In a previous life, I worked for one of the largest used car operations in America. The one that was founded by Circuit City. I was a buyer for the organization, and boy did we sure buy a lot of cars. The cream of the crop was the cars that customers brought us to either trade-in or buy outright.
We all know why those are better than auction cars, but how many of those should we buy? All of them, right? That would be great in a perfect world, but it would never happen for many reasons. With that being said, what is a realistic number and how do we get to it?
Let’s look at one store that I help manage that has a 58% closing rate. First off, is that a good closing rate on appraisals? This is one of the highest ones I have seen in a long time. So, let’s look at how the store gets those results.
- First and foremost, they use their appraisal tool for every single car. Even if your gut says it’s nothing more than a $1000 car, make sure you use your tools to confirm this.
- Put the right money on the car the first time. I am not saying to lose any gross, but make sure you have proof for the value of the car. Customers want a fair price more than anything, per a study by Carmax. If the car is worth $10k and it has frame damage, make sure you talk to the customer and explain this. The days of back and forth negotiating are slowing down due to online transactions.
- Follow up….and follow up again. This is a no-brainer, but you would be surprised by how many people don’t. There are a lot of tools out there that even automate this process. Get those customers back on the phone and get them to sell their car.
- Swallow your pride a little. No one knows everything about every car. If you are wondering if you should put more on a car…simply ask. Ask one of your Buyers, Sales Managers, GSM, etc. We often are too concerned about not looking like we know everything that this may cause us to miss a trade opportunity.
- Get crafty. Automotive News said, “Efforts like spiffing salespeople has become more crucial than ever amid an overall shortage of sale-ready used vehicles coupled with unrelenting demand from customers.”
- Tell your customers you want their car everywhere you can. I was in a dealership this week and they even had marketing material in the bathroom trying to convince people to let them appraise their car.
Get a process in place and stick to it. You can’t deviate from a plan without having one to begin with. A detailed roadmap will help you stay organized and get you on the right track. If you want to increase your closing rate, now is the time to pay special attention to the way you are doing things.