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Jared Hamilton
From: Jared Hamilton
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Jim Bell

Jim Bell Performance Manager

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Are You Passing on Deals That You Shouldn't?

Here we are at the beginning of a new month.  We are all employed for another 30 days.  Whew!There is a myth in the autobusiness that the best car deals are at the end of the month.  I know from personal experience as a sales manager for several years, this can be so true and the general public knows it.  I got to thinking this past week in how are the deals from the first part of the month different from the last part of the month.  Why do we as sales managers pass on a deal that we will take a the end of the month?  One word comes to mind and that is goals.  Should they be different?  No.  They should be worked the same 100% of the time.  No matter how big or how small the profit is, move the metal and gain the customer no matter what part of the month it is.

In 2009 as a dealership, we missed getting the prestigeous Honda President's Award by a mere 18 units for the year.  If we would not have passed on the few deals that we did early on in the month, we probably would have gotten our award.  We as managers think to ourselves that we have a gem (whether new or used) on our lot and think, we can make more money than the customer is offering, so I will pass on this one and make it up on the next one.  We have to change that mindset and even if it is a little shorter deal than we would like, take it now, make a customer, and hope that they keep coming back for service, repeat sales, and referrals from that customer.  We can replace metal, but not a customer

My 2 cents is no matter how big or small the profit is, no matter what part of the month it is, move the unit and invest that money in something else and gain a customer now, earn their business in service and parts, and ask them for the referral.  If you don't have a referral program in place, get one and give the customer some money for sending in prospects.  The best form of advertising is word of mouth and if a customer in the beginning of the month doesn't get 'the deal' in the beginning of the month, they may tell all of their friends verbally and via social networking.

Bryan Armstrong
You bring up some valid points. With today's ever crunching of inventory availability it's a fine edged sword to walk but consistency is the key. I do look at whether I can reasonably look to retaining the customer on the Service side when I am determining pricing on harder to obtain units though. I don't think anyone can afford to go into "triple net" just for volume anywhere any longer. More importantly, when have we retrained our staff that the value NEEDS to be built because we are no longer in the era of the OEM jamming unwanted units down our throats. Hoarding now and hoping for higher profits though will surely result in decreased allocations when things do open back up though. SO beware of the greed that may undo you.
Jim Bell
I am in no way dating to sell cars at triple net. Are there dealers that are doing it still with 'hot inventory'? Unfortunately, yes and they are stupid to do so. But we have to be smart in the whole transaction. If you know that you can retain them in service, yes, give them a deal and don't hold out. We have a great repeat and referral customer base so we can. We also have a HUGE retention rate with our customers when it comes to service. When you treat them right the first time, it will pay back 10 fold down the road.
Dennis Galbraith
This is a great post Jim. Any sound pricing strategy does not change based on which day of the month the customer is trying to buy. This is the kind of silliness and inefficiency the industry can no longer afford. Worst of all, it sets a tone with the sales team. If you are only serious about your business on weekends and the end of the month, then that is the kind of sales team you will attract.
Randy Taylor
When I worked in a small dealership, this was never a problem. Not until I worked in a store with floor managers, desk managers...too many chiefs. Well said. If it is a deal, it is a deal anytime.
Jim Bell
Randy...you are exactly right. I was at a 'small store' also at one point in my career and saw the same thing. We couldn't afford to pass up on a deal. At a much larger volume dealer, managers do tend to pass on deals at times when they have a buyer right in front of them. Thanks for the comments Randy and Dennis.

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