

Who knows what

BHAGstands for?

(And for extra credit, where did it come from?)


Big Hairy Audacious GoalA long-term goal that changes the very nature of a

business’ existence.

BHAGs are meant to shift how we do business, the way we are perceived in the industry and possibly even the industry

itself.

#1 Answer


The “Dealer Strategy Matrix”(developed by Dennis Galbraith)

Service Dominator

Skim Velocity

Bran

ding

No

Bran

ding

Gross Inventory Turn


Price Based Sales

• Price Elasticity– Low price = High volume– High price = Low volume

• The Strategies– Skim – We’re expensive, so what?– Velocity – No one beats our price!

Skim VelocityGross Inventory Turn

No

Bran

ding


Value Based Sales

• Price Elasticity Modified– Lower price with differentiation = Higher volume– Higher price with differentiation = Lower volume

• The Strategies– Service – We’re expensive, but worth it!– Dominator – Great prices and a great experience!

Service DominatorGross Inventory Turn

Bran

ding


About The “Skim” Strategy

• Holding gross– No emphasis on delivering

excellence in service or experience

– “We’ve been in business for 30 years.”

– “We are your neighborhood store.”

• When it works– Clear geographic advantage– Lifestyle business

• When it fails– Competitive marketplace

Bran

ding

No

Bran

ding



About The “Velocity” Strategy• Turn inventory with price

– Target price over service or experience

– “You can’t beat my prices.”– “Lowest payments anywhere.”

• When it works– Reduced flooring through high turns

supports low margins as long as overall traffic volume is sufficient

– Strong backend sales• When it fails

– Down markets or rapidly rising interest rates

– Highly competitive markets where differentiation is required

Bran

ding

No

Bran

ding



About The “Service” Strategy• Hold gross and differentiate

– Outstanding customer experience– Emotes luxury– Customer service is king

• When it works– Stable buying communities where

customer loyalty, word-of-mouth and repeat business are critical

• When it fails– Service excellence comes at a cost;

in down markets when reduced sales force compromise in service approach the reputation damage my be irreparable

Bran

ding

No

Bran

ding



About The “Dominator” Strategy• Great service and great prices

– Attract customers with an excellent experience and pricing flexibility

– Customers come in when they see the price, they stay when they feel the experience

• When it works– Storewide commitment to

excellence in front of the customer and behind the scenes

• When it fails– Lack of training in selling value

and delivering qualityBr

andi

ngN

o Br

andi

ngGross Inventory Turn


Service Dominator

Skim Velocity

Profits, Margins – The Target

Bran

ding

No

Bran

ding


Unit Margin

Unit Margin

Store Profit

Store Profit


Why Isn’t Everyone A Dominator?• Insufficient Commitment

– Owner/management fail to enforce:• Consultation versus sales• Luxury environment• Customer-first behavior• Well articulated and demonstrated value propositions – customers are not told brand value, they are immersed in it• Price never leads• 100% Professionalism

Bran

ding

No

Bran

ding



Why Isn’t Everyone A Dominator?• Insufficient Training

– Your store-your way, your way must be taught:• Greeting customers

– In-person– Phone– Email

• Value propositions – Features as benefits– F&I– Service

• Selling without price (full price is fair price)• Follow-up

Bran

ding

No

Bran

ding



Why Isn’t Everyone A Dominator?

• Non-Supportive Infrastructure– Training environment and plan missing– Unfriendly phone system– CRM that is hard to use or not useful– Inadequate website

• Poor lead generation• High bounce rate

– DMS that fails to facilitate sales processes

Bran

ding

No

Bran

ding



Your BHAG – Be A Dominator The Virtuous Cycle


The Virtuous CyclePeople

• People – Traffic In The Door– Traffic sources:

• Traditional advertising• Sales people cold calling• Shows• Email marketing• Social media• Your website converting leads

– A credit application is not a lead form• Digital advertising• Community/charitable sponsorships with branding• Walk-ins• Word of mouth


Quiz #2How Good Is Your Website?

What percentage of

Website visitors

leave without taking any action?


96% - 98%

#2 Answer


The Virtuous Cycle People – Take Home Tips

• Maximize the effectiveness of your shows by leveraging social media

• Social media is about influencers – children and grandchildren

• Ensure that leads can be captured easily and everywhere on your website – especially vehicle view pages (improve the bounce rate)


The Virtuous CycleProducts

• Products – Sell Everything– What are you selling?

• OEM manufactured vehicles• Used/brokered vehicles• Financing• Backend products

– Extended service agreements– GAP Insurance– Credit Life/disability– Property insurance

• “Pro-Shop” products• Parts and service


Quiz #3How Important Is Financing?

What percentage of

Boat and RV buyers

finance some or all of their purchase?


80%

#3 Answer


The Virtuous CycleProducts – Take Home Tips

• Offering financing increases units sales by 25% - 35% (80% of buyers finance; 55% of buyers who leave to arrange financing, don’t come back)

• Ensure that you understand the buyer’s financial position early so that you can guide them to the right product

• When presenting backend products, offer the consumer prices “with protection” and “without protection” – “Is $15/mth worth a good night’s sleep?”


