Hold Your Recon Department Accountable with Help from Rapid Recon – Dennis McGinn, CEO

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At NADA 2020 in beautiful Las Vegas, host Jim Fitzpatrick was joined by Dennis McGinn, Founder and CEO of Rapid Recon. The pair discussed the importance of accountability in the dealership’s reconditioning department.

VIDEO TRANSCRIPT:

Jim Fitzpatrick: I hope you’re having a great show and thank you so much for taking the time out of your busy schedule.

Dennis McGinn: I love this. I love NADA. It’s so exciting.

Jim Fitzpatrick: It is.

Dennis McGinn: And we get to see a lot of people.

Jim Fitzpatrick: That’s right.

Dennis McGinn: That we don’t get to see very often. Anyway, it’s a lot of energy here.

Jim Fitzpatrick: Yeah, it really is.

Dennis McGinn: And there’s some big changes going on in the market. I’ll talk about it in a bit.

Jim Fitzpatrick: That’s right. Yeah. We’re going to talk about that here shortly.

Dennis McGinn: I’d like to give you my insights because big things are happening.

Jim Fitzpatrick: Yeah, they are. They are. Let’s jump right in and talk a little bit about that. First, let’s talk a little bit about Rapid Recon. You’ve been on CBT News a number of times and I know that we’ve done a number of segments with dealers. We get a lot of great feedback and emails from dealers whenever you’re on to talk about that and talk about the other dealers. But for the few dealers that are out there that are saying “Rapid recon? That’s not a name that I’m familiar with.” What solution do you bring to dealers?

Dennis McGinn: Well, we started out getting reconditioning in order, when in the beginning there was really no accountability, it was all a joke. Well, we made that now to where it’s no longer a joke and people are measuring it and managing it and feeling good about being accountable. That was the first big step. Second big step was to help them speed the process up using metrics that they then owned. And now that’s happening too, the idea of getting down to a couple of days because you only really have three weeks to sell a car before you are better off dropping the price or getting rid of it. It literally is right there in front of you. Three weeks, that’s it.

Jim Fitzpatrick: That’s right.

Dennis McGinn: If it takes you a week or two to get the car ready, you’re going to be dropping that price a lot faster–

Jim Fitzpatrick: That’s exactly right.

Dennis McGinn: Yeah. But I think what’s happening in my world is that we’re now realizing we have 20,000 dealers and more than half of them at least, their salespeople are using it as well.

Jim Fitzpatrick: Oh, that’s awesome.

Dennis McGinn: And what they’re doing now is very interesting. They’re helping to build value in the deal right from the first call they get.

Jim Fitzpatrick: From what’s been done on the vehicle?

Dennis McGinn: Yes, okay.

Jim Fitzpatrick: Yeah.

Dennis McGinn: Because they can see in Rapid what’s been done and of course, why do you do all this anyway? It’s to sell a car.

Jim Fitzpatrick: That’s right. That’s right.

Dennis McGinn: We’ve announced two things here. One is called Vendor Advantage, which deals with making all the cosmetic stuff as important and central to the reconditioning process, our time-to-line as everything else. And we’re giving them what they need so they can prioritize and say, “I’m done.” We were announcing another thing called Live Locate because the next big thing is, okay, now I’ve got everybody excited about this thing, but I need to know exactly where the car is and where the keys are.

Jim Fitzpatrick: Right, right.

Dennis McGinn: That addresses that part.

Jim Fitzpatrick: Yeah. That’s huge. That’s huge. I’m putting my car dealer hat on right now, but we all know you can lose a deal based on the fact somebody walks in and waits too long just to find out where the vehicle is in 300 vehicles across the lot, right?

Dennis McGinn: Yep.

Jim Fitzpatrick: Even if it might even be off the lot, right?

Dennis McGinn: Yes. There’s this… I call it a trust point, which is that first contact either comes in from an ad that goes up, I saw this car, and it gets to a salesperson or the BDC and you’re either going to say one or two things. “Well, let me see if I can figure that out and call you back.” And that’s about a one out of three follow through.

Jim Fitzpatrick: That’s right.

Dennis McGinn: But what you really want to say is, “Well, let me look.” And they can do it on their phone. “Oh, I see where it is. It’s in mechanical right now. We just put tires and brakes and so on, and it’ll be available next day or two days to for you to see it.” And you’re giving them specific and that’s changed to two out of three. It’s doubled-

Jim Fitzpatrick: That’s huge.

Dennis McGinn: … the opportunity.

Jim Fitzpatrick: That’s right.

Dennis McGinn: And you’re already paying for those leads. You’re paying for those people to come to you.

Jim Fitzpatrick: That’s right.

Dennis McGinn: That little point there, that first communication-

Jim Fitzpatrick: Isn’t that something?

Dennis McGinn: … it’s probably the highest return of anything you can think about doing.

