Designing a Better Sales Worksheet

As part of our mission to uncover the hidden gold mine that is leasing, we recently conducted an interview to share.

Rick Johnston, the Founder and VP of Autovance, sat down with Brayden Lisecki, Autovance Account Manager, to discuss the current state of the automotive sales worksheet and what Autovance is doing to drive change. Have a read, or watch the video version, and let us know what YOU think about worksheets in today’s dealership.

Note: this transcript has been lightly edited for clarity.

Please introduce yourself and provide a quick backstory.

Rick Johnston, I am the Vice President of Autovance Technologies, I started in the car business in 1999 and sold vehicles for Honda West in Calgary for about 7 years and then a couple more dealerships. Eventually went on to work for Quorum Information Systems, a DMS, and travelled North America taught dealers how to use their system for a couple of years and then moved on to sort of a sweeper role I used to call it. I kind of did a whole bunch of everything, sales, marketing, development. I did that for 5 or 6 years and then started Autovance. I built Autovance up for 7 years and eventually exited to Quorum last year, September of last year and so now I’m back on as a Senior Manager with Quorum and running Autovance.

Starting back with your time in the dealership, what was it that first made you want to print your own worksheet?

Rick: I don’t know if it’s that I wanted to print my own worksheet, but I remember that I had a lot of success in selling accessories and one of the things that Honda West did is they gave us this little booklet. It had a picture of all the accessories with the price, and I used to flip to the Civic page and turn it around and show the customer and I would literally walk through. It was a really interactive selection process with the customer, and I sold tons of accessories, and the customers liked it. So I think that maybe subconsciously maybe not consciously I learned from that experience that customers enjoyed that engaged buying process and so as I went on it felt that was natural.

How did the first version of the worksheet actually come to be?

Rick: I remember I had actually done a presentation for a dealer group in Florida or something to that effect and they asked me how they could get finance and lease payments to print on the same paper and they wanted a variety of down payments and terms. It was just something we couldn’t do in the product I was demoing them, and it didn’t seem like it would be that hard to do. I had so many questions over the years while I was at Quorum about “can we customize the worksheet?” and I remember Davis in Lethbridge wanted their own worksheet customized for years and I couldn’t deliver it for them. So I set out in excel to not build necessarily a program to do it but to build like some sheet of paper, I don’t know, I don’t even really know. All I really wanted to do was make sure I could calculate finance and lease payments inside of this worksheet. So that’s kind of how the first iteration of it started, and I had this very early prototype that I had kind of been picking at and I went to have dinner with a friend of mine in Calgary, my wife and I did, and I showed it to him and at the time he was the used car manager at Honda West and he said “aw this is killer man, but if you could make it so it did this for Honda, like let us pick the Honda car and it had the right interest rates and residuals and then printed that sheet, aw we’d buy this from you”. So then I was like “Ooh”. So I had sort of the secondary piece, which was the worksheet, which to me was the most important piece, and then I had to build the inputs or build the software on top of that in order for them to be able to do that. So that’s kind of what I set out on a mission to do and over the course of maybe six months and 3000 google searches, we did that so…

What did the first worksheet look like?

Rick: Well it was exactly that question I got asked, it was three terms, three down payments, finance, and lease, and it was just both (boom boom). It was just like two things, it was pretty fixed, it did one thing. I mean you could change the term and you could change the down payments but it was just one model of presenting payments and it was 18 payments.

So, I remember the first video I did to tell dealers about it, in the video I can almost hear myself because I read the script 1000 times right. When you go to print the worksheet, you get three terms, three down payments for finance and three terms three down payments for lease and that was how it looked.

With all the hype around digital retailing, why are we still printing worksheets?

Rick: Well I think that like every process if we think about how many people buy their TV from Amazon, and then how many people buy their TV from Costco, I still think the better percentage of people are buying their TV from Costco. And so as much as I definitely want to be on the leading edge of moving to online retailing, I think we can’t forget about the fact that traditional retailing still occurs and it is still 90+ percent of the transactions that take place and so we need to try and correct that model as best we can today. I think so many people are ahead of themselves trying to solve tomorrow’s problems, and forgetting about today’s and that’s why I think the worksheet is so important. Because I still think 90+ percent of the transactions occur in the store.

Were their ideas that you rejected in developing the worksheet?

Rick: Not only has there been things I have rejected, so my default and anyone who’s been a long time customer of Autovance will know, my default answer is “No we’re not doing that”. I really believe in this model of kind of no first before I say Yes, and the reason for that is if someone asks for a feature, and I’ll give you an example: Tom Lin at Henley Honda asked me for accessories in Autovance in the Matrix, and I was like “No, it’s not happening.” and then a week later Tom phoned me back and said “Bro, you’ve got to do accessories” and I was like “No, I can’t do it Tom it’s too much work, I can’t do it.” and my thinking is, is that if I say no and they don’t keep pushing, it really wasn’t that important. And so software as a result of not saying no initially tends to become this sort of cesspool of feature requests that are so hard to learn, doesn’t make sense to new users, because too many people just say yes along the way. So anyway, the third call from Tom was not that nice, it was two weeks later and he was like: “Bro, if you want to sell this thing it has to have accessories!” and I knew at that point I had to do accessories and so I say no to lots of features, some that get lots of requests, but at the end of the day if it’s really that important enough people will continue to ask for it or the people that ask for it will put enough pressure on us that we have to do it, or we have to make a really difficult decision and that happens sometimes too.

