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Tag Archive: Retail Sales

Jonathan Dawson

How Introducing Objections Removes Objections

mature salesman showing new car to a couple

Do you know the difference between reactive and proactive service? Understanding it will make a big impact on your sales career and your customers’ experience.

Let me use a common example of going out to dinner to illustrate it. Imagine arriving at a new restaurant in your town you’ve wanted to try with your friends. You walk inside and are immediately struck by the great design, décor, and ambiance. You get seated at your table and after a couple of minutes you notice you don’t have a menu, so you ask the waiter walking by for menus. He replies politely, “My pleasure!” and with a smile hands you and your friends some menus.

Have you noticed anything not quite right yet?

The menu offers a wonderful diverse selection: prime steaks, fresh seafood, and homemade pastas. Even the pricing is a pleasant surprise as all the options seem affordable. As you discuss the options with your friends, you reflexively reach to grab a drink of water. But there isn’t any on the table yet. You ask your friends, “Have they come by to take drink orders yet?” Your friends say no. Once again, you stop a passing waitress and ask her to bring drinks. She responds with, “I’m happy to take your drink orders. Your waiter is Mike and he’ll be right with you.” She takes your drink orders and brings them back right away.

What is missing from this experience?

Now you start to notice something about this place. Despite the amazing ambiance, superb food choices, and the staff always smiling, something is not quite right. Mike shows up, apologizes for the delay, and takes your orders. As he walks away from the table you notice your glass of ice tea is almost empty and try to get his attention, but he’s gone. You flag down a waiter walking by and ask him to have Mike bring you a refill. Mike brings out the refill and the food too. It’s piping hot and smells delicious.

The table is ready to dig in when you all notice there is no silverware on the table. By now you feel irritated. Once again, you signal for Mike and ask for silverware. He offers his apology and brings it with a smile. As the night continues, you ask for refills, desert menus, and finally the bill.

It is not just about serving the client, it’s about the type of service you provide.

In this restaurant the staff were friendly, courteous, and willing to get everything that was requested WHEN it was requested. But your experience will never be excellent if you constantly have to ask for things.

Some salespeople are just like the waiters in this restaurant. They wait for the customer to bring up a concern or to offer an objection. Then, they try to overcome them. This is providing reactive service.

Reactive service is service in response to a request. Once the request is made, the salesperson reacts to it or satisfies it. Reactive service is the most common kind of service salespeople provide.

How could you tell if you provide reactive service? If you constantly hear any of these things from a customer on the lot, it’s one of the signs that your service is reactive:

  • I’m just looking
  • This is my first stop
  • I just want your best price
  • The car is not for me
  • I don’t have much time
  • I just need a trade-in value
  • All I need to know is payments
  • Just tell me about your programs
  • You don’t have what I am looking for
  • I’m only gathering information

Do you like hearing these things and then having to overcome them? I didn’t think so! And there is a better way! The better way is to become proactive instead of being reactive.

Proactive service is offering service PRIOR to a request. Being proactive means anticipating instead of waiting for something to happen. My Sellchology Training philosophy is based on the idea of being proactive.

How would it change your experience if that restaurant paid attention to your table and brought menus, offered refills, and made sure you had everything else to enjoy your dinner BEFORE you had to ask for it? It would have transformed  your experience!

A salesperson who offers proactive service does not wait for the customer to bring up common issues or objections. He learns to anticipate them and to bring them up FIRST!

By doing this you can completely transform the entire buying experience for you and your customer. Just as every waiter should know that a customer will need menus, silverware, and refills, so should a salesperson know that customers will mention price, shopping around, or being pressed for time! Instead of waiting for the customer to bring up these concerns, you do it first!

I call it becoming a PRO, a PRO-active salesperson. Anyone can become a PRO by learning how to positively introduce common questions or objections FIRST. What can you expect to happen if you learn to do this?

Proactive salespeople see these results:

  • Objections are minimized or removed entirely
  • Customer experience is transformed
  • Salesperson no longer feels rejected

Here are a few examples of reactive vs. proactive approaches when greeting a new customer on the lot:


Reactive: Offer generic help to a customer only to hear them say, “I’m just looking.” Result: You feel rejected and there is no rapport building happening.

