What to Look for in Car Sales Training Programs

When you first dive into the world of car sales training, it’s easy to get bogged down in a sea of generic advice and cookie-cutter solutions. Ironically, the one-size-fits-all approach doesn’t really work for anyone. 

The reality is that effective training is tailored for each salesperson and the unique dynamics of every dealership. But that’s just one of the many qualities that separates a superb training program from the pack. 

So, what should you look for in car sales training programs? We’ve narrowed it down to 7 key elements.

#1: Personalized Training

Every salesperson brings a unique combination of experience, talents, quirks, and potential to the table. Top-tier training doesn’t mold agents into a predefined shape—it understands and shapes their individual strengths while addressing areas for improvement. 

A personalized training program helps your agents grow in a way that feels authentic to them. When agents receive evaluations, they’re tailored to their unique skills and strengths. When they’re encouraged to grow, it’s based on a real understanding of their possibilities.

#2: Deep Dive Learning

Selling a car isn’t just about knowing all the features or being able to read a script with confidence. It’s about understanding the nuances of social interaction, reading the customer, and adapting on the fly. A standout training framework goes beyond the basics and gives your sales agents comprehensive skill development. 

The best programs combine the four cornerstones of phone sales: knowledge (knowing what to say), skill (knowing when to say it), consistency (positive habits), and confidence (self-belief). Salespeople come away equipped with the “what” but also the “how” and the “why” of effective communication. 

#3: Feedback That Fuels Growth

Occasional bursts of inspiration are great, but it’s the daily grind that truly shapes an agent. It’s consistent, actionable feedback and effective practice that build lasting expertise. When you’re looking at car sales training programs, consider whether they ensure “stickiness” with a cadence of regular touchpoints and evaluations. 

Detailed performance reviews will highlight both strengths and areas for improvement—key considerations in helping an agent hone in on their potential. Over time, these nudges will form habits in your sales team and reinforce what they learned. Your agents will gain a better understanding of themselves, but they also learn how to continuously improve long after the training program has ended.

#4: Confidence Building

Beginner salespeople might think confidence is feeling relaxed while running their pitch. But real confidence is more than swagger and a strong handshake. It’s having the assurance to navigate tricky situations and make smart decisions on the fly. 

By providing realistic training scenarios paired with constructive feedback, a solid program conditions your agents to build genuine confidence—the kind that goes beyond following scripts and truly connects them with customers.

#5: Active Coaching & Real Interactions

While sales theory can get an agent past the starting block, it’s the on-the-ground application that truly tests their mettle. The most impactful training programs seamlessly blend active coaching with on-the-job experiences. Active coaching is essentially working one-on-one with each agent, giving them the skills and knowledge to handle the phones confidently.

Active coaching can include initial certification, scripting, critical feedback sessions, personalized sessions, and mystery shops. These practical exercises challenge your salespeople, testing their limits and turning their book smarts into street smarts. 

#6: Milestones That Motivate

Performance reviews are great for identifying growth opportunities, but meaningful milestones are what keep agents going. Smart training programs capitalize on your sales team’s desire to see markers for their progress. 

Phone Ninjas, for example, offers certification incentives, like our Perfect Score Contest. Perfect scores are entered into a drawing to win a trip to Hawaii along with a sum of cash. But a perfect score is more than just a chance at a well-earned vacation—it distinguishes an agent as truly capable, signifying their commitment to excellence and showcasing their skill. When agents have goals to strive toward, it adds dimension to their motivation, pushing them to hone their skills and push for new heights.

#7: Real Sales, Visible Results

When a program doesn’t deliver the goods, it won’t be hard to figure out. The best car sales training programs will show demonstrably more contact info in your CRM, faster call times, and better appointment set rates. Great training programs will combine all the traits we discussed previously: that means they listen to, score, review, and coach each agent individually. One that simply offers generic sales advice that all agents should follow religiously is going to change very little. 

These one-size-fits-all programs might boast about their effectiveness, but they use vague language when it comes to measurable results. When you’re looking for a training program, don’t be afraid to ask what kind of improvement you’re likely to see. It’s your business, and they should set expectations.

