The efficiency of your dealership’s recon process affects more than just your fixed-ops department. From dealer margins to the overall competitiveness of your store, there are many reasons why your dealership should consider revamping its recon process in 2019.
Joining Jim today are Jeff “J.D.” Dantzler, GM of Manly Honda out of Santa Rosa, California, and Dennis McGinn, founder and CEO of RapidRecon, and they discuss the latest updates on what your dealership needs to know about the best reconditioning practices.
Jim Fitzpatrick: Hello, everyone. I’m Jim Fitzpatrick. Thanks for joining us on another edition of CBT News. Today, we welcome Jeff Dantzler, GM of Manly Honda in Santa Rosa, California, and Mr. Dennis McGinn. You know him from CBT News. He’s on all the time. We love when he joins us, a huge amount of insight that he gives us in the area of reconditioning. Of course, he’s founder and CEO of RapidRecon, and to really talk about today, we want to talk about the latest things that your dealership needs to know about the reconditioning process.
This has been, as you know, a very hot topic over the years in an area right now that every dealer needs to focus on with regard to tightening up their expenses, getting every last dollar that we can out of a vehicle sale, and this has been one of those areas that’s been kind of bleeding dollars, if you will. So, Jeff, welcome to the show. We appreciate you taking the time out of your day.
Jeff Dantzler: No, thank you very much. I love your show. It’s an honor being on.
Jim Fitzpatrick: Sure. So since you’re kind of the guest today, or the newbie, tell us a little about yourself and the dealership that you’re running.
Jeff Dantzler: Well, with Manly Honda, we are the first Honda dealership in the continental United States, so it’s really an honor being here, and being the general manager here.
Jim Fitzpatrick: Yeah. Talk to me about that, when you say the first Honda dealership, do you actually mean you guys were the first dealership to get a Honda vehicle?
Jeff Dantzler: Yeah. Dealer number 01.
Jim Fitzpatrick: That’s pretty cool!
Jeff Dantzler: Yeah, it really is. It’s quite the honor. We got the first car in the showroom, and it’s great being part of it.
Jim Fitzpatrick: So how did you get the first car in the showroom? You had to find the car and buy it back from the owner?
Jeff Dantzler: Yeah. Mr. Manly had great insight and kept that car when it got traded in.
Jim Fitzpatrick: Wow, that is an awesome story. Well, I know you guys are knocking the cover off the ball. Tell us a little about yourself. How did you get started in the car business?
Jeff Dantzler: You know, like a lot of us, started in the sales department and fell in love with it. Within about six weeks, I knew I’d found my mission, and been in it ever since for about 25 years.
Jim Fitzpatrick: That’s great. Well, talk to us about this reconditioning process. I know you’re a fan of RapidRecon. A, tell us the need that was there when you found RapidRecon, and a little bit about how it’s kind of changed the things or the ways in your dealership to be more profitable in this area.
Jeff Dantzler: Well, yeah. Absolutely.
Jeff Dantzler: Yeah, well, when we were looking for a way to recon our cars more efficiently, great ideas readily interrupt you, so we had to pursue it. And we looked everywhere. We scoured a lot of the publications and saw an article about Dennis McGinn, and when I read that article, I knew it was exactly what I was looking for.
Jim Fitzpatrick: Sure. Dennis, talk to us about the GMs that are much like Jeff out there in the marketplace looking for the answers. What are some of the problems that exist when it comes to recon department at a dealership?
Dennis McGinn: Well, the first thing that comes up is always I can’t find my cars. I don’t know where they are. And everybody’s running around saying, okay, who’s fault is all this? And so then we get involved, and we found out, okay, well, that’s just the beginning of it. Not only do they need to know where the cars are, they need to know why, and then they need to be able to set objectives and work towards those.
Dennis McGinn: And so the GMs want to not have to worry about this. That’s the big thing. They don’t want to have to be concerned about this. They don’t want to have their people fighting about it, and we see that a lot, people coming in.
Jim Fitzpatrick: Can you share that same feeling, Jeff, as a GM of a high volume dealership, that it’s an area that you’re like “I just want somebody to take care of this?”
Jeff Dantzler: Well, I want somebody to take care of it, but I also like to be involved in it, and with something as important as the used car operation, recon is just essential. And it was very well received. I mean, when accountability is fair, people want to be held accountable as long as it’s fair, and RapidRecon did do that for us.
