Training » Turning the "Switch"

Turning the “Switch”

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The automotive industry today faces real challenges which cause some to question the future. The talking heads and pundits are claiming that this year could be the worst year in the car business since 1993. Whether it is a case of “Chicken Little” who thought the sky was falling or a case of a tough reality - we don’t know yet. But it is safe to say that dealerships that thrive vs. those who just survive in crazy times are savvy enough to recognize that this business is more about process and systems than about circumstances and economy.

We recently met with a Michigan dealer who wanted to make the first step in understanding and implementing this process. He realized that his dealership had to make necessary changes to thrive in today’s marketplace. His specific goal is to grow the Subprime business his dealership currently does.

When we met, one of the first things we reviewed was his dealership’s sales process. We asked him, as we ask all of our customers, “How are your people doing with the unique tasks of Subprime?”

He responded, “They are doing what we are asking of them and are doing a good job.”

We followed up with another question, “What percentage of the time do you have to switch a customer out of a unit they had already selected, in order to get the deal done?”

Without hesitation, he responded that a shocking 75% of his customers are switched. We asked him how he felt about only 25% of his customers leaving his dealership happy as they went home! While it seems like a mean question, does anyone want 75% of their customers leaving the dealership frustrated or disappointed? Of course not!

The second question gave him a reason to take another good hard look at the “good job” he said his sales people are doing. The real story here is that his impression is his people are doing great; however, the reality is a majority of his customers (if they actually bought the switched unit) are going home with their expectations unmet. Switching cars is a common and typical practice that is fine for the dealer but not for the customer.

When your customer leaves with a bad taste in their mouth from the “sales experience” they’ve been through, your dealership only gets to cash one check. The customer may take a vehicle from your store, but has little reason to recommend your dealership and even less reason to come back. The dollars you miss from service and parts purchases, as well as the opportunity to sell this customer additional vehicles can amount to hundreds of thousands of dollars over the years.

To create a “win-win” experience for both the dealership and the customer, the finance-appropriate vehicle must being “landed” on the customer. Get them excited about getting a loan, and then find the right vehicle, and this customer becomes a “customer for life”!

A key to subprime success: Make the sales experience a collaboration between the sales person and the customer and both get what they want – the customer gets the loan and the transportation they need. Your sales person makes a sale and earns a commission.

When a customer leaves your dealership without purchasing a vehicle, they may take what they learned from your dealership and go directly to your competitor. How many times have you spent the time to educate a customer on what they can buy, but they purchased it somewhere else? Maybe it’s to save face, or maybe it’s just the frustration this customer feels when they’re told they can’t get what the vehicle they want. Either way, you end up doing all the work without making the sale. There is a better way.

Changing the sales process to a “buying experience” that gives the customer compelling reasons to do business with your dealership produces fewer switched units, which in turn leads to higher closing ratios and gross profits!

Getting through these tough times will require you to take an honest, perhaps hard, look at the “sales” experience your dealership provides to your customers. You can have “customers for life” provided you give them the right experience.

If you’d like to find out more about changing your process, email me, and I send you the “Two Minute Audit”.


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