I’ve discussed the reasons why your sales staff needs to demonstrate its expertise on every unit in your dealership. Here’s how successful dealerships are doing just that.
Mike Anderson Auto Group has been able to close sales without double discounting and taking the subsequent reduction in gross profits or closing rates. They did this by proactively building value into every car. How?
- They sold consumers on specific units—not on the model alone.
- The sales team proactively pointed out the differences between their units and their competitors’ instead of waiting to be asked by the consumer.
The Right Tools
Essentially, Anderson armed its staff with the tools to become product experts instead of salespeople. And it’s not just about building value—it’s also about developing trust in your process. Remember, consumers inherently distrust car salespeople. But by taking a proactive approach, Anderson created a sense of “transparency” in the process.
Tools like MAX Digital Showroom allow salespeople to search for specific stock or VIN numbers and access detailed vehicle information—including packages, MSRP values, and certified information—all of which helps you sell on value rather than price.
Salespeople can email this information directly to customers while they’re on the lot so they can view it on their own devices. Anderson’s sales team was able to develop trust by sharing this information with customers versus simply telling them.
In the end, Anderson no longer had to discount to get the deal closed (or if they did, the discounts were significantly smaller). Because the salespeople provided detailed information proactively and offered a sense of transparency, customers were confident that they were getting a good value at the asking price. As a result, Anderson raised its pre-owned gross profits by more than $700 per car.
The old ways of closing a sale are no longer relevant. Today, you have to build trust and value into every car on your lot. That’s what Mike Anderson Auto Group has done, and the results speak for themselves.
Here’s a news flash for you: car shoppers don’t want to talk with salespeople. Not only do they come to your dealership armed with more knowledge than most of your sales staff, they simply don’t trust auto dealers. Yet too many dealerships continue to stick with the old ways of trying to close the sale and neglect becoming product experts.
Lack of Trust
According to a 2013 Gallup poll, 91 percent of consumers said they don’t trust car salespeople. So they do what any wise person would do—they try to negotiate as low a price as possible or they walk away. And as I’ve previously explained, salespeople have been trained to negotiate to close the sale by discounting or else take a hit on their closing rates, in effect offering a “double discount.”
It’s that focus on “always be closing” that is keeping dealerships from building trust and adding value. When a shopper enters your dealership, they already know what they want. They’re simply there to find out why they should buy that particular car from you. But before they can get any of that information, a salesperson is usually hounding him or her for their phone number. No wonder the customer’s first reaction is typically, “Slow down. You’re moving too fast.”
Product Specialists Needed
That approach doesn’t foster trust or communicate value to the consumer. That’s because too many sales staffs aren’t equipped to collect customer information without sounding like the creep in the bar.
If you stick with the old ways of trying to close the sale, you’re not building trust or adding value. That’s why dealerships need to convert their salespeople to product specialists. How do you do that?
In my next post I’ll share a case study with you that demonstrates how one dealership was able to add value into every car sold and build trust in the process—without double discounting or chipping away at closing rates.
I’ve discussed the various issues that are putting gross margins under pressure. Those factors aside, there’s another barrier that dealers have to contend with—the fact that consumers come to the dealership armed with more knowledge than ever. When the amateur knows more than the professionals on your lot, it’s difficult for salespeople to develop trust and add value.
Wanted: Product Experts
The average customer conducts about five months of research before visiting a dealership. Information available on the Internet and the ubiquity of mobile devices mean consumers can access all the information they need about a car anytime, anyplace—including your showroom.
According to a Nielsen/Cars.com survey, 83 percent of consumers have a smartphone in their pockets when they walk into your dealership. That means even when they’re in your showroom, they’re able to access information not immediately available to the salesperson. That makes it nearly impossible for your salespeople to build trust and add value.
The fact is that today, consumers don’t want salespeople; they want product experts. Salespeople tend to be very knowledgeable about models in general but not necessarily about specific units. But consumers already know about makes and models. You have to talk about why the cars on your lot are preferable to the ones offered at a nearby competitor.
Why Buy This Car?
Used car buyers in particular have done their research online and have already made the decision to visit your store to see a specific vehicle—for instance, a BMW 328i. Unlike new car buyers, they didn’t come to your store because you sell the BMW 3 Series. They came because they found a particular 328i on your website and they want to know why they should buy the one on your lot today. So when your salesperson starts talking about the benefits of the 3 Series in general, the used car buyer is thinking, “I already know this.”
That’s why it’s critical for dealerships to equip their staffs with the insights that consumers already have. Your salespeople have to be instant experts on every car on your lot. They have to be able to demonstrate why the BMW 328i on your lot is better than the one a mile down the road that’s $1,000 cheaper.
The only way to build that value and trust to reach today’s car shopper is to adapt your processes. In my next post, I’ll elaborate further on why this is necessary.