Posts Tagged liability exposure
Award Winning Dealerships
Today’s automobile dealership is a complex business. Management faces daunting challenges to operate sales, finance, fixed assets, human resources, inventory and regulatory requirements successfully. Smart executives take advantage of an ever-increasing variety of products and services made available to them by suppliers specializing in specific areas of expertise such as sales training, finance, human resources, security, loss prevention, insurance, and specialty equipment.
Even with all of the energy now being devoted to keeping a dealership running smoothly there are still some areas of day to day operations for which the appropriate solution, product or consultant has not yet been found. One such area is the use and control of dealer demo tags, a statutory requirement in most states, and long regarded by most dealers as a problem without any good solution.
Efforts have been made over the years by individual dealers to govern demo tags in a variety of manners ranging from:
Furnishing every salesperson with an never ending supply of tags in order to ensure that the unavailability of a demo tag does not compromise the continuity of the communication established between a salesperson and their customer. This solution results in the dealership owning far more demo tags than necessary. The dealer incurs higher acquisition and insurance costs, greater management requirements and added liability exposure. These are issues that managers as well as financial and insurance consultants find troublesome.Requiring salespeople to sign demo tags out and in, which, while reducing the overall number of tags required (a plus for managers, financial and insurance people) interferes with the flow of the sale and requires the time and attention of an employee. Signing tags out and in takes time that should and could be used more productively. Further, this method, as many dealers are finding out when doing dealer tag inventory checks, is not a foolproof system for controlling use and access to dealer tags.
Some dealers believe that by charging a large deposit to the salesperson the tag will not be abused or lost. However, a large deposit virtually insures that a prompt lost or theft report, which limits the dealer’s liability, is less likely to be made. Until a report is made, the liability associated with that demo tag remains with the dealer and not the person using or possessing the tag. Prompt reporting of lost or stolen tags is a very big issue with insurance providers.
While the problem of demo tag control appears intractable, there are solutions. The solutions take the form of dealer demo tag control systems and there are a number of providers in the market today.
One such provider is M-Tech, a company that is specializing in dealer demo tag control systems. M-Tech manufactures and markets the Securitag System. This “Smart Box” has been solving demo tag access control problems for nearly twenty years.
M-Tech’s biggest supporters are the dealers, managers and salespeople using the product. It is gratifying to be given such a vote of confidence.
Access Control Systems (ACS) and Your Dealership
Posted by Bernard Boulé in Opinion, WM 30 on April 1st, 2009
Reading through “Trade Publications” as I do on a regular basis I cannot help but think that the Automobile Dealership Business (ADB) has become technologically as complex and consequently as acronym ridden as the fields of engineering, aviation or the military. In which, you need to know the meanings of what seems like hundreds of Upper Case Letter Groupings (UCLG) in order to understand what is being discussed in any particular article. To make matters worse, it seems that anyone can add to the acronym body at anytime without warning or prior notification, so I was not surprised when I discovered that the Field Of Endeavor (FOE) in which I have been working for the past 20 years, the technology of Access Control Systems, has been “acronymized” as (ACS) technology.
By now, you are beginning to wonder what any of this has to do with you and your dealership’s day-to-day operations and the answer is simple:
- Increased Profitability
- Improved Security
- Streamlined Sales
- Increased Management Efficiency
- Reduced Overhead
- Lower Liability Exposure and perhaps even Lower Insurance Costs.
All of the above benefits can be realized through the utilization of ACS Technology. You may be wondering how ACS technology even fits into the dealership environment. Your question probably is: ‘ How does this apply to me and to my dealership?’ In response to this question I would say every dealership, regardless of its size or location needs to employ some type or types of ACS to limit access to everything from the shop supplies to the cash drawer. After all, you wouldn’t leave your cash drawer open exposing its contents to all of your employees and customers would you? So why would you leave your other assets like specialty tools, inventory, inventory keys, dealer tags or office supplies exposed? They are all valuable assets requiring some type of access control to make certain that only the persons authorized to have access to them actually have that access.
