As the nation's #1 lease return outlet, Novak Motors prides itself on providing exceptional pre-owned vehicles at below-market pricing. Headquartered in Bedford, TX, the company serves the greater New York, New Jersey, and Texas areas through dealerships located in Farmingdale, NY; Lebanon, NJ; and Bedford, TX. The three-rooftop dealership offers pre-owned sedans, SUVs, and trucks from major manufacturers such as Jeep, Chrysler, Dodge, Ram, Fiat, Honda, Acura, Toyota, Subaru, Chevrolet, and Land Rover.
Within one year, I’ve received more data from EFG than my entire 20 years in the industry working with other providers.
While the Novak team takes great pride in putting the needs of their customers first, dealership management found itself in a common predicament for dealers conducting business across state lines. Their F&I portfolios and procedures were inconsistent and misaligned across the three dealerships. Novak Motors was working with different F&I providers in each location. While F&I managers could assess performance at their own location, they could not make accurate comparisons with other locations, therefore F&I performance across the auto group was difficult to measure. According to dealer principal and owner Jim Calvert, it was impossible to look holistically across the group and assess true F&I performance metrics.
There were other challenges with supporting three different F&I product providers. Contract processes and procedures were unique to each provider, prompting inconsistencies in back-end business and accounting operations with Novak staff. Product details for each F&I product were different at each location, hampering sales and F&I team members from cross-pollinating across locations. Something as simple as backfilling staff during vacations and sick leave became challenging. Novak was also unable to provide group-wide training to its team members because they all spoke a different F&I language.
Calvert recognized this disparity while working on a strategic plan to survive 2020 and achieve long-term growth goals. The leadership team was unable to truly assess performance, areas for improvement, and opportunities to expand. Individual dealership data was available but the top-line information was missing. Consistent employee performance metrics were also inconsistent across stores.
While it meant ending long-held relationships, Calvert made the strategic decision to consolidate his F&I business with one provider that could support each location while giving his management team a more strategic view of the business. He also wanted a partner that could serve as an extension of his business. While Calvert was the expert when it came to his dealerships, he needed an expert in the F&I space that would bring added value in terms of training, product optimization, and recruiting expertise. He also needed the highest level of F&I products available to meet the Novak brand commitment and customer expectations.
New Approach Drives Revenue, VSC Penetration
While Calvert needed a consistent, across-the-board view of this company, he also recognized that each dealership was unique and had different customer and product demographics. A single F&I product menu was needed to provide teams at the three locations with a consistent platform that could also support their local needs.
Novak’s product menu now includes:
- Driver Forever Worry Free limited lifetime powertrain protection
- MAP Vehicle Service Contract
- Guaranteed Asset Protection
- Signature Finish Dent, Tire and Wheel, Windshield, and Roadside Assistance
- MVP Prepaid Maintenance
In addition to an F&I product menu, Novak leadership also implemented training across all F&I managers on how to sell the products and maximize the menu’s use within each location. With this across-the-board training, now all team members can speak the same language and support other locations if needed. In addition to the F&I product menu, Novak also implemented proprietary guided-discovery F&I producer training and deal-auditing processes to further elevate revenue generation across the company. Finally, Novak also implemented a new recruiting model, designed to create buy-in for its new F&I process and turn performance issues into production success.
Calvert reported that as a result of working with EFG Companies, his dealership has experienced a 15 percent increase in unit sales, a 24 percent increase in VSC penetration, and a 21 percent increase in PRU. In addition to these exceptional results, Calvert said, “Within one year, I’ve received more data from EFG than my entire 20 years in the industry working with other providers.” This data gives Calvert and his Novak team greater visibility into the auto group’s performance overall, enabling the group to make more strategic business decisions and achieve long-term goals. As dealerships exit a challenging 2020 – and enter into the unknowns of 2021 – having the right data can make the difference between proven success and questionable results.
Originally posted on Auto Dealer Today