In a recent article I posted, I discussed the five things car dealers can do today to ensure they stay on top during the next down market; and one of those five was to increase your lease portfolio. In the post I explained why increasing lease penetration was important, but I didn’t give any tips on how a dealer should or could go about doing this.
My bad. Though, thankfully, a few of you called me out on this. Of the notes I received on the lease topic, my favorite was this brief personal email:
Hey Steve! Nice article. Good advice. But telling me WHY to increase leasing is like telling me WHY I should exercise, eat right or get a good night’s sleep. I already know the WHY, now tell me the HOW damn you! (When you only give the WHY, you become just like all of those other a*******s who write for their own good and not for the dealers!)
This from a friend of over ten years…
Of course, he was correct in calling me out. Most of my posts contain not just the why you should do something, but also the what to do and the how to do it. For leasing, my last article did not. Here is where I make amends for that (and hopefully get an apology from my friend):
The First and Most Important Step to Doubling Your Lease Portfolio
Dealers with a healthy lease portfolio are likely already taking this first, important step. But for the average dealer I work with today, this is not happening. Increasing your lease penetration – just like growing your F&I revenue or increasing your customer pay ROs – starts with one important step that I call the “One Hundred Percent Step.”
Unless or until you take the One Hundred Percent Step, anything you do to grow your lease portfolio (like training your team on the benefits of writing more leases or even throwing out spiffs for short-term leases) will be short lived, because the changes will only be cosmetic. And, over time, cosmetic changes that are not supported by actions begin to fade away until we’re back to where we started.
You need more than cosmetic changes if you expect to permanently and continually grow your lease portfolio. For most dealers, the first and most important step is the One Hundred Percent Step.
In F&I, the One Hundred Percent Step means that in order to meaningfully increase your back-end grosses, you need to Present 100% of the Options, to 100% of the Customers, 100% of the Time.
Similarly, in Service, the One Hundred Percent Step means that in order to meaningfully increase the number and average amount of your customer pay ROs, you need to Complete an MPI 100% of the Time, Presenting 100% of the Options, to 100% of the Customers.
While you’ve probably already guessed what this means for leasing, allow me to go ahead and put that into writing.
The first step to meaningfully increase your lease penetration is to Present 100% of your Prospects, with 100% of the (viable) Lease Options, 100% of the Time.
Simple enough, right? (I do wish there was more to it, but there’s not.)
Not sure why I left it out of the last post – maybe I just wanted to catch heat from my friends.