Selling Backend Products


The Virtuous CycleProfit

• Profit – The payoff– Areas to drive profit:

• Vehicle margin– Full price is fair price– Selling benefits not features– Enthusiasm is contagious and profitable

• Financing– Maximize funding reserve

• Backend profit– 100% on Extended Service– GAP– Insurance referrals


The Virtuous CycleProfit – Take Home Tips

• When you provide value through the experience, price is the last consideration

• People purchase an experience not a vehicle – the experience starts on your website and carries through every aspect of the in-store visit – make it all count

• Never be afraid to maximize your funding reserve – sell payments not rates


The Virtuous CyclePopularity

• Popularity – Building the buzz– Technology is the amplifier:

• Pictures – Lots – Everywhere– Pictures of:

» Products in use» Happy buyers» Test drives

– Pictures on (both your pages and customer pages – provide instructions):» Facebook» Twitter» Instagram

• Videos– YouTube– Vines

• Reviews– Solicit reviews– Reputation management


The Virtuous CyclePopularity – Take Home Tips

• Use a rewards program to encourage customer referrals

• Create and promote a YouTube channel – video sells

• Ensure that you have a social media savvy employee focused on your social media and reputation management programs (90% of shoppers search online reputations before they visit your store)


The Virtuous CycleLet The Spin Begin

• People buy product• Product sales drive profit• Value based profit builds popularity• Popularity invites people

• Rinse and repeat

• Being a Dominator is a function of a free spinning Virtuous Cycle with management support and process excellence throughout the store


First Approval SourceWhere We Fit

We

enable

DOMINATORS!


First Approval SourcePrimary Services

• The provider of CreditMiner for the Marine and RV industries– Replaces your website Credit

Application– Appears on your Finance tab, your

Get Pre-Approved tab and on every VDP page

– Guaranteed to at least double your finance leads• The provider of comprehensive F&I

Services– Red Flags and OFAC compliance– Consumer qualification and loan

sourcing– Credit improvement– Backend sales– Contract preparation and delivery


First Approval SourceOther Services

• Web services

• Reputation/social media management

• Educational resources


First Approval SourceStandard Rates Profit Services

OnlyCreditMiner Only Profit Services and

CreditMinerFirst Approval Source Profit Services with

Broker authorization with

Coast To Coast Yacht Sales

First Approval Source Profit Services with Credit Miner Virtual Credit

Consultant finance lead generation

and Broker authorization with


Setup $0 $497 $0 $0 $0

Soft Credit Pull NA $3.50/pull (pre- paid in batches of 50)

$3.25/pull (pre- paid in batches of 50)

NA $3.10/pull (pre- paid in batches of 50)

Per Application $0 NA $0 NA $0

Usage Dealer retains 65% of monthly F&I Profit

for first 60 days, then

Flex Fees

$497/mth $0 plus Flex Fees, provided the

previous 12 month or time since signed

average FAS invoice is $450 or greater,

otherwise ,the lesser of the amount

needed to make the average monthly amount invoiced equal to $450, or

$450. During first 60 days, Dealer

retains 65% of monthly F&I profit

over $450.

$0 plus Flex Fees, provided the



otherwise,the lesser of the

amount needed to make the average monthly amount invoiced equal to$300, or $300.

During first 60 days, Dealer retains 65% of monthly F&I profit

over $300.







over $650.


First Approval SourceFlex FeesAverage Monthly F&I Profit (12 mth running average)

From: Up To and Excluding: Percentage Retained By Dealer:

$0 $2,000 40%

$2,000 $3,000 50%

$3,000 $6,000 60%

$6,000 $9,000 70%

$9,000 80%


First Approval SourceSpecial Rates – This Week Profit Services

OnlyCreditMiner Only Profit Services and

CreditMinerFirst Approval Source Profit Services with

Broker authorization with


First Approval Source Profit Services with Credit Miner Virtual Credit

Consultant finance lead generation

and Broker authorization with


Setup $0 $0 $0 $0 $0

Soft Credit Pull NA $3.25/pull (pre- paid in batches of 50)

$3.10/pull (pre- paid in batches of 50)

NA $3.05/pull (pre- paid in batches of 50)

Per Application $0 NA $0 NA $0

Usage Dealer retains 70% of monthly F&I Profit

for first 60 days, then

Flex Fees

$450/mth $0 plus Flex Fees, provided the



otherwise ,the lesser of the amount

needed to make the average monthly amount invoiced equal to $425, or

$425. During first 60 days, Dealer

Retains 70% of monthly F&I profit

over $425.







over $300.







over $625.


First Approval SourceSpecial Flex Fees – This WeekAverage Monthly F&I Profit (12 mth running average)

From: Up To and Excluding: Percentage Retained By Dealer:

$0 $2,000 50%

$2,000 $3,000 55%

$3,000 $6,000 65%

$6,000 $9,000 75%

$9,000 85%

Plus: This Week For Attendees•Access To NADA Guides online – no charge•OFAC Compliance reports for cash buyers – no charge•Coming soon: Administered Incentive Reward program for you and your customers


First Approval SourceBut…

• We have a finance manager (or, I am the finance manager)– We are NOT the “fire the finance guy” company

• We do not demand that you do 100% of your financing through us

– Flex Fees should encourage you to allow us to assist you most of the time

• You can, if you wish, keep existing relationships– We can share relationships

» Even if there is a Re-Direct in place, we will never charge for a transaction that we did not initiate

• Skilled Finance Managers should be leveraged in assisting maximizing profit through the sales process, with financing presentation and with backend product sales

– We can handle all the paperwork

• Reputation/social media management

• Educational resources


First Approval SourceYour Profit Services Company

• The best customer service in the industry

• One stop shop for all your profit needs

• Most aggressive rates anywhere

• Your provider for CreditMiner


Goals For Today

• No one falls asleep• You are energized or

entertained or at least not bored stupid

• You learn at least one new thing

• You leave with immediately and directly actionable information


First Approval SourceYour Profit Services Company

QUESTIONS?

For a copy of this presentation:Myril Shaw

[email protected]

mailto:[email protected]

first approval source - enabling dominators

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