Article

Your Salespeople Are Being Outsold

Personalized training and enforcement of the fundamentals can help bridge the knowledge gap between your sales team and the customers they serve.

February 2018, Auto Dealer Today - Feature

by Phillip Hellstrom

Photo ©GettyImages.com/Hero Images
Photo ©GettyImages.com/Hero Images

The tables have turned in the automotive industry. Car buyers are outselling dealers. Your customers are better at selling than the majority of your sales consultants, because you have become complacent.

Many dealers have shifted their focus from the front line to the back office. They have forgotten the golden rule of selling a vehicle: Customers still want to buy from a person, not a robotic order-taker — which is what the majority of the dealers have produced and instilled in their sales staff.

Any customer can buy from any dealership. Their salesperson will make or break the deal. With that in mind, here are the five major reasons why your customers are outselling your sales team:

1. Lack of Personalized Training

After 15 years in automotive sales, I have yet to witness, participant in or hear about any personalized sales training for sales consultants. As far as I can tell, there are only two platforms in place for sales training: the one your manufacturer provides or train-by-video tutorials.

Since no two individuals learn the same, most sales consultants fall victim to one of three outcomes: self-learning by trial and error, shadowing a seasoned vet, or learning how to sell “on the fly” and “in passing” by a superior in the field. Therefore, each outcome barely scratches the surface of actual knowledge and practical applications that can be utilized and tailored to one’s style of selling.

2. A Lack of Basic Knowledge

The majority of sales consultants do not know the 10 steps to the close. They don’t know about their products or their competitors’ products. They don’t know how to effectively structure a deal based on the customer’s information.

This is inexcusable. This basic knowledge paves the road to the sale.

3. A Misconceived Blueprint

Car buyers shop several dealerships online, searching for the lowest price and attempting to avoid playing games or negotiating. Dealers advertise their lowest possible price because they “know” they are being cross-shopped and consumers hate to negotiate. Interestingly, car buyers and dealers follow this blueprint, all to bypass the step of negotiation in the car-buying process.

Unfortunately, 90% of new-car buyers initiate the negotiation by never accepting the first price. Dealers submit and entertain all offers based on the monthly incentives and monthly objectives, which means each decision is grounded on the target’s relativity.

4. Lack of Motivation

Every salesperson is motivated, but how many are individually motivated? For example, mini-deals are inevitable (not including used vehicles) because dealers are solely enticing customers based on price. This leads to slim profit margins, and in return, sales consultants know that the deal is attached to a capped-limit of a flat-fee no matter how much the price is for the vehicle.

The vast majority of sales consultants are naturally not confident in the first pencil and unwilling to stay firm on price. They know a mini-deal when they see one. Unfortunately, those same sales consultants will voluntarily forgo efforts to increase the slim profit margin by simply handing the deal off to the sales manager.

5. More Educated Customers

Every in-market car buy has tailored or trained themselves to seek out specific variables. They have a personalized structure for what they need to achieve. Customers also understand how the process works, they know the facts, and they lean heavily on the idea that it is a buyer’s market. They accept your internet price and then ask for more.

Understanding these factors is the first step toward improved production. Equip your sales team with the training and knowledge they need to match wits with your customers and close more deals. 

Phillip Hellstrom is founder of Phelcan Group LLC and a 17-year automotive retail professional with expertise in sales training and customer relations. Email him at phillip.hellstrom@bobit.com.

Comment

  1. 1. Jack C. Fuller [ February 26, 2018 @ 01:37PM ]

    The"art of the deal" is lost. In my opinion it is not just the sales people but the management that is in place. Since most of today's managers are yesterdays sales people and what they learned was to take the customer through four or five write-ups and drop the price to the bottom to make the deal. I have been in the business 30 years and as you have said sales and salesmen have changed.It use to be that as a salesman you made your living on your commission only, so first pencil closes was where your money was at. Of course to get the top dollar was to sell the Features, Benefits and Advantages. Which today is so much easier because your customers know about the features they just want a salesperson to reinforce that this is what they need and that they, the customer has made the right decision. Once you have accomplished convincing them they are the smartest person they know because they selected this vehicle and the salesperson knows how smart they are, the negotiation gets really easy. Knowing your customers wants, needs and desires, pointing out the features,benefits and advantages of your vehicle and doing these things in a professional manner will make getting big grosses a piece of cake and just as sweet.

  2. 2. Phillip Hellstrom [ March 08, 2018 @ 09:27AM ]

    Thank you Jack for your comments. I agree - it is not all on the sales people, but a dealer is only as strong as their weakest link. First pencil closes in today's market are extremely difficult to accomplish. I believe that if sales people and managers decided to put a little more effort into each deal they would be able to maintain a better average on those "slim-margin" deals, which at the end of the day would sharpen their swords for the next deal. I also agree that selling the features, benefits, and advantages make the deal not only easier to make, but create a smoother process for the customer - which can only happen if a sales person is truly taught the fundamentals first and works on one's craft from there on. This can only happen if the managing staff focuses on the following: Personalized training to suit the sales person; passes down the basic knowledge (10 steps); uses the misconceived blueprint as a tool to close more deals; is encouraging each sales person; and respects the fact that customers are educated. Thank you again Jack!

  3. 3. Eddie Colville [ March 30, 2018 @ 08:54AM ]

    I really liked the article, it had great content look forward to reading many more. Good source of intel. Great info I am a 15 year vet in the business.

 

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