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Tag Archive: General Sales Management

Alan Ram

Is Your Dealership in Conflict?

Chess

Here’s the problem at many dealerships: In our heads, we know what we want our people to be doing on a daily basis, but our actions and processes (or lack thereof) contradict what our heads are thinking, and we end up sending our staff conflicting messages. What do many of you see as you walk through your showroom? You might see five salespeople standing out on the point for three hours, waiting for one customer while discussing their upcoming fantasy football draft. As a dealer, that should make you crazy. What do you want to see? You want to see your people working the phones EFFECTIVELY and driving better quality traffic to the dealership.

Here are a couple issues I see at play at many dealerships:

First and foremost is your open floor. There is absolutely no benefit to you as a dealer in having an open floor. NONE!! All an open floor does is encourage your people to stand around and do nothing while they wait around for a floor up that was coming in anyway.

I see this happen all the time; a dealership has my training and their people are excited to work the phones. A couple salespeople, who don’t necessarily think it’s part of their job to actually follow up or generate anything, continue to stand out on the lot…and wait. Luckily for them, they don’t have to compete anymore for floor traffic with all the salespeople who are doing what you want them to do on the phones. Let’s just say that one of the salespeople standing around happens to bump into a customer that buys a car. Pretty soon the salespeople who are on the telephone, doing what you want them to do, start realizing that they’re not having a chance to even get an up. Now human nature takes over and they start the migration back to the front door. They indirectly feel that they are being punished by doing what you asked them to do. Your open floor is hurting productivity and needs to go.

Have you ever had to bribe your kids to get them to eat their candy and ice cream? “Now Billy, if you don’t eat your ice cream, you’re not going to get any candy.” I doubt that’s a conversation that happens at anyone’s house. It’s more like, “If you don’t eat your Brussels sprouts, you don’t get dessert”. You don’t need to convince them to eat their candy and ice cream. They were going to eat that anyway. To me, spiffing your salespeople for selling your floor ups is the same thing. They’re going to take your floor ups whether you spiff them or not! If a salesperson that sold 25 cars off strictly floor ups was to leave tomorrow, how many deals would you lose? Probably none. Why? Because those customers would still come in. They would just be distributed differently. What about that salesperson that sells 20 cars a month off primarily their own efforts to repeat and referral clients? If that salesperson was to leave, how many deals would you lose? I would say all of them. Therefore, a salesperson that sells repeat and referral customers is far more valuable to you than one that sells floor ups. If you’re going to have a spiff program, let’s spiff them for what you want them to do versus what they were going to do anyway! A referral spiff for example. If it really is a referral your salesperson generated through their efforts, wouldn’t it make sense to spiff them for it?

We also all want our sales staff doing a better job at working (mining) their sold customer base. What if we spiff them for selling repeat customers or for turning service customers back into sales clients. Now you have your salespeople thinking, “I make more money by selling a repeat or referral client than I do a floor up.” That’s when they’ll start focusing on those things you want them to focus on. That’s when you’re using your spiff money to change their behavior and ultimately change the culture. You will not sell one less car by eliminating a unit bonus, but you’ll sell a lot more cars by instituting a repeat and referral spiff.

The key to this coming together and getting the results you want is obviously training. Your people need to be trained on how to get results on the phone. When they’re trained it gives them confidence. When they have confidence, they’re much more likely to be successful and they gain momentum. It all starts with training and having processes in place that are consistent with, and not in conflict with, what you want to see happening on your showroom floor.

Permanent link to this article: http://blog.ncm20.com/2015/07/dont-let-business-development-kill-your-business/

Robin Cunningham

Unrealized Opportunities in the Used Vehicle Department

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Forgive me for saying this, but from where I now stand, it is quite apparent to me that there is way more opportunity for improving profitability than most dealership managers are aware of. I certainly know looking back on my career (and I thought I was very pro-active) that there was so much more opportunity to be realized than I was able to completely grasp at the time.

Most people agree that there is more upside potential left on the table, they are just not aware how much there is or how to attain it. Today I’d like to share some of the upside potential that we see in relation to the used vehicle department. One of the primary opportunity areas in the used car department is in increasing the average ratio of used to new vehicle sales.

We work with a Nissan dealer, in a single city market, that three years ago was selling close to a 1:1 used to new ratio. They realized there were only so many new Nissans they could sell no matter how aggressive they got with pricing and marketing. So, they got very clear on what does and does not work in today’s used vehicle market. They made steady progress in the quality of their processes and accountability management, and today are selling a 3:1 used to new ratio.

One of their managers was in class a month or so ago made a comment during a discussion. He said that as a variable department, they “freak out if and when any used vehicle hits 21 days in stock.”  They so highly value the processes in place from each vehicle’s first day in stock, that at 21 days, they know something is going terribly wrong. That comment raised a lot of eyes in class, especially from the managers of stores with huge aging issues. To get to that 3:1 ratio took a lot of trial and error, and a high degree of trust in their processes. It was all made easier by beginning to see it adding up in more total used vehicle gross profit.

