Where do GM's and DP's come from?

[tcollins]

Why do "most" GM's and DP's come from the sales department? Before people post up to say that their GM was the wash boy, I'm talking about in general. We all have stories of the office manager or parts manager, but in general GM's and DP's are promoted from the a sales managers position or GSM position. Does anyone see this as changing? If so, how would that effect the way the dealerships run.

[JustBob]

Not precise numbers but my non scientific survey concerning DP's

1/3 are second or third generation and hopefully there was enough equity to last their life time.

1/3 are former salesmen that were agressive enough and able to somehow purchase a dealership when the opportunity arose and think all that matters is CAR SALES and usually gross not even net.

1/3 are business owners that truly run the business. They may have come from the first two categories but the have evolved to be truly capable owners.

Inspite of the tough times in auto retail many of the poor operators survive. The really good ones thrive. Not uncommon in many businesses.

I have had the privledge of knowing two persons that began their career as service writers. Ironically when the previous owner saw that Jr. was not going to be able to keep the ball rolling they approached the present owners and made them an offer they could not refuse. In both cases they have become extremely successful and realize they are in a multi dimensional business. Treat their employees like they wanted to be treated and expect performance. Sure they had to fire some, still have departmental disagreements and all else that goes with the business. They address the issues and build Teams.

Unfortunately these type of dealers are in the minority but if you find one jump on and enjoy working for them and being a part of the Team.


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Have a tremendous day
Bob Britting

[kcatdeejay]

I was recently jousting with calgm988 regarding this very issue,Bob. We didn't quite agree with one another's viewpoint. Mine was very, very closely aligned with yours. What you state is pretty much what I've discovered in the past 35 or so years in the business especially with regard to poor performers hanging on. It seems in today's climate, however, they seem to be dropping like flies at a very high rate of speed.

[This message has been edited by kcatdeejay (edited 06-29-2007).]

[calgm988]

tcollins:

Generally dealers and GM's came from the sales end because that's where the profits came from. Dealerships were built on the sales end of the building. The business acumen for a sales driven person is entirely different than that of a fixed operations person. Competition for example: was much more complex for sales than service. Sales had to push profits while service had to sustain them.

Today, however dealerships profits are much more lucrative from the fixed operations end. So, my answer is yes there is an industry swing towards fixed operations people. Those "personalities" tend to be more operations focused than front-end focused. Lower profit margins per car as an industry trend - is forcing DP's to look at fixed operations managers to direct thier entire operations to stabalize the profits.

My question to you is: Why does it matter? Are you wondering if a fixed operations person is more qualified than a sales oriented person? Is their management style different? Why do you ask?



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"focus on the purpose, not the outcome."

[tcollins]

Does it matter? Is a sales person more or less qualified? No department has a monopoly on ignorance or intelligence. I see good and bad on both sides. However, in thirty years, fixed has always been the first to take the cuts and the last to get funded, regardless of the program. Why? You said yourself that the fixed side has become more lucrative and I would add with much greater potential. Yet the trend is moving very slowly if at all towards fixed. Take a look at the gross of a good sales person versus a good service writer in a dealership that has a good fixed operation.

The GMs from variable are wired different, agreed. But why are they still the most prevalent choice when we hire? Most can talk about ELR, HPR, fill rates, obsolescence, etc. etc. I have yet to find one that understands enough about fixed to understand how to drive those numbers or even where they come from in most instances. Most don't care although they pretend to probably more for the DP's sake than any other. But where do they spend most of there time because this speaks volumes about their priorities? Desking deals? Selling cars? Training the proliferation of new sales hires? It's certainly not in fixed, not in my dealership or any of my peers dealerships, import or domestic. If youre different, I applaud you but you are the minority.

I see fixed as being the entry point for most customers sometime in the future. Most progressive service and parts directors are not only looking at the branded product but also the used product and trying to retain them equally; pushing them into the customer cycle. My peers disagree on how fast, but in most instances agree at least in principle it will happen. I say long term, they argue that it will have to happen sooner than later. Form your own opinion.

So why do I ask? Because I don't believe we will see this paradigm shift until fixed managers are hired as GM's or DP's or variable managers are trained in the idiosyncrasies of the fixed side. Maybe Ill be complaining that the next GM from fixed doesnt have enough variable experience, but today shouldnt we be leaning toward the skill set that is producing the gross? Our industry has certainly been guilty in the past of moving too slow and here is yet another opportunity to prove we have learned from our past lessons.

[bsilcox]

I believe if we get all the EGO"S out of the way for the guys or gals holding the purse strings we could all make a lot more money for the Dealers that have the major dollar investment in their Dealerships. Most of the Variable Sales People have EGO"S that are a hindrance to the Dealership as a WHOLE!! Move over EGO'S and let's SELL something!! Nothing Happens in this world until someone Sells Something!

[calgm988]

tcollins:

You have a very intelligent take on the matter. It is clear by your explanation that the GM's in your market place either have no interest in fixed operations and/or no knowledge in fixed operations. That my friend, is a sad state.

Not only should the GM know what about "ELR, HPR, fill rates, obsolescence, etc. etc" but how they're derrived and the effects of those measurments. He/she should know how to drive those numbers and what market conditions affect those numbers.

However, the real answer lies in your own explanation. Fixed operations runs daily based on a customer flow. I know that simplifies the answer but sales doesn't run off a specific customer flow. The changes in market conditions are daily, not monthly as in fixed. Someone must manage that inbound customer with a clear goal to improve market share, volume and maintain a consistent flow of cash. Fixed operations on the other hand works off UIO. That UIO determines its direction through proper customer managment, marketing reach and ultimately through reputation. I certainly am not suggesting that a fixed ops director won't make a good GM. I'm suggesting that due to the market conditions, one needs to pay more daily attention in the sales dept.

Ultimately, as I've said multiple times...it comes down to leadership. If you have a good leader (who regardless of dept background) can increase profitability year-over-year in all depts than he/she is doing their job well. Perhaps it is not the position as it is the person!

bsilcox: "Most of the Variable Sales People have EGO"S that are a hindrance to the Dealership as a WHOLE!! Move over EGO'S and let's SELL something!! Nothing Happens in this world until someone Sells Something!"

What does that mean? Can you elaborate? Are you insinuating that sales people hinder the profitability of a dealership?

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"focus on the purpose, not the outcome."