Tag: PEN

Why I Freelance

Recently, Linked-In reminded me that I have been an independent consultant for fifteen years.  Thanks to all who called and wrote with congratulations.  In fact, I have been either consulting, at a startup (or consulting for a startup) since business school.

I used “freelance” in the title because this word is in need of some rehabilitation.  There was a bitter post on Linked-In about how “freelance photographer” means “unemployed guy with a camera.”  I get that all the time.  I spoke with a recruiter recently who was startled to learn this is really what I do, and not just a placeholder on my resume.

According to McKinsey, there are 49 million of us “free agents,” equal in number to those who do it out of necessity.

I started consulting for a Big Six firm, back when there were six, and I noticed that our projects were always a big deal for the client staff.  They felt lucky to be on the client’s once-in-a-lifetime project.  We consultants, meanwhile, were continuously assigned to the good projects, client after client.  It becomes addictive.

If I were recruiting here, I would recount some groovy projects and then pitch the glamour and excitement – but I have a much more practical argument.  When you work for a long time at one company, you accrue specific knowledge about its organization, procedures, and history.  If you ever leave that company, the value of this knowledge falls to zero.

I was engaged by GMAC just before the crash.  Suddenly, my entire department was shuttered – desks empty, lights out.  It was a disaster for the faithful, lifetime employees.  Some were out of work for a year.  The consultants, however, rapidly found new jobs.

Job security no longer exists, and the good wages, generous benefits and secure retirement that used to be guaranteed with full-time employment are in decline or have disappeared.

It is a little scary not knowing where I’ll be working next year.  I won’t deny that.  My point about GMAC is that the people who thought they had job security were mistaken – and they were the ones most at risk.

Tom Peters writes that job security does not come from allegiance to your company.  It comes from having skills and accomplishments, plus a network of people who know about your skills and accomplishments.  This is where the exciting projects come in.  When I call around looking for work, I want people to recognize me as “the guy who created Provider Exchange Network,” or something like that.

Changing jobs enhances your value by exposing you to new people, technology, and business models.  This has certainly been true for me.  F&I is a small community, but it includes dealer groups, software companies, and finance sources.  This is great because it allows me to move around without violating any non-competes.

This article in Harvard Business Review echoes Peters’ observation about job security.  The author is a B-school prof, who writes that the gig economy is the future.  Focus on finding work, she says, not a job. I am lucky that this attitude (and related skills) were drilled into me at Coopers.   In case you’re inspired to quit your day job, I’ll follow up with a “how to” article.

Stop Using Combo Products

I have had a hand in designing a few menu systems over the years, and I have always disliked combo products.  You know what I mean: the VSA form, plus maintenance and PDR, on which Marketing has found an extra square inch to offer road hazard.

Menu people hate combo products because the whole point of menu selling is for the F&I Manager to combine products into menu columns, not the combinations defined by the provider’s form.  What if she wants to sell the factory’s VSA, but her own choice of ancillary products?

One cavil I sometimes hear is the definition of “a product,” but this is straightforward.  If it can be sold separately, like key protection, then it’s a product.  If it always rides on another contract, like car rental, then it’s not.

What I try to tell my menu clients (and reinforce with my API clients) is this:

  • The unit of work for presentation is the product
  • The unit of work for contracting is the form

The correct data structure thus has discrete products at the top level, then coverages with their rates, and form codes at the bottom.  Obviously, you can have different forms based on coverage, and you can have the same form for multiple products.  Then, in the contracting phase, you collect the products onto the forms as indicated.

combo-productsCombo products persist because providers legitimately want to reduce the number of forms they manage.  The two-phase approach solves this.  Also, there are old-timers who design products based on the form.  I have even seen F&I shops where the completed contract form is used as a selling tool.

The package discount is the only serious challenge to the menu system.  A workaround here is to include a phantom product with no display and a negative price – although that may be as much work as developing an explicit feature.  Of course, if the manager chooses to discount a package other than one subsidized by a provider, then that discount is her responsibility.

I’ll close with an exception to the rule or, rather, a refinement.  Menu systems are compromised when we mistake forms for products.  On the other hand, there is a practical limit (six) to the number of products offered on a menu.  So, I can see the logic in a product that combines dent, coatings, windshield, and road hazard – especially PDR and windshield, if you think about how the services are delivered.

In this case, we are not merely combining products based on a form.  These products hang together in the same semantic class, appearance protection, and may indeed use separate forms.

Farewell to PEN

Clients are often surprised when I say, “my work here is finished.”  The consultant’s handbook says you should hang around until they’re sick and tired of you.  I feel it is better, when retained for a specific task – like a startup – to do the job in good style and then move on.

So it is with Provider Exchange Network.  The business model is established, the software is up and patented, and the staff are fluent in their new roles.  It has been my pleasure to work with the talented people at PEN, and I wish them all the best.

The Portal Puzzle

Many Provider Exchange Network customers have dealer-access “portal” sites.  These sites support electronic rating, contracting, and a variety of other functions.  Providers tell us they’re happy with this approach, and what they really want is DMS integration.  We end up referring these customers to 3PA and RCI.  Along the way, we try to make the case for PEN.

As I wrote recently in P&A Magazine, the purpose of PEN is to transfer data directly between the DMS and the provider’s administrative system, bypassing any intermediate systems.  While we do support a menu system, we connect “behind” it, on the provider side.

Farsighted providers, like Safe-Guard, recognize that their portal is just one tool the dealer might use to sell F&I products.  Indeed, some providers use a web-service approach to support a portal in parallel with multiple menu systems.  Our pitch with PEN is that going direct to the DMS results in a more streamlined process for the dealer.

Greetings from NADA

We made a good showing at NADA.  I met with every F&I provider, and now have a long list of contacts to follow up.  Most are already using PEN, and they were excited to learn that ADP and Reynolds will soon join the network.  To those who could not attend, I will send materials today.  Here is that link again for the press release, and here is the fact sheet.  Anyone I missed, please feel free to contact me directly.

See You at NADA

I am heading up to Orlando to represent Provider Exchange Network.  PEN will soon have direct integration with ADP Drive, ERA, and POWER – in addition to the dealers already using PEN through MenuVantage.  I have spoken with a number of F&I providers, and all agree this is an exciting prospect for the industry.

To learn more about PEN, please contact me.  Click here for the press release. I will be splitting my time between the Reynolds booth and the ADP booth.  You can also check out a brilliant demonstration of web rating and e-contracting by MenuVantage.