Auto Sales "Nuts and Bolts"

[Gregory A, Reichenbach]

I would be interested in comments from salespeople, sales managers and dealer Principals regarding the success or lack of success of their dealerships "Sales Process". Is anyone experiencing a sales process that is not manipulative and does not create adverse feelings with our customers?

Do you have suggestions that would make a new, inexperienced salesperson successful?

Other comments please: hours... good or bad at your dealership. What does your management do to make you happy and productive?

I am not looking to start Bit.. session. I sincerely want to see if we can all contribute to each others success.

[mchastek]

I would like to hear some feedback as well. I don't have much experience from the dealer side, but I can honestly tell you from the consumer side, dealerships leave something to be desired!

Any dealers here that wish to give their $0.02?

-Mark

[Paul12801]

Perhaps I can help with this, but I am confused as what you would want feedback on. Do you want sales tips or managment tips?

[Gregory A, Reichenbach]

Mark... you got it. Our reputation on the retail side is extremely poor. I opened the subject because over the years there has not been any meaningful changes in the retail sales process. The process by design... leads the customer, in a manipulative way to close the sale. And, of course, the heat and pressure is turned up to buy today. I understand why it is this way. The figures show that if a customer leaves with out making a purchase they buy elsewhere... by a very large margin.

There are newer sales processes that are more customer friendly "on the surface" but the buy today retail motto is still dominate.

As for Pauls question... "Do I want sales or managements feedback? Of course I want both. They must work together under a system and I am interested how positively they co-exist. I am very interested in how salespeople and management try to make their dealership more customer friendly without sacrificing the salespeople.

If you are not happy with your sales process...What would you suggest to change the culture?

[mchastek]

Gregory -

I think adding my opinion from the consumer side should be interesting. The last time I went into a dealership (about 4-5 months ago), I found myself asking the question "why don't car dealerships work like any other retail store?" For example, if I go into a department store, all of the prices are clearly marked. They may have sales and coupons, but at least you know exactly what you'll be paying.

When I went into this particular dealership, I asked the salesperson to give me a figure. He wouldn't budge. He wanted ME to give him a price first. I refused, because I felt that was my only bargaining chip. I seriously spent about 20 minutes going back and forth with this person until I finally gave up. I walked out of the dealership.

I know several manufacturers are taking the "no haggle" approach now. How is that working? I don't have much experience with those dealerships. The idea sounds like a good one though.

Anyone else have anything to add?

[bobcooke]

Is the GM, Ford and Chrysler "employee" pricing success
a step toward one-price? Would this help to remove some of
the "buyer beware" mentality the customer thinks he must
have so keep "us" from abusing him?????

[mchastek]

Is the GM, Ford and Chrysler "employee" pricing success
a step toward one-price? Would this help to remove some of
the "buyer beware" mentality the customer thinks he must
have so keep "us" from abusing him?????

The whole topic of "no-haggle pricing" is an interesting one. There was an article on AutomotiveDigest.com about this very topic - from Roger Penske's point of view: http://www.automotivedigest.com/view_art.asp?articlesID=16334

In his opinion, "the closer we can get to one price in this business, the better we are going to be long term."

In my personal opinion, I like the idea of one-price-fits-all. That way, no one is getting a better deal than the next guy, and it wouldn't take hours upon hours of haggling to buy a new car. Used cars will still face this problem (as they aren't going to have a one-price model).

I think if all cars had one price for everyone, the market would naturally weed out the good from the bad. It seems almost discriminatory to sell the exact same car at a higher price to some buyers, just because they don't go through the haggling process.

On the other hand, I've been to Scion dealerships who claim they have one price for every customer. If there's no ability for a consumer to haggle, it might seem less like they're getting a good deal. The process of inflating prices and then having a sale works wonders with consumers, and this would no longer be possible with no-haggle pricing.

Anyone else have a comment?

[Carmine_Rider]

Couple of things...

First, research shows that about 70% of people feel they need to haggle for the best price -- and even in the Saturn model, there's that pesky trade-in value -- which means there's a deal to be made. So I don't think that we're going to a one-price everywhere model.