To realize that opportunity, especially if one is still struggling in the used vehicle department, a pretty systematic overhaul of everything is often needed. That would include such processes as:

  • Acquisition
  • Appraising
  • Stocking
  • Reconditioning
  • Initial Pricing
  • Internet Marketing
  • Re-pricing
  • Desking policy
  • Pay plans
  • Aging

For sure, the change in focus from the amount of gross per vehicle retail to total department gross is required. To clarify, we are not against getting as much gross per vehicle as you can; but you just need to know which market segment each vehicle you are stocking is in, so your pricing policy is not getting you into aging problems.

I have been saying of late that our initial pricing policy is our turn policy. If you are pricing above market average right out of the box, we rarely see the pricing come back in line before the vehicle has aging issues, because the above market price has kept it largely invisible to the shopping public on the Internet… where, of course, most shoppers are today.

I just referred to what “market segment” each vehicle is in. We break those segments into: A, B, C and W categories. CPO, of course, is another category and I am going to come back to that separately.

A Vehicles

An “A” vehicle is a one of a kind, mostly irreplaceable vehicle. It is generally easier to replace the customer than it is the car. These almost always come from a trade, either rare in the first place, with very low miles, or both. At most, this makes up 10% of inventory. These vehicles should have a much higher than average gross profit, so the opportunity there is for a higher PVR.

B Vehicles

The “B” car is usually our own brand and is still under factory warranty. These are the most available cars to us, through trade, auction or our service drive. This is the case for all dealers, so the day’s supply is high, relatively speaking. These cars have the highest potential for wholesale loss, largely due to over-pricing on the Internet. Because these are very nice cars with lower miles on them, it can be tempting to try to get “above market” prices for them. Without a doubt, most vehicles with aging issues come from this segment, especially the ones bought at auction.

Because this segment makes up 60+% of inventory dollars, it can have devastating effects when these dollars become aged. The strategy for this segment is to aggressively price them to market immediately, get the F&I turn and the gross profit from reconditioning, and then go get more just like it. These will have slightly less than an average gross profit per vehicle. But again, since this is where the largest dollar amount of inventory is, a faster turn will equate to more total departmental gross. Again, the focus and opportunity for total departmental gross profit has to be primary here.

C Vehicles

The next segment is the “C” car. These are cars that are out of factory warranty, though a warranty could still be sold. They have higher miles and don’t have to be in perfect condition. These are the vehicles everyone seems to be wanting and almost always come from trades. The opportunity is a gross per vehicle that can be at or slightly higher than average. The return on investment is higher because they have a lower average cost of sale. Fortunately, most dealers are keeping more of these vehicles for retail these days, because in the past many got wholesaled and were the key source of inventory for the independent dealers. I know I wholesaled a lot of those in my past, and I now realize how we were missing out on possibly the richest segment of the business.

CPO Vehicles

The other retail segment that gets uneven attention is the certified pre-owned category, or CPO as we all call it. The luxury brands are all strong in this segment, and those manufacturers play a key role in helping make sure it is viable by actively supporting the strategy. For most of the other brands we see a very spotty consistency of dealers taking full advantage of this opportunity. It truly is like a separate franchise and has to be treated that way.

I have seen dealers of almost any brand take full advantage of it and other dealers from those same brands try to play both sides off the middle. Those dealers end up not having many CPO vehicles and that likely leads to less total volume, less gross per vehicle, less reconditioning gross, less future service and parts gross — and ultimately less customer retention. The other thing I see happen with CPO vehicles is when a dealer trades or acquires vehicles other than their own brands that have a strong CPO compliance; it makes it harder for competing dealers to retail those vehicles successfully. One thing we see that can offset this are some of the third-party, certified pre-owned programs that are available in the market place, like the Motor Trend Certified Program.

I would be remiss if I did not mention the very big opportunities that often get untapped in F&I. The public groups, who are under the most scrutiny of all, are at about $1,100 per vehicle retailed net after chargebacks. Many dealers are well above that, but most are way off that number and it really seems to be a focus issue. Selling more financial products and less focus on rate has been the trend, and it really seems to be working. Many of the financial service vendors provide the training as well.

W Vehicles

The last used vehicle segment is the “W” car or wholesale. There are two levels of wholesale: The ones we decide not to keep at the time of acquisition for various reasons (too many miles,  poor mechanical condition, or too expensive to keep). This level of W vehicles is actually a profit center.

Then, there are the vehicles we got for retail and for some reason have not sold. Maybe we have kept them for too long and now believe we have to get rid of them, often at a loss. Our friend Dale Pollak says there are only two reasons that could possibly happen: We somehow could not find the right price that others were selling the same vehicle during that time frame or we were unwilling to put the vehicle on that price. Knowing this is a possible unrealized opportunity can allow you take advantage of this.

This of course was just a very brief discussion of some of the most BASIC OPPORTUNITIES available in the used vehicle department that are very often not taken advantage of.

