CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
Here is a story about a customer that communicated and negotiated at one of the highest levels I have seen to-date. This was near the beginning of my career in auto I was the BDC Director at a great up-and-coming dealership in the North Chicago suburbs.
The customer in question had inquired on our website about a specific $12k, 30k mile, Honda Civic for his son. He was clear, to the point and no nonsense in his initial request asking for additional pictures of the interior, tread depths on all 4 tires, pictures of the underbody (with the car up on the rack) and scanned copy of the repair work we had completed after taking it on trade. After quickly complying with all of his requests as well providing an in-depth video walk-around, I explained in email that I would be calling in 20 minutes to ask him when he would be able to drive in. He quickly emailed me back and set an appointment within the next 1 hour. So far so good, right?
He shows up for his appointment early and very pleasant. We have the car pulled up and ready to go. He thanks me for being honest and prepared. He then takes an hour test drive with our top sales person (sells 25-30, 10+ year’s tenure). After the trial close, he asks for a write-up goes through the full process, multiple TOs etc. Using a binder we display the complete repair history from previous customer, our internal repair work, the car fax and a list of cars in the market that are close in miles and options. We go over our internet pricing technology and how this car is priced well below the market.
He is clear at every turn that he feels the car is a great candidate but he has others to review. Our store had a write-up everybody approach, so those of you thinking let him walk without numbers, please understand this was a core philosophy of ownership. The GSM lets him go with a slightly reduced price and doesn’t do any hard selling. I call the customer back that evening and thank him for visiting, any questions etc. and ask for the appointment. He tells me he will call me in 2 days at a specific time. I attempt to turn the phone appointment into a store appointment and he restates his prerogative to call me in 2 days.
2 days later… He calls me on-time and explains that he would like to come in that evening as he had driven the other vehicles. Again, he is on time and very thankful. The original sales person starts the write-up from the number we let him out at. He brings a folder that appears to contain the same information that we provided him the on the other cars. The sales person asks to see the other vehicles and he says that he would prefer to purchase our vehicle with price being the only remaining factor. We ask multiple times in every imaginable way to see the other 2 cars. He never shares this with us. After multiple rounds of numbers and no end in sight our GSM starts pressing him harder to commit. The customer remains very calm and simply states that he does prefer our car in all aspects other than the price. He thanks the GSM for his passion and after about 1 hour says that sometimes it’s just not meant to be and starts to walk. The owner jumps in and attempts to charm him…45 minutes later and some of the best back and forth from a customer I have ever seen the owner has dropped everything selling the car at zero profit.
Quite simply the customer was the best sales person in the building. He was honest, punctual, and extremely pleasant to speak with and never allowed his emotion to enter HIS sales process. After the customer agreed to purchase the owner asked him what he did for a living (he wouldn’t answer prior) he politely explained he was the Senior VP of purchasing for one of the largest grocers in the Midwest. He was responsible for all bulk purchasing deals for the entire company.
The owner told him that his skill as a purchaser was the best he had ever seen and because he was so pleasant he was fine with selling the car at the price…stating you 100% earned it.
I am sure that nearly anyone in the business that reads this has at least 1 customer that you are thinking of right now that performed similar to this one. Why is this type of customer so good at getting an awesome deal? They cannot be persuaded by emotion, only logic...their logic.
Today we have tools that allow us to negotiate through documentation as we did in the story above. Is your team using them at every stage in the sales process? It was the philosophy in the dealership in the story that if the deal was worked properly and it got down to a near zero profit deal we sold the car, earned the customer and built the relationship with service.
In the case of the customer in my story he did give our sales person referral business, purchased a warranty and did use us for service. However, this didn’t just happen. The F&I manager conducted his interview after the numbers were agreed to even though he said he was paying cash. The sales person asked for the referrals after the F&I interview and before the customer went to F&I. After all of the paperwork was complete, he was given a full walkthrough of the service department as well as introduced to the parts and service director. It was here that we enrolled him in our loyalty program and scheduled his first service appointment. 90 days later a post card was mailed and 95 days later an outbound call was made reminding him of his appointment.
And he continued to be punctual showing up on time for his appointments.
It is my experience that when you sell a vehicle at a lower front-end profit everyone in the dealership rallies on the second half of the sales process. Fear of selling the tougher customers based on the selling price alone excludes you from all of the other potential profit opportunities. An effective sales process must plan for these at or below zero front-end profit situations and as a team adjust accordingly on the fly.
Driven Data Consulting