Proactive: When you approach the customer, say this first: “Are you doing some looking or shopping today?” The customer will probably respond with, “Yes, we are.” Result: You’ve brought up the idea of shopping around first, and it will not make sense for them to respond with “I’m just looking.” You have positively engaged the customer by saying something they were probably about to say to you.


Reactive: Offer to help a customer only to hear them respond with, “This is my first stop.” Result: You are now in a defensive position having to justify your help. This is a poor start!

Proactive solution: Be proactive in bringing up the question of whether it’s their first stop: “Do we get to be your first stop or have you been to a few dealerships already?” Result: if you phrase it that way, you turn a potential objection into a compliment – we “get” to be their first stop. And regardless of their answer, they’re responding to your question and engaging in a dialogue with you. You’ve just removed the objection of “This is my first stop.”


Reactive: Offer to help with vehicle selection but the customer says, “No, thanks, I don’t have much time now.” Result: You’ve just heard an objection you now have to overcome.

Proactive solution: Say this first, “I know your time is valuable. What would you like to accomplish with the limited time that you have and how can I help you do it?” Result: Customers cannot bring up the time constraint because you already acknowledged it! Plus, you came across as a professional who wants to offer a solution based on their needs. Nobody wants to talk to a car salesman but everybody wants to talk to someone who has solutions!

This is the simple beauty of learning how to become a proactive salesperson: Objections are removed or minimized, customer experience is transformed, and the salesperson becomes a solutions provider.

Virtually all sales situations are better handled with proactive service. Take the list of common objections you hear and start practicing the proactive approach – mention it FIRST in a positive manner.

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Garry House

Vehicle Sales OTDBs in the Service Lane…Part 1

Target-Rich-EnvironmentIt happened again two weeks ago! It seems to happen each time I talk about opportunities to do business (OTDBs) with a training group of automotive dealers and/or their managers. When I suggest the potential sales, trades and purchases available as a result of an effective prospecting initiative in the dealership’s service lane, I get that “deer in the headlights” look from the vast majority of my audience. C’mon guys and gals… As “Goose” (Anthony Edwards, as the co-pilot to Tom Cruise’s “Maverick” character) said in the 1986 movie Top Gun, “This is a Target Rich environment.”

As I’m sure you know, I’m all about the numbers and sales mathematics. So I’m going to take you through an exercise, by which you can determine how many unit sales are available through a service drive prospecting initiative at your dealership…assuming that all required processes are in place and are being effectively executed. Process details will be addressed in a subsequent article.

OK, here’s how to crunch the numbers and see how the mathematics work:

  1. What percent of the customer vehicles entering your service department each month are (a) those that should be replaced based on age, mileage, and/or condition, plus (b) those that would be a great addition to your pre-owned vehicle inventory? What was your overall percentage estimate for the two categories? Your answer is Variable #1.
  2. What percent of the owners in above category #1 do you think would be willing to discuss (by making an appointment) replacing their current vehicle with a new or nearly new vehicle, if they were approached at the right time, and in the right manner? Remember, these people are currently doing business with you, so they have a “relationship” with you. Your answer is Variable #2.
  3. Finally, what percent of the owners in above category #2 will you ultimately deliver after they have shown up for their appointment? Remember, these people are currently doing business with you, so they have a relationship with you. Your answer is Variable #3.

So when you multiply the three variables together (Variable #1  x  Variable #2  x  Variable #3), what answer do you get? This final metric, when applied against the total customer-paid and warranty R.O.s written in an average month, calculates the number of potential monthly vehicle sales as a result of the service lane prospecting initiative.

Every time I’ve performed this calculation for a dealership, the resulting sales potential was both shocking and impressive to the dealer principal and/or the dealership managers. If you’d like to learn more about developing and managing your opportunities to do business, I encourage you to check out our next webinar series on OTDB Development and Management in the Variable and Fixed Operating Departments beginning July 25th.