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Permanent link to this article: http://blog.ncm20.com/2015/07/unrealized-opportunities-in-the-used-vehicle-department/

Alan Ram

Education, Simulation, Accountability

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For training to be effective three elements need to be present; you need to have:

1. Education

2. Simulation

3. Accountability

Education, simulation, and accountability! Let me just expand on this. If I want to train in golf, I don’t just watch golf on TV. While watching golf on TV I may become educated in golf, but then I need to train through simulation. I would need to go out and hit bucket after bucket after bucket of balls to get good and stay good. The day I stop practicing (simulating) is the day my performance starts to suffer. But then where am I held accountable? On the scorecard!

How many statistical categories are golfers held accountable? Obviously, there’s your score but there’s also putting average, greens in regulation, and driving distance. How many statistical categories are baseball players held accountable? If I’m a position player, obviously batting average, fielding percentage, slugging percentage, and many more. As the dealer I also need to hold my people accountable. While most dealers can tell you how many cars they sold last month, how many new cars, how many used cars, how many certified, it’s surprising how many dealers can’t tell you how many overall opportunities they had. The way we improve is not by looking at how many cars we sold last month; it’s by focusing on what we didn’t sell!

Let’s talk about phone-ups for example.

Do you know exactly how many fresh sales calls your dealership received last month? Of those callers, how many actually visited the dealership at least once? Many of you (and it should be all of you) have call monitoring, that’s great, but make sure that there are no holes or gaps in your recordings with customers calling on your local number. Those calls need to be switched over to a recorded line. Everything needs to be recorded! Recording 80% of your calls is not sufficient! We live in a day and age of incredible accountability and we need to be making sure that we are taking advantage of it.

Let’s talk about the role your switchboard operator plays.

Your switchboard operator is an integral part in your dealership’s accountability when it comes to handling inbound sales calls. No CRM or automated system alone can get it done. What I’m going to go over now are just a few pointers and tips to help you hold your people accountable. First off, logging is mandatory. Some dealers will tell me that they ask their people to log calls for protection. In other words, if the call is logged under a specific salespersons name, that sales person is protected for 72 to 96 hours or whatever time frame is designated by yourself, or the dealership.

Let me run through a quick scenario: Bill takes a sales call. The caller asks about a 2011 Honda Accord that you have listed on Auto Trader. Bill promptly informs the caller that it is sold, and the call ends. Bill could not care less about protection and he knows that the caller he just spoke with won’t be coming in… Actually, he’s insured that. At the end of the day Bill is only going to log the callers that he thinks that he has a chance of showing up. In other words, your sales people are only going to log their successes. That would be the equivalent of having baseball players track their own batting averages, but if they strike out or fly out, they probably won’t count that one.

Every call gets counted. Not by the sales people, but by the switchboard operator. I guarantee you, your switchboard operator can and needs to do this. If Disneyland can tell you exactly how many people came to see Mickey on a daily basis, you should be able to tell how many people called you on Explorers today.

It all boils down to training and more than that, proper training!

  1. Education
  2. Simulation
  3. Accountability

Make sure these three elements are present in your training game plan in order to be effective. Training isn’t something you did, it’s something you do!

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Permanent link to this article: http://blog.ncm20.com/2015/05/education-simulation-accountability/

Dustin Kerr

Oregon Senate Bill 276 – How Could This Affect Your BHPH Operation?

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The Oregon Senate recently introduced a bill that has BHPH dealers in that state up in arms, and for good reason. The bill would drastically change the way some buy here pay here dealers do business. I am not going to try to debate the merits of this bill, or the lack there of. As BHPH dealers, we have all been discussing and fearing the changing landscape of compliance for many years.

The point of this article is to focus on a couple of the provisions in the bill and ask ourselves, “Doesn’t this just make good business sense?” Keep in mind the old saying “Pigs get fat; hogs get slaughtered” and ask yourself if you are running your dealership as a fat, happy pig or as a hog headed for slaughter.

Here’s a quick rundown of the highlights of the bill:

  • Obtain the same type of license from Oregon’s Department of Consumer and Business Services (DCBS) as payday or auto title lenders.
  • Reduce interest rates to account for the amount of the consumer’s down payment.
  • Stop accruing interest once a vehicle has been repossessed.
  • Cap repossession fees at 7.5 percent of the purchase price.
  • Stop using GPS or starter-interrupt devices.
  • Wait to repossess a vehicle until after 30 days from when nonpayment has occurred.
  • Cap interest rates at no more than 20 percent or the federal funds rate plus 17 percent, whichever is lower.
  • Form a good faith belief that the consumer has the ability to perform on the contract by using underwriting standards passed by DCBS.

I want to focus on the last two bullet points of this bill and ask you, as a dealer, to think about how you are handling these two issues in your state?

Cap interest rates at no more than 20 percent or the federal funds rate plus 17 percent, whichever is lower.

Full disclosure here, I used the state max of 21% for nearly every car deal I ever financed and would have probably charged more if the state would have allowed. My question to you though is this: is it good business to charge our customers more than 20% interest? Every 20 Group meeting I have ever been a part of has included conversation on how we reduce the term of our loans and retain our good customers.