But, as prices become more competitive and everyone pays the same, like we currently have with Ford, GM and DC -- dealerships have to distinguish themselves.

I'm always shocked that sales consultants sell price, and often price only. I have a list of things that sales people should be doing to endear the customer to the dealership. Make the customer get the impression that they're going to LIKE the dealership, and buying elsewhere would deny them of the great service manager, that top-notch customer care, etc, etc. Too many sales people take the customer on a tour to meet people after the sale -- instead of as a selling tool.

Sell the benefits of the dealership. Tell about charities the dealer supports, your place in the community....

[mchastek]

Couple of things...

First, research shows that about 70% of people feel they need to haggle for the best price -- and even in the Saturn model, there's that pesky trade-in value -- which means there's a deal to be made. So I don't think that we're going to a one-price everywhere model.

But, as prices become more competitive and everyone pays the same, like we currently have with Ford, GM and DC -- dealerships have to distinguish themselves.

I'm always shocked that sales consultants sell price, and often price only. I have a list of things that sales people should be doing to endear the customer to the dealership. Make the customer get the impression that they're going to LIKE the dealership, and buying elsewhere would deny them of the great service manager, that top-notch customer care, etc, etc. Too many sales people take the customer on a tour to meet people after the sale -- instead of as a selling tool.

Sell the benefits of the dealership. Tell about charities the dealer supports, your place in the community....

You are RIGHT ON. I thought about the trade-in situation myself. Even though there won't be any haggling on new models, the dealerships will probably offer LESS for trade-ins to make up the difference.

I agree with you 100% that customer service and loyalty should play a big part in a dealership's sales process. When I purchased a new car about 2 years ago, that played a big part in my decision. When I went to look again at new cars with another person about a year ago, we were treated so poorly, no matter what price the dealership offered us, we weren't going to do any business with them.

Word of mouth gets around! I've told many of my friends about my car-buying experiences, both good and bad - and once a dealership goes on my bad list, there's no coming back!

[Paul12801]

I completley agree with the last few comments. Dealerships should stop selling price, and start selling themselves! People will pay extra for things, you just have to make it worth it for them!

[Rennsport Calgary]

In the 17 years I have sold cars I have never worked in what I would call a "systems store". Having said that I fully understand what they are and why they are used.

I doubt that you can give anything to a newbie other than a system to get them off the ground and help you as a manager seperate the wheat from the chaff. The problem IMHO, and maybe yours, is that the systems as they are set up have fundamental flaws in the way they teach and promote salesmanship. They are old school........the process has to be manipulative or else we'll all end up like Infiniti did in their first few years.....but done correctly it can be manipulative and contain very strong pressure without coming across as such.

When I started out in my first year in the business I became salesman of the year at a BMW store by simply doing everything the opposite of what I saw being done. That is to say....if I didn't like it...or I thought my client wouldn't like it...I didn't do it. I asked the prospects what "they" wanted and did it. Did I ever piss off the sales managers.....but what could they do ? I was selling cars....a lot in fact.

As to hours....cut back......I open my own store at 8am and close at 6pm. If you are a previous client and/or known to me I will work later by appointment. And guess what.....I don't sell fewer cars per year.

Pay salespeople a living salary......treat them with respect....don't hire because they have a pulse......A LOT OF PEOPLE want to work in the car business, but will not because we make it to hard for them to do so.

[harkul]

Well, and quite frankly I am a bit dissapointed to see how this discussion is developing, and while some points, such as selling the price, is understood fairly well by all, then on the other hand this situation with customer vs. dealer is somehow approached with a good degree of naivete in my opinion. It's the history of car marketing that runs deep, and you are not going to convince the customer anytime soon that, really, this is the price and that is it, and there's just no room for negotiation. I would say that generally speaking, perhaps the proverbial 20% of the customers will buy without a whole lot of hassle, but the rest, it is tough, and again, the opposite 20% is downright hostile and will do almost anything to get a better deal. Yes, which came first, the egg or the chicken, that is the deal for sure, and to combat this, the "one price only" is one way to do it, but it is not the end all, be all by any means. The only real solution is trainining of new sales people, and as much as we have lots of good concepts and programs out there to help us to do this, the critical issue is on how that program or selling concept is actually implemented both immediately and on a long term. Generally speaking, a strong program, coupled with a solid in house training that continues seamlessly over time is the only real thing against the ills of today.