Choosing the Right Program for Your Business

The program you choose should “fit” who you are as a brand, a team, and a dealership. Finding one that understands your agents as individuals can make the difference between delivering results and hoping for improvement. As you evaluate your options, remember to look for these 7 elements that make car sales training programs truly great.

One of the key features that makes Phone Ninjas a true disruptor in this industry is our commitment to ongoing coaching. After initial certification, we break up training sessions into bite-sized, relevant pieces of guidance tailored to each sales agent and their continuous improvement. No generic advice, and no one-time training that leaves your team dazzled… but not confident. 

Ready to see it in action? Schedule a demo today!

You never hear a prize fighter say he fired his trainer directly after he won the championship belt, right? Well, that's why it's important to continue coaching and training the salespeople and BDC employees. Even after they seem to have mastered the phones and their appointment set rate is off the charts, continued coaching and training are paramount. This is what keeps them sharp!

As your dealership moves toward a nearly perfect appointment schedule, setting an appointment from every call or at least asking for one, you may think it's okay to rest on your laurels. However, this is the exact time to push harder with your training. Have your sales team run calls with each other, practicing every day how to handle difficult callers and different situations.

To ensure your sales team is working to their highest level, you must ensure your dealership is applying what you've learned during your training. Review key principles at your sales meetings. Ask your sales team how they would handle specific situations over the phone, such as how to answer questions about credit, best prices, or even reluctance to set an appointment.

Training your dealership Sales Consultants and BD Agents isn't only about the phone calls, as this training will positively impact all customer-facing communications. As a Sales Manager, you also want to make sure you're running through proper emailing etiquette, how to handle outbound calls, and how to leave an enticing message that'll ensure a callback. It's important to cover these different facets of dealership culture and ensure your team always works to improve.

Reviewing calls with each of the members of your sales team is an excellent means by which you can keep your training and coaching fresh. With Phone Ninjas Dealership Sales Coaching, each call is submitted to the sales associate for review. Pick a call a week and listen to the coach's critique with them. Take heed of what the coach is saying and make sure your team member understands the direction.

If your Sales Consultants are being coached by Phone Ninjas, monthly one-on-one sessions can help your sales team keep their skills fresh. These unique calls, performed by one of our coaches, can function in many different ways. Traditionally, our coach will review past coached calls and then walk the sales associate through parts of the script where they have an opportunity to improve. However, we also like to ensure that they're running through the script in a role-playing fashion. This is the beauty of ongoing coaching, it's always fresh and relevant!

If you haven't already hired us at Phone Ninjas to help with training your Sales Consultants and BD Agents, it's not too late to do so. To get started, submit your dealership for two complimentary Mystery Shops. 

Scripts aren’t just important, they’re critical! And it’s not just the importance of scripts themselves but the strict adherence to them with ongoing inspection and confirmation of progress to their correct deployment.

A strong process sets you free, we all know that. It’s proven time and again in the military, business, and academia. Successful people follow a process in almost every aspect of their daily lives, whether they realize it or not.

Scripts go hand in hand with every strong process if you wish to enjoy ultimate success. Most rank-and-file teammates simply don’t know what to say, when to say it, or how to say it… This is where a strong process accompanied by situational scripts comes into play. But again, not just scripts themselves; ongoing checks and balances to ensure strict adherence to them, pointing out successes and coaching through fumbles. Without the ongoing aspect of the inspection, you leave much to chance.

This week I was involved in three different (yet similar) occurrences where a customer’s experience was compromised and revenue was lost. These are things that happen more often than not and can be easily remedied with a process, a script, and checks and balances…

Situation 1: Sitting at a bar waiting for a table during happy hour…

I’m sitting by myself at the bar waiting for the rest of my party and our table. I was early. Watching the bartender go from patron to patron solely focusing on those seated at the bar made me realize there was no process, no script, and no rhyme nor reason to anything. Some people were told about the happy hour specials, some weren’t. Some people received water, some didn’t. Some were handed menus, others weren’t. Some had place settings, others were given silverware and a few had nothing.

