NABD’s Shilson: How to Get Your Best Customers Back


At Issue:

Many BHPH oper­a­tors reported lower unit sales ver­sus the same period last year. Two impor­tant ques­tions: “Why?” and “What can be done to improve unit sales dur­ing the remain­der of the year?”

The Back­story:

The upcom­ing NABD East Coast BHPH Con­fer­ence in New Orleans on Novem­ber 3–5 will focus on how to find and keep our best cus­tomers. This is a great time to net­work and make each other suc­cess­ful. Good luck dur­ing the remain­der of 2013 and let’s make 2014 our best year ever!

First Half 2013 Analy­sis – What Caused the Decline?

1.  Tax refunds were slow to arrive and some­what smaller when they did! Some never arrived at all.

2.  Addi­tional pay­roll with­hold­ing reduced low-income earn­ers ($30,000 — $50,000 per annum) take-home pay by $600 to $1,000. This really hurt their liquidity!

3.  Gas and food prices increased sharply com­pared with 2012, con­sum­ing more of each customer’s dis­pos­able income.

4.  The US econ­omy has rebounded some­what; how­ever, over­time hours and work­forces have been reduced.

5.  The sub­prime auto finance indus­try has been extremely aggres­sive in buy­ing deals from deep sub­prime cus­tomers with bureau scores as low as 460! Worse yet, these cus­tomers are being sold new and late-model vehi­cles with long repay­ment terms and very large monthly pay­ments, which they can’t afford.

6.  Sub­prime cus­tomers are encour­aged to “give back” their exist­ing vehi­cles by sub­prime finance com­pa­nies, and to pur­chase the vehi­cles described in 5 above. This has resulted in more vol­un­tary repos­ses­sions for BHPH operators.

Ken Shil­son Sug­gests Dealer ‘Do’s and Don’ts’:

  • Oper­a­tors should not change their busi­ness mod­els by putting too lit­tle cus­tomer into too much vehi­cle. This is a “road map for fail­ure” as doc­u­mented by more than $11 bil­lion in con­tracts I have analyzed.
  • Oper­a­tors must not sit back and wait for the mar­ket to return. If you do noth­ing, you can­not expect dif­fer­ent results.
  • The answer is to rebuild a stronger bond with their BHPH cus­tomers. As I sur­vey the oper­a­tors who are main­tain­ing or grow­ing mar­ket share, I note one com­mon trait – they are proac­tive.

What BHPH Dealer Man­agers Should Do Today:

  • Place a ‘wel­come’ tele­phone call shortly after each sale, and ask for referrals.
  • Hold cus­tomer appre­ci­a­tion events.
  • Strengthen war­ranty or extended service-contract programs.
  • Offer free main­te­nance ser­vices to good pay­ing customers.
  • Main­tain more-positive con­tact with cus­tomers dur­ing the entire term of their contracts.

Ken Shil­son, CPA, is founder and pres­i­dent of the NABD/Subprime Ana­lyt­ics. Read the full arti­cle here. For more infor­ma­tion on upcom­ing NABD events visit