Another big conversation is about the cars not lasting the term of the note. Are we sacrificing a few thousand dollars of gross for a few hundred dollars of interest? Interest income is a big part of this business and I have always been on the side of maximizing the interest dollars collected. Although, when do we hit a point of diminishing returns?

Form a good faith belief that the consumer has the ability to perform on the contract by using underwriting standards passed by DCBS.

Now I have no idea what the DCBS will set as underwriting standards should this bill pass, but let’s look closely at the rest of that statement and change it slightly.

What if the motto of our underwriting department was something similar to this? “Form a good faith belief that our customer has the ability to perform on the contract based on our underwriting and verification practices.” Nearly all BHPH dealers want to reduce charge-off losses and regulators on the state and federal level want to make sure you are not setting your customers up for failure. Having a written underwriting policy in place that is based on industry analytics and your own loss ratios will go a long way towards achieving those goals.

Don’t forget the verification part of the process. An application is only as good as the verification to support it. There is little doubt that there are serious changes on the horizon for the BHPH industry and some that may change the way we do business forever. However, some of these items just make good business sense. Is your business a “fat, happy pig” or a “hog headed for slaughter”?


Learn more by attending these upcoming courses:

 


Permanent link to this article: http://blog.ncm20.com/2015/04/oregon-senate-bill-276-how-could-this-affect-your-bhph-operation/

Rebecca Chernek

Integrating Desking and F&I to Boost Sales and Profits

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I developed my Desking and F&I Integration workshop to address the single biggest factor limiting sales and profits in dealerships today – the bottleneck that exists between the sales and F&I department. It’s caused by an entrenched “Us vs. Them” mentality that evolved during the F&I industry’s first quarter century. Because “it’s always been this way,” dealers accept it as the status quo.

The lack of integration between sales and F&I yields only negatives. It’s the reason customers like the True Car model. They’re tired of games. They want straight talk. They’re tired of being dragged through the mud. They’re tired of waiting for hours at the dealership, only to find they can’t get financed for the car they thought they’d be driving home that day.

Desking and F&I Integration takes a hard look at the problem, why it exists, and offers proven solutions. My workshop provides a system that delivers a seamless, transparent and resoundingly positive customer experience – while boosting sales and profit! Because it requires teamwork between sales management and F&I managers, I recommend that dealerships send a representative from each department to attend the workshop.

Before you can fix something, you have to recognize why it doesn’t work.

I get workshop attendees thinking about how things work at their dealership – and how they should work. We’ll talk about how important it is to have a meeting of the minds between sales managers and F&I – and the customer.

We address issues that impact the overall customer experience, from how the sales department exchanges information about the sale, to finalizing the deal with the F&I manager. When is the best time to talk payments – before or after the customer goes into the F&I office? We talk about why not having a true meeting of the minds will undermine your menu every time – and reduce profits earned.

We talk about why establishing credit criteria earlier in the sale process helps to properly land the customer on a vehicle he can afford. And why structuring the unit earlier in the process allows for more units sold – while maximizing profits and limiting liability.

I share why it’s so important to conduct what I call “The Interview,” to qualify the customer and establish value points for later menu sales. The Interview occurs during the meet-and-greet and during the transaction review process, but it’s essential to expediting the sale and maximizing profits.

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Besides contributing to the customer’s sense of a seamless process, having the F&I manager engage with the customer earlier in the buying process to learn the reason behind limited credit or slow pay history will pay off in several ways. Getting the story from the customer can result in stronger call-back decisions and fewer declined offerings. And the F&I manager can use information gathered during the meeting at the sales person’s desk to reduce customer resistance to products offered later during the menu presentation. Taking the time to meet with the customer briefly will cut delivery time in half.

How will the customer perceive the introduction to F&I? Will the customer see it as a one- or two-step process? Do old methodologies increase customer resistance? Has the sales department been concise with the buying numbers? Do we have a true meeting of the minds before the customer makes his way into the F&I office?

Why is that important? It’s all about the bottom line. With an F&I bottleneck, it takes too much time to deliver the car… is the paper work straight? Is the deal checklist complete and ready to go? What if the customer isn’t approved?

We’ll talk about why time is your worst enemy – deterring sales and reducing profits. If the dealer expects to use menu selling, how does that work if all the terms haven’t been confirmed with the customer prior to the menu presentation? Would it make sense to confirm the transaction prior to a menu presentation – and why is that so important?

The system I propose takes into account that every customer is different. I offer suggestions for managing subprime customers to enhance the customer’s experience and maximize dealer profit while limiting liability.

The workshop culminates in role-play sessions that allow attendees to practice what they’ve learned. It’s an excellent opportunity for sales managers and F&I people to work through new word tracks and hand-offs to another team member.

The “Us vs. Them” mentality is a dinosaur throwback that only drags the customer, sales manager, F&I manager, and dealership down. Customers and the marketplace have changed – it’s time to evolve and thrive in this new landscape.

