By Richard F. Libin, Ward’s Dealer Business
Does your sales staff send customers to the competition? Don’t laugh. This happens more than most dealer principals care to admit.
In an attempt to boost revenue and profits, dealerships often put up roadblocks that drive buyers directly to the competition.
Most customers take a thoughtful approach when choosing a dealership to visit, much like they select a holiday destination.
First they get organized. They determine what they need and want most in a new vehicle. They look at different brands and models, typically on the internet, and narrow the list to a few select vehicles. With the number of models available, that can be difficult.
Next, they locate a dealership nearby, find out if anyone they know has a recommendation and select those they will visit, when and who in the family will go along.
Then they make a list of what to check out at the dealership — models, features, cost, service department, warranty, trade-ins, etc. Finally, they take the trip and hope for a memorable experience.
So much of the preliminary work is completed by the time the customer arrives. The job of a dealership salesperson is to act as a tour guide who knows the destination, has the ability to remove obstacles so the customer doesn’t get hurt and manages the details and makes the trip enjoyable.
Along the way, the salesperson finds out what the customer wants, helps identify the right vehicle, demonstrates the product, shows the service department, simplifies negotiations and paperwork and congratulates the customer on his or her purchase.
Recently we learned of several cases where dealerships, instead of removing obstacles and facilitating a purchase, are actually raising barriers to closing deals. The first is the new and costly “behind-the-scenes” trend spreading across the country: “We do not take in gas guzzlers as trades.”
How does this help sell cars?
It doesn’t. In fact, it stops the sale and puts off customers. There is a home for every car — junkers, gas guzzlers and jalopies as well as sporty, luxurious vehicles. If a certain type of car is less desirable, simply offer a lower trade-in value. Give the customer a number and negotiate. Don’t stop the sale by refusing to take a car.
Let’s look at the first situation. This news has spread like wildfire via the internet and news stations with one blog, citing a salesperson who actually told a customer that his truck was “worthless” (just before the customer walked out).
Yet in 2007, 53 percent of used cars on dealership lots come from trade-ins on new or used car sales, according to the National Automobile Dealers Association.
Knowing in advance that a store won’t accept certain trade-ins, most customers will shop elsewhere, even though there was a possibility that they would buy a new car without taking a trade. Actions like this one are the result of previous bad purchasing decisions and are significant obstacles that reduce traffic, sales gross and bottom line profits.
In the second situation, word of mouth is the culprit. In Southern California, the buzz is that no Honda dealer will negotiate on any high-mpg car. How did this start?
A Honda sales manager told a few friends, who were inquiring about buying a new car, that area dealers were holding firm on prices for these cars. These people told a few friends, who told some more, and on and on.
The impact? Loyal Honda owners considered other brands, shopped other dealerships and bought a brand they otherwise would never have considered. This innocent comment turned untold numbers of buyers into shoppers by creating an obstacle and a perception that the experience in working with Honda was bound to be unpleasant. Who stopped this sale?
On the extreme opposite side of the spectrum is Lifetime Kia, a dealership committed to making buying a car the ultimate experience for the entire family — for generations to come.
From the valet parking at the front door to the shopping village filled with conveniences and charm reminiscent of an old-time European village. This environment paired with extraordinary service (free oil changes and car washes to police and firemen, women, veterans, and even scrub-suited medical personnel regardless of the car’s brand), referring to customers as “friends” and a staff trained in offering exceptional service.
This dealership understands that you can never afford to let anyone walk away or prevent them from coming in the first place. They train their teams to follow a well-defined process. They sell on product and service, not on price, as they understand that customers make purchases based on value, especially in today’s market.
A concentrated and dedicated sales training program can often mean the difference between success and failure in today’s challenging economic climate. When considering a training program, include every employee, not only on the skills required for his or her job function, but also on the processes, philosophy, language and techniques unique to each dealership.
Learning a new sales technique or honing existing practices can help sales people gather information, remove obstacles and close the deal.
Ongoing training programs can be tailored to unique needs and include training and reinforcement, consulting and coaching. Methods should ensure teams understand and retain the information. The result is increased sales, enhanced customer retention and bottom line improvements.
It is important to provide all employees, both new hires and old hands, with ongoing development. In most cases, it’s not the customer that stops the sale, it’s the sales team.
This article reprinted with permission from Ward’s Dealer Business.