Unqualified Sales Managers and Unproductive Finance Managers
In today’s marketplace, dealerships have limited time to make a positive impact and close the sale. It doesn’t make sense to allow the bulk of business to be managed by a sales manager who has no experience or training in finance. Too many sales are stalled and too many profits are lost because a sales manager may not fully understand how to structure a viable deal or may reject a customer by relying on a credit report while negotiating or structuring a sale. Does your sales manager know how to read a credit report properly? Maybe so, but when was the last time you monitored the number of such “deals” a sales manager finalized utilizing interest rates and terms that put them in a hotspot?
Conversely, when was the last time you monitored how often a finance manager accepted such doubtful deals and kept your hopeful customer waiting while calling several lenders? In most cases, if a lender finally accepts, the customers usually cannot accept the terms. If you don’t monitor the deals your managers are attempting to make and take action, this mind manipulation of your customers will continue, and if it continues, deals will be lost and profits will be diminished. Mind deals rarely make your dealership money.
The action you take involves a simple solution: retraining with more up-to-date and effective sales processes and a thorough education in effective procedures. Sales managers can be taught how to structure a proper transaction for each customer, regardless of what the credit report says. A poor payment history and budget restraints are no longer inhibitors in the making of a sale that maximizes profitability. It starts with knowing how to effectively qualify such customers for the right vehicles. It also starts with honest and direct communication.
What Constitutes a Workable Process?
Sales and finance managers should know certain information about potential lenders and at-risk customers before a transaction ever takes place.
- Which lenders will buy such a customer with no money down?
- What credit terms are acceptable?
- What advance is appropriate, based on a customer’s payment history and debt to income?
- What interest rate will be charged based on a customer’s credit history, advance and terms?
In addition to knowing the answers to these questions beforehand, every finance manager should plan to sit at the desk with the sales manager to show support for the deal and to offer solutions, whenever asked to do so. The talent of a great finance manager should never be ignored. Finance managers must take the lead and interview all customers outside the finance office in the following situations:
- On ordered or dealer exchanged units, to determine why a stocked unit isn’t an option
- On cash or credit union sales, to determine if there is the possibility to arrange financing
- On credit checks to determine the reason behind a slow pay history and the potential for lender disapproval
- At time of delivery to qualify a customer for product objections
Stephen R. Covey, author of the book bestseller, The 7 Habits of Highly Effective People, stated that if we keep doing what we're doing, we’ll keep getting the same results. When sales and finance managers are well trained in effective procedures and well informed about the terms of various lenders in advance, they can treat each deal as if it was being delivered that very day. Mind manipulation will no longer be a factor and everyone will be happier. Sales and profits will rise as a new and valuable customer market is established.
Vol 4, Issue 4