Attendees will return to their dealerships ready to implement a system that will speed up delivery, putting wheels over curb in a fraction of the time compared to when your sales team and F&I staff were at loggerheads. Your F&I manager will have been able to present a menu to a trusting customer who appreciates the transparent process and the dealership team that understands his needs. Your satisfied customer will tell everyone he knows, and you’ll be delivering more units in one day than you ever thought possible.

Permanent link to this article: http://blog.ncm20.com/2015/04/integrating-desking-and-fi-to-boost-sales-and-profits/

Tom Hopkins

Arouse Emotions, Don’t Sell Logic

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What is the emotional process that leads to the purchase of a new vehicle? It begins with a new development in the buyer’s self-image. That is, the buyers see themselves in a new way — as the owners of that new car, truck, van, or SUV and all the status it affords them.

If the projected vehicle purchase is small in relation to the buyer’s income, the self-image change need only be small. But if the purchase is a large one, the change in self-image that makes the purchase possible will be large. Such a change can come about very quickly. It can take place within a few minutes, or even within a few seconds.

Champion automotive salespeople are adept at spotting these changes in self-image as they occur during sales presentations. They are quick to reinforce the buyers’ realization that they can have, enjoy, deserve, need, and are worthy of the marvelous new vehicle they like. Do that, and they won’t just like it; they’ll want it, need it, and realize they can’t get along without it — then, they’ll buy it.

To begin with, you must be genuinely interested in doing your best for them. Once they see that you’re on their side — wanting them to have what they want and to feel great about it — they’ll begin to like you and trust you. Then, they will tell you what they’re seeking to accomplish.

It’s critical to your success that you first go beyond the limitations of your own tastes and preferences. Recognize that what’s right for you isn’t right for everyone, and make an intense effort to see the world through your buyer’s eyes. Stop saying, “What I like about this vehicle…” They don’t care what you like. They want to hear what they’ll like about it.

Second, use your expertise to guide your buyers to the best solution your inventory provides them.

Third, wait for positive stimulus from your buyers. If you believe they’ve found something that helps them satisfy their needs, reinforce their image about that purchase. Avoid worn out phrases they’ve heard a thousand times. Stay away from the words clients stopped believing years ago.

The key is to be disciplined to wait for positive input. Unless you do that, you’ll find yourself going on and on about something they don’t like, and before you know it, you’re caught in a web of obvious insincerity. Stick to the facts.

The mere fact that you’re a salesperson will arouse their negative emotions and they’ll want to emotionally fight you. You need to get their emotions focused on their own needs and desires in relation to the vehicle they’re interested in. Then, you’ll build their emotions to where they will have convinced themselves of the decision to own.

Logic in sales is a gun without a trigger. You can twirl it all you care to, but you can’t fire it. Emotion is the trigger. You can hit the target with it. Every time you generate another positive emotion, you’re pulling the trigger on another accurate shot at closing the sale.

No skill that you can acquire in sales will enhance your earning power more than learning how to arouse emotions in your buyers in ways that are positive to the sale. The exact words that you use will depend on your offering, personality, buyers, and market conditions.

Some clients will see a new feature such as the self-parking option and find no reason to have it other than the fact that suddenly they want it. It’s the latest and greatest. None of their friends have it. They start to feel excited, important, and “rich” in thinking that they’ll be ahead of the crowd by being the first in their group of friends to own it. Or, they might be feeling the pull to get it because their friends already have it and can’t stop talking about how cool it is.

As you work at developing the skills to evoke emotions in your buyers, always keep that concept in mind. You can destroy sales as rapidly as you can create them through the clumsy use of, or the lack of control over, the emotional setting. Also remember that your actions, manners, words (how you say them), grooming, and clothes are all things that trigger emotions in your future clients — whether you want them to or not.

There’s no way around it. People will react emotionally to you. It is important not to have them react with fear, anger, or apathy. To see some salespeople approach clients as though they had just fallen off the garbage truck, you’d swear that they don’t realize that future clients have feelings, too. Clients suffer the effects of fear when a salesperson comes on too strong; clients get angry when a salesperson patronizes them; clients feel apathy when a salesperson is non-professional. Play the odds. Always be professional and keep their emotions in mind. Do that and you’ll close more sales.

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Permanent link to this article: http://blog.ncm20.com/2014/11/arouse-emotions-dont-sell-logic/

Alan Ram

To be or not to BDC? That is the question.

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Here’s a question for you:
Is your BDC the result of a failure in training?

That should have your attention.  If I’ve ever written an article that will be misconstrued, this will be the one! Let’s get this straight; your people don’t suck on the phones because you don’t have a BDC! They suck because you haven’t properly trained them! As I’ve talked to dealers over the years, I’ve seen many BDC’s spring up out of knee-jerk frustration. While there are obviously exceptions to the rule, this is something I’ve seen repeated in the industry over the past several years.  A dealer says, “We tried training our salespeople, but they’re still terrible at handling phones, so we’ve hired three people and all they’re going to do now is handle our inbound sales calls, as well as Internet leads.” I have a number of different problems with this thought process, and I’m happy to tell you about them:

1) So you’re telling me that the people that you’ve hired to sell Lexus in Chicago are capable of talking to a customer that walks into the dealership, but for some reason, it blows their flipping minds to talk to that same customer on the telephone or communicate via email? I’m not willing to accept that.

