Desire, Commitment Drive Impressive Used Vehicle Turn-Around

June 4, 2019

A few months after CeCe Brown earned the responsibility of managing used vehicles at Sisbarro Buick GMC in Las Cruces, N.M. last year, he grew frustrated with the results.

The department consistently lost money—a problem that he believed owed to paying too much for the wrong cars, and pricing them as if they were the right cars.

Fast forward to January 2019, after Brown had convinced his dealer that they wouldn’t see any different results unless and until they offered more appealing vehicles at market-competitive prices.

“We signed up for vAuto in January (2019) and our turn was at 3.97 times a year,” Brown says. “We had 79 cars in inventory and our average age was 93 days.”

The next 45 days weren’t pretty as Brown worked to get the department humming.

“The first thing I did is study the market,” Brown says. “I retailed my old age cars. I lost some money because we had to write-down cars. But I knew I was now competitive with the rest of the market.”

He also spent a fair amount of time on the phone with his Performance Manager, Pete Lewandowski.

“I showed CeCe a lot of love,” Lewandowski says. “The one thing is that he was never shy about reaching out. Most Performance Managers are like me. If someone keeps reaching out, we’ll keep giving you what you need. I love the fact that CeCe embraced the Velocity principles and committed himself to learning more. His store has just flourished.”

Indeed, in 60 days, Brown’s department has discovered what might be called its new normal. He’s retailing about 65 cars a month (almost double the average of previous months with essentially the same size inventory), his days in inventory has shrunk from 93 to 23, and he’s increased his turn rate to 15, a nearly four-fold lift. Meanwhile, the department’s front-end gross has doubled to more than $1800, due largely to less frequent, and far smaller, retail losses.

Brown, who was recently promoted to general sales manager and is looking to increase sales velocity in new vehicles, says there’s no “magic” behind the turn-around.

“It’s all about hard work, and believing in the system, and using the system,” he says. “There’s a big difference between having a system, and knowing the system, and actually doing it.

“I would tell any dealer or sales manager that if you listen to what your Performance Managers tell you, and follow it, things will change—as long as you do it.”

I asked Brown to share a few other pointers for dealers and managers who are looking to lift their used vehicle performance and sales:

Redefine your “niche.” Like many dealers, Brown’s inventory skewed more heavily to “core” inventory that reflected the store’s franchise brands. Today, he sells a more balanced mix of makes and models based on what’s selling in the local market.

Get buy-in from service. It’s difficult to increase sales velocity and volume if it takes days, or even weeks, to get cars out of reconditioning and retail-ready. Brown understood the potential problem, having managed used vehicle reconditioning earlier in his career at a different dealership. He made the case that if the service department met the goal of a 72-hour turnaround time for recondition, he would sell more cars and bring more customers to service. To help, Brown also implemented a process that requires sales associates to set each customer’s first service appointment. “It goes a lot smoother when everyone understands the front helps the back and the back helps the front,” he says.

Expand your sourcing network. Previously, Brown’s department preferred to only acquire auction vehicles within 300 miles of the dealership—a policy intended to minimize transportation costs and time. Today, with the help of Stockwave and his Performance Consultant Joe Leszkowicz, Brown is “buying anywhere in the country” to acquire vehicles where the Cost to Market and Market Days Supply metrics are sufficiently favorable to justify the additional distance and cost.

Perhaps the most impressive part of Brown’s turnaround story is the commitment he made to his dealer right up front: He told his dealer that if he gave him 90 days to make a difference, and it didn’t happen, he’d resign.

Even with the promise, I suspect Brown wasn’t really worried that he’d need to find another job.

“I’m just one of those guys,” he says. “I’m driven. I’m structured. If you tell me ‘this is how it’s going to work,’ I’m going to listen and do it. I always knew this store had more potential.”