One of my favorite quotes and perhaps the single most important fundamental of sales is “price is what you pay and value is what you get.” Price is tangible, arguable, and comparable. Value is not. Value is perceived, and you have to build it incrementally in a consistent, step-by-step process that begins the very moment you meet the customer. Since you know that the first question is usually going to be centered on price, prepare yourself. Don’t be like the competition and tap-dance around it, ignore it or, even worse, fumble through an inventory sheet desperately thinking of something clever to say before those four little misspoken words weakly fall from your lips (“The asking price is…”). Be prepared with a standardized and well thought-out answer that you use every time, then take control of the sale with a question that re-directs the focus to the customers needs and wants.
This is not being manipulative. It’s selling, and sales is about understanding needs, finding solutions and creating value in the process. As consumers, we are all conditioned to initially focus on price, but how many of us actually buy the least expensive product or service? We don’t! We buy value or should I say we buy perceived value. Do you purchase the least expensive appliances, furniture or jewelry? Did you choose your family doctor because he or she has the lowest fees in town? No! We all want the best we can afford. We want value, and the more significant the purchase is, the more significant value becomes. So, if you earn a living in sales, you must be able to create value. You and your business must add to that value, so your product or service meets your customers needs.
These solutions can always be expressed in financial terms. So show them the money! “Dollarize” the value, and present the larger benefit. For a Special Finance customer, the larger benefit is “re-establishing” a positive credit rating. Quantify the customer’s return on their investment in buying a car from you by reminding them about the benefits of good credit and explaining how to improve their credit score. You are the expert, and your solution will make their life easier. Price quickly becomes irrelevant, and the discussion begins to shift to solving the customer’s long-term problems and their immediate need for reliable transportation.
Five-star customer service is the least costly and most effective benefit you can give your customers today, and they want it. In fact, they expect it, even in non-prime automotive finance and buy here pay here dealerships. Business is competitive, and consumers have more choices than ever before. Our job is to understand our customers and exceed their expectations. Winning businesses provide world-class customer satisfaction, and their customers become fans that rave about the service and tell others, who tell more people. Winning car dealers understand this concept very well and enjoy the benefits of repeat and referral business that often represents more than half of their monthly sales.
Price is not a deal breaker particularly in Special Finance, so forget about it. In fact, lose it from your vocabulary. Replace that profane little word with the phrase “market value”, say, “The market value of this particular vehicle is…” and say it with confidence. Then, immediately follow up with a re-directing question that focuses the conversation on the needs of the customer and the service you offer. Get rid of those prices that end in a “995” that scream, “let’s negotiate,” and replace them with an odd number as a value rather than a price. For example, if you typically price your inventory with something like $8,995. Try using $9,537 and call it the market value instead. You will find that this simple little change is more respectable and believable by the customer and actually builds value and increases profit at the same time. Perception is a reality in business, and you and your staff will be better perceived as an expert in the industry.
Training, practice and preparation will make bypassing price an elementary process. To a properly trained salesperson, price is never an obstacle, and those opening questions by the customer are nothing more than a common greeting to initiate a conversation about what they really need. The irony is that when a car dealer lowers price, gives stuff away or creates gimmicks to sell, the perceived value actually decreases. It’s almost like they don’t have anything else to say about their product or service. Our business is not about price, it’s about value and benefits, and one thing for certain is if you want to win the race to the bottom, decrease price and be the lowest in town. Your profits will quickly follow, but if running a profitable business is your goal, find another point of differentiation to attract and keep your customers’ interest. It’s amazing how quickly your profits will increase, and your closing ratios will improve the day you stop talking about price.
Vol 5, Issue 7