Jim Fitzpatrick: Right. Talk to us about some of the changes that it’s made at your dealership.
Jeff Dantzler: Well, one of them that really isn’t … Can’t put on paper as far as a profitability standpoint but I think all of us in the GM world and automobile industry would say morale is one of the most valuable things you can get, and that’s one of the things with RapidRecon is you don’t have salespeople that are in a huddle that they’re joking about a car that’s 12 days old that they traded in that is not even ready yet. Or a sales manager that has a deal ready to go, and they look up the days in stock, and it’s 10 days old and it hasn’t been safetied or inspected yet.
So everybody from the salespeople to the used car manager to the desk managers to the technician that walks by a car five days later and it’s still sitting there, they don’t see that emphasis unless we have that accountability, and say, “Hey, we’re going to be a used car retailer, and this is what we’re going to do.” So there is a morale factor that is hard to put a number on but is substantial.
Jim Fitzpatrick: Yeah. And before a plan or a platform like this was available, you mentioned pointing the finger or blaming the other guy. There was a lot of that going on, wasn’t there? Just “It wasn’t my fault. I can’t do what I’ve got to do until they do what they’ve got to do, and the part comes in, or it’s at the body shop, or at the detail.” Whatever the case might be. Is that a safe assumption?
Jeff Dantzler: Yeah, and that’s why they love the real accountability being fair because everybody knows where that car is, how long it’s in that step, and everybody’s working together on that same vision and that same mission.
Jim Fitzpatrick: Right. Dennis, on average, how many days will it shave off to get that car on the front line and get it front line ready? I mean, if you’ve got vehicles that are sitting for 10 days without being touched, some cases 15 or 30 days, on average, how many days will a plan like this shave off?
Dennis McGinn: Well, it should initially cut the number in half.
Jim Fitzpatrick: Wow.
Dennis McGinn: I mean, that’s been our universal finding, which is that the dealers don’t really know where they are. They’re all guessing all the time, and trying to make each other feel better, but when you really get the starting number, when everybody starts putting their fingers on their phones and saying, “Okay, I’ve got it,” and “I’m done,” it’s 10 days. I mean, it’s almost always 10 days. And for first shot is you cut it down to five.
Jim Fitzpatrick: Talk to us about the impact that something like that has on the customer and the CSI score in the dealership. If they come in and we’re running around like the keystone cops looking for a vehicle that we’ve owned for 10 days.
Jeff Dantzler: Absolutely. And with customer experience being paramount, and speed of transaction being paramount, you mentioned the customer, which is a great point, is that customer deserves to be able to buy that car as soon as possible. Because we all know salespeople, you trade in a car. There’s three of them that have somebody that’s looking for that exact car. They need to sell it as soon as possible.
And I always like to remind myself success leaves clues. Well, what are the ultra-successful organizations doing, such as CarMax, such as the Echo Parks? One of the things they’re doing, along with a lot of other things right, is their recon process is dialed in. And you also take a look at what marketing is these days, and business being innovation in marketing, as Peter Drucker would say, is this takes the innovation part of it, because if you are going to market on third party websites and you don’t have your recon process in play, with the third parties, it’s like a NASDAQ and a New York Stock Exchange. The only difference is we know our shares are depreciating every single day, and the longer we hold that share of metal, the more that metal is going to depreciate.
So the ROI on those third party websites are almost going to be nonexistent unless you get your recon dialed in and under control.
Jim Fitzpatrick: That’s right. We recently spoke to [Dale Pollack 00:08:36], and he said to us in the interview that for used car managers and GMs that are buying merchandise for their used car department today, it’s like buying a huge block of ice. The only difference is today every single day is 190 degrees out, and you’re putting it there on your front line, and every single day, it’s decreasing in value at a tremendous pace. And it’s all about efficiencies.
And things like this with RapidRecon, to have this in your back pocket, to say at least in the recon area we’re covered. Of course, we’ve got great third-party lead providers, and great digital marketing as you mentioned, but, man, to have this vehicle now that comes in to get caught up in the process, or I should say the lack of process in a dealership, is crazy in today’s way of technology, right?