How did the worksheet develop into what it is today, with the default being six-and-six?

Rick: So much the same as accessories, I made a trip out to Toronto and met with Tom at Henley Honda and Alex Digenis, it was one of the first things they said: “Look this is cool, the nine-and-nine, and the ability to print just finance or just lease, it would be better for us if we had less focus on a whole bunch of the little numbers like residual, due-upon signing, and more focus just on big payments and it was actually sort of in working with those guys that we came up with the six-and-six which is three-finance, three-lease, one down, and another down.and the idea being big focus on payment and a nice secondary set of payments there so when the customer says “Oh geez I wanted to be at this much” we can use that down as a guide to say well you’re probably going to need three or four thousand down right. So that was how the six-and-six came to be, and you know we did the twelve-and-twelve for another dealer, and then really it wasn’t very long before we needed to come up with a way to just give them the ability to print whatever payments they wanted to show the customer.

I say this often but desking tools are built by most software companies as an afterthought to some other product. So the desking tool might be to manage the rates, and the residuals, and the rebates, and all of the things that a desking tool needs to be able to do. Then somebody went “oh by the way it has to print” and then they go and they collect either a little bit of information like just one payment and they spit it out on a worksheet, or they collect all of the information and they produce this worksheet that has like a gazillion payment options on it right. So one of the things that’s unique at Autovance is that we didn’t think about the software, the desking tool first, and then built the worksheet. We built a worksheet and then we tied the software into the worksheet, and so our focus has always been the worksheet.

Here at Autovance we love leasing, and so what role does the worksheet play in leasing more vehicles?

Rick: Pretty much every desking tool can generate a lease payment but it has to be told to. I think especially in the domestic world we’ve fallen into a habit of like 98.5 percent, or even I mean 3 or 4 years ago 100% of our deals were all finance because manufacturer’s weren’t backing leasing. MAybe it was longer than that, maybe it was 10 years now, but time flies. So the systems then got built to generate a finance payment and then if you told it you instead wanted a lease payment then it would give you that instead of a finance payment. I think with Autovance, one of the reasons we were able to help dealers lease more vehicles, is that it’s not something you have to do it, it just intuitively “does” the lease payment alongside the finance payment and gives you the flexibility to produce the worksheet that gives the customer three or four payment options, three finance, and a lease, and it happens in like less than two minutes, a minute and a half, depends how good you are. It kind of by default, leasing is not an afterthought with Autovance, it’s part of the deal.

How have you encouraged dealers to make the leap to promote leasing?

Rick: I mean I think you pick your battles a little bit, I mean sometimes you don’t. I always challenge everybody I mean I don’t think I have become the person I am today, Autovance hasn’t become the company it is, I mean I worked for some really progressive dealers that are incredibly successful and they didn’t get to where they are with the rejection of new ideas and so I am always open to adopting new ideas and so I challenge dealers. I get the fear, and the fear is well my business office isn’t going to get the revenue they normally get out of the finance contract because we don’t have as much net to finance. Everything goes into the front half of the lease and so the payment inflates higher when you throw three or four thousand of aftermarket in there, right. But I think the same argument can be made for the fact that even though there is maybe not as much per vehicle F&I on a lease, there’s more leases and more transactions. We put people into a buying cycle, and not only are we trying to retain them with the existing manufacturer, if we have a GM buyer we are keeping them into the GM family on a lease, really really high percentage they stay on a GM. We also have a really good chance at retaining their business at a set time, so they’re going to come back and do another transaction in three (years).

You could actually think about some of that money you’re losing on F&I, you’re saving in marketing spend to try and pull those customers back in, that’s one way to look at it. I think another argument I make a lot is when you lease a vehicle, boy it’s hard to think you’re not going to follow the service schedule right to a T, there’s a chance you might want to return that car, you better have done the maintenance. There’s lots of money to be made on leasing it just doesn’t sometimes appear the same way, it doesn’t show the same way.

Leasing has a bad rap in the market because it was bad for a long time. I mean, leasing to consumers represented a really bad way to buy a vehicle for a long time, and then it came back and it’s better today than it ever has been and if you don’t show a customer a lease payment, unless you’re in the luxury or import business, you have a less than 3 or 4 percent chance they are walking in asking you to lease that car or truck for that matter.

That’s a wrap!

Thanks for reading the Autovance blog, if you’re interested in learning more about what we are doing to help dealers, book a demo!

Let us know what you think in the comments below and connect with us on social media for more!

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