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Gene Daughtry

Why the difference in price?

consumer-protectionIn my 16 years in Buy Here, Pay Here operations, we marketed the business as “in-house” or “bad credit” financing. We sold a few cars for cash, but we were predominantly a Dealer-Controller Financing business.  Since the inception of the Consumer Financial Protection Bureau (CFPB) and its complaint website,, the FTC is watching these dealers more closely than ever.

There are several resources available to assist automotive dealers avoid illegal and deceptive advertising and marketing practices.  I’ve compiled a short list of links to what I consider the most pertinent, but there are other good resources available, as well:

As a dealer, you must be careful that your salespeople are not telling customers that due to their credit, they cannot purchase the car you advertised for the ad price. You know it happens when the customer is declined for “bank financing” but approved for special financing or second-chance financing. The special financing approval requires a large loan discount. Your salesperson goes out and tells the customer they can get the car they want, but the price will be “x” instead of the advertised price. The same happens if the only way to get a deal approved is through the store’s BHPH operation.

Some independent dealers are primarily “retail” where they offer prime and subprime indirect financing. Some of these dealers will offer a few in-house loans to the right customers. If these dealers offer low prices or payment specials in their advertising, they need to be sure how the above scenario is handled by the salesforce. Many BHPH/LHPH dealers do not advertise prices or payment deals in order to prevent false advertising issues or bait-and-switch pricing. BHPH dealers generally advertise what they do — help the consumer with bad credit. Our message is about services available, vehicle dependability and how we can help most everyone get a vehicle.

I always tell retail dealers that almost every process in their retail operation will be opposite in a BHPH operation. Your salespeople in retail generally up the customer, meet and greet, qualify, test drive, trial close if “we can get the figures right,” then go inside and negotiate.  Then they try to get the deal approved. In BHPH or special financing, after a salesperson ups the customer and begins to qualify, the salesman brings the customer inside to find out if they have an approvable deal, which then determines what vehicles to show them.

If you are doing deals in secondary financing or BHPH, you might consider advertising that does not contain vehicle prices or payments. Those ads open the door for possible FTC violations. With commission salespeople and managers it is hard to resist “converting” customers from one to the other. You probably already know that if your customer has landed on a particular vehicle that is “value priced” online or in other ads, your people cannot legally add a discount fee back to the price and do the deal.

The CFPB’s hotline for consumer complaints is just beginning to be known. As dealers, there are enough headaches to go around without creating them yourself. Market into your primary business and attract the customers that fit your business model.

Gene Daughtry is a BHPH executive conference moderator, trainer and consultant for NCM Associates. He’ll be teaching “BHPH Service Management” June 5-6 in Kansas City and he’ll be a presenter at the National Alliance for Buy Here Pay Here Dealers Conference and Dealer Academy in Las Vegas next week.

If you’re a retail dealer thinking about Buy Here, Pay Here, you’ll want to read Gene’s “Straight Talk About Dealer-Controlled Financing” whitepaper. It will help you understand the differences and similarities between franchised and BHPH operations and explains the various types of BHPH business models you need to consider before getting started. Get your copy here or visit Gene at NABD in the NCM exhibit booth, or at our Open House on May 21 in room Alsace I from 2:30 to 3:30 p.m.!

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Jeremy Anwyl

Is Your Auto Dealership’s Sales Process Customer-Approved?

Today, we’re introducing a new Guest Expert to the Up To Speed blog. Jeremy Anwyl, Vice Chairman of will be contributing a series of articles on consumer-centric and cost-efficient marketing strategies for automotive dealerships.

customer-approvedEvery few months or so we have groups of dealers visit the Edmunds office in Santa Monica. The idea is to get “street level” market feedback and stay current on any issues dealers might be wrestling with.Along these lines, we also get together with consumers regularly to develop insights and understanding on their views on the vehicle buying process.

Some time ago we had a group of dealers in and decided to try to bridge the two exercises; basically, to get dealers thinking like consumers.To make this work, we asked to dealers to participate in the following exercise:“Imagine you have been asked to deliver the keynote at a fictional prestigious automotive conference. (Think TED for autos.)

