February 2018, Auto Dealer Today - Feature
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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 firstname.lastname@example.org.