Article

Eliminating The Box Sale

November 2007, Auto Dealer Today - WebXclusive

by Becky Chernek - Also by this author

Dealer advocates have been endorsing menu selling for more than 10 years. Why? Because it’s a logical, sure-fire, proficient way for dealers to become more profitable, while limiting their overall liability. Menu selling supports an infinitely more professional approach for presenting every customer with as many products as a dealer has available, without prejudice. It brings in untold profits, and customers leave the dealership feeling satisfied that no one has “toyed” with them during the buying process. Menu selling has been, is and will be the best friend of Finance & Insurance (F&I) for a long time to come, so why are so many dealerships still playing Jack in the box?
Dozens of F&I companies offer menu selling software programs, gadgets and various sales approaches to engage in menu selling, but not every car dealer is buying into the program. You may be one of them. You may be one of those stubborn ones who say, “I’ve already got a system that works, and change isn’t always good. There’s no guarantee about anything these days … I’ve tried menu selling techniques and they don’t work for me … The menu concept of upfront selling can’t possibly work because customers won’t buy a thing from me, unless we cleverly conceal payments or pricing in the old tried-and-true way.” 

In the name of selling cars, that old technique is called the BOX CLOSE. Yes, the box close. It’s that sneaky system where the sales manager works out deals by getting customers to settle on only a monthly payment. Then, he sends them into the finance manager to close the deal, knowing the payments are likely to be $30 or more than what they were told their base payment would be because the sales manager’s motto is, “Any finance manager who can’t bump a payment more than $30 isn’t doing his job.” Every day inappropriate deals are sent into the box for Jack to close. If Jack isn’t closing on payment, he’s closing on the sales figures.

Far too often, deals are pitched into Jack’s finance office, without the customers knowing what they have agreed to pay for their vehicle. The sales manager is on the floor rubbing his hands and doing a little tap dance, fully believing that if these customers have accepted his quoted figure, they have bought the vehicle. Why bring up a sore subject, like the full price of the vehicle, and cast doubts on their ability to buy? Why disclose the real numbers of anything on the floor? Let Jack handle it.

Let’s say Jack has just returned from two days at menu school. He takes out a menu, fills in the blanks and reviews the buying information with the eager customer. “Wait a second!” the customer thinks. “That isn’t the number the sales guy quoted! Is Jack out to get me?” Jack’s inflated numbers are not based on anything that was originally agreed upon. The customer points this out and makes ready to leave the office, voicing disappointment. This customer really wanted the vehicle, but now can’t afford it. Jack is suddenly backpedaling, and everything he learned in menu selling school goes flying out the door. Hastily—and talking a mile a minute—Jack goes back to the system that has always made him a little money under these circumstances. He climbs back into his box.

Jack isn’t going to use full disclosure selling any more. He’s going to stick to the old box close. Why? Because his boss has failed to realize the most important aspect of menu selling: all managers must be on the same page at all times if menu selling (full disclosure selling) is to be successful. Full disclosure selling must be used every day, all day, by every employee and with every customer, and it begins on the sales floor.

What exactly does full disclosure mean?
Full disclosure means the dealer and all sales and finance personnel are on the same page when discussing prices, costs, products, taxes, interest and whatever else is involved in closing the deal. Nothing is hidden. Nothing is fudged. It’s the law. It means that all customers fully understand everything, including sale price, trade amount, down payment, rebates, established payment, term and APR. It means that the sales manager must stop sending clueless customers into the finance office and that Jack must stop playing the box close. The box close creates havoc with the menu selling system, which supports full compliance. The two sales methods do not mix.

Menu selling is a decision that all sales personnel support. They understand that compliance does not begin at the desk. It begins the minute the customer appears on the lot. Sales managers cannot decide to pitch deals into finance if they are unable to close on the floor. Managers should never be given the authority to refrain from disclosing the purchase price. Their goal must be to close every sale, while limiting liability and maximizing front-end profitability.

Menu selling’s purpose: to avoid litigation and inspire trust.
To avoid deceptive trade practices, former rules of thumb must be set aside. In an article on this subject back in 2005, I wrote, “Menu selling and grinding no longer go hand-in-hand. If sales teams jam customers into finance in order to close on payment or price, in addition to selling optional products, menu selling won’t work. Menu selling requires that sales staff make a concerted effort to earn the trust and creditability of customers prior to presenting them with product options. If confidence in the honesty of any dealership employee or the sales deal is lost on the lot or in the showroom, it’s hard to win back.”

There it is in a nutshell. Menu selling aspires to build confidence and trust, and this doesn’t take place only in Jack’s box. Jack will lose all creditability and the chance to sell any of his products if the sales staff hasn’t already established it through full disclosure on the floor.

When everyone in a dealership understands that upfront and ethical business practices result in trusting, satisfied customers, the menu selling process can become a phenomenal success. When every member of the sales and finance staff fully appreciates how much more knowledgeable their customers are than they were a couple years ago, they will understand why full disclosure and menu selling are key to building profits. Customers use the Internet to investigate car models and sales prices and processes; they read articles about deceptive business practices and talk to friends who have experienced nightmare sales techniques with disastrous results. They may enjoy walking the lot and searching for the vehicle of their dreams and then dread the hassle that is sure to follow in the finance office. They fortify themselves for the upcoming fight over figures. Surprise them! With full disclosure and effective menu selling, there is no need for fighting, pitching, concealing or games.

Menu selling works. Changing from the box close and the Jack-in-the-box mentality to the ethical presentation of products is the best way to go for everyone involved. Compliance to federal and industry regulations inspires trust. Trust builds confidence. Confidence molds strong dealership-customer relationships. And that means more vehicles and products are sold to satisfied customers, which means higher dealership profits and employee commissions. But none of this will happen, if dealers don’t provide both sales and finance personnel with continuous training in menu selling and insist upon a commitment to see it through.

Vol 4, Issue 10

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