Desking for Dollars
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Desking for Dollars
Every time the factory came into my store they would lecture me to lower my grosses so I would sell more cars. I NEVER found that to be true and wrote the advice off as typical factory ignorance on how to sell one car at a time.
I always found the opposite to be true. Sales up and gross profit was up. Sales dropped and gross profit dropped. Car Sales is still about SELLING and that is about making a value argument and being measured. When Value exceeds the price they buy. Without salespeople presenting the value cars become a price commodity and car vending machines become the order of the day. I laugh when I think about vending machines that would still be full of Chevrolet Citations and Pontiac Aztecs 30 years later. By the way dealers sold them all. No one took a new Citation apart and sold it for parts.
When Value Exceeds The Price By One Penny - They Buy
What I don't understand is the desk offering severe discounts on the first offer. Without measuring the sales person's value performance or the customer even asking for a discount. We are offering the customer a bare nuts deal the first time out of the gate. I am all in on selling everything if there is a dollar in it, but let the customer say "NO" a couple of times first. I consider this a self-inflicted wound and unnecessary.
Why?
For the life of me I cannot figure out why, but I will make up a couple of reasons/excuses that may be floating around the store.
Internet
"Every car is aggressively priced to sell on the internet".
If this is true - STOP IT!
We always advertised. Before the internet, we blew up the newspaper with cars aggressively priced to give consumers the PERCEPTION we were the cheapest around. The cars advertised usually were overage, slow movers that we needed to sell. We still had a lot full of fresh inventory to sell right.
If Advertising used - 3 tier pricing.
- Overage units price down and dirty (c pricing).
- Cars over 45 days but under (pick a number) discounted but not blow out (b pricing).
- Cars under 45 days price at retail. I don't care what V Auto says. A clean fresh vehicle priced at 130% on V Auto can still draw traffic, and we can only sell it once. So I only need one buyer.
New - Don't advertise car Lines pricing - Advertise Individual cars.
Credit - Upside Down Trade - Bullshit - Bullshit - Bullshit
A desk manager would need a crystal ball to assume one of these is the issue and therefore offer a discount out of the gate. There is no excuse. Ask for it all just one time. This way you can tell which salespeople are selling and which are order taking. The customer is in the showroom. Either you have control, or you don't.
If the customer says no - deal with it. If the T.O. is necessary - GO IN and show your salesperson how to make an argument and hold price. Get all you can, and we will match credit, upside down, down payment issues right after they sign. The car needs to be sold first.
Now if a discount needs to happen to make circumstance match terms - we are in charge of the discount - NOT THE CUSTOMER. We know one hundred ways to put this together, and we can give the customer the good news at delivery.
The Math
Let's say one-half of the customers you need to get down and dirty on the price because they said NO six times. These deals only produce some factory welfare and perhaps a good trade.
Let's say 30% recognize the value presented and appreciate the relationship. The customer may only say no one or two times, and if the salesperson asks why they said no, one might be able to make an argument and hold price. This 30 % may not be big grosses but will have some gross.
Now we have the top 20% who perceive the value of the car and the relationship with the salesperson and this dealership worth paying everything. They are not stupid they just appreciate the value and are not going to waste time haggling over $30.00 to $40.00 a month.
Do a shotgun analysis on where you are now. What percentage of your deals are over $3000 front? What percentage do you have between $1,500 and $2,999? How many between $500 and $1,499. Then how many under $500. Now, what is it worth if the top 20% are $3000 and over. If 30% are between $1,500 and $2,999, and if 50% are $500 to $0. Then ask what has to change to get there?
Retail Car Sales is a function of sales and we eat what we kill. So unless salespeople and managers are on a salary and doing walk-through drills, it is worth stopping this behavior and get back to selling and asking for it ONE TIME.
