Dealer Best Practices Best Practice asserts that there is a technique, method, process, activity, incentive or reward that is more effective at delivering a particular outcome than any other technique, method, process, etc. Top 10 Money Makers The idea is that with proper processes, checks, and testing, a desired outcome can be delivered with fewer problems and unforeseen complications.

Dealer Best Practices 10. Term & Conditions Terms & Conditions should reviewed by legal counsel. They should protect the dealership in general. Effective Terms and Conditions protect the dealer from margin erosion and create margin opportunity. In order for Terms & Conditions to be effective, they must be reviewed with the client on the front end of the sale. This prevents any misunderstanding later in the project that could significantly cost the dealer and frustrate the customer. Best Practice-Review & Teach your T&Cs, also consider multiple T&Cs Payment terms Progress Payments Deposits Storage & Fees Changes & Returns Partial Deliveries Security Interest Title Order Acceptance Order Cancellations COMs Specials Specials finishes Delivery Delays Warranty

Dealer Best Practices Customer Deposits increase cash on hand. Increased Cash reduces Interest Expense* Reducing Interest Expense raises profitability You get deposits by asking customers “You miss 100% of the shots you never take.” Wayne Gretzky 9. Deposits & Discounts *.33% for High Profit Dealers vs..51 for Middle Profit Dealers OFDA 2006 Benchmarking Increased cash allows taking of the 2/15 trade terms At 75% Haworth COGS, 2% per every $1MM net =$15K profit Benefit = 2% for 15 days/4% monthly/48% per annum Cost of money is approx 6% per annum (prime + 1%) Best Practice-Ask for Deposits and take the Discounts

Dealer Best Practices 8. Job Costing Where is the money? Best Practice-recognize all costs to recognize true profitability

Dealer Best Practices 7. Start It UP Faster learning curve for new sales people Quicker solution set for Transactional Customers Higher profits for day to day and small-mid projects Less resources committed for higher profit return 2 to 1

Dealer Best Practices 6. Existing Account Expansion Marketing Opportunity A shoe factory sends two executives to a remote region of a third-world country to study the prospects for business expansion. One sends an saying: ‘No opportunities for expansion - no one wears shoes.’ The other s triumphantly: ‘They have no shoes - tremendous business opportunity.’ Where do clients spend their time? Working with people on engagement. Lowered cost of acquiring new business Creates a greater value added relationship within an account Ensures that competitors are held outside of an account or reduced to a minimum Generates a greater opportunity to maximize higher profits Best Practice: Look for and expand on new opportunity within existing accounts

Dealer Best Practices 5. Account Segmentation & Diversification Too much business in any one segment is dangerous. Studying market segment gaps with the dealership provide insight into areas of opportunity. This helps drive growth, sustainability and survivability. Global Commercial Government Local State Services Healthcare Education Financial Legal Technology Services Best Practice: Study where the business is coming from and develop where it isn’t. “Diversification is the art of thinking independently together” –Malcolm Forbes

Dealer Best Practices 4. Prospect Qualification Signs of Ineffective Qualification Loosing deals and slippage Deals don't move in the funnel Time management issues Decision makers not willing to be accessed Internal resources don't want to work with sales persons Decisions usually coming down to price No understanding of customer's business Relationship issues with client Factoid: More than 80% of sales opportunities lost are due to: An inadequate or non-existent qualification process Lack of an effective sales planning process Guessing! Are we asking the right questions?

Dealer Best Practices 3. New Business Development Use a sales planning process Employ CRM Engage the Principal as a rainmaker Assign networking to each sales person and designer Get them on a board position in an organization Sponsor a community impact events annually Host community and affiliate groups in your facility Regularly contribute to local newspapers, business journals, etc. Best Practice: plan your selling, initiate selling, keep selling

Dealer Best Practices 2. Budget and Variance Author Unknown “Economic swings are very difficult to predict, but sophisticated econometric modeling houses like Data Resources and Chase Econometrics have successfully predicted 14 of the last 3 recessions.” Best Practice: Review the monthly budget against budget forecast to understand variances and opportunity. What are we spending monthly? How is our cash flow? Does our Sales Forecast support our budget? Where do we need to increase investment? Do our people understand the impact of their decisions?

Dealer Best Practices 1. Accurate Sales Forecasting Sales forecasting is critical to understanding and managing the sales funnel. Managing the sales funnel puts the right resources into the right opportunity to maximize sales and profits. Near term forecasting is more accurate. While 30, 60 and 90 forecasting is typical, weekly forecasting gives highest degree of control and accuracy. Good forecasting deals with who, how much, when and how. “Eighty percent of putts that fall short don't go in”-Yogi Berra

Dealer Best Practices Top 10 Money Makers Terms & Conditions Deposits and Discounts Job Costing Start It Up Existing Account Expansion Account Segmentation & Diversification Prospect Qualification New Business Development Budget & Variance Accurate Sales Forecasting Questions? Dealer Best Practices.com via dNet