The bartender asked me if I was there for happy hour, and I said I wasn’t. That didn’t mean I wasn’t going to order something, it just meant I didn’t want something off the happy hour menu. Then, she leaves me and goes to the next patron to take his order and she stops him with a warning “That’s not on happy hour…” to which he responded, “Is it not available at all? I still want it!”

So, what is there to learn from this dining experience? The lack of ongoing training, the lack of inspection coaching, and the lack of a process with script cost them thousands daily. Imagine if everyone was greeted properly: “Welcome to ABC Restaurant, my name is Michele, and here are our happy hour specials which end at 7. I’ll be right back with water and to take your order…” WOW! Now you know her name, what’s included with the happy hour, when it ends and you have water en route!

Situation 2: Standing at the hostess stand waiting to be seated (a different restaurant)…

I’m waiting in line to be seated and the hostess is on the phone with a customer. She wasn’t given any training, any scripts, or any semblance of a process. All roads lead to her, phone, fax (yes, they had a fax up there), and walk-ins. I’m pretty sure she also handles the online appointments.

Here’s what I heard her say: “2 pm Saturday? Yeah, come on in, we’re here…” The person on the other end of the call clearly confirmed a reservation wasn’t necessary and she then said “Nope, we’re dead on Saturdays, come on up.” Now, the person on the other end of the phone triple-checked due to the size of the party and she then said “Yeah, we’re good for 10 people…”

Uh…

·      WHY WOULD YOU NOT MAKE A RESERVATION?

·      WHY WOULD YOU NOT GET CONTACT INFORMATION?

·      WHY WOULD YOU NOT CONFIRM THE RESERVATION?

·      WHY WOULD YOU NOT CONFIRM THEY KNOW WHERE YOU’RE LOCATED?

Personally, and the same for at least two other people in line based on the looks we were giving each other, we’d NOT eat there. I’m now worried there’s a reason they’re “dead on Saturdays…” Is it cleanliness? Quality? Staffing? All issues that would ruin the meals of 10 people, right?

So, how should this exchange have gone? “It’s a great day at ABC Restaurant, this is Jill, are you calling to make a reservation?” Then, after they said yes, she should confirm the party size, and the time and repeat it back to them, not “2 at 10” but “10 at 2.” “What name shall we place this reservation under and what’s a good contact number for you? Is it textable?” Repeat it back and then call the day of the reservation to confirm as it’s a big party. The fact they’re “dead” at that time is all the more reason to secure a party that size!

Situation 3: The Rolex as a corporate gift…

A really good friend of mine owns a company that gifts tenured teammates a brand-new Rolex. The average price of the ones they buy come to around $15,000. Essentially the price of a car. I was in his office as he was making calls to secure one and he was on speakerphone. The first two calls were appalling.

They went like this:

Jewelry Store: “Watches, this is Jim.”

Customer: Hi Jim, my name is Gary and I’d like to purchase a stainless-steel Rolex for an employee.

Jewelry Store: “We don’t have any…”

Customer: I didn’t think you would but perhaps you could take my name and number…

Jewelry Store: “We don’t have a timeframe…”

Customer: I can give you a deposit over the phone, I don’t care how long it takes…

Jewelry Store: “You’ll have to come in…”

Now, when I tell you both calls were the same, I mean they were equally as horrible. This is a $15,000 watch and he usually buys two each year based on his staff size and length of employment. That’s a nice client to have in your pipeline... Imagine if these guys presented him with options, pre-owned, another brand of equal value, a waiting list, etc etc. Nothing.

So, on the third call, he finally found someone that handled the call properly. It was the owner of the store and we left to go directly there and purchase it. Now, while he was there, he also purchased his wife a significant piece of jewelry and when she went in to pick it up from being sized, she purchased their son a Rolex as a graduation present and she purchased herself a new Rolex as well. So that one call not only turned into a customer for life but went from a $15,000 sale to $100,000 in sales in a matter of 3 days.

A good acid test is to ask yourself, what would the owner do in that situation… If he wouldn’t do what you just did, then perhaps you need scripts, a process, and ongoing adherence coaching.