Your selection was based on how you have reshaped the retail sales process, removed customer pain points and achieved a remarkable level of business success. In your speech, you share your secrets.”We split the dealers into two groups and give each 40 minutes to outline their speech. I found the result interesting.

Here’s the combined work from the two groups: First, the dealers identified the pain points; the things that consumers valued, but also found frustrating.

Pain point #1.  It just takes too long. The dealer nailed this one; it is a recurring theme from consumers as well. The interesting thing in talking with customers is that it is not the entire process that takes too long.  Some aspects of buying a new vehicle consumers actually enjoy. Things like checking out options or touring/viewing vehicles in inventory. Some dealers are trying out an extended delivery at the consumer’s home that consumers really like, as well. The parts of the process that take too long and the customers don’t enjoy, are getting in and out of F & I, and the back and forth of negotiations.To address these areas, the dealers talked about how they launched digital contracts, where most of the consumer and deal information could be entered online. They also proposed integrating the tools that consumers use across the Internet so the same information doesn’t have to be entered over and over again. The dealers didn’t focus on this, but it would also seem to emphasize that customers set appointments before coming into the store so the personnel can be ready and waiting.

Pain point #2.  The customer worries about paying too much. (Ripped off, using the dealers’ words.) The dealers proposed transparent pricing as the solution.

“Transparency” is a catch all term these days. Sometimes it means access to info on what other consumers paid for the same vehicle. In this context, the dealers were referring to pricing info that is freely available, with no or limited negotiation.

This worried the dealers a bit as they made the leap that if/when this kind of transparency arrives it is going to drive down margins. There is a tension they expressed as “new world pricing with old world expenses.” The dealers correctly see being more efficient as being essential to survival in the future. But also feel they are being pulled in the opposite direction by manufacturer demands for facility upgrades, etc.

The risk that margin pressure will increase is real, but there is also a chance we might be surprised in how this plays out. So far, transparency has been about a single price; specifically, a new vehicle price. But we all know that a deal involves many elements. The new vehicle price is just one.

Testing a theory, I asked our analysts to run some data. They ranked a set of new vehicle transactions, in order, based on the new vehicle gross. This ranked list was divided into four groups.

My suspicion was that for deals with a lower new vehicle margin, dealers work harder to make up for the “loss” by pushing for higher margins in other areas.   (Think of the old four square.) Charging a bit more for the loan, or offering a bit less for the trade. This might not work in all cases, but across a broad enough number of deals a pattern should emerge.

The group with the highest new vehicle margin was a bit of a surprise in that the interest rate paid was also higher and the appraised value lower than the other groups. Apparently there is a group of consumers—even today—that makes a mess of buying a vehicle. They pay way over the norms in all areas. (They averaged paying over $2,000 more overall!) Let’s forget this group for a moment.

There is also a small subset of the deal with the lowest margins. These buyers are very savvy shoppers who are willing to put enormous time into getting the absolutely lowest price, often have no trade and don’t use dealer financing.  Let’s ignore this group as well.

Looking at the remaining transactions—roughly 60% of the market— there is a pattern where the new vehicle gross and the margin on other deal elements are inversely correlated.

Seems to me that this accounts for much of the frustration that consumers associate with vehicle purchases. The greater the focus on the new vehicle price, the greater the level frustration with the overall negotiation.

The dealers see a future with more transparent pricing around all the elements of a deal. What is preventing dealers moving in this direction today is the fear that offering this level of transparency will just make it easier for consumers to take the new vehicle price and shop another dealership; a dealership where it is simple enough for a salesperson to offer a lower price and work to make it up on the trade, etc.

The irony is that consumer behavior is the impediment to consumers getting the simplicity and straightforwardness they crave. The dealers didn’t have a solution for this, but it is clearly a puzzle we need to figure out.

The final pain point: Confidence in making a purchase.  I put this pain point in my own words as the dealers were focused on the customer feedback that is scattered around the Internet. I rephrased this because what we see consumers looking for when they look at customer feedback is the assurance that the vehicle and/or dealership will perform as promised. One way to ease this concern is to look at the experience of other customers.

