Issue link: https://read.dmtmag.com/i/288267
10 • April 8, 2014 • Powersports Business FINANCE www.PowersportsBusiness.com some finance and aftermarket products. Tent cards, handlebar hangers and wind- shield stickers — spread these throughout the showroom or where appropriate to give customers a chance to see a few things that will eventually be presented by the finance manager. Knowledgeable salespeople can also share a story or even some features and ben- efits of some finance or aftermarket products while they are waiting for finance to be ready. Incentives to salespeople depend on knowl- edge and experience of both departments, on the volume of the store, on existing pay plans and the complexity of the products being sold. STEPS TO A PROPER TURNOVER The salesperson has just completed the deal, both the manager and the customer have signed on the dotted line determining the price of the machine (before taxes and fees, acces- sories and any finance products) and a deposit has been received. The customer's internal clock has started ticking; they perceive that it will only be a few minutes before they will be out the door rid- ing their new machine. It is crucial that the salesperson has instructed the customer that a normal time frame to purchase a machine can be 3-4 hours total. The salesperson should have gathered all proper paperwork, if not, then now is the time: drivers license, insurance, credit cards, trade- ins, titles, customer information loaded into the computer and credit application. Once all paperwork is completed, the salesperson explains what happens next. The deal packet is given to finance while the cus- tomer browses or waits in the waiting area. If finance is available, the salesperson explains the deal's details, and informs his col- league about conversations held thus far. In most instances the salesperson knows whether this is a cash or finance deal, and has done everything possible to make it a finance deal. THE TURNOVER Escort the finance manager back to the customer and introduce him/her by name and title. It is critical that the salesperson be sympa- thetic to the finance manager's time. Finance can be the greatest bottleneck in most stores. Now that he/she is introduced, finance will conduct a brief interview before returning to his/her office. Finance will review the entire deal packet, ensuring all customer and unit information is correct, and then submitting the deal informa- tion to the proper bank for approval. This pro- cess may take 15 minutes, or a full day or more depending on the deal and finance workload. The salesperson might have more than an hour before finance is ready. It is time to review any ancillary products, do an acces- sory tour, walk the entire dealership and pro- vide a tour of service. Once the bank approves the deal, finance returns to the customer or instructs the salesper- son to escort the customer back to finance. The salesperson should not return to finance with customer in hand unless instructed. Customers may feel their deal is not important if finance has been interrupted and possibly they are speaking with another customer or salesperson. Summary: "The turnover" itself is really just a brief introduction. However, it is what hap- pens before "the turnover" that is much more important for the dealership to have strong finance department performance overall. PSB Brian Gallmeier, founder of Income Develop- ment Partners, uses his powersports experience at the retail level to train F&I departments. He can be reached at bgallmeier@charter.net or 612/616-8611. GALLMEIER CONTINUED FROM PAGE 8 a $234,000 charge for termination benefits. It is anticipated that the reduction in head- count associated with the charge will result in $2.5 million in annualized savings. ARI reported revenues of $8.1 million for the second quarter of fiscal year 2014 versus $7.5 million for the second quarter of fiscal year 2013, an increase of 8.8 percent. Recurring revenue comprised 94.7 percent of total revenue for the second quarter of fiscal year 2014 versus 87.9 percent for the second quarter of fiscal year 2013. Overall gross margin for Q2 2014 was 79.3 percent versus 77.0 percent last year. The gross margin improvement resulted primar- ily from the growth in the firm's recurring revenue, which carries a higher gross profit. Operating loss was ($606,000) for Q2 2014, compared to ($566,000) for the same period last year. The decrease in results from operations was primarily due to the $234,000 charge related to termination benefits. The company reported a net loss of ($461,000) or ($0.03) per share for the quarter, compared to net income of $4,000 or $0.00 per share last year. Roy W. Olivier, president and CEO of ARI, commented, "We continue to make good prog- ress from our increased investment in sales and marketing which we initiated in the fiscal first quarter of 2014 and continued in the fiscal sec- ond quarter. During the second quarter of fiscal 2014, we invested 30.0 percent of revenue in sales and marketing versus 25.6 percent for the same period last year. Early indications are that these investments are having a positive impact as new dealer sales and upsells, measured as the annual contract value ("ACV"), are up 28.1 percent year to date versus last year." William Nurthen, chief financial officer, commented, "In the second quarter, we took action to reduce our headcount as we continue to see cost saving opportunities from the ongo- ing integration of our recent acquisitions. This action was in line with our goal of increasing EBITDA and profitability in the back half of our fiscal year while at the same time preserving our ability to continue making investments in sales and marketing." PSB ROY OLIVIER ARI CONTINUED FROM PAGE 9 P08x10-PSB5-Finance.indd 10 3/27/14 10:52 AM