Don’t just wonder how your team does when you’re not standing over them, find out for certain! Let us MYSTERY SHOP you on the phone and the web for free and report back our findings. Zero obligation, zero cost, and zero hard feelings 😊

We'd be lying if we said we didn't enjoy the time when cars flew off the lot faster than we could restock our inventory. But as that excitement hit the road, have we asked ourselves, "Are we ready to sell again?" Let's be real, over the past three years, we could easily overcome objections and even achieve record levels of profit. But did we actually stick to a sales process during this frenzy? The truth is NO, most of us didn’t.

Considering that customer response times have declined in the last three years, chances are our sales process suffered a similar fate. And while we've always struggled with consistency in our sales approach, it’s even more crucial to follow one in the weeks and months ahead. Customers have more choices again. So, for those of us whose heads have been stuck in the sand counting dollars, it’s high time we put a plan into action and execute.

The good news is that it doesn't have to be complicated. It's time to get back to the basics - or as they say - focus on the core aspects of a sales process… You know, manage your managables. Let's remember that customer buying behavior has changed in the last three years. However, one thing remains true: customers expect their questions to be answered. And more importantly, they expect to know what comes next when they step into the dealership. It's safe to say that customers don't visit the dealership just for fun today; they're there to buy a car.

But make no mistake, as customers have more options, their patience for dealing with a lack of a sales process will wear thin. Do we really want to miss out on sales opportunities simply because we don’t have a structured approach? Or, worse yet, we aren’t inspecting what we expect and the one we have still isn’t being followed? Instead, let's focus on ensuring our Sales Consultants and BD Agents understand the phone and web processes. These are, after all, the ways to communicate with your store. Unless you’re still receiving faxes saying “sales opportunity” and the customer is “accepting offers” which I used to HATE! They need to grasp the various options customers have when making inquiries via the phone and the web. This way, when your Sales Consultants or BD Agents interact with customers whether online, on the phone, or in person, there’s consistency.

A smooth process on the phone, online, and in-store will make a significant difference in the overall customer experience. And a positive experience - thanks to your dealership following a solid sales process - means more cars sold and better customer satisfaction scores. It sounds simple, right? But the hard truth is that, more often than not, each of your Sales Consultants and Sales Managers tends to have their own processes. This only makes it more challenging to effectively manage the gaps in their approaches. None of us are perfect, and we all have room to improve. So why make it harder on ourselves by juggling multiple sales processes simultaneously? Instead, let's focus on one unified sales process, a “store” sales process. This way, regardless of who's working with a customer, as a Sales Manager, you can easily step in or assist your Sales Consultants without causing unnecessary disruptions for your customers and confusion for your team.

To get started, take a minute and sign-up for two no-charge Dealership Mystery Shops! We could all use a tune-up as we strive for a new normal. That means following a consistent sales process!

As a savvy customer, nothing is more infuriating than being ignored or receiving a response that dodges all your questions. Pre-Covid, dealerships used to pride themselves on their promptness in addressing leads. Even the OEMs had standards in place to ensure that all inquiries were answered within a specific timeframe. However, during the peak of the pandemic, when demand outstripped supply, some dealerships conveniently chose to overlook their leads. And if they did bother to respond, it certainly wasn't within the respectable ten to fifteen-minute window. A study even highlighted the dismal decline in 2021 - 2022, where dealerships dropped the ball on response time and failed to answer customer inquiries altogether.

Now, let's delve into what went wrong. While we can't change the past, we can certainly revamp our lead response strategy for the future. First off, it's high time you give your CRM workflows a makeover. When was the last time they were given a once-over? If you're struggling to recall, it's a sign you need to dive in. Once you've thoroughly inspected your CRM workflows, spare a moment to scrutinize your automated emails. Are the signature lines up to date? Do these automated messages still make sense? And for goodness' sake, do all those social media links actually work? It may sound like a walk in the park, but believe it or not, some dealerships are still sending automated responses from employees who don’t even work there anymore.