As the dealers pointed out, currently this feedback is a bit of a mess; some is useful, much is not. There also is no single source—either for the consumers to rely upon or the dealers to stay on top of.

As I think about this area, it is clear that if we focus on the pain point for the consumer, there are ways to deliver confidence that don’t involve customer reviews. Referrals, for example, are a source of business for dealerships where the store has great credibility. (A customer is hardly going to refer a store to a friend if they had a bad experience.)

I am not sure that customer feedback on the Internet is going to prove to be the best way for customers to feel confident about a decision. The source data is just so unreliable. But in identifying this pain point, the dealers again tied closely to what we have been hearing from consumers.

In fact, that is what struck me the most about this exercise with the dealers.  They get it. What consumers are looking for in the sales process is not a mystery. (We are hearing the same things from consumers as well.) What may be a mystery is figuring out how to remove these pain points in a way that supports a profitable business.

I have some thoughts on this that I will start to explore in the next article.


Jeremy Anwyl began his auto industry career in 1979 working with auto dealers who were looking for more consumer-centric and cost efficient ways of marketing. In 1991 he began working with manufacturers—again on projects that focused on retailing and marketing efficiency. Anwyl joined Edmunds in late 1999 where his years of experience working with dealers and the manufacturers on retail opportunities have been a key part of Edmunds’ success. To reach Jeremy, tweet @JeremyAnwyl, call 310.309.6393 or email

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Gene Daughtry

BHPH Inventory Makes the Difference

Gene DaughtryBack when I first started desking deals, the “seasoned” salespeople would tell me, “Let’s do this deal; we’ll make up the gross on the next one. It’s easier to get iron than customers.” I believe there was a change in that attitude in 2008. Four years later, Buy-Here-Pay-Here (BHPH) dealers are still facing the challenge of finding enough choice inventory for their business model while maintaining portfolio performance.

In my last BHPH operation we operated a little different than most. We operated a business model where we would attract our customers away from the big retail store and not just our note lot competition down the street. The program we offered helped with that. We offered a lower interest rate, extended service plans, GAP, sales tax help and we reported to the bureaus. These were excellent talking points and customers cited them as primary reasons to do business with us. The real draw that attracted the customers we wanted were the vehicles out front.

In a BHPH or LHPH operation it is critical to watch your underwriting and collections every day. Your inventory is almost as important. What we could buy for the money four years ago is not the case today. Even with recent market improvements, there are fewer rigs to pick from with twice as many people needing to buy them. The vehicles making it into the wholesale market have been less desirable because the huge drop in retail sales 3-4 years ago has fewer trades available today and the franchise dealers are holding onto their trades, while some are keeping their used inventory on the books longer.

In my previous operation, we always limited our cost of vehicle to $8,500. This allowed our portfolio to maintain loan terms at 156 weeks. We chose a complete reconditioning program to make sure the vehicles we sold would stay rolling as long as possible. After 2008 our ACV didn’t change, but what we put on the lot did. Recently, the market has seen lending start to loosen with special financing coming back to life and new car sales improving. This will help the supply of trades as we continue through 2013.

As owners and managers in BHPH, you have many responsibilities in the day-to-day operations of your stores. Your inventory is one of the most critical components of your business model. It plays a key role in profits and losses. The vehicles out front are a major part of your advertising and attract the customers who are shopping on your lot. Inventory is critical in the success of your BHPH portfolio, not only in the collection performance, but also in your loss ratios when you get the vehicles back or (depending on your business model) your experience with damage claims.

Finding a good balance between affordability, portfolio success, loss ratios and desire from customers has always been a challenge. That challenge increased the last four years and, hopefully, those experiences toughened us up and will help keep everyone sharp as changes continue into next year.

Gene Daughtry is an executive conference moderator, trainer and consultant for NCM Associates with specialization in sales, finance and special finance for franchised and BHPH dealership operations. To reach Gene, email or call 913.649.7830.

Buy Here Pay Here

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