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Jared Hamilton
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Showroom traffic control is a vital aspect of successfully operating a car dealership and depends heavily on a dealerships sales process.  Dealers spend thousands of dollars every month to get people to come into the store.   Therefore, it’s critical for dealers to have an effective sales process in place.  I am sure you’re thinking that you have a fairly effective process in place already…but, in today’s challenging economic times, there may be more you could be doing. I’ll provide you with 3 important rules to follow to increase sales and gross profits by establishing processes for showroom control.

Rule #1:
Understand the customer’s vehicle needs and financial situation up front…to decrease the number of “pencils” and increase your bottom line.

In most stores, salespeople greet a customer with “How can I help you? What are you interested in?” and hopefully strongly urges them to take a test drive.  (Always require prospects to take a test drive.  If they don’t they are emotionally connected to the vehicle they test drove at your competitor and financially connected to your store). The salesperson does his /her own pencil then starts going back and forth between the desk and the customer to communicate the customer’s concerns and the dealer’s desire to make a buck and move some metal.   As the number of “pencils” increase, the gross profit decreases, and moving from one vehicle to another has the exact same negative effect on the bottom line. 

Why does it take 3 or 4 “pencils” to get a deal done?   It’s part of the sales process:  it’s likely the salesperson didn’t understand the customer’s vehicle needs or they didn’t understand the customer’s financial situation before they landed on the vehicle. 

Solution:
Most  Salespeople usually don’t ask the right questions, such as,  “Why are you looking at this particular vehicle?  Have you been shopping?   What other vehicles have you looked at? Did you make an offer?  Why didn’t you buy?” It’s the “art of a sale”.  Salespeople have to have a natural ability to converse with people.  We can’t start peppering the prospect with “Why? Why?  Why?”  But you can’t grab the keys to a vehicle without knowing something about the customer and their interests.   It’s important to understand the opportunity in front of you before you take action.

Rule #2:
Get a manager involved in the process UP FRONT!

After all of that, typically your staff will then get a manager involved in the transaction to “save the deal”!  The salesperson’s mentality is typically, “Help me! They’re going to walk!  We’re WAY OFF on monthly payments, what do I do?”  Guess what?  It’s too late!  The manager really doesn’t stand a chance.  Your sales process got him involved at the absolute worst time.  It’s like asking him to get on a bucking bronco after the gate has opened.   THINK ABOUT IT!  Your managers are your best “closers” and you’re not even getting him in the game until it’s too late.

I know what you’re thinking…I thought it too…”We don’t have time to do that.  We cut back our staff.   We’re running with only 2 managers etc.”  I thought the exact same thing until I learned how it was done and watched others try it.  When you get your best closers involved up front you reduce the number of pencils and the number of times you move from one vehicle to another and the time it takes to make a deal.   Because you already have a better understanding of your customer’s vehicle and financial needs, you will increase your gross profits.

Rule #3
: Carefully manage your customer’s perception of the situation

One of the best practices I learned in my 15+ years was from a GM in a large store that insisted on greeting every customer before they took a test drive.  He introduced himself as the GM and he was “the man”… the best person in his store…and he would make sure the prospect drove home in the best vehicle for their needs at the best price in their market.  I asked, “How can you work every deal?”  He told me he didn’t work any deals.  Every salesperson told their prospect that they needed to go to the GM to make sure they got the BEST DEAL IN TOWN.  The salesperson spent 2 minutes in the GM’s office and then went back to the customer and worked the deal.  The customer control they established by getting managers involved up front in the process gives the customers the perception the dealer wants them to have.  Customer perception is a HUGE factor in gross profit.  If a customer’s perception is that he got ripped off, they will tell every person they know about “their terrible experience” at your dealership.  You’ll NEVER get a chance to sell him or anyone they know another vehicle.  The guy you made $3,800 on whose perception is that the “THE MAN” worked his deal.  He’ll tell everyone he knows about the “outstanding experience” he had at your dealership.  

In summary, by understanding your customer’s situation, getting your best people involved in the transaction up front, and managing your customer’s perception you will optimize your sales process, increase your gross profits and give your customers the perception and the vehicle you want them to drive away with.

~ Steve Dozier, Sales Director @ DMEautomotive

Bio:
Steve Dozier brings 15 years of experience in the automotive industry to DMEautomotive. Before joining Full Circle Solution and DMEautomotive, he held upper level management positions in the retail industry. Steve also owned a consulting company that specialized in CRM and direct mail, which brought in $2 Million in Sales for approximately 5 years. While serving as a consultant Steve was consistently recruited by the top 3 CRM firms of that time.  Since starting with DMEautomotive Steve has held a managerial position overseeing the Dealer-to-Dealer team. He is responsible for the entire telephony sales department.  Steve is married with two children and enjoys scuba diving and boating in his free time.

LinkedIn: http://www.linkedin.com/pub/steve-dozier/10/903/623

 

Jared Hamilton
For me the most important part of the sales process is the needs analysis. (essentially your rule #1) If the sales person cannot understand the customers needs and wants, they will not effectively solve the customers needs, they will not demo properly and like you said, they will lose gross profit because they didnt understand the guests budget requirements. Its important to use both open and closed ended questions properly and build trust. The more you sincerely look out for your customer, the more open they will be with you. The more open they are with you, the better the position you will be in to help them more. Deserve your customers trust and the needs analysis will set the tone for a win win of a car deal.

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