Once you've conquered the CRM basics, it's time to gather your BD agents and Sales Consultants for a pep talk. A quick refresher never hurts, right? After discussing the best practices for responding to leads, holding your team accountable is crucial. By leveraging CRM reporting, you can easily track response times. But don't stop there – evaluate the actual content of their responses. We can all stop the clock, but not everyone is sending out top-notch replies to leads. Let's make sure we answer customers' questions and provide clear next steps. After all, the ultimate goal is to build rapport with customers and boost our chances of securing their business. And that's impossible if we ignore leads or respond with flimsy replies that fail to address their needs.

If your team is still struggling with word-tracking or crafting compelling responses to customers' questions and objections, fret not! We've got your back. Knowing what to say and when to say it can mean the difference between winning or losing a customer. we have the expertise to help you master this crucial skill.

If you're still on the fence, take a moment and request a Dealership Mystery Shop! Once we've completed the test, we'll be in touch. Here's to getting back to the basics and being proactive rather than reactive. 

When it comes to training, there are an endless number of things that you can prioritize. While the specific issues you may be facing at your dealership may be unique, there are certain things that every sales training schedule should include.

Set More Quality Appointments

Setting appointments is the lifeblood of automotive sales. While you may see some foot traffic coming in from people looking to buy a car, there are so many dealerships out there that you need to be proactive about driving people to come to you and buy a car from your store. Your phone agents are the key to this. If they are spending time on the phone with potential customers, but they are constantly failing to convert these conversations into appointments, then they are wasting their time, the customer’s time, and your dealership’s time. Training should focus on getting them to set commitments and increasing the average ratio of appointments set to phone calls. But not every appointment made is a good appointment. Not only do your phone agents need to be setting appointments, but they also need to set appointments that actually show. It may take several steps in training to get to this point, but your end goal should be to have more appointments with more people showing up.

Resolve Concerns Quickly

The longer someone has to spend on the phone with an agent, the worse their impression of the service tends to be. While this isn’t necessarily fair, it is something that your phone agents need to be aware of and something they need to work with. In order to shorten phone call times, your phone agents need to be able to find information quickly, keep the customer on topic, and address concerns in a thoughtful but efficient manner. This isn’t an easy thing to do, and it takes training in phone skills, phone scripts, and knowledge databases to make sure that they can find the information that they need as quickly as possible.

Standardize Procedures

In order to make sure that all of your customers are being properly taken care of, you need to have standardized procedures set in place to help phone conversations run smoothly and issues be escalated appropriately. The thing is, if they aren’t properly trained in your dealership’s procedures and what is expected of them, phone agents will find their own way of doing things that may make life more difficult for everyone. Regular training on procedures is important to make sure that everyone is on the same page. This training also provides the opportunity for your phone agents to bring up any issues they are struggling with in regard to procedures. Make sure you listen carefully to these concerns. Your agents are the ones on the phone all day, and they know what the issues really are. They are also in the best position to help you find the solution to whatever problems you are dealing with because they are the experts.

Empower Action

The most effective phone agents are able to act for themselves within dealership procedures and satisfy the demands of your customers. You don’t want your phone agents to constantly be looking to you for approval; you want them to be empowered to act and problem-solve for themselves. The point of training is to give them the tools that they need to do this. While there are always going to be some issues that need to be escalated, empowered employees know how to handle these situations to the best of their ability, and they are often able to resolve conflicts that may have overwhelmed a less well-trained employee. Training should focus on helping phone agents learn how to use their tools, such as phone scripts and knowledge databases, but it should also focus on building their soft skills.

In addition to these areas of focus, you should make sure that you take the time to evaluate the performance of your phone agents individually. This can give you an excellent overview of any areas that need improvement, and it allows you to set goals with each of them that are tailored to help them and your dealership succeed.

Need help with phone scripts? Check out our free ones here!

Sales agents spend much of their time on the phone, so it’s important for this time to be used effectively. While some may be natural at selling, everyone can stand to have at least a little training to help them out. There are some areas of phone etiquette that you should be focusing on to help them be the most effective.