You probably already have some type of Access Control Systems at work in your dealership such as cash registers, locked tool rooms or secure office supply storage. You may even have a fenced and gated lot or lots, which limits access to your inventory. This is rudimentary ACS Technology working for you. Some of this may be manually controlled in which case it would probably require the time and attention of a manager or a specifically assigned employee and likely does not produce accurate records of access usage. Some may be automated, eliminating the need for direct supervision, and they may produce reliable access usage reports. The latter is the direction ACS Technology is heading today. Dealerships should be taking advantage of this emerging technology to control access to assets such as: inventory keys and dealer demo tags. Two areas of constant concern to dealers and managers everywhere. There are good, proven, reliable and affordable ACS specially designed to deal with these concerns.
With technology advancing at such a rapid pace now is the best time to jump in and find out exactly how ACS technology can benefit your dealership.
Who Needs Dealer Plate Control?
Posted by Bernard Boulé in Opinion on March 17th, 2009
I’ve just returned from what you might call a whirlwind tour of the Eastern Seaboard of the U.S. A trip from the Canadian border to the southern part of Florida and back in 10 days. During that brief time I was able to visit with some of the automobile dealers along my route and I certainly saw the facilities of hundreds more. Some very impressive installations to be sure!
On a trip like this by car, in my case a very nice 4X4 crew cab pick-up truck (I prefer trucks), one has a lot of time to think. I spent that driving time thinking about you dealers and your need for dealer demo plate control. I looked at the beautiful stores knowing that they were at risk with every dealer demo plate that was out on the road because as in a line paraphrased from an insurance industry publication, “A demo plate represents the entire assets of the dealership when it is on the road.” I was also comforted by seeing many whose names were very familiar to me knowing that they were using a demo plate control system that significantly reduced their liability exposure. I wondered how I could convince each and every one of you, large and small, that you need to have some form of demo plate control for your own protection. Certainly, if you all decided to purchase the product that my company manufactures it would be very good for my business, but in the overall scheme of things if every dealership had some form of demo plate security and control system it would be even better for the automobile retail business.
Did you know that 70% of all money paid out by the insurers of automobile dealerships is directly related to claims arising from the use of demos? If something could be done to reduce the amount of money paid out by insurers, costs would surely come down as would risk. Well, something can be done. Every dealership, regardless of size, or location, regardless of state requirement or regulation, needs to implement some form of reliable, proven and effective dealer plate security and control system. There should be industry standards for such equipment. Industry experts should be working with state and national dealer associations and insurance industry consultants should establish these standards. With these standards in place, dealers could purchase dealer plate control systems and equipment with confidence, knowing that the system met at least minimum security and control requirements.
I’m ready to get to work on this to improve security and reduce risk all across the nation. It’s not a small job and will doubtless require a great deal of time and effort but I’m convinced that the result will be worth the effort. Dealers will be able to profit from reduced costs and improved efficiency. I fear it will take a long time to get the work of creating industry standards done so I would suggest that you not put off securing your plates while you wait for the standards to be established. Every dealer already knows what is required and with a little effort can verify the capabilities of the few offerings presently on the market. I would recommend that you check them all or seek the endorsement of a dealer you know who is using a product you are interested in. Who needs dealer demo plate control? You all do.
Keys to a More Successful Dealership
Posted by Bernard Boulé in How To, Opinion on March 11th, 2009
How much longer will you continue to rely on the same security practices and procedures you used 15, 20 or more years ago to ensure the safety and security of your dealership? These measures, which at that time were probably sufficient, are likely to be seriously inadequate in today’s technologically advanced environment. Every dealership’s management realizes the need for various types of security equipment, practices and procedures in the dealership.
However, all security is not created equal. There are good security systems, practices and procedures and there are bad security measures. The good ones result in a smoother running, more productive, efficient, safe and secure place for your people to work. The bad ones only provide the appearance of the real thing while leaving your dealership exposed to an untold variety of potential hazards. The real danger is that you are relying on these bad security systems, practices and procedures to protect your business. A task they may be unable to perform.
Management has many responsibilities; one of them is to make certain that the assets of the business are properly protected. It’s up to you to test your current security systems to find out if they are actually working. Check each system to make sure it is fully functional and that it still meets your requirements. Review practices and procedures and if necessary make changes to bring them up to date. Often good security measures fail to meet objectives simply because your personnel have been allowed to settle into a comfortable routine. Routine is the enemy of security. It is your responsibility to make sure your personnel are aware of the importance of security at the dealership at all times.