[Mr. Pebble]

About "No haggle pricing."

A few years ago, a bright bulb salesperson realized that the potential customers coming in the door were so ill-educated and so insecure within themselves that they were terrified at the prospect of negotiating with a car dealership. The plan was to refer to it the no haggle "best price" and therefore call it non-negotiable. It worked like a charm. People came in and felt relieved that they could accept with confidence the "fair" price on the windshield and not have to dicker and deal for it. The biggest reward was that, in the surveys, the average "no haggle" price was $400 per vehicle higher than those cars sold with haggling.

Is this wrong? Not hardly. The dealer saw a marketing edge, took a stand on price and was richly rewarded. The customer could have easily gone elsewhere but felt comfortable and obviously was willing to pay the price. The practice was so lucrative that pretty soon everyone was doing it.

The only down side was that prices became fixed and dealers would complain to me that if they did not charge the "fixed" price, other dealerships would not dealer trade with them. The safety valve was the trade-in price which was still flexible and allowed the maintenance of the fixed price.

Recently, the dealers have advertised various leased prices and one was so low ($55 per month for a Cobalt) that I went to the dealership and the dealer confirmed that the vehicle, with $2,000 down as advertised, could be bought for that price. I took out my pencil and quickly figured that GM would lose about $14,000 on the vehicle, $24,000 on the Trailblazer, not a very good way to reduce inventory.

By the way, the last three dealers I went in to, with the direct intent to buy a car were so horrible that I walked out without buying. The Dodge Dealer was so bad that I sent an email to DCX and complained. They replied that they had no control with their dealers and I should take it up with them. I replied that they were a bunch of idiots at Chrysler and I was going elsewhere. Dealers need to learn that 80% of the sale is getting the customer in the door and at that point, if that person goes away, they need to go back to school and learn how to sell.

If you want the spreadsheet on the GM vehicles, send an email to berkprod@acd.net.

Mr. Pebble

[harkul]

Mr. Pebble's letter further proves my point, and while the one price concept has its merits, still, the trade-in pretty much throws that into a loop anyway, so really, not much has changed in a way of improving the landcsape between the car dealer and the customer. Some companies I know, have become quite transparent, and will not even allow trade ins at all, this of course can work, but this resembles a wholesale type of operation, and people are not quite ready to deal on cars as if they were hairdryers even though such compairson is not so far out as one might think, I think that is the direction we are heading anyways, but we are not there yet.

Believe you me, there's just no substitute for good, day to day hands on training, and yes, do not hire somebody else's problems either, because then you end up undoing the earlier damage, and only after that can you start your training program. Hiring process too, has become way too unrealistic really. Sort of works like getting a loan in the bank, if you tick all the boxes, you're hired, or go through a some kind of evaluation program, either in-house or outside of the company, and again, if you tick the right boxes, you are hired. Well, that just does not work, if you actually think in terms of adding value between the dealer and the customer, at some point one has to take actual responsibility over this issue, and make the hiring process down to earth and understand that, really just about anybody can do the work, but not without proper training. Yes, this does mean that hiring by the pulse is possible, but not without a well thought out training program. Unfortunately most training programs are more or less just lip service, and if someone was indeed hired just because they had the pulse, well, it'll surely be a mess.

[mbell]

never judge a book buy its cover

[carguy]

I find this thread interesting because as a Toyota Dealer in Canada we have changed our sales process dramatically in parts of the country. Here in BC we have embraced Access Toyota and have really changed the way we sell cars with a transparent full disclosure sales process.

To describe the process in a nutshell when a customer arrives at the store we determine how much time they have, and what info they want. Then we give it to them.

Including a price sheet with full disclosure of all taxes, leasing rates, finance rates, etc. To every customer.

I was a little hesitant with the process at first but I would never go back to the old way of selling again.

At the end of the day we sell more cars to happier customers.