2) I have trained tens (if not hundreds) of thousands of salespeople and BDC reps over the years. In that period of time, I have found that it takes every minute as long to PROPERLY train a BDC rep as it does a salesperson. The operative word in the previous sentence is “properly.” As a matter of fact, it takes longer to train a BDC rep. Why? Because while the sales staff already knows the product, the BDC staff is starting from scratch. I’ve asked BDC reps specific product questions before, and you may as well be asking some of them the gross domestic product of Bolivia. So while you think you’re solving one problem, you’re really creating another. Most of the calls I listen to that are made into BDC’s do not represent an improvement over the sales staff. At most, it’s the “get the customer’s name and number” department while trying to set up an appointment without giving the customer an actual reason to come in. I’m not trying to be harsh here. This is fact. We are creating an unnecessary level of specialization at many dealerships.

3) In this day and age, where the number one thing I hear when I do dealer 20 group meetings is “expense, expense, expense!”, shouldn’t the number one expense be hiring a second group of people to do the job the first group should have been doing? We’re talking about communicating with customers on the telephone and Internet here! This stuff isn’t quantum physics. It amazes me that the same dealers who throw up in a trash can when they get a $1000 invoice for training have absolutely no problem adding as much as 20-40k of expense per month in creating a BDC.

4) With that model, no one will want to work for you! Your dealership will compound one of the biggest challenges we already have in this industry, which is the struggle to find good salespeople.  Put yourself in the position of a good sales-person looking for a place to work. You walk into a dealership to interview; it’s a beautiful facility and a great brand. Then the person interviewing you drops the bomb, “by the way, our BDC takes all sales calls as well as handles our Internet leads”. At that point, I would imagine you would stand up, thank the interviewer for their time, and walk out the door to the dealership that lets you handle phone-ups and Internet leads. Do not kid yourself! That is a huge challenge that many dealers hadn’t considered but are now facing. Good salespeople avoid working at those dealerships that severely restrict their opportunities, and those dealerships tend to become a culture of telemarketers and greeters.

Here’s the solution:
Train your people to do the jobs you hired them to do.

If I’m hired to sell cars at your dealership, I should be capable of communicating with customers in person, on the telephone, and online. That would be part of being a well-rounded salesperson. Unfortunately, salespeople don’t necessarily arrive on your doorstep well-rounded. It’s your job to train them. The sad fact is that much of what dealers have bought over the years in the name of training, hasn’t been anything close to training at all. Going to the Marriott and listening to myself or anyone else talk for eight hours is as much training as going to a baseball game is training for baseball. You might get educated, but you’re not necessarily going to get trained. For something to be considered training, three elements need to be present: 1) Education 2) Simulation 3) Accountability. If any of those three elements is missing, whatever you’re trying to accomplish probably isn’t going to happen.

Now I’m not trying to convince anyone to dismantle their BDC. What I’m telling you to do is make sure that you’re not replacing one group of people that you didn’t train properly, with another layer of expense that you’re not training properly either.

BDC’s ARE GREAT and provide a wonderful return on investment when you have them doing the right things the right way. For example, following up unsold customers. 39% of people surveyed say that the reason they would not come back to a dealership is because they didn’t like the salesperson for whatever reason. Too tall, too short, reminded them of their ex-brother-in-law or smelled like smoke. What this is saying is that your sales staff does not have a shot with 39% of what you think are their be-back opportunities. When the customer doesn’t like the salesperson they won’t tell him or her “we didn’t like you”. What will they say? “We’ve decided to hold off” or “We’re not going to do anything right now.” They won’t tell the salesperson, but they will tell someone else. That’s why it is critical that every dealership have someone in ADDITION to salespeople following up on each and every customer that visits the store. That is a great function for your BDC.

Another thing you can do is shift their focus to your service department. I have worked with many dealerships that have amazing success in having BDC representatives schedule both repair as well as recommended maintenance. They can actively be following up on recall notices and generating service revenue.  This is a huge opportunity.  Your service advisors are on the drive talking to customers. They’re in the shop checking on vehicles. Call your dealership. Try to get a hold of the service advisor sometime and see how often you get voicemail or get put on hold for a period of time.

So again, I’m not telling you to dismantle your BDC. Business Development Centers are great when they are actually developing business. Let’s just make sure you have yours focused on the proper opportunities.

ondemand

Permanent link to this article: http://blog.ncm20.com/2014/11/to-be-or-not-to-bdc-that-is-the-question/

Tom Hopkins

Activity Breeds Productivity

Businessman in Cubicle Raising Foam Hand

What are you going to do today that will lead to more sales? If you have a list of business-building activities to complete, wonderful! If you do not, let me show you one that has worked for others for many years.

