Where is the Money In Today’s Market?

 Richard Libin
  6th-Sep-2008

As manufacturers scramble to reduce inventory, decrease downtime and move vehicles, pressure mounts on dealers to cut expenses and find new ways to drive sales while increasing their bottom line. Some dealers have cleared these hurdles by re-inventing their retail culture, instituting sales processes, and providing ongoing training to create a structured environment supported by technology linked directly to the sales process.

It is a common belief in the automotive retail business that customers want to get in and out of a dealership as quickly as possible. While this may be true, understanding and changing the reason for this is the first step to creating a successful culture. Research by Automotive Profit Builders (APB) indicates that prospects fitting this description find their experience as uncomfortable, because the sale is not moving in a positive direction, the salesperson is not connecting with them, or they are not being shown a car that meets their needs.

An automotive retail culture that makes car buying a comfortable experience where sales professionals spend quality time with customers, results in higher sales, higher gross margins, and satisfied customers who make referrals. Consider the impact changing the vernacular has on attitude and perception. Train professionals to stop regarding prospects as “ups” – a direction, not even a human being. Train them to think beyond “customers” who make a single purchase and leave. Train them to think of prospects as clients, guests with whom they should foster a long-term relationship. Re-characterize their jobs as Selection Specialists – not salespeople.

This perception must be supported by a well-structured and clearly defined sales process designed to help customers select three things:

1) Your dealership – make the customer glad they came and eager to purchase from you now and over time.

2) The car – guide customers, help them build an emotional tie to the car that meets their needs, wants, and desires; only then talk price.

3) The Selection Specialist – spends quality time with the customer – give them “The Red Carpet Treatment”, connect, listen, learn and lead the sale in an inviting and comfortable manner; avoiding confrontation at all costs.

Training Selection Specialists in a customer-centric culture to use this type of sales process results in a scenario such as this:

§ The Greeter welcomes the guest saying, “Welcome to APB Motors. My name is Susan.” Then she collects the guest’s name and introduces the guest to a Selection Specialist. This becomes the start of the monitoring process for Management to support the Selection Specialist.

§ The Selection Specialist says, “I’m glad you are here; my job is to help you select a car and get you a price.”

§ From there, the Selection Specialist communicates with the customer – interviews them in a manner of speaking – listens and learns what the guest needs, wants, and desires.

§ The Selection Specialist quickly identifies a model that fits those needs. For the guest to drive and familiarize the guest with the features that meet their needs. The Selection Specialist scans the driver’s license before he creates the Demo Drive. Throughout the drive, the Selection Specialist guides the guest as they experience the features that will satisfy their wants and desires, and build an emotional bond with the car as well.

§ Upon returning, they visit the Service Department where the guest receives a thank you gift from the Service Department. After picking a vehicle, they move to the Showroom to close the deal.

§ Price is the last point of discussion, raised only after the guest feels at home and has built an emotional bond with the car, dealership and the Selection Specialist. This process results in more closed sales, higher Total Vehicle Gross (TVG), and more satisfied, long-term clients.

Ideally, this is supported by ongoing training and technology that mirrors the sales process. The majority of dealers understand the need for IT systems but don’t consider whether or not their solution mirrors sales processes. Only when this happens, will the technology help revitalize their operations and profits.

APB consistently works with dealers to build structured, well-defined processes complemented with ongoing training and technology to support the process and training resulting in radically improved sales, gross margins, employee retention, and customer loyalty.

J. M. Lexus in Margate, Florida, for example, worked with APB to increase its monthly sales average from 150 cars to over 600 cars consistently for nearly 12 years, making it one of the largest Lexus dealers in the world. During this time, the dealership achieved 100% retention rate for Selection Specialists who reached their three-year service mark, according to Dave Mullen, formerly Vice President and General Manager of the dealership.

“The deal really starts and ends with the Demo; without one, both the deal and the relationship will die. By using a structured sales process that focuses on the customer and providing consistent training for teams we’ve been able to achieve a 90% success rate in getting guests to say ‘yes’ to the Demo,” said Mullen.

With mounting external pressures, automotive retailers must refine their internal systems to drive sales and profits. By adopting the unique combination of a well-defined, structured sales process and continuous training married with technology that directly supports the process, automotive retailers will develop ongoing relationships with guests turning them into long-term clients.

Views: 2348
Domain: Electronics
Category: Business
Richard Libin
06 October, 2009

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