One of the next things you can do is examine the method you use to manage your dealer demo plates. Dealer plates are one of your strongest selling tools and as such they should be readily available to personnel who need them. They should also be one of the main security concerns in any dealership. A dealer plate is more than just a piece of metal you get from the State. It represents the entire assets of your dealership when it is on the road. Should you trust everyone in your dealership with access to your demo plates 24 hours a day 7 days a week?
Does your current method of demo plate management provide you with the access control and security you require while keeping the number to demo plates at a minimum?
Does it allow you to follow the number of demonstrations given by your sales staff?
Does it keep sales persons from spending valuable time searching for lost or missing dealer plates?
Does it prevent them borrowing demo plates from other salespersons?
If the answer to these questions is NO then you need to change your current system.
A good dealer plate control system makes plates available to sales persons whenever they need them. They can stay focused on selling. This allows them to maintain the continuity of their presentation. A good presentation equals more sales. More sales equal larger profits. Remember sales people are trained to make sales. Their training probably does not include the course on ‘how to care for a dealer plate’. There are several dealer plate control systems available on the market today. Take the time to evaluate them before you make your selection and remember you are looking for a system that provides you with both security and access control. Function, not cost, should be the motivating factor in your selection.
Once you have checked everything and removed bad systems and procedures that didn’t provide your business with an adequate level of security and you have implemented good security systems, practices and procedures designed to handle the security requirements of your dealership today, you should be all set to move forward confidently. Some training will doubtless be required and any good security system will expose those most in need of this training. It is possible that it will also reveal the presence of persons on your staff who do not, or cannot, respect the rules and regulations in place. Under the previous systems and procedures it may have been possible for these individuals to remain unnoticed while taking advantage of your faith and trust. With a good system in place these individuals cannot remain invisible. It is security’s job to expose these problems. It is management’s job to decide how to handle the situations.
Good security systems, practices and procedures work invisibly in the foreground. If they do their job properly, no one even knows they are there. While the cost of good security is not insignificant, the cost of bad security or no security has the potential to be unlimited. The ultimate goal of every dealership is to sustain growth and operate profitably. The return on your investment in good security is assured as your dealership profits from increased sales by a more confident, efficient, focused and honest sales force working in a stable secure environment benefiting from lower overhead and reduced liability exposure. These are the keys to a more successful dealership.
Custom Dealership Solution for Bronco Motors
The friendly People at M-Tech worked with me to create a dealer plate control system matched to my requirements. I will now be able to operate my entire operation, 3 locations, 2 franchises, using half the number of dealer plates I would have otherwise needed. My liability risk is reduced, my overhead is reduced, for the first time in years I know where my demo plates are, and my insurance costs may even be lower. The ‘Securitag System’ works for me!
Grant Petersen, President & CEO, Bronco Motors, Boise, ID
Based on the design of the SS-120, the Securitag SS-120RX2 was designed in consultation with Boise, ID dealer Grant Petersen of Bronco Motors. It was designed to meet the demo plate availability, control and security requirements of modern dealerships. The Securitag SS-120RX2 incorporates the proven, patented Securitag system into a durable brushed stainless steel case. The upper portion can rotate to provide easy access to any of the 8 demo plates it contains. This unique feature means the SS120RX2 needs very little floor space. Easily meeting the demo plate requirements of a sales force of up to 24 salespersons.
Seen here installed close to a glass office partition. Minimum floor space is needed.
Convenient and secure, the compact Securitag SS-120RX2 pictured here with the dynamic, Boise, ID dealer Grant Petersen Jr.
The Securitag SS-120RX2 provides a secure convenient location for your demo plates. Each plate is locked behind a clear polycarbonate door making the plate visible. The high security, American made, tubular key locks which are assembled to our strict specifications can be keyed alike or individually as required by our customers needs.
Each person requiring access to dealer demo plates is provided with a numbered key. These numbered keys are assigned to each person requiring access to the SS-120RX2.
