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Jared Hamilton
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Jared Hamilton

Jared Hamilton Founder - CEO

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Welcome friends and family of the deceased.RIP - Tombstone


We are gathered here today to honor the life and mourn the passing of the infamous “4-square.”  The 4-square was born at the dawn of the auto industry when vehicle margins were thick, consumers were uneducated and invoice data was guarded with upmost secrecy.  In recent years, with transparency increasing, the four square has been on life support plagued with “old-schooler’s disease, but the time has come to bid farewell. Our beloved 4-square is survived by market based pricing, transparent information exchanges and multi choice menu styled write-ups.  Unless you want to die of old school-ers disease too, I suggest you move on and find a new way of negotiating.

 

How do you negotiate?


Like many of you, my first sales manager was a master negotiator who indoctrinated me on “4-Square” negotiating.  He would role-play tactics to avoid price and “hit, hit, commit” then move to the next square.  After the customer had autographed the write-up I would head to the tower only to return with the  “atomic” pencil, (numbers so extremely high to “adjust the guests thinking” and raise the expectation so could come in lower and make the deal.)  The 4-square WAS the ultimate negotiation game.  However, the days where 4-square negotiation was the best mode of operations are officially behind us.  Today, “games” don’t get you car deals!

 

Market Based Pricing:


Successful negotiating should get off on the right foot with market based pricing.  This means your inventory is priced according to real market value for all to see and advertised online.  Your prices should be aggressive enough to put you in the top consideration of the customer.  If you have thousands and thousands to drop from the price at the first pencil, its highly unlikely you are using market based pricing.  Poor pricing will dramatically reduce your phone, email and lot traffic.

 

Transparency:


Then you must offer you customers a transparent transaction.  If they ask for a price, give it to them.  If they ask for payments, give it to them.  Your customers CAN get the answers they are looking for; the question is will they get them answered from you or your competitors? By avoiding their questions and side stepping the information they want will only push them away.  Yes, this breaks the rules of old negotiation; but being the best never was easy.  If you want to be the best you may need to learn new ways of handling objections.

 

Menu Presentations:


If you resurrect the “ol’ 4-square” and slap it on the desk in front of the guest you will immediately invoke old school buying emotions in them and they will start shutting you out.  If you want to keep the process moving towards happy customers, you need a write up that is customer friendly yet still leaves them an element of control while helping them come to a decision.  I recommend a menu of various choices, easily presented with 2-4 options that is an excellent closing tool.  It makes life easy when you can present options 1,2 & 3 and say “which one works best?”  If they don’t come back with quick close, you can, in a consultative yet influential way, walk them through the pros and cons of each option.  Menus display information in a quick to read format and facilitate a customer centric negotiation process.

 

Time to move on:

Yes, the glory days of the 4-square have passed and its time to move on.  Chances are if you still use a 4-square you disagree with what I have written and will argue that it still works well.  My response is that there are simply better ways.  I am not convinced there is only one way to perform a write up. However, I firmly believe the most successful practices will involve market based pricing, exchanging transparent information and giving choices to the customer in some form of a menu format.  What works for you? If you agree back me up with examples from your experiences.  If you disagree, I'd love to hear why.

Jared Hamilton
@Ken thats good to hear the luxury segment is out of much of the old school crap. It still amazes me at how much it is out there still... my feeling is that is its with the domesitcs. Is that fair? hmm not sure. I think the key is the option, but like thomas said, not too many. YOu cant confuse them. Just enough to provide CHOICES so they can make a decision while steering them in the right direction for them. Treating them with respect "like they have a brain" - great quote jon. The industry is making progress, looking outside a bit and finding solutions. This economy is tough, and so much change does not help. Usually when the market drops, stores cut costs to survive, then build right back the same way they were before the market softened. This downturn is different. Sure dealers need to have cut major costs to survive, but as it corrects if they try and go back to their old ways as the market rebounds they will not make it. (if they are not dead already)
Edward Pine
A Four Square Presentation gives customers what they want. It gives a price on the new vehicle, a trade value, down payments, and payments. Nothing tricky, just all the info a customers needs.
Matt Watson
As a Desking software provider we offer the ability to print 4 squares, but we also offer some more sophisticated versions that show multiple payment options. http://www.vinsolutions.com
Jared Hamilton
The problem with 4 squares is not the format, nor the information they present. The reason I dont like them is 2 fold: 1. the sytle of negotiation that usually comes with them. They tend to be wide open, evasive and non transparent. 2. Because they have been abused for so long, if you sit down and present one to a customer of yours, you will invoke a history of emotions because the last few times they sat down do negotiate over a 4 square is was likely a ROUGH experience. Price, trade, down and payments should be included on any write up you choose, but dealerships should be doing all they can to signal to the guest that they are not like the "nightmare-ish" dealerships most customers have in their minds. The write up, as a historical point of contention, is a great opportunity for a dealer to stand out and earn the guest's trust.
Steve Lausch
Menu selling has had a dramatic impact on F&I results because the customer feels they are in control of the sale. The choice close is argueably the most effective way to help the customer make a decision he's going to walk away feeling good about -- and THAT is the customer that will walk back into the store to service his vehicle and find his next car. To do this effectively, sales presentations need to be created and edited in seconds, because this is not just about providing numbers; it's about selling. Multiple finance vs. lease options, target payment vs. target down, side-by-side presentations -- whatever it is, it's about selling. As a desking solution provider that believes strongly in Jared position, we are seeing more and more dealers securing more and more down payment with the choice close, sometimes in a matter of minutes. The choice close is the way to go. http://www.autobase.net

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