Jeff Dantzler: Absolutely. Because those third-party websites are great, but if you don’t price the cars to market, and you don’t merchandise them correctly, you’re not getting your ROI because they are really an open market for exchange of vehicles. They’re not a billboard. They’re not a radio commercial. They are an avenue and a tool for us to market our vehicles and merchandise them correctly, but that is all a science within itself, and recon is an intricate part of that science.
Jim Fitzpatrick: Yeah, that’s for sure.
Dennis McGinn: To Jeff’s point and yours about though the importance of the recon process, there’s been so much attention given to what cars to buy, how to price them, how to merchandise them, and then of course there’s a lot of money spent on that. And then once the car gets to the front line and it’s customer ready, a lot of money spent on merchandising that car. And what I’ve found a lot is that people haven’t spent a lot of time thinking about … The general managers, the dealers haven’t spent enough time thinking about, well, wait a minute, what am I losing by adding some days into this reconditioning that I thought I knew what it is but I really don’t? And so it turns out it’s a really big number.
Jim Fitzpatrick: Yeah, that can turn into a major concern and a big pain point for a GM like Jeff, that’s for sure. What kind of support did you get? Make believe he’s not listening, but what kind of support did you get from RapidRecon, Jeff, when launching this?
Jeff Dantzler: Really, actually fantastic support. We even have a coach that helps us on our specific account, so it’s really been fantastic because the team needs to see a goal, needs to see a vision, and needs to know how to win. So at the end of that, they need to know, okay, we’ve won, which RapidRecon does do that for us also, and that support helps us do that. But everybody involved in that process, from the used car manager to the acquisition manager to the used car recon techs, they know by what RapidRecon says whether, hey, it’s a winning scoreboard, or, hey, we need to pick it up and we need to shave off another day, and then we can get a little granular with it and see where we need to shave off, and see what’s slowing us down.
Jim Fitzpatrick: Dennis, crazy question, but as a former dealer and running dealerships for 25 years, why would a dealer not opt for a program like this? Are you charging like a million dollars a year for this, or …? This seems to me to be a no-brainer.
Dennis McGinn: It does, and probably because it’s too inexpensive. Maybe take a page from the DMS guides. But, no, I decided when I started this company that everything was going to be month-to-month, no contracts. It’s $500, $600 a month, no contract. There’s no commitment. There’s no reason for any dealer not to do this. It is literally probably the biggest no-brainer out there.
But what I think these kind of communications really help because the GM has so many things to worry about, there’s so many moving parts in a dealership today, and things are always changing that getting their attention is sometimes difficult. And they have to be in there. They have to be in the game. The GMs like Jeff have to have their head in the game, and then everybody follows. It’s the leadership model. Always has been.
And so I think our business is growing very fast, and is accelerating, but there’s a lot of dealers out there that don’t have a solution yet. They haven’t gotten down below the noise level to get to take care of this.
Jim Fitzpatrick: It just seems to me if you’re talking about a product like this for $500, $600 a month with no contracts, you almost want to say to the dealer, look, I’ll tell you what, just give me five percent of your additional gross profit for the first 90 days. I won’t charge you anything for it, or you could pay $500 or $600 a month.
Jim Fitzpatrick: With a number like that, as you know, that’s a bar tab for many car dealers and GMs on a good night. I probably shouldn’t say that. It’ll get me in trouble, but it’s reality, right? We’ll spend that much taking our bankers to lunch, to buy ourselves some F&I deals.
But for those dealers and managers that are listening, you’ve got to check this plan out because it sounds, like I said, like a no-brainer. And as a former dealer myself and manager, man, I’d be all over this thing. I was hoping that there was some kind of solution to this problem, but back when I was in it 10, 15 years ago, we didn’t have something like this.
But Jeff Dantzler and Dennis McGinn, I want to thank you so much for joining us on CBT News. It’s been very enlightening, and best of luck to you, Jeff, for continued success, I should say. Are you going to finish the year out strong?
Jeff Dantzler: Absolutely.
Jim Fitzpatrick: Yeah. That’s great.
Jeff Dantzler: It’s been a great year.
Jim Fitzpatrick: Good, good. That’s great. Well, hopefully we can have you back after the first of this year and talk about this issue as well as some others.
Jeff Dantzler: Absolutely. I’d be honored. Thank you so much.
Jim Fitzpatrick: That’s great. Thank you so much, gentlemen.
Jeff Dantzler: Thank you.
Dennis McGinn: Thank you. I appreciate the opportunity.
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