Recon Will Sink You in 3Q

Recon Will Sink You in 3Q

If recon accountability is inaccurate, then profit expectations will not be realistic. And specific problems are sure to arise, which will kill sale margin.

Has anyone ever told you, “If the shoe fits, wear it?” 

If advice or counsel describes your situation, don’t foolishly kick the wisdom to the curb.

I bought a pair of Hoka running shoes the other day and, after trying them on for a test drive, I bought them. This shoe brand was not on my radar until someone mentioned how they might rest my feet more than the chain-store runners I usually wore. I was struck by how much better a shoe they were — leaps and bounds ahead of some other well-known runners I’d sworn by for years. Yes, this shoe fit — and I’m grateful I listened to that recommendation.

Simply recon alone can’t provide what will be essential to navigating the fluctuating automotive retail market coming at
us fast!

Regardless of how you get your used cars from acquisition to sale-ready, you can do better for your dealership. And who doesn’t want to do better? Who doesn’t wish to have their processes and procedures prepared for whatever the market throws our way?

Which is, recon itself can help you accomplish only so much. 

“There is always something that can be maximized,” said Dustin Jones, a former Nissan award-winning service advisor who is now a dealership performance consultant for our customers. 

The miss in so many dealerships is no one’s thinking about how strategic recon creates and pushes efficiency improvements and savings throughout the organization beyond recon.

Being stuck in an attitude or conclusion about the importance of reconditioning is like continuing to wear shoes that might have been fine. Because they’re still familiar, why try something different? 

If recon — or the lack of a predictable plan and method — isn’t strategic, your second quarter could get bumpy. Strategic T2L (time to line) means being intentional in what you do. Improved efficiencies, collaboration, job satisfaction and value from reconditioning operations arise from purposeful, mindful and deliberate planning and implementation — and ongoing accountability to time-to-line results.

To make these advantages measurable, two key metrics were developed. Average Days in Recon (ADR) is when a vehicle is worked out through inspection, mechanical, cosmetic and other staff “touch” points once it enters the recon process. ADR is a critical information metric, but it is incomplete for detailed time-cost analysis. T2L adds this detail. T2L measures time in days from acquisition through ADR to a vehicle’s sale-ready status. ADR is a complex metric — how long did Dave need to recondition the car’s mechanicals, how long did Carla need to detail and cosmetically recon it and how many hours did the glass replacement vendor take to replace the windshield? 

What is your “real” ADR? Be sure you count all ADR workflow steps. If you exclude any, do so only temporarily; not counting necessary steps promotes accountability problems.

If recon accountability is inaccurate, then profit expectations will not be realistic. And specific problems are sure to arise — parts delivery delays, increasing technician unapplied time, workflow delays and higher holding costs, which kill sale margin.

“When I was asked who’s accountable for our Average Days in Recon, the answer led to the most dramatic change in our reconditioning profitability,” said Matt Sodikoff, director of fixed operations at Steven Toyota in Harrisburg, Virginia.

Accountability translates into higher usage and faster ADR and T2L.

As the GM, how do you keep your recon speed-to-sale train on the track? The old test for average days in recon is to divide the number of cars through recon by the days in the month. If the answer you’re given is less than five days, ask for the data. If more than five, you should want to know why so you can fix that inefficiency.

You May Also Like

Dealership Cybersecurity: Why a Proactive Approach Matters

Being proactive about cybersecurity is much cheaper and less painful than suffering the consequences of a breach.

Spring break is a time for many families to relax from school and work, potentially even take that long overdue family vacation to the beach. Just imagine you’re relaxing under the warm sun; you can hear the ocean waves rolling and crashing. All your stress is washing away. Coming home from vacation is always bittersweet, but what if you approached your front door only to notice shards of glass scattered across the ground? The front door is slightly ajar and when you step inside, you’re met with a chaotic mess of all your belongings strewn across the room. This would be the start to a very bad day, weeks or even months. 

The 3 Questions Customers Need Answered

When we answer the three questions, we’re engaging the customer in a discussion, rather than “pitching a product.”

Ouch! Didn’t See That Comin’

A GM who expects healthy used car volume and profitability is one who tracks recon speed and efficiency.

Building a More Informed Recon Process

An informed process is an efficient process, which is key to driving turns in a slower market.

A Mentor’s Influence

There are so many aspects of the mentoring relationship that make it such a powerful tool for shaping our next generation leaders.

Other Posts

Rapid Recon Bridging Broadens Group Dealerships’ ‘Economies of Scale’

Bridging “brings new economies of scale” to group enterprises managing and operating multiple car dealerships, said John Canales, Senior Vice President of Sales for reconditioning software and services company Rapid Recon.

Create a Clear Path to Conversion

Aim to emulate the ideal showroom experience by translating it to the digital world.

How Car Subscriptions Can Alleviate Uncertainty in Used Car Inventories

With a steady flow of subscriptions from six to 12 months in length, subscription providers offer the ability to plan out dealers’ desired inventory months in advance.

Why Management Buy-In is Essential for Video

Here are some tips for how to create a video culture in your store.