Active Listening

Active listening is one of the most important things a sales professional can focus on. Not only will it help them understand what the customer’s actual concerns and needs are, but it also helps the customer feel validated, which in turn helps them have a better experience and a more favorable impression of your dealership. However, active listening over the phone requires different skills than active listening in person. Because body language can’t play a role here, sales agents need to get comfortable with vocalizing affirmations and conversational cues. Active listening can also involve asking clarifying questions and restating what the customer has said to show understanding. One of the best ways to train on this is through Active Coaching. Not only should you be evaluating how your sales agents perform on actual phone calls, but you should also give them opportunities to roleplay and learn to verbalize what they may normally use visual clues for.

Conflict Resolution

If there is one thing that sales agents can count on, it’s that there will be angry customers that they have to deal with over the phone. No one really enjoys dealing with it, but it is a fact of life when you work on the phone. Active listening can play a huge role in fending off conflict, but when it rears its ugly head, you need to have the plan to deal with it. The number one thing you need to train into your sales agents for these situations is the ability to stay calm and roll with the situation. Nothing is worse than having a sales agent lose their cool and fight with a customer. They should also be given resources to resolve the conflict and the necessary information on what they can and can’t do to resolve the conflict. This is where phone scripts and other resources become incredibly valuable. Not only will they give your sales agents the path, but they also help them determine when the phone call needs to be escalated because they are out of options.

Information Gathering and Research

In order to answer any questions your customers have, your sales agents need to be experts in gathering information and researching any questions they aren’t familiar with. This is best accomplished if they can stay on the phone with the customer and give them the answer quickly, but it may occasionally require putting a customer on hold and searching out the information needed. Your sales agents need to be intimately familiar with the knowledge database and how to look things up in order to make sure they find the needed information as quickly as possible. Phone scripts can be incredibly helpful in this area, but you should also make sure that your knowledge database is well organized so they are able to search for any answers they may be unfamiliar with. Make sure you give your sales agents, especially any newer ones, adequate time to become familiar with how any search functions work and what the organization is. The less time a customer has to spend on hold, the better.

Setting Appointments

No matter how much time a sales agent spends on the phone with a customer, if they aren’t able to set appointments and commitments, then they aren’t being effective. While sales agents won’t be successful 100% of the time, it is important for them to be effective at setting commitments and appointments with the people to whom they speak. Phone scripts are helpful for this, mainly because they prompt the necessary parts of the conversation. Still, you should also employ active coaching and stealth testing to see how each agent is doing and whether they use their resources appropriately to set commitments.

Good phone etiquette training is an integral part of helping your sales agents to be effective employees and to see success in their phone conversations. These sales agents are a large part of the overall impression of your dealership, so make sure you prioritize helping them find success.

Would you like to know how Phone Ninjas can help you? Click here to learn more about our methodology.

Artificial intelligence is one of the current buzzwords in business. Everywhere you look, articles and posts talk about how artificial intelligence can redefine your operations. Artificial intelligence has quickly become one of the most important tools your dealership can use to increase sales and the customer’s overall impression of your dealership and the sales process.

Identify Customer Behavior

In sales, one of the most important things you can do is understand how a customer thinks and is likely to act. This information can help you provide better customer service and more personalized interactions, especially during phone calls and in-person meetings. Artificial intelligence can analyze your conversations and customers' online behavior to help you understand what they need and want. Customer data is one of the most valuable things you can use in sales, so you should ensure that the data you are collecting is accurate and safeguarded. Data gathered from artificial intelligence can also identify customers’ root problems, spot customer trends and suggest actions to improve them, and capture your customers' emotional and cognitive responses in real time.

Boost Productivity

There are endless tasks that need to be done at a dealership, especially in the sales and phone sales departments. Finding a way to streamline these tasks allows employees to focus more on productive activities, spend quality time on the phone with customers, set appointments that show and buy, and follow up on successful sales. Artificial intelligence can take over some of the menial tasks and free up your sales and support agents. Not only does this help things move faster, but it can also help your records and other tasks be completed more accurately since they aren’t exposed to human error. These tasks also tend to be the least favorite part of the workload, so removing them can also improve morale. These tools can also make your phone agents' jobs easier, leading to more overall success.

