Deal or No Deal. Part 2

Okay, here’s the situation:

A customer (up) pulls into your dealership parking lot. They get out of their car and start to walk towards your showroom front door. A group of sales representatives are standing outside talking and see them. What happens next?
1. A sales rep goes up and welcomes them to your dealerships and asks what kind of vehicle they are looking for today.

2. A sales rep goes up and welcomes them to your dealership and asks if they are there to see anyone in particular.

So what happens at your dealership? Is it “Deal or No Deal”? Most of the time, the first scene unfolds. While it’s great to have a sales person “assume the sale”, this sales rep is already counting his commission. Better yet, he’s planning on selling that big bonus vehicle your sales manager announced at this morning’s sales meeting. He’s got it all figured out in his head, and he ready to make a deal.

Two hours later, these nice folks are driving away from your dealership in the car they drove up in! Your sales manager is sitting with his head in his hands, and your sales rep is off, muttering to himself about another “waste of time” his customer was.

What missing from this picture? Well, what about the customer? Do you really know why this “hot prospect” turned into a “No Deal” so quickly? It’s probably because the sales person never really took the time to find out the particulars about this customer until it was too late. The customer was never identified as either a primary or secondary customer. They arrived at your dealership, fully prepared to purchase a vehicle, but they were never shown a vehicle that they could actually purchase. The sale person never properly qualified the customer to find this out. And the “No Deal” at your store quick became a “Deal” at the dealer down the street, where your customer went right after he left your store!

“Why?” is the question most people would ask at this point? “What’s different at the dealership down the street?” Very simply, they’re probably identifying their subprime customers at the start of the process. What does that mean?

Most, if not all of us that have been in the business of selling cars for a while, learned the basic sales process known as “The 10 Steps to a Sale”. We probably learned it from someone years ago, who learned it from someone years earlier, who probably learned it from Henry Ford himself! The basic steps in this system haven’t change much over the years although some dealerships have made a few minor modifications. All in all, it is still pretty much the same process system today as it was in the beginning. What has changed, more so lately, is the customer.

As the number of “credit challenged” customers continues to increase, isn’t it time to think about changing the way your sales staff sells cars. Consider the fact that your dealership may no longer just be in the business of selling cars. If you are arranging financing for your customers, aren’t you really in the loan origination business? And if you happen to own your own finance company, you might be in the collections business as well.
If the business you’re in has changed, then the way your sales people conduct your business has got to change as well. If you are doing any subprime business at all, then your sales people need to understand the process to successfully work with these customers. While the meet and greet portions of the 10 Steps remain in essence the same as before, you should delay the “product decision” portion of the sales presentation until you have secured the “credit decision” . Keeping your customer focused on rebuilding their credit instead of trying to purchase a vehicle. They should be selling the program, not the car. Remember, in subprime, the objective is to get a loan and you get a “free” car. If your sales people focus on selling the program, this will avoid landing the customer on a vehicle that they can’t really buy. Keeping the customer off the lot and in your showroom lets you maintain control over the process. You can maximize your profit or move desired inventory by controlling the “product decision” and showing the customer the vehicles you want to sell them,

Take proactive approach to the subprime sales process. By settling the credit issues up front, you help set the customer’s expectation to reality. Avoid the “no sale” or short deal you’re forced into taking. Have your sales people once again explain the concept your dealership embraces. Keep your customers in the “credit decision” mode. Emphasize your dealership’s role as a credit counselor, trying to help them rebuild their credit. Doing this accomplishes several things;

· First of all, it tells the customer that your dealership is genuinely concerned and trying to help him.

· This gives your customer a chance to explain away their credit problems. Bad things happen to good people, and lenders try to understand that. A serious catastrophic medical event can bankrupt a family faster than anything else. This is much different from the guy who just went out on a “credit bender”, overdosed on easy credit, and just financed himself right into the ground.

· It reconfirms the credit issues that got the customer here in the first place. This sets the stage for later negotiations, legitimizing the higher rates they may have to pay.

· It helps set customer expectations where you need them – firmly in the reality mode. It gets the customer away from the “product decision” and focused on the “credit decision”.

Explain further that, if the job is done correctly, not only will they get a vehicle to drive, but they’re on their way to obtaining a credit card or maybe even buying a home. Maybe you can even provide them with some information on how they can repair their own credit for free! How many other auto dealerships offered to do that for them? You’re probably going to be the one an only!
Selling the vehicle first, as we have seen causes the “no deal” scenario to keep happening over and over again at your dealership. If your sales staff understands that subprime customers must be worked backwards from the start, they will have a lot more success at closing subprime customers. Your staff will ultimately have an easier time dealing with these customers because they understand the sale process. Keeping your customers focused on the “credit decision” part of the sales process allows you to control the sale and generate substantial profits. You’ll ultimately have a lot more “deals” than “no deals”.