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How car dealers can keep a shrinking sales window open

By Richard Yarrow

Tablet computers will be the big hit of Christmas, with a leading High Street electrical retailer claiming they were selling one every two seconds during December. For the car dealer, all these new digital distractions in the home mean one thing – even more customers will be even more product-savvy by the time they make contact with the showroom.

  NEED TO KNOW

        
♦  Dealers must get product, price, place and promotions right  
Use a lead management system to capture customers’ requirements  
Staff should review their sales strategy and persuasion tactics  
   

Smart online research means they come to the forecourt knowing what they want, how much they’re willing to pay, what other outlets are charging for similar vehicles and how much their trade-in is worth.

The net result is the ‘sales window’ – the opportunity for you to actually sell them something, whether it’s a higher spec car, optional extras, paint protection or a service plan – is now smaller than ever. The big question is how best to exploit that.

Tim Peake, group strategy director at Trader Media Group, said the first thing to do was get the basics right. He believes it’s never been more important for dealers to embrace the four Ps – product, price, place and promotion – as part of an integrated approach to sales.

Beyond that, it’s about understanding the market. “The best retailers have an understanding of how to exploit changing consumer behaviour, particularly in terms of that crucial first contact,” said Peake.

“Those who are signed up to things like ‘live chat’, and are able to respond quickly and professionally, will be the ones to welcome people into the showroom and with whom the deal will be done.”

Le Etta Pearce, sales and operations director at Manheim Retail Services, said it was important to understand how the customer had arrived at the point of first contact. That could be via the website, local advertising, being an existing customer, or as a result of email marketing or social media.

With that in mind, staff need to be just as ready as the customer and demonstrate their knowledge.

“If they’ve made an enquiry about a car online, make sure you have a lead management system that captures all their requirements. If someone visits a dealership following an enquiry on live chat, try to recall the conversation and mention it. Show the customer you care,” said Pearce.

So what should the dealer actually be selling? Pearce said if a customer is interested in a specific vehicle then concentrate on that, but if not, promote the benefits of the experience of buying a vehicle from you as you find out what they want.

“Dealerships should be selling their knowledge, demonstrating to customers that they have vehicles that match their requirements,” she said.

The biggest pitfall is pushing what you want to sell, rather than what they want to buy. That means avoiding the wrong type of car for their needs and inappropriate optional extras at prices they can’t afford. The secret is to listen and respond accordingly.

Leeds-based Luscombe Motors has Suzuki and Mitsubishi franchises. Managing director Robin Luscombe agreed the sales window was smaller than ever, but said the success ratio was higher.

“It used to be about two out of 10 customers, but now it’s seven or eight out of 10 because people won’t bother coming to you unless you’ve got something they’re interested in,” he said.

He believes people can get carried away with thinking everything is online.

“There’s still a large number of people who want to simply visit the dealer at the end of the road and the car still has to be sold. It might not be as big a sales job, but can easily lose the business by doing something wrong. The customer has seen enough on the internet to be interested, then it’s down to us if we haven’t prepared it right or say the wrong thing.”

Automotive sales trainer Rob Purfield labels what goes on in the window of opportunity as ‘transactional selling’. He also believes it’s impatient, devoid of desire and focused on the financial considerations.

“What if we moved from a position of selling to helping customers to buy? What if the mindset wasn’t ‘how quickly can I divest you of your hard-earned money for my personal gain’? What if it was one of ‘let me provide you with an amazing showroom experience’?”

Purfield said staff must still focus on the sale, but need to review their strategy and persuasion tactics. He believes it’s more important than ever that they follow a process to maximise the profit. “They need to avoid reverting to the hard-sell tactics of the 70s and 80s, but should be upselling extra products such as Supagard and GAP insurance, plus improving their finance penetration,” he said.

One alternative is to try to extend the sales opportunity with some creative thinking and smart marketing. The Mitchell Group operates Lexus, Škoda and Mazda franchises in Chester, and offers new and used vehicle customers a free car wash on a Saturday morning.

In the words of managing director Mark Mitchell, anyone with a Mitchell Group number plate gets “the royal welcome”. He has five extra valeters working outside and five staff covering the customer lounge serving coffee and cakes. They’re often local sixth formers or the children of existing customers, further cementing relationships.

“I visited some Lexus dealerships in the US 11 years ago and I brought back this idea,” he said. “We started it here with that brand and washed eight cars in the first week. Now it’s across all three brands, plus Mitchell Select used cars, and last Saturday we did 187.”

With an average 2.5 occupants per car that’s a whopping 450 people in the dealership every Saturday morning. “Yes, there’s a cost but relative to what I could spend in advertising, it barely registers on the measuring stick. There’s no hard sell – we see some people every week – but there’s a very sharp commercial focus behind it. We had a 61% retention rate in 2013. My guess is it would be lower if we didn’t wash their car.”



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