Jim Fitzpatrick: When you go into the average dealership and they say, “Oh, we don’t think we have much of a problem getting cars out of recon, they’re probably in there for a few days.” What are you typically finding on the average? How many days are the actually in the recon process?

Dennis McGinn: Around 12.

Jim Fitzpatrick: 12 days?

Dennis McGinn: Yeah. And it’s because they’ve been selectively remembering this so they won’t embarrass themselves. And they always like to send their GM off to their 20 Group meeting with, “Oh, it’s two or three days.” And that’s really just trying to tell him what he wants to hear, which is-

Jim Fitzpatrick: Are you saying lies are being told at 20 Group meetings?

Dennis McGinn: I would never say that but they go around the table, and they’re trying to help each other get better.

Jim Fitzpatrick: I know.

Dennis McGinn: But if they don’t trust the numbers-

Jim Fitzpatrick: I know.

Dennis McGinn: … when they couldn’t, unless you have a way to measure and manage it-

Jim Fitzpatrick: That’s right.

Dennis McGinn: … and people want to be accountable, there’s no way.

Jim Fitzpatrick: That’s right.

Dennis McGinn: You can’t work on something until you get your hands around it.

Jim Fitzpatrick: That’s right. You know it is a problem.

Dennis McGinn: Yeah.

Jim Fitzpatrick: I would imagine when you guys go into a dealership and you uncover, oh, guess what, it’s actually 12, 13 days, hey, you probably have a target on your back from somebody at the store. But B, it’s an eye opener for the dealer to go, “Oh my gosh, how much are we bleeding in the way of money because these vehicles are sitting in recon for 12, 13 days?

Dennis McGinn: Yeah. We usually don’t come in from an auditing standpoint, they self identify. We don’t go out and try and shake them and say, “You got this reconditioning problem,” because they don’t want to listen. They already understand. We wait until they explode. And then they come in and they say, “I got this problem. I don’t know where my cars are.” Literally it’s, “I don’t know where my cars are-

Jim Fitzpatrick: I was right there with those guys. I-

Dennis McGinn: Yeah, with a few expletives in there.

Jim Fitzpatrick: That’s exactly right.

Dennis McGinn: They know they have a problem, and then our job is to get the people that are invested in it, the fixed ops director or the used car manager, inventory manager, get them together and have them agree on what the goal is. Because it has to make all of their lives better. That’s what we’ve learned how to do.

Jim Fitzpatrick: Yeah, that’s incredible.

Dennis McGinn: Some of them come in and say, “Well, I went to a 20 Group meeting and I was talking about this problem, I don’t know where my cars are, and three people in there are using Rapid Recon.” That that guy will come back and say, “I want to have what he has.”

Jim Fitzpatrick: It’s a coming to Jesus party.

Dennis McGinn: Yeah. And we say, “Well it doesn’t work that way. Your problem’s different than theirs.” We have to take a step through. We get to this, your people own it and they’re continually evolving improving processes.

Jim Fitzpatrick: That’s right. Hey, before I let you get out of here, talk to us a little bit about your new book. We launched it on CBT news, got a lot of great responses from it, a lot of people want it. I’m sure they’re coming by the booth to say, “Hey, I want to get a copy,” maybe a signed copy. Talk to us about what somebody is going to learn in the new book.

Dennis McGinn: Well, it is like the first one, a collection of interviews. This one is a little nicer book, color and all that stuff. A whole lot of new interviews, but really the first book was there about getting people thinking about the time-to-line, not just the reconditioning time, but from the time they own the car. The next book is really about inventory is a waste because the more we know about the market, and the market is coming at us, it literally is coming at us. Dale Pollak’s talking about it and how things have changed.

Jim Fitzpatrick: I know, I know. It’s a whole new normal.

Dennis McGinn: Right, new normal. And it’s not provision first, it’s we got to sell first. We’re right dead center in that because that’s really what we do. We’re a sales tool and the reason you do everything else is to make it saleable and as early as possible. And you can see the whole thing now. We talk to these people about how does Starbucks do it? Well, they don’t put all the inventory out there at one time.

Jim Fitzpatrick: No, they don’t. They’d be in trouble if they did.

Dennis McGinn: They have to use that scarcity factor, and that only works for a little while.

Jim Fitzpatrick: That has began the official of a Rapid Recon and an all things recon. Check out his booth if you’re here. If you’re not here, go to… It’s rapidrecon.com right?

Dennis McGinn: Yep.

Jim Fitzpatrick: Okay. rapidrecon.com for dealers that weren’t able to make it out to the NADA Convention here in Vegas. And that’s probably the vast majority of dealers out there. But, check it out, rapidrecon.com, I know you’re going to like what you see and if you’ve got that little question that’s bothering you, hey, how many days are my vehicles actually in inventory once they hit the lot? And want to fix it in 2020, he’s the guy that can help you with that. Again, Dennis McGinn, thank you so much for joining me. Always a pleasure.

Dennis McGinn: Thank you, appreciate it.

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