July 25, 2017 By Rick Brubaker
Ford Motor Company dealers could be losing thousands of dollars a month in sales and profit, and the culprit is lurking only a click away – inadequate desking software.
This tale of lost opportunity begins, ironically enough, with one crafty general sales manager (GSM), who routinely exploits a weakness in his competitors’ software when it comes time to calculate a monthly lease price under the Ford Motor Credit Lease Program.
And the competitors are clueless to their lost revenue.
“I do this 5-10 times a month!” the GSM said. “I love it when a competitor doesn’t know the program.”
So what is this loophole, you ask? Fair enough, let me start from the top.
One Tuesday, I watched a salesman slump into a chair in the GSM’s office with a serious look on his face.
“My first up of the day, and there is nothing I can do with him,” the salesman said, referring to his first customer of the morning.
“Now why would you say that?” the GSM said, probing his salesman’s pessimism for a possible lesson learned.
“He brought in a quote from another Ford Dealership on an F-150 and said that if we beat this lease payment by $20, he would buy the truck right now.”
The GSM held his gaze on the salesman.
“But, as you can see, they are selling the truck for way below the MSRP,” the salesman finished, holding out some papers and dropping his head.
Grasping the situation, the GSM asked the salesman if their dealership had the same truck.
“Yes,” the salesman said, providing the stock number but not sure what the GSM had in mind.
“Did you show him this truck to make sure he likes it? Is it exactly like the one he has the lease quote on?” asked the GSM.
“Yes, I did, and yes, it is equipped exactly the same, and it is even the same color as the one he was quoted on,” the salesman said.
With a paternal tone, the GSM told the salesman to calm down and went to work. He printed out the truck’s invoice, and using the same MSRP as his competitor, the GSM came up with a lease payment that was $76 per month cheaper.
The salesman was befuddled at his manager’s apparent sleight of hand. How had he done it?
The only change – the GSM used the little-known Before Options Discount, not the more widely-known After Options Discount. This was a difference of $5,600.
But the sales manager was not done yet. He raised the truck’s sales price – to match the customer’s requested lease payment – for a total profit of $3,300.
Were other Ford dealerships missing out on big profits? Over the course of the next 10 days, I visited eight other dealers and asked them to work me up a lease payment on a new F-150 truck.
To my amazement, each one printed out an invoice using only the After Options Discount. Now I wondered if the dealerships’ desking software was to blame.
I returned to the eight dealerships, and again the sales managers presented me MSRPs using the After Options Discount.
When pressed, each of the sales managers confirmed my suspicions about their desking software.
“It has to be because that is what is in our computer system,” they would say. None of the eight dealers used ProMax to figure their lease payments, so I had my answer.
The sales managers were unaware of the Before Options Discount because their desking software did not present it as a choice. As a result, they were losing large numbers of sales and huge profits.
To avoid this pitfall, it is important that dealerships partner with a desking software company that shares and trains with comprehensive vital market information.
If not, you could be losing thousands of dollars a month with a click of the finger!