Early in my sales career, I identified activities I could do during non-client times that would eventually lead to productivity. I would try to get as many of those activities worked into each day as possible. So, even when business was slow and I didn’t have anyone to talk with that day, I had other things to do that would bring me people to talk with.

Eventually, I put these activities on a chart so I could track my efforts and be able to predict my future success. I would give each of these activities a point value and set a goal to achieve a certain number of points per day. I quickly saw the difference in my success levels when I achieved 50 points in a day versus when I achieved 100.

Here is a list of activities you could and should be doing to build your business to the success level of your dreams:

1. Identify new potential clients

Think of the various groups of people you know. In each group, there is likely to be at least one or two people who would have an interest in or need for a new vehicle.

2. Make calls to potential clients

Prepare a short message about new vehicles or services that would entice someone to want to experience them or to learn more. If you reach them in person, close for a time to get together. If you reach a voice messaging system, leave your message, but end with when and how they can best reach you. If you do not hear back from them within 48 hours, try again at a different time of the day.

3. Contact existing clients for follow up

Commit to a regularly-scheduled follow up call or email with every client. Your goals are to be certain they are still satisfied with the vehicle; to determine if they need service; and to ask who they’ve talked with about their vehicle. If they’re telling others about their positive experiences, these clients should be asked to provide you with referrals.

4. Schedule presentations or meetings

Getting commitments for demonstrations is an extremely valuable activity. Be certain to send out a confirmation of the details immediately and to reconfirm everything early on the day of the meeting.

5. Distribute product information

Carry information with you everywhere. Always be ready to leave something in the hands of someone new. Always ask for their business card or contact information and follow up immediately with a note of appreciation for their time.

6. Prepare for your next presentation

You can’t be over-prepared to give a demonstration on your vehicles. If you have nothing else to do, practice! Have a friend or associate watch you and offer suggestions for improvement—whether it’s in what you say or in your body movements.

7. Give presentations

This is the most fun part our days. We all love the opportunity to show our vehicles to new potential clients. Unfortunately, we don’t get too many opportunities to do this if we haven’t been busy with all the other activities listed above.

8. Close new clients

For this activity, you might give yourself a money value as points. As your selling skills improve, so should the amount of money you earn.

9. Referrals received

Give yourself a point for every referred lead you acquire each and every day. Referrals are like gold — but only when you do something with them.

10. Thank you notes sent

Develop a habit of sending thank you notes to everyone you meet and talk with on a daily basis. I used to set a goal for sending 10 each day. That meant I needed to get out in the world physically or on the phone and talk with 10 people each day. I would thank past clients for their patronage. I would thank potential clients for sharing their time with me. I would send thank you notes to anyone who provided me service. They appreciated it and would often tell others about me — generating interest and leads.

11. Attend business functions or sales meetings

If you are with a strong company that is dedicated to growth in your industry and your geographic area, attend every meeting you possibly can. They may all begin to sound the same after awhile, but if you listen well, you will soon find yourself with new ideas for success.

By making a game or challenge out of completing activities, I soon found myself becoming much more productive in business. If you would like to see a sample of the Daily Activity Graph I used for my own productivity, click here.


See more from Tom Hopkins on NCM OnDemand. 

Permanent link to this article: http://blog.ncm20.com/2014/09/activity-breeds-productivity/

Tom Hopkins

Questions Are The Answer

customer

When you work with a new car prospect, don’t you agree that you should try for several minor yeses before you go for the “big yes” buying decision? It makes sense, doesn’t it? It would be helpful to learn a specific technique that would begin a string of “yes” answers, wouldn’t it? You’re probably getting tired of all these questions, aren’t you?

If you answered “yes” to these four questions, you’ve just proven the effectiveness of the “Tie-Down” questioning technique. Let me begin by defining the term “tie-down.” A tie-down is a question at the end of a sentence that calls for a positive response.

Here are some examples:

  • “A reputation for excellent service after the sale is important in making this decision, isn’t it?
  • “I can tell you are happy to hear that we have a wide range of financing options, aren’t you?
  • “You can see how our evening service hours would make your life easier, can’t you?

This technique works most effectively when you tie-down a positive statement about the benefits of your services that you know your prospect needs. The key is not to over-use them so your prospect won’t suspect you’re using a technique.

Here are 18 standard tie-downs that you’ll find useful.

Aren’t they? Don’t we? Isn’t it?
Aren’t you? Shouldn’t it? Isn’t that right?
Can’t you? Wouldn’t you? Didn’t it?
Couldn’t it? Haven’t they? Wasn’t it?
Doesn’t it? Hasn’t he? Won’t they?
Hasn’t she? Won’t you?? Don’t you agree?

You don’t want to use too many of them with any one client, just enough to get the yeses flowing. Experiment with your existing presentation until you find a comfortable number of tie-downs to use without sounding repetitive.

