Bogues? Credit-Criminals? Deadbeats? Get Real.

My monthly column usually doesn’t start with a rant. It also isn’t my style to pick a fight. I have been known a time or two to stand on a soapbox and express an opinion, but to my recollection, only one other time in 10 years have I written a column commenting on what a writer said in another magazine about the industry.

… Until now. This time I really have to. You see, this other writer is widely known. He is a self-proclaimed superstar. He drinks cognac that sells for $60 an ounce and is happy to tell you so. I do read his column every month, as I generally find it entertaining. On a number of items, we often agree. This month, however, he threw a glove in my face, and some of the readers who are both my consulting clients and his consulting clients know that I can’t let this one pass.

His opinion is that customers who have subprime credit “are bogues and there should be a stigma attached,” and that he is “paying a high price because they walked on their obligation.” Additionally, he feels that because some dealers have learned how to market and work with customers with subprime credit, “they don’t know how to sell to a citizen.”

He’s had one too many shots of his high-priced cognac. He isn’t paying $60 an ounce because some factory worker in Michigan lost their $25-an-hour job due to downsizing and couldn’t make ends meet. The word “elitist” comes to mind. (I can say all this because he obviously wouldn’t be caught dead reading a magazine dedicated to special finance!)

Here is what I know and am quite certain of, indeed. If you approach SF customers like second-class customers, with that expectation, that attitude, you will fail. I learned this the hard way 19 years ago. It certainly applies today—especially today when credit scores are dropping and more and more prime credit customers are suddenly finding themselves in a pickle.

It is also obvious he has never owned a dealership. You see, 19 years ago when I started SF at my first Buick store, I had great employees. We had an internal referral system, which accounted for many sales every month. We rewarded employees for steering their friends and family to our dealership for their business. It was easy. Our employees were proud of where they worked, not to mention they got paid for it. Then, we ramped up for SF. The finance company that got me into the business then called them “bogues.” It was a term their trainer threw around throughout my store. Out of fun, on our first newspaper ads we even directed customers to “ask for Mr. Bogue.”

Guess what? Many of our own employees had subprime credit. They were good people. They worked hard. They had limited budgets and limited ability to earn good credit. They were offended. Our referral system stopped dead. It took months, maybe years, to earn back their respect.

Yesterday, I spent three hours on the phone with a dealer-client of mine who I consider a good friend. He was beside himself fearing that, in this economy, he was going to lose his stores of over 25 years, his home, his nest-egg—everything he has worked hard to build. He was actually talking about potential bankruptcy. He has employed hundreds of people, and he has been a stellar part of his community. His business is teetering on the brink, just as hundreds, maybe thousands, of dealers’ businesses are. If he were to fail, as hundreds have this year already, does that make him and his family “bogues” too? Hell, no!

If you really want to excel in SF, you have to wipe the elitists out of your operation. People with subprime credit have choices, even in this tough market. They have pride and they have feelings. I have always said that if you treat a SF prospect with respect and empathy, you will make a customer because so many of your brethren choose not to do so. The elite (not elitist) SF and buy here pay here dealers and managers having been doing this for years, which is one reason they have been so successful. Wipe the attitude and words out of your vocabulary and your results will improve immediately. I guarantee it.

To pooh-pooh special finance is nuts. Take away SF and/or BHPH from many stores today and they are out of business. Indeed, that is what has already happened to some dealerships. SF is certainly more challenging than it was 12 months ago, but it isn’t down for the count and neither are your customers.

Finally, as long as I am ranting – to my esteemed colleague – if you fear that focusing on the SF customer ruins your ability to sell a prime credit customer, I know a SF training school coming up that can fix that! With that, I climb back down from my soapbox and take a sip of my Coke Zero.

Until next year,
Happy Holidays!