How the Best of the Best Craft CPO Culture
For Ed Rykulski, fostering the certified pre-owned culture begins with putting as many vehicles as possible through the certification process.
“First of all, we feel the most important thing is to certify every vehicle that you possibly can,” said Rykulski, the used-car manager at Al Serra Auto Plaza in Grand Blanc, Mich.
“Second of all, the more we certify, the more profit for the dealership; not only off the car itself, but, more importantly, the service work it brings into the dealership,” he said.
How dealerships can best establish a CPO culture will be one of the topics addressed during Used Car Week’s CPO Forum next week. On Tuesday, NCM Associates’ Paul Faletti Jr. is moderating a panel about “Building a Winning CPO Culture in Your Dealership,” which features some of the top stores in the country.
NCM Associates is also sponsoring the Auto Remarketing 2012 CPO Dealer of the Year award, which will honor Longo Toyota this year. Faletti will present the award to Greg Penske, chairman and chief executive officer of Penske Motor Group — which includes Longo Toyota — during a ceremony on Monday.
A full agenda for the CPO Forum can be seen here.
In anticipation of NCM’s workshop and to give our readers a few best practices, Auto Remarketing reached out to leaders of the major OEM CPO programs recently to see how their top dealers foster such a foundation.
“It all starts with the customer. Multiple studies have shown, CPO buyers have higher expectations about their CPO vehicle; with a factory-backed warranty and a thorough, multi-point inspection associated with that vehicle,” said Brian Butts, the national manager of auto remarketing at Honda. “As a result, program compliance it top of mind with our two programs."
Todd Fites, the national CPO sales manager at Ford, named a few of the key common traits found among the Ford and Lincoln dealerships that have built such a “winning CPO culture.”
Fites broke these shared traits down as follows:
Management Buying In and Actively Pushing CPO
“Our most successful dealerships understand both the short- and long-term benefits of our certified programs and each department manager within the dealership — new, used, service, parts and body shop — supports the program,” said Fites.
Define the Inventory Strategy
This task of finding used vehicles for the CPO program is often one of the toughest, says Fites. The best dealers, he said, are the ones who have put in the effort to come up with a plan.
“Our most successful dealers have done their homework on their local market and have a specific inventory strategy. They understand the most popular models that sell in their local market and pro-actively purchase vehicles that fit the profile,” Fites said.
“They don’t limit their purchase activity to auctions, but utilize their own customer base to seek out good trades through their trade cycle management tools and their service shop.”
Training the Sales & Service Staff Properly on CPO
Educating the staff is also vital to building a certified culture. The salesperson needs to be able to convey the message of CPO benefits to the shopper, Fites said.
“Successful dealers have invested the time and effort to ensure their staff understands the benefits that a certified pre-owned vehicle has over a traditional used vehicle. Customers receive a professional walk around at these dealerships where the ‘value’ of purchasing a CPO vehicle is clearly explained,” he said.
Top-Notch Merchandising
Having the proper information is also critical, whether the vehicle is on the lot or online.
Fites said: “High performing dealers understand the importance of merchandising their vehicles both on the lot and in the digital marketplace. Vehicles are prepped and reconditioned to a ‘like-new’ level and are physically displayed with the correct point of purchase information.”
Vehicles on the lot need to have window stickers, an inspection checklist, vehicle history report and warranty coverage information, Fites said.
As for the vehicles posted online, there are specific merchandising items that should accompany these models, as well, he added.
For instance, they should have dealership-branded photographs that clearly show each of the “important features.” Fites recommends at least pictures and says that vehicle videos are “even better.”
He also said that pricing on these online units should be clear and consistent with the price shown on the physical lot.
Lastly, Fites said that listings should include descriptions that not only share unique features of the car, but emphasize the CPO program’s benefits, as well.