Another way to keep these tie-downs from sounding overused is to use them in other forms: “Inverted,” and “Internal.” I’ll use the same example as above to demonstrate them.

Standard:

A reputation for excellent service after the sale is important in making this decision, isn’t it?

Inverted:

Isn’t a reputation for service after the sale important in making this decision?

Internal:

A reputation for excellent service after the sale is important, isn’t it, in making this decision?

The inverted and internal tie-downs allow you to hide the fact that you’re using a technique while adding warmth to your statements. By utilizing all three types, you’ll have a good mixture of them to build into your presentation. Once you’ve learned them and worked with them, use of the tie-down will become a speech habit that will improve your business and your earnings.

Another form of the tie-down you might consider using is the “Tag-On Tie-Down.” It can be used in a variety of ways. The simplest is to tie-down a positive statement your prospect has just made. For example, if they say, “Having a good extended warranty is important.” You would say, “Isn’t it?” They make a positive statement and you agreed, but asked for another positive statement. The statement being the word, “yes.”

Another useful questioning technique is the “Alternate of Choice” technique.

An alternate of choice question is one that suggests two answers, either one will confirm that your prospect is going ahead. The easiest example of this is getting an appointment. The average salesperson will say to their prospect, “When can we get together?” This allows the prospect to say, “Never” or, “I’m too busy just now, I’ll call you later.” Now, that won’t get you an appointment today, will it?

In using the alternate of choice question you would say, “I have an appointment opening this afternoon at 3:00, or would 4:30 be more convenient for you?” You’ve given your prospect two choices, one of which they will most likely agree to. If they cannot make either appointment, they’ll tell you and you can counter with another alternate.

This is also a good technique to use when you try to get a delivery date from your prospect once they show signs of going ahead. “You mentioned needing to remove some things from your garage in order to park your new vehicle in there. How soon would you want to take delivery of your new truck? Now? Or, would later this afternoon be better?” Just remember to use it whenever you have two alternatives you can give to your prospect, and either one means the sale is proceeding forward.

These two simple questioning techniques are the first steps to turning your existing presentations into positive momentum builders. Please remember, a quick reading of these techniques will not do. You need to read them, study them, learn them, and practice them until they become a natural part of your speech. If you have to stop and think before using these techniques, your prospect will suspect you are using a sales technique and will try to fight you. Once they’ve become a natural part of your speech, they will flow smoothly and add warmth to your presentation. All it takes is one “yes” to turn a prospect into a satisfied client.


fo_roadshow

Permanent link to this article: http://blog.ncm20.com/2014/08/questions-are-the-answer/

Alan Ram

Persistence Wears Down Resistance

call center

I’ve said this before and I’ll say it again, I have learned so much about selling by being a customer. Here’s a saying that we take for granted, that you’ve heard a million times: “Persistence wears down resistance;” as a matter fact, I invented it. That’s not really true, but it’s a great saying that you need to apply to your mindset daily when you sell cars.

Let me tell you what happened last night. I got a call from a Wells Fargo mortgage broker, Greg, who is following up with me from back in my San Diego days; in fact, he’s been following up with me for about five years. He called me about refinancing my house as well as a couple of rental properties I own. So, I asked him to put together a proposal for me because I recently had been thinking that I should refinance at a lower rate. Now is the time, and Greg’s going to get the deal!

This story probably doesn’t sound unusual to you until I tell you about our previous conversation (or lack thereof) when Greg called me, probably about three months prior, and I was sick, grumpy, and I blew him off. I probably shouldn’t even have been answering the phone that day, but he had been calling me for years now and leaving messages most of the time. But today, he happened to follow up with me at a perfect time when I was ready to do something.

That’s what you get when you’re persistent!

For so many salespeople, follow-up is a one-and-done proposition. You follow up with a customer, you don’t get the answers you’re looking for – and you’re done with them. Well, that’s a huge mistake!

Everybody is going to be buying a car eventually, so sometimes you just have to be willing to follow up long-term. What I didn’t realize over the years of Greg following up with me, was that Greg was, in fact, secretly building up a little bit of rapport with me.

Every time you follow up with a customer, whether they come down and buy or not, you should be building up a little bit of rapport with them so that they feel like they owe you as soon as the time is right.

You can’t take things too personally when you sell cars.

You don’t know what’s going on in this person’s life when you’re following up with them. I’ve been blown off hard by customers before and many times, I suspect it’s just because they’re in a bad mood about something that has nothing to do with me; they’re in a fight with their spouse, their boss has been yelling at them, or they are hungry and cranky. Who knows, but the next time I call them, they are usually a completely different person and I get the result that I am looking for!

The bottom line is this, I don’t think that 90% of car salespeople would’ve been as persistent as Greg.

After the call he had made to me three months prior, and my angry response, most salespeople would’ve deleted me from their CRM. His persistence wore down my resistance, and I suspect my commission will be making his house payment for the next few months.

 

Permanent link to this article: http://blog.ncm20.com/2014/08/persistence-wears-down-resistance/

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