We recommend that you take a security deposit from them or actually sell the keys to them. In either case, keep a record of the users name and their key number. Demo plates are accessed by using the numbered keys. Once the demo plate is accessed and removed from the SS-120RX2 the users’ key is trapped by the SS-120RX2 and cannot be removed until the plate is replaced and the door closed.
This makes each user accountable at all times as management can immediately identify the user who has the demo plate.
Flexible Solutions for Dealer Plate Control
Multiple installation options provide a total solution.
Furnishing every salesperson with an never ending supply of tags in order to ensure that the unavailability of a dealer plate does not compromise the continuity of the communication established between a salesperson and their customer. This solution results in the dealership owning far more dealer plates than necessary. The dealer incurs higher acquisition and insurance costs, greater management requirements and added liability exposure. These are issues that managers as well as financial and insurance consultants find troublesome. Securitag eliminates all these problems.
Securitag Unit also available as WM-30
Requiring salespeople to sign dealer plates out and in, which, while reducing the overall number of tags required (a plus for managers, financial and insurance people) interferes with the flow of the sale and requires the time and attention of an employee. Signing tags out and in takes time that should and could be used more productively. Further, this method, as many dealers are finding out when doing dealer plate inventory checks, is not a foolproof system for controlling use and access to dealer plates. Securitag eliminates all these problems.
Charging a large deposit virtually insures that a prompt lost or theft report, which limits the dealer’s liability, is less likely to be made. Until a report is made, the liability associated with that dealer plate remains with the dealer and not the person using or possessing the tag. Prompt reporting of lost or stolen tags is a very big issue with insurance providers. Securitag eliminates all these problems.
The Securitag System has been solving dealer plate access control problems for over twenty years. 2,500 North American dealers agree – Securitag is the best way to control dealer plates.
How Many Dealer Plates Do I Really Need?
Posted by Bernard Boulé in How To on March 7th, 2009
So you’ve finally decided that you need to do something about those dealer demo plates. Now all you have to do is decide what you need to do. There are several things you can and should do.
- You need to determine how many demo plates you really need to operate your store efficiently.
- You need to make demo plates readily available to personnel who need them when they need them.
- You have to know where your demo plates are and who has them.
- You need to know if any are lost, stolen or misappropriated.
- You need to take control of your demo plates.
Let’s take a look at determining how many demo plates you really need to operate your store efficiently. There are at least two basic categories of demo plates in most dealerships; there are those that are affixed to vehicles used by certain employees of the dealership and there are those used for doing demo rides. For the most part, the demo plates that are affixed to vehicles do not present a problem. Their location and disposition are known. As for the plates used for demo rides, most dealerships, for one reason or another have decided that they need at least one plate for each salesperson to use. These are the plates that are most likely to be a control risk factor. There are several reasons for this:
First of all, the plates are not permanently affixed to any vehicle so their disposition is not known; they may be in a salesperson’s desk drawer or on a vehicle out on a demo drive or on a vehicle that doesn’t even belong to the dealer on business that has nothing to do with the dealership. The possibilities are endless and so is the risk potential. The larger the number of plates you have in this category the greater your liability exposure.
To find out how many demo plates you need at your dealership for demo purposes you have to look at your sales records. From this information you should be able to determine how many demo rides your sales team gave in the busiest month in the last twelve-month period. Once you have determined the number of demo rides your team has given, you can multiply that number by the number of hours duration of an average demo ride. Next, divide the hours of demo time by the number of sales persons on your team, and you get the number of hours in the period that each member of your team actually needs a demo plate.
Here is the equation where:
- dr = monthly demo rides
- hr = avg hours per demo ride
- sp = salespersons
- hw = avg monthly hours worked per salesperson
- pr = percentage of hours worked that dealer plates are required
I know that such mathematical calculations cannot exactly represent the real world environment. If I were to suggest that a member of your team needed a demo plate 30% of the time he or she was on duty, would you consider that to be a fair assessment? It is according to the above equation. If so, you actually only need one dealer plate for every three salespersons.
Now to make that work, all dealer plates would have to be made available to all the members of the team all the time. That is where a good dealer plate control system comes into play, making all your dealer plates available to your sales team all the time while keeping them safe, secure and in a known location so their disposition is known when they are not in use.
Next article, I’ll cover how to keep plates available so your team always has instant access to a plate when they need one.
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