Case Study: Franchise Dealership Group

Franchise Dealership Group Increases F&I Department Income by almost 200%, Continues to Reinvest in Growth

Background: P1’s CEO Robert Smith was initially contacted by the Chief Operating Officer of a multi-point, multi- franchise dealership group in Texas, one that is owned and operated by a second generation auto dealer. The COO reported that the group’s executive team was dissatisfied with the dealerships’ financial performance, in addition to a specific concern regarding the financial impact of the dealerships’ existing vehicle service contracts (VSC). The senior executive sought assistance from P1 in strengthening the group’s overall performance.

P1 Approach: With a clear focus on identifying customized solutions to improve the group’s results, Robert and the P1 Team worked collaboratively with the group’s executive team and staff, applying the P1 Approach to achieving top-performance outcomes.

1. Analysis: The P1 Team began by interviewing the executive team, spending time with sales, service, and parts department staff, observing existing operational processes and systems, reviewing compensation plans, and analyzing sales, F&I, and financial data. Key takeaways from the team’s analysis included an overall lack of robust systems and processes, undertrained staff, and an F&I department with an underperforming F&I product portfolio.

2. Opportunity Identification: After summarizing and presenting their findings, the P1 Team worked with executive leadership to review the findings and identify the existing operational gaps and specific opportunities for performance improvement. In addition to building a stronger F&I product portfolio, opportunities that emerged from analysis included revising staff pay to better incentive performance and a review of vending contracts to achieve fee reductions.

3. Solution Recommendation: In response to the opportunities identified, the P1 Team provided concrete recommendations for product and process improvements. The P1 Team also helped the dealership group’s executives set ambitious but realistic performance targets that aligned with the solutions they sought to implement. P1’s solutions also sought to strengthen and better integrate internal compliance with regulatory and legal requirements.

4. Execution: To ensure the dealership group saw immediate and long-lasting performance improvements, the P1 Team did much more than just hand over a report of recommendations and access to F&I products. In addition to building the dealerships’ a portfolio of best-in-class F&I products, Robert and his team provided hands-on training, aided the dealerships’ departmental leaders in restructuring compensation plans and revising organizational processes and systems, advised on strengthening hiring practices, and helped the executive team identify, educate, and motivate new sales and upper management talent. Additionally, P1 was trusted to lead the search and selection processes to replace C-Suite executives following their retirements.

Results:

The table below details how significantly the dealership group improved its key performance measures, reaping more than $9.5 million in additional annual income. Demonstrating solid financial performance year after year, the group has seized the opportunity to reinvest in upgrades to dealership’s facilities and evaluates future new and/or acquired opportunities on an ongoing basis.