“In the absence of value, all we have is price.” We have all heard that quote and a few weeks ago I was witness to the truth of that statement. Let me set the stage—the location was the Midwest and the customer had been to the dealership once to look at a vehicle. The sales associate quoted a sales price that had all the discounts in it, as the first and only financial presentation.
The sales associate found herself on the telephone trying to talk the customer into returning to the dealership and then conversing with the sales manager about yet another discount. This was a small dealership, accustomed to operating using a cost-line method. The sales manager typically approves the final figures, but really does not get involved with the negotiations unless it is necessary.
It was clear the seasoned sales associate (a seven-year veteran at the dealership) was working the sales manager more than the customer. Traffic at the dealership has been slow this past year and, as a result, when customers do come in, often the sales associates are selling from fear rather than from a proven process.
My words of counsel to the sales associate were simply to get the customer in again and show them parts and service. The weather was cold with light snow flurries and the customer was returning after work, so I asked her to see if service had a bay in which they could showcase the vehicle. I recommended that when she greeted the customers, she take them on a dealership tour and tell them the story—how long the dealership has been in business, how long the employees have worked there, and then end up in the service bay where she could “re-demonstrate” the vehicle.
Only after she had demonstrated to the customer value in herself, the dealership, and the vehicle could she return to her workstation and review the original price quote. We also rewrote the worksheet to properly identify the discount previously given, so she could point out the great deal already offered on this vehicle.
The customer had been shopping the deal and had reported that the discounts ranged from 20 to 25 percent. The sales associate responded with the perfect question, “Twenty-five percent off of what?” Anyone can write down a huge discount, if you do not know the beginning number, in the end the difference will be the same.
The customer departed again. The sales associate had a day off. Upon everyone’s return to the dealership, I asked the sales associate to telephone the customer to tell them thanks for coming in the other evening and to ask them if they had any additional questions.
Saying thank you for coming in is the professional action, and it provides a perfect reason to speak to the customer. With proper coaching, the sale was achieved without any further discounts being made. Yes, it took the customers coming back yet again, but that is what happens when a salesperson turns a buyer into a shopper by quoting all the available discounts to the customer at the beginning of the negotiations.
This story demonstrates the power of emphasizing the value of a dealership as evidenced by the longevity of its employees. Customers are not just buying a vehicle, they are investing in their community, and it is acceptable for every business to make a reasonable profit so they will have the resources to remain in business in the future. While price is an important piece of the puzzle in the buying decision, we need to remember that it is not the only piece.
Work on building the value of your sales team, your dealership, and your vehicle, prior to talking price to your customers.
Jan Kelly is president of Kelly Enterprises. She is a sales educator and consultant, convention speaker, and writes frequently for industry publications. For information about educational venues or joining an F&I 20 group, call 800-336-4275 or visit www.JLKelly.com.
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