Assist in Coaching

To have effective sales, your phone agents need to be properly trained. Artificial intelligence is an incredibly valuable tool for coaching and training. Just as it can analyze your customers in real-time, it can also measure and analyze your agents’ performance while performing their jobs. This data can help you identify performance patterns and decide what kind of coaching each employee needs. During individualized training, artificial intelligence can also provide assistance at any point and immediate feedback during the training process rather than having to wait. Allowing mistakes to be corrected at the moment prevents them from being reinforced. With the data gathered by the system, you can also allow employees to have more customized training, which will work to your advantage. Combined with experts' coaching sessions, artificial intelligence training can help your entire department of phone agents reach new levels of productivity and success in appointment setting.

Improve Communication

Your clients care about the communication they receive. In fact, the communication you have as part of the sales process is often one of the things that leaves the biggest impression on clients. Artificial intelligence allows you to set up automated messaging filled in with the details of your interactions that best reflect where the customer is in the buyer's journey. These digitized communications are perfect for following up effectively after setting an appointment. Reminders as the appointment approaches make it more likely that they will actually show up. Appropriate messaging after the appointment can improve the overall impression that your customer has of the entire experience, and it allows you to get real-time feedback on their impressions.

Suppose you aren’t using artificial intelligence as a dealership sales strategy. In that case, you are missing out on some of the most valuable tools you have at your disposal to improve the performance of your phone agents. To succeed with the state of the auto industry today, you need to use your resources to improve.

Are you looking for more resources to help with training your phone agents? Click here to learn more about our active coaching service!

Ouch!

Let's preface this article by saying it isn't about beating anyone up. It's about offering realistic insights into the struggles we're currently facing. If we don't tackle the issues we face head-on, we're asking for a rude awakening in the coming months. For those living under a rock, according to a recent NY Times article, auto sales in 2023 will be at a low that we haven't seen since 2011. Sure, with the increased gross profit, that'd be okay. But is that the perspective of looking through rose-colored glasses?

It's no secret that interest rates have steadily increased. And while half of a point here and there is minimal – it is considerably higher than it was at this time last year. So, while dealers previously could easily justify selling over MSRP in the past due to supply shortages – can they do the same when inventory levels start to saturate, and interest rates continue to climb to an all-time high? The reality is that the dealers will have to start selling again. And if we don't have a game plan, whether that'd be managing inventory or handling a sales process, then we're in trouble.

One of the biggest things dealers will have to be cautious of in the next year or so is what the OEMs will do regarding pricing and inventory. If dealers can maintain lower, nimble inventory levels, then it might work out. But even if dealers maintain lower inventory levels, it doesn't mean they will sell their vehicles. If the rates continue to climb, the customer may be more reserved when purchasing a car. Let us also remember that those customers who bought pre-owned vehicles in the last three years did so at an all-time high. And they will most likely be in trouble when it comes time to purchase another car. Think about it: those who bought in the peak of 2021 will already have their vehicle for a mere two years! If when those customers come back to possibly trade in their cars, are we really going to be able to get them into a new car?

If the customer is flipped, having paid at or above MSRP, or paid 135% of the used car value, the banks will most certainly limit their book-out values. So, are we ready and prepared to deal with the aftermath of selling at record-high profits? Is this going to come back to bite us? I mean, sure, we could do cash for clunkers as we did in 2008. But it's just that the beaters aren't necessarily going to be worth the money the customer needs to purchase a new vehicle. Not to mention, the banks – with increased APRs – aren't necessarily going to offer approvals with substantial negative equity without considerable cash down. And are the OEMs going to be prepared or willing to start offering increased incentives to purchase vehicles? If you've seen the latest trends in OEM incentives, they're actually down year over year, and it's not likely that they're going to go up.

So, what does all of this mean? Well, it means that we have to be strategic in the coming months. We don't have much room for error. Those with digital retailing on their websites – such as offering pre-approvals and monthly payments, ought to ensure their online processes are clear and to the point. How many customers have potentially exited due to the "potential" financing not being within their range? This will only worsen as trade-in values ease, and the lenders are only willing to book out so much of the value.

Bottom line: look, this isn't about being a pessimistic doomsayer; it’s about making sure dealers have a plan to tackle the issues we're going to face. If there is anything we have learned in the last decade is that dealers are resilient and often tackle challenges head-on. Tackling those challenges head-on means that we must have effective processes on the dealer level. Ensuring that we're correctly handling every opportunity we get. Long gone are the hay days of the pandemic when the customers came to us without any objections. There will be objections we have to face, and if we don't face those objections head-on, we will have a hard time.

The good news out of all of this is that there are resources available to ensure that you're on the right track. Every phone call counts more now than ever. Take a minute to submit for a free stealth test. We will mystery shop your dealership, offering insights on what your team can do to improve their customer service. And no, this isn't a one-time phone call review. It's a long-term strategy for improving and refining their technique. A technique that will prove itself valuable in the days ahead.

Are you ready to tackle the challenges ahead in 2023?

Who doesn't like a nice front-end gross profit? Most of us would be lying if we said otherwise. In the last three years, things have been different, right? For the first time in years, we consistently held a healthy front-end gross profit on new vehicles. Something that seemed to be of a bygone era. Previously, we'd focus on how much we're willing to lose to hit the stair-step program from the OEM. It has been refreshing, though another conversation is to be had for those dealers who have charged egregiously above MSRP (I’ve never sold a car for over MSRP in my life). So here we are today, and it's as if the days of losing front-end gross are behind us. Sounds too good to be true, doesn’t it? As inventory supply eases, we must prepare ourselves for the days ahead.

There have been several articles as of late that indicate the days-to-market supply has steadily increased. It's evident that increasing inventory levels will provide customers with more options. Options they haven't had in the last three years. Where previously, the customer had a choice, you either purchase what I have on the lot, or you don't. Heck, vehicles were selling before they even hit the dealers’ lots! But there's a good chance that's about to change in the coming months.

How will that change? Well, it depends. Some suggest that it will be a chaotic dance between the OEM, Dealer, and the customer. Noting that whoever "blinks" first will set the tone on pricing. Will the OEMs start to provide customers with incentives? Will the Dealers fall back into offering discounts off the front-end gross selling under MSRP, or worse yet, below invoice? Or will the customers refuse to pay at or above MSRP? Who will blink first?

There are a few things to note in these questions:

1.    Customers will have more options if there is an increased supply of vehicles on the dealers’ lots and having more options can create less urgency on the customer's behalf.

2.    Whereas arguably, the last three years have created a deep sense of FOMO if the customer didn't purchase the vehicle, they'd literally be missing out.

3.    But with more inventory and increased APRs, the customer might be less enthused to purchase a car.

a.    You pair that with dealers slipping in responding to customer inquiries or the Sales Consultants unable to follow a sales process on the dealer level, and we're potentially putting ourselves in a tough spot.

A tough spot that might make it harder to sell a vehicle to the customer. Think about it, if the customer no longer has FOMO - as there're more options to choose from - will they be as willing to pay at or above MSRP with increased financing costs? Not to mention, we have to think about where the OEM will stand in this situation. Suppose the OEM starts to offer the customers increased incentives paired with increased inventory and potentially less demand. In that case, it can create a trifecta of madness that has the potential to upend the days of selling at or above MSRP.

Not to mention, if we as dealers do not offer the customer the experience they expect, i.e. a seamless transaction vs. one riddled with breakpoints and frustrations - are we giving the customer a reason to do business with us? Albeit, this isn't a doomsayer "run for the hills" mantra. But make no mistake; it is about ensuring that our dealers have strong, solid sales processes so that as pricing eases, inventory increases, and the OEMs reevaluate incentives, we're offering our customers a positive experience. Giving them a reason to purchase their next vehicle from us.

So how do you make sure you're prepared? Well, it's simple. Start with a free stealth test. Having insight into your store's potential breakpoints will allow you to tackle the concerns. It's tackling those concerns